School Administrative Reorganization Public Law 2007, Chapter 240, Part XXXX

1. School Administrative ReorganizationPublic Law 2007,Chapter 240, Part XXXX Susan A. Gendron Commissioner of Education June 25, 2007

2. Overview: What is the new Reorganization Law? Policy objectives Parameters AFA projections

3.  Policy Objectives (20-A MRSA 1451) • To ensure that schools be organized as units to provide: • equitable educational opportunities • rigorous academic programs • uniformity in delivering programs • a greater uniformity in tax rates for education • more efficient and effective use of limited resources • preservation of school choice • maximum opportunity to deliver services in an efficient manner

4.  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

5. 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

7. Education Funding Law Implementation State / Local Share of Education Costs (+3.82%) 2.2 (+3.58%) $2,113,004,956 FY2009 – FY2010 - FY2011 With Current Growth Patterns 100%EPS (+3.45%) $2,035,191,982 $1,964,876,999 2.0 100%EPS $1,895,210,824 100%EPS $1,829,788,109 100%EPS $1,786,037,540 1.8 $1,856,104,069 $1,827,623,778 + 95%EPS $1,697,174,567 1.6 $1,578,447,540 90%EPS Local Share $ 84%EPS 1.4 $849,665,393 7.44 Mills $783,076,345 7.60 Mills $1,162,152,726 1.2 $1,119,355,590 $742,331,574 8.26 Mills $1,080,682,349 $977,958,385 1.0 $1,020,857,238 $914,098,222 K-12 EDUCATION COSTS TOTAL (BILLIONS) $836,115,966 51.60% State Share (of 100% EPS) 53.51% State Share (of 95% EPS) 55.0% .8 55.0% 50.0% State Share (of 100% EPS) $737,013,147 46.5% State Share (of 100% EPS) .6 State Share $ 53.86% State Share (of 90% EPS) .4 100% of EPS Model Costs – Current Trends FY08FY09 Enacted Budget FY09-10-11 W Current EPS Trends .2 J.E. Rier 6-24-07 Department of Education Phase-in Requirements of EPS / LD-1 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

8. Getting Started Who initiates? Municipality or SAU

9. 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

10. What needs to be accomplished? Identify partners Prepare notice of intent – August 31

11. 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 Facilitator

12. Determining Partners • Proximity (physical, size) • Existing relationships • Tuition/partnership for high school students • Commitment to common expectations • Data analysis

13. $64,373,235 $60,557,333 $60,557,333 $64,373,235 $44,493,804

14. 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

15. 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)

16. DOE next step • Review all Notices of Intent • Compare to Parameters • Notify SAU type of plan to be submitted December 1, 2007

17. 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

18. Reorganization Plan • Disposition of: • Real and personal school property • Existing school indebtedness and lease obligations • Fund balances, trust, reserve funds • Assignment of employment contracts

19. Reorganization Plan • Transition Plan • Budget for year one • Interim personnel policies • Documentation of Public meeting • How to proceed if not all saus approve rsu • Estimated cost savings • Other matters as necessary

20. 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

21. Submission of Plans • December 1, 2007 • All School administrative units • Reorganization or Alternative Plan

22. Example Plan Bath and Union #47 William Shuttleworth

23. Review of Plans Completed by December 15, 2007

24. 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,

25. Criteria for approval20-A MSRA 1461,3. 1-4 Exception to 2,500: • Coastal islands • Tribal schools • No Fewer than 1,200

26. Criteria for approval20-A MSRA 1461,3. 1-4 Exception to 2,500: • Coastal islands • Tribal schools • No Fewer than 1,200

27. 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

28. 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

29. Table Discussion • Review and discuss guidance document (10 mins) • Brainstorm what additional information would be helpful? (10 mins) • Report out from tables (10 mins)

30. Hold Referendum on Plan • By January 15, 2008 – Municipal referendum on plans approved by December 15, 2007 • Cost 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

31. 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

32. 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%

33. Certificate of Organization • Commissioner approves plan • State Board issues certificate

34. Form the Regional School Unit • Elect RSU Board Members • Hire Superintendent • Transfer of authority • Vote Annually on RSU Budget

35. 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

36. 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

37. 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

38. 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

39. 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

40. Budget Preparation Content K-12 budget • Operating costs • Bonds falling due • Interest on bonds or other obligations • Rentals and other charges in a contract • Temporary loans • Summary of anticipated revenues • Statement – 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.”

41. 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 format20A MRSA 1485

42. Budget Format after January 31, 2008 Cost Center Summary format20A 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

43. Calculating EPS for FY 09 Achieving the $36.5 million reduction How does this impact each unit FY 09 does include approximately $43 million in new revenue

44. 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

45. 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

46. 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

47. Regional School unit assessments Understanding the calculations Minimum mill rate contribution – 2

48. RSU Budget Summary • 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

49. 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

50. 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