2. SCHOOL DISTRICT REORGANIZATION Vicki L. Barber, Ed.D., Superintendent Terena Mendonca, Deputy Superintendent El Dorado County Office of Education El Dorado County 2011

3. Purposes of Presentation Provide General Information –Process –Implications –Options Financial Implications Employee Issues 3 El Dorado County Office of Education

4. 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

5. 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

6. 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 6 El Dorado County Office of Education

7. Reorganization Options Territory Transfers/Unionization Unifications Lapsation of a district Transfer Junior High Students 7 El Dorado County Office of Education

8. Petitions Initiated by the Electorate –10% registered voters Initiated by the County Committee –25% registered voters County Committee Directed Local Governmental Agency 8El Dorado County Office of Education

9. 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. 9El Dorado County Office of Education

10. 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

11. 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

12. 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

13. 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 13 El Dorado County Office of Education

14. 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

15. 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

16. 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 16El Dorado County Office of Education

17. 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

18. 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) 18El Dorado County Office of Education

19. Elections When? –Next Regular Election –Special Election – SBE Waiver Area of Election? –Affected Area –Unclear –If opposed – expect Litigation 19El Dorado County Office of Education

20. 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

21. 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 21 El Dorado County Office of Education

22. 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

23. 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) 23El Dorado County Office of Education

24. Employee Contracts Right to Continued Employment does not exist, except Unification for Classified Staff Prior Contracts are not Enforceable in a New District 24El Dorado County Office of Education

25. 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 25El Dorado County Office of Education

26. Economies of Scale Difficult Decisions Greater staff specialization Analysis of Potential Reductions –Administration –Support Staff –Closing School Sites –Transportation –Other Areas 26El Dorado County Office of Education

27. 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

28. 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

29. 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)

30. 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)

31. Small District Consolidations

32. 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

33. Large District Consolidations

34. 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

35. Geographic Consolidations

36. 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

37. Consolidations, Greater than 5% Increase

38. 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

39. Questions Complex Issue – No Easy Answers

40. Thank You!