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SCHOOL DISTRICT REORGANIZATION
Vicki L. Barber, Ed.D., SuperintendentTerena Mendonca, Deputy SuperintendentEl Dorado County Office of Education
El Dorado County2011
Purposes of Presentation
• Provide General Information– Process– Implications– Options
• Financial Implications
• Employee Issues
3El Dorado County Office of Education
Background
• The recession has taken its toll on all public programs
– State General Fund revenues are down more than 14% since 2007-08
– K-12 funding for general purpose functions is down more than 10% and most categorical programs have been cut 20%
4
Background
• School district consolidations provide an opportunity to increase revenue limit income and reduce local costs
– Current law (Education Code Section [E.C.] 35735, et. seq.) provides for a permanent increase to the base revenue limit
– Consolidations provide opportunities to capture economies of scale and reduce or eliminate duplicative functions
5
Why Look at Reorganization?
• Consolidate some services, i.e.: administration, pupil personnel services, library services, etc.
• Improve fiscal status – increase state aid and/or reduce expenditures
• Facilitate economies of scale
• Provide more options for students – improve educational offerings
6El Dorado County Office of Education
Reorganization Options• Territory
Transfers/Unionization
• Unifications
• Lapsation of a district
• Transfer Junior High Students
7El Dorado County Office of Education
Petitions
• Initiated by the Electorate– 10% registered voters
• Initiated by the County Committee– 25% registered voters
• County Committee Directed
• Local Governmental Agency
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New or Consolidated
• Consolidate districts by transfer of territory– eliminate one district and
transfer into existing district. District A becomes bigger, contracts continue in place
– Can have a waiver to require a new governing board election.
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New or Consolidated
• Create a new district • Dissolve two or more
elementary districts and create new one
• Initiated by the electorate or by majority of boards
Elements of a Petition• Petition• Boundary Description
and Maps• Rationale for
Reorganization• Analysis and Conclusions
based on State’s 10 criteria
• E.C. Section 35705.5 Provisions
• No Adverse Affect on School District Organization
• Agenda and Minutes Public Hearings
11El Dorado County Office of Education
State’s 10 Criteria
• Adequacy of Size
• Substantial Community Identity
• Equitable Division of Property and Facilities
• Not promote Racial/Ethnic Discrimination/Segregation
• No Substantial Increase in State’s Costs
12El Dorado County Office of Education
State’s 10 Criteria (Cont.)• No Disruption of Educational
Programs
• No Significant Increase in Housing Cost
• Not Primarily Designed to Result in Significant Increase in Property Values
• Not Cause a Substantial Negative Affect on Fiscal Management/Fiscal Status of Affected Districts
• Any Other SBE Criteria Prescribed
13El Dorado County Office of Education
AB 174 Streamline Option
• Streamlines the process for specified school district reorganization– If affected school districts and
county superintendent of schools consent, and
– If an agreement to share CEQA costs exists
• Eliminates approval or disapproval at the state level by the SBE
• Clarifies CEQA responsibilities
14El Dorado County Office of Education
AB 174 Concerns & Benefits• Concerns
– Support from the governing boards of affected school districts and county superintendent may not be a guarantee that no local controversy exists
• Benefits– Process for local school
district organization is simplified and streamlined
– Local county committee empowered to make local decisions 15
El Dorado County Office of Education
E.C. Section 35705.5 Provisions• Rights of the Employees• Revenue Limit• Governance by Provisions of
City Charter• Governing Board
Composition (5 or 7) and Trustee Areas or Election at Large
• Election Area
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E.C. Section 35705.5 Provisions, (Cont.)
• Whether the Proposal Creates 2 or More Districts and Whether the Proposal Will be Voted on as a Single Proposition
• How Property, Obligations, and Any Bonded Indebtedness Will be Divided
• First Governing Board Election and Terms of Office
17El Dorado County Office of Education
Other Issues in the Process
• Public Hearings in Each Affected District
• Estimated Timelines: 2 – 3 Years
• Election Needed (Unless territory uninhabited or comprises less than 10% of assessed valuation of district transferring territory and Governing Boards agree or Waived by SBE)
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Elections
• When? – Next Regular Election– Special Election – SBE
Waiver
• Area of Election?– Affected Area– Unclear– If opposed – expect Litigation
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Revenue Limit Calculations• When districts reorganize – a
new base revenue limit is calculated using 2 step process:
– Step 1 – Blend existing revenue limits using weighted average calculation – No new money
– Step 2 – Calculate add-on for differences in average salary/benefits costs – Only new revenue
20El Dorado County Office of Education
Other Issues with Add-On to Revenue Limit
• Not required to adopt higher salary schedules/benefit offerings – Subject to Negotiations
• Add-On Capped at 10% of Blended Base Revenue Limit
• Calculations are Prorated based on ADA for District Partially Included in Reorganization
• District used to Determine Highest Costs per FTE must constitute 25% of total FTE of Reorganized District 21El Dorado County Office of Education
Employee Issues
• Consolidation – All employees become employees of new district
• If not total district affected by reorganization – staff assigned to new district based on whether site is within the area reorganized – district-wide staff may choose, subject to reasonable reassignment
22El Dorado County Office of Education
Employee Issues (Cont.)
• Surplus employees – dismissed in reverse order of seniority – with May 15 notification and 39 month reemployment rights
• Power to determine compensation resides with governing board of reorganized district, subject to PERB decisions and negotiations. (Note Unification exception for Classified Staff)
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Employee Contracts
• Right to Continued Employment does not exist, except Unification for Classified Staff
• Prior Contracts are not Enforceable in a New District
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Employee Contracts (Cont.)• Representation of Employees
• Recruiting for New district – Duty of New Board
• Development of Uniform Salary/Benefit Schedule
• Contracts with Superintendents Probably Nullified
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Economies of Scale• Difficult Decisions
• Greater staff specialization
• Analysis of Potential Reductions– Administration– Support Staff– Closing School Sites– Transportation– Other Areas
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Potential Positive Outcomes
• More sites – Greater flexibility, more programs and capacity to serve students
• More specialization of programs
• More specialized staff – more opportunities for curriculum and staff development
27El Dorado County Office of Education
Potential Added Costs In Reorganizations
• Additional Administrative Staff – larger student population = more staff
• Transportation Issues• Salary Schedules/Benefit
Packages in Excess of Add-On Revenue Limit Funding
• Assumption of Debts• Loss of some income, i.e.:
Direct Service, etc.• Others
28El Dorado County Office of Education
Preliminary Revenue Analysis and Findings
29El Dorado County Office of Education
• School Services of California, Inc., computed 24 different district combinations– Small district combinations of less than 2,000 ADA– Large district combinations of more than 8,000 ADA– Geographic consolidations arranged by the two major local
highways – Highway 50 (east/west) and Highway 49 (north/south)
Preliminary Revenue Analysis and Findings
30El Dorado County Office of Education
• Small district consolidations – six combinations considered– Largest funding increase: Gold Trail + Mother Lode (1,800
ADA; 9.74% increase yielding $1,068,926)– Smallest funding increase: Pollock Pines + Camino (1,083
ADA; 2.59% increase yielding $171,127)
Small District Consolidations
Preliminary Revenue Analysis and Findings
32El Dorado County Office of Education
• Large district consolidations – 11 combinations considered
– Largest funding increase: 5.79% yielding almost $4.8 million
– Smallest funding increase: 1.65% yielding almost $850,000
Large District Consolidations
Preliminary Revenue Analysis and Findings
34El Dorado County Office of Education
• Geographic consolidations – Seven combinations considered
– Largest funding increase: Mother Lode + Gold Oak + Pioneer (2,218 ADA; 6.4% increase yielding just under $870,000)
– Smallest funding increase: Rescue + Gold Trail (4,500 ADA; no increase)
• This combination produces no additional funding because the district with the higher average salaries – Gold Trail – cannot be the target district due to size
Geographic Consolidations
Preliminary Revenue Analysis and Findings
36El Dorado County Office of Education
• Other findings
– 11 district combinations generate at least a 5% increase
– The largest increases are from small size consolidations
– Buckeye influences most of these combinations due to its size and average salaries
Consolidations, Greater than 5% Increase
Community Considerations…• Community Decision Making Points
– Greater Educational Opportunities for Kids?
– Greater Economies of Scale?– Greater Opportunity to Manage
Dwindling Resources?– Opportunity to Capture Additional
Revenue– Greater Opportunity to Focus on Areas
of Expertise?– School vs. District identity
Questions
Complex Issue – No Easy Answers
Thank You!