SCHOOL DISTRICT REORGANIZATION

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

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%

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

6. El Dorado County Office of Education 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

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

8. El 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

9. El Dorado County Office of Education 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. 

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. El Dorado County Office of Education 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

12. El 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

13. El 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

14. El 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

15. El 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

16. 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

17. El Dorado County Office of Education 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

18. El 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)

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

20. El Dorado County Office of Education 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

21. El 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

22. El 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

23. El 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)

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

25. El Dorado County Office of Education 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

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

27. El Dorado County Office of Education 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

28. El 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

29. El Dorado County Office of Education Preliminary Revenue Analysis and Findings • 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. El Dorado County Office of Education Preliminary Revenue Analysis and Findings • 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. El Dorado County Office of Education Preliminary Revenue Analysis and Findings • 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. El Dorado County Office of Education Preliminary Revenue Analysis and Findings • 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. El Dorado County Office of Education Preliminary Revenue Analysis and Findings • 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!