School Administrative Reorganization

Public Law 2007, Chapter 240, Part XXXX

Susan A. GendronCommissioner of Education

June 25, 2007

Overview: What is the new Reorganization Law?

Policy objectives

Parameters

AFA projections

Policy Objectives (20-A MRSA 1451)

●To ensure that schools be organized as units to provide:equitable educational opportunitiesrigorous academic programsuniformity in delivering programsa greater uniformity in tax rates for educationmore efficient and effective use of limited

resourcespreservation of school choicemaximum opportunity to deliver services in an

efficient manner

Policy Objectives

• All school units, of whatever form and whatever size – SADs, CSDs and municipal school units, small and large – must:

• Work with other units to reorganize into larger, more efficient units; or

• Where expansion of the unit would be impractical or inconsistent with state policy, reorganize their own administrative structures to reduce costs

Parameters and Exceptions (XXXX 36(6))

New Regional School Units:• 2,500 students• 1,200 students• Island and tribal schools• No more than 80

Exceptions:• “Doughnut hole”• High performing and highly efficient districts• No “automatic” exceptions

ALL • Must submit a plan

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2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Education Funding Law Implementation Education Funding Law Implementation

.2

84%EPS

2.0

Local Share $ Local Share $

$737,013,147

100%EPS$1,786,037,540 100%EPS$1,786,037,540

$836,115,966 $836,115,966

State Share $State Share $

$742,331,574

8.26 Mills

46.5%State Share

(of 100% EPS)

46.5%State Share

(of 100% EPS)

55.0%55.0%

Phase-in Requirements of EPS / LD-1 Phase-in Requirements of EPS / LD-1 J.E. Rier

6-24-07Department of Education

$849,665,393

7.44 Mills

100%EPS$1,895,210,824 100%EPS$1,895,210,824

$1,578,447,540$1,578,447,540

51.60%State Share

(of 100% EPS)

53.51%State Share(of 95% EPS)

51.60%State Share

(of 100% EPS)

53.51%State Share(of 95% EPS)

$1,020,857,238 $1,020,857,238

$1,856,104,069$1,856,104,069

$783,076,345

7.60 Mills

100%EPS$1,829,788,109 100%EPS$1,829,788,109

95%EPS$1,827,623,778$1,827,623,778

$1,697,174,567$1,697,174,567 90%EPS

$914,098,222 $914,098,222

50.0%State Share

(of 100% EPS)

50.0%State Share

(of 100% EPS)

100%EPS (+3.45%) 100%EPS (+3.45%)

State / Local Share of Education Costs 2.2

$1,964,876,999$1,964,876,999

$2,035,191,982$2,035,191,982$2,113,004,956$2,113,004,956

$1,080,682,349 $1,080,682,349 $1,119,355,590 $1,119,355,590 $1,162,152,726 $1,162,152,726

(+3.58%)(+3.58%) (+3.82%) (+3.82%)

55.0%55.0%

FY08FY09 Enacted Budget FY08FY09 Enacted Budget

FY09-10-11 W Current EPS Trends FY09-10-11 W Current EPS Trends

100% of EPS Model Costs – Current Trends 100% of EPS Model Costs – Current Trends

FY2009 – FY2010 - FY2011 With Current Growth Patterns FY2009 – FY2010 - FY2011 With Current Growth Patterns

53.86%State Share(of 90% EPS)

53.86%State Share(of 90% EPS)

$977,958,385 $977,958,385

Getting Started

Who initiates?

Municipality

or

SAU

Form Reorganization Planning Committee20-A MRSA 1461(2), and XXXX-36(3)

Representation from:

School administrative units

Member municipalities in the proposed RSU

General public, including business, in the proposed RSU

What needs to be

accomplished?

Identify partners

Prepare notice of intent – August 31

Facilitator

Decided on partners:– Coordinating meeting– Facilitate meetings– Assist with Data analysis– Organizing public

hearing(s)– Preparation of Notice of

Intent, Reorganization Plan, and/or Alternative Plan

– Identifying areas for collaborative agreements

Not decided:– Identifing/Collecting data– Assist identification of

partners– Facilitate meetings– Organize public hearing(s)– Preparation of Intent,

Reorganization Plan, and/or Alternative Plan

– Identifying areas for collaborative agreements

Determining Partners

Proximity (physical, size)

Existing relationships Tuition/partnership

for high school students

Commitment to common expectations

Data analysis

For Fiscal Year 2007-08

ED281 & Notes TOTAL Falmouth Freeport Yarmouth SAD #51 Cumberland N. Yarmouth SAD #62 Pownal

1. Total Combined Allocations for individual units Line 48 64,373,235 19,431,185 11,291,057 12,333,872 19,545,520 1,771,601(Includes operating Alloc at 95%)

2. Debt Service Allocation for individual units Line 48 3,815,902 1,472,700 403,981 328,646 1,610,575 0

3. Total Comb. Alloc. Less Debt Serv. Alloc. Line 1 less 60,557,333 17,958,485 10,887,076 12,005,226 17,934,945 1,771,601Line 2

4. Students Line 21 K-8 7,187.0 2,146.0 1,168.0 1,394.5 2,259.5 1,575.0 684.5 219.0 219.05. SAD Student Percentages plus 9-12 or 100.00% 69.71% 30.29% 100.00% 100.00%

Section D for

6. Percentage Students - Redistribute % SADs / CSDs 100.00% 29.86% 16.25% 19.40% 21.91% 9.52% 3.05%

7. New Regional EPS Allocation 60,557,333 18,082,098 9,841,515 11,749,993 19,038,444 13,270,878 5,767,566 1,845,284 1,845,2848. PLUS Debt Service (Assigned) 3,815,902 1,472,700 403,981 328,646 1,610,575 1,122,662 487,912 0 0

Line 7 plus

9. New Regional EPS Total Allocation Line 8 64,373,235 19,554,798 10,245,496 12,078,639 20,649,018 14,393,540 6,255,478 1,845,284 1,845,284

10. State Valuations Section D 1,766,750,000 1,337,850,000 1,379,950,000 1,337,900,000 968,500,000 369,400,000 157,900,000 157,900,00011. Times Mill Expectation 7.44 13,144,620 9,953,604 10,266,828 9,953,976 7,205,640 2,748,336 1,174,776 1,174,776

Lessor of Line

12. Local Contribution Share: 9 or Line 11 44,493,804 13,144,620 9,953,604 10,266,828 9,953,976 7,205,640 2,748,336 1,174,776 1,174,776Local Share Percentage Line 9 less 100.00% 29.54% 22.37% 23.07% 22.37% 2.64%

13. State Contribution Share: Line 12 19,879,431

14. Local Share Percentage (from above) 100.00% 29.54% 22.37% 23.07% 22.37% 2.64%15. Additional Local Share (Distribute): 1,000,000 295,426 223,708 230,747 223,716 26,403

16. Assessment for Choice Students (Assigned) 500 0 0 0 0 500

17. Sub-total Local Shares: Line 12 plus 13,440,046 10,177,312 10,497,575 10,177,692 1,201,679Line 15 and 16

18. LESS Balance Forward (Assign): 45,000 10,000 20,000 30,000 10,000 5,00019. PLUS Nutrition (Assign): 1,000 0 0 0 0 1,000

Line 17 less 18

20. ESTIMATED TOTAL LOCAL: plus 19 34,952,729 13,430,046 10,157,312 10,467,575 10,167,692 1,197,679

Note:Current Combined State Shares Line 50 19,963,995 Prior to miscellaneous adjustments lines 51 through 59

Difference in State Share -84,565

FINANCIAL TEMPLATE

$64,373,235

$60,557,333

$60,557,333

$64,373,235

$44,493,804

Notice of Intent – August 31

RSU Alternative Plan –

subsection 6 Offshore island Tribal school > 2500 or 1200 as

defined in subsection 6

High performing/efficient

Examples from the state

• Bath and Union #47

• Table Discussion: (10 mins)– What has worked in your area?

• Committee structure• Helpful data

– Suggestions – Concerns

• Report Out (10 mins)

DOE next step

Review all Notices of Intent

Compare to Parameters

Notify SAU type of plan to be submitted December 1, 2007

Reorganization Plan Units to be included

Size, and composition of district board Method of voting

Subdistrict – whole municipality or approximately equal size Weighted – apportionment of 1,000 votes based on

population At-large – elected from the entire rsu

Composition and duties of any local school committees to be created

Reorganization Plan

Disposition of:Real and personal school propertyExisting school indebtedness and lease

obligationsFund balances, trust, reserve funds

Assignment of employment contracts

Reorganization Plan

Transition PlanBudget for year oneInterim personnel policies

Documentation of Public meeting

How to proceed if not all saus approve rsu

Estimated cost savings

Other matters as necessary

Alternative Plan

• May only be submitted by a unit that meets criteria in XXXX-36 Sec 2 B 1-4

• Must address XXXX-36 Sec 6 paragraph F– How the SAU will reorganize administrative

functions, duties and non-instructional personnel to meet FY 2009 EPS projections and not have an adverse impact on the instructional program

Submission of Plans

• December 1, 2007

• All School administrative units

• Reorganization or Alternative Plan

Example Plan

Bath and Union #47

William Shuttleworth

Review of Plans

Completed by December 15, 2007

Criteria for approval20-A MSRA 1461,3. 1-4

• 1. 2,500 unless exception justified– a. Geography- physical proximity– b. Demographics – enrollment trends– c. Economics– d. Transportation– e. Population density– f. Other unique circumstances – preserve

existing relationships, meet needs of students,

Criteria for approval20-A MSRA 1461,3. 1-4

Exception to 2,500:

Coastal islandsTribal schoolsNo Fewer than 1,200

Criteria for approval20-A MSRA 1461,3. 1-4

Exception to 2,500:

Coastal islandsTribal schoolsNo Fewer than 1,200

Criteria for approval20-A MSRA 1461,3. 1-4

• 2. Comprehensive programming for K-12

• 3. Consistent with policies in sec. 1451– School choice

• 4. Must not displace teachers or students or close schools existing during the school year preceding reorganization, excepted as permitted under section 1512

Review of Reorganization Plans

• Reorganization Planning Committee submits plan to Commissioner for review by December 1, 2007

• Commissioner to approve by December 15, 2007 OR • Return with specific suggestions and written findings by

December 15, 2007 (revisions due 30 days from return of plan to SAU); Commissioner’s determination due 14 days after revised plan is filed by SAU

• Commissioner may not disapprove a plan SOLELY because it would cause the number of Regional School Units to exceed 80

Table Discussion

1. Review and discuss guidance document (10 mins)

2. Brainstorm what additional information would be helpful? (10 mins)

3. Report out from tables (10 mins)

Hold Referendum on Plan

• By January 15, 2008 – Municipal referendum on plans approved by December 15, 2007Cost covered by the Department of Education

• On June 10, 2008 – Municipal referendum on plans received or revised after December 15, 2007

• By November 4, 2008 – Last opportunity for SAUs to hold a referendum and pass plan prior to penalties being incurred

Referendum questions

• Can determine the effective date 08 or 09• Explanation statement must accompany

the article XXXX-36 Subsection 8

– Approve, more favorable school construction– Eligible for additional reorganization funds– No vote, less favorable school construction– Reduction in state funding, ongoing penalties

Penalties

The following adjustments to the calculation of subsidy are required beginning July 1, 2009 for a school administrative unit that is not a conforming school administrative unit:

 • The SAU is eligible for only 50% of the minimum state

allocation • The SAU’s total cost of education is reduced by adjusting

the cost component for system administration by half  • The SAU is not eligible for a transition adjustment or any

comparable year-over-year transition amount • The SAU receives less favorable consideration for

approval and funding for school construction AND• General Purpose Aid remains at 53.86%

Certificate of Organization

Commissioner approves plan

State Board issues certificate

–Elect RSU Board Members

–Hire Superintendent

–Transfer of authority

–Vote Annually on RSU Budget

Form the Regional School UnitForm the Regional School Unit

Schools and School Choice

Every RSU must have a publicly-supported high school, either:

• A public school, or • A publicly-supported high school• More than one is OK

Schools and School Choice

Students who have school choice now will continue to have school choice.

Whether or not there is a contract

Even if they join a RSU with its own high school

Secondary school programs options

• Expiration of contract– Option continues to be available to students

who reside in the previous educational unit– Rsu may negotiate the contract

• Absence of contract– Option maintained

• Additional expense– Another rsu– Private school approved for tuition

Local Schools

• Reorganization won’t close schools or displace teachers and students

(20-A MRSA, Section 1461, paragraph 3 (B)(4))

• The law makes it harder to close schools

Finances 20A MSRA 1481

RSU may raise funds for maintaining schools, erecting buildings and providing equipment

Additional costs shared by same percentages for each municipality established under 15688

Private and special cost-sharing agreements remain in effect

Budget Preparation

Content K-12 budgetOperating costsBonds falling due Interest on bonds or other obligationsRentals and other charges in a contractTemporary loansSummary of anticipated revenuesStatement – estimated dollar amount of state

retirement payments “This budget does not include the estimated amount of $..... In employer share of teacher retirement costs that is paid by the State.”

Budget Format after January 31, 2008 Cost

Center Summary format 20A MRSA 1485

Expenditures: Regular instruction Special Education CTE Other instruction Student and staff

support System administration

School administration Transportation/buses Facilities

maintenance Debt service & other

commitments All other, including

school lunch

Budget Format after January 31, 2008 Cost

Center Summary format 20A MRSA 1485

Revenue sources Summary of total RSU expenditures Other optional data showing % changes

proposed in state, local and RSU budget Data similar to expenditures for high

performing FY 09 data documenting state and local

savings from the reorganization and mill rate reduction

Calculating EPS for FY 09

Achieving the $36.5 million reductionHow does this impact each unit

FY 09 does include approximately $43 million in new revenue

Budget Approval

• Regional budget meeting • Transfer between cost center lines:

– An amount not exceeding 5%

• Budget validation referendum– Public hearing not required– Article questions

• Does not exceed EPS – Do you favor approving (RSU) budget for the upcoming school year that was adopted at the RSU budget meeting? Yes No

Budget Approval

• Budget validation– Exceeds maximum target question “Do you favor

approving the (RSU) budget for the upcoming school year that was adopted at the latest RSU budget meeting and that includes locally raised fund that exceed the required local contribution as described in the EPS Act?

• A YES vote allows additional funds to be raised for K-12 public education

• A NO vote means additional funds cannot be raised for K-12 public education

Failure to approve budget

• Board reviews and hold budget meeting

• Budget submitted for validation referendum

• Not approved by July 1- latest submitted is automatically considered the budget until one is passed

• RSU board may call emergency budget meeting when the need arises

Regional School unit assessments

Understanding the calculations

Minimum mill rate contribution – 2

RSU budget must be K-12 Uniform budget format After 3 years the community can ask the citizens

if they wish to continue the budget validation process

A municipality may raise and spend additional funds for a K-8 school to supplement the RSU budget

RSU Budget Summary

Debt Liability 20 A MSRA 1506

• Definitions– Existing debt – issued prior to July 1, 2008,

does not include routine payables or commercial contract obligations

– Original unit – previous SAU or a municipality that incurred debt for educational unit

– New unit – means an RSU

Debt Liability 20 A MSRA 1506

Liability remains with original unit after RSU formed Original unit may not be finally dissolved until debt is

paid in full May be merged into RSU

New unit agree to pay the existing debt New unit may issue bonds or other debt to

refinance or retire the existing debt, act as agent Bonds to complete school construction and

renovation

Transfer of teachers and employees

• Application of law for those on probation or contract – not required to be transferred

• Probationary period • Collective bargaining

– Continued recognition of agents– 3 yrs to merge to a regional contract– One unit of teachers– Existing patterns of organization for others– Interim agreements

Superintendent contracts

• Transferred to the regional school unit

• RSU determines duties

What are the Responsibilities of the Dept. of Education?

Guidelines for Reorganization Planning Committees Review of Reorganization Plans Prepare report for Legislature by January 31, 2008

detailing compliance with this statute and any legislation needed to fully implement this law

Conduct a review of unfunded state mandates and submit report no later than December 15, 2008

Conduct review of the results of the validation referenda Adopt major substantive rules to establish criteria to

identify efficient, high-performing school districts by December 1, 2007

Notify SADs of Requirement to be RSU as of July 1, 2009

• School administrative districts that have not formed a Regional School Unit by November 4, 2008

• SADs may be changed to a RSU upon notice to the State Board of Education, without dissolving the school administrative district

• Commissioner shall notify affected SADs by December 1, 2008

What Resources are Available to Local Communities (and how do we access them)?

Facilitators – July 2, 2007 Data Funding for Reorganization Funding for Early Start UpCommissioner’s Office

624-6620 communications.doe@maine.gov

More information available online:

• Full text of the Reorganization Law

• Schedule of regional informational meetings

• Questions & Answers

• Sign up for e-News Updates

www.maine.gov/education