Report and Recommendation

Windham Central Supervisory Union

 ACT 46    EXPLORATION

Report and Recommendation

Adopted by the

WCSU Executive Committee and

Windham Central Supervisory Union Board

May 25, 2016

Windham Central Supervisory Union

ACT 46      EXPLORATION

Report and Recommendation

Context for this Report

Act 46 was signed into law by Governor Peter Shumlin in June, 2015.  The stated goals of the law are:

·       Provide substantial equity in the quality and variety of educational opportunities;

·       Lead students to achieve or exceed the State’s Education Quality Standards;

·       Maximize operational efficiencies through increased flexibility to manage, share, and transfer resources, with the goal of increasing the district-level ratio of students to full-time equivalent staff;

·       Promote transparency and accountability;

·       Deliver education at a cost that parents, voters, and taxpayers value.

Act 46 pushes for the creation of somewhat larger districts across the state of Vermont to promote equity and quality at a more advantageous cost.  Districts have been given approximately two years to develop plans and have been incentivized to take action themselves.    If districts do not select their own pathways, the State Board of Education is empowered to realign districts effective July, 2019.

In the months following the bill signing, most of the school districts in the Windham Central Supervisory Union have spent time discussing the implications of the law and many have held public meetings to begin to engage their communities in these discussions.  Although ultimately each district must decide on a course of action, a well-coordinated plan can result in better results for students and maximum benefits for taxpayers.   In February, the ten school districts of the Supervisory Union came together to formally look at Act 46 and the options available.   They designated the WCSU Executive Committee to serve as an Act 46 Exploratory Committee with a charge as follows:

To consider the goals and provisions of Act 46 and to recommend to the school boards of the Windham Central Supervisory Union actions that might be taken in a coordinated way to maximize benefits for students, taxpayers, and communities.

Target date:   Mid-Late May, 2016

This report summarizes the discussions, to date, and makes recommendations to the school districts of the Windham Central Supervisory Union.  

Process

The WCSU Executive Committee approached this process very openly.   Although meetings were warned as meetings of the Executive Committee acting as the group doing Act 46 Exploration, the meetings were conducted openly and flexibly with full participation of all board participants who attended.

The committee met at the Leland and Gray library on the following dates:

February 24—Reviewed Act 46.  Brainstorming desired outcomes and proposed criteria for deciding on an approach.

March 14—Reviewed list of possible criteria.  Generated possible options for action.

March 29—Special meeting of the Leland and Gray districts to discuss options that are before them.

April 18—Reviewed criteria and possible options to be considered.   Following meeting, draft report was developed by consultant.

May 25—Reviewed and adopted report and recommendations.  Planned for next steps.

The Case for Action

The Executive Committee of the WCSU believes that it is in the best interest of the member districts to study the creation of unified districts: 

Student enrollment levels remain relatively flat, but there is some volatility in particular districts which will impact equity and quality in a number of locations. 

Some school boards have had to make difficult budget decisions and are likely to face continued pressure to reduce offerings.  

The state has created a mandate for developing somewhat larger school districts.  We have a choice of acting on our own or having a plan imposed at some point.   We are better to act on our own terms. 

Act 46 will likely result in the loss of the ADM hold harmless provision and many of the small schools grants enjoyed within the region.  Those actions would result in property tax increases.   (See Appendix A) 

Act 46 includes incentives for action prior to July 1, 2017.  It is in our interest to coordinate our responses to maximize those incentives where possible.

The Criteria for Moving Forward

In considering structural options under Act 46, it is essential to sort out the goals that are to be achieved.   To assist in this complex process, the WCSU Exploratory Committee, during its early meetings, brainstormed the criteria that should be considered in assessing available options.     Criteria brainstormed are shown below:

CRITERIA FOR ASSESSING STRUCTURAL OPTIONS UNDER ACT 46

What must any acceptable plan for structural change be able to achieve?  What should be the criteria for assessing any plan?

Global Criteria

Contributes to the overall social and economic well-being of the region.

Contributes to the attractiveness of the area for those seeking a community in which to live.

Achieves the educational and financial goals of Act 46—equity, quality, and sustainability.

Absolute Screening Criteria--

Achieves improved quality and equity by raising the bar for all.   Does not result in diminished quality or opportunity for students in any of the communities.

Guarantees that current choice options remain intact, if desired by towns.

Criteria to be weighted and applied to options

1.      Strengthens educational opportunities for all students throughout the region:

Promotes the ability to attract and retain top-rated educators.   (Professional development, pay levels, etc.)

Improves overall student outcomes, including increasing post-secondary enrollment rates.

Promotes the ability of all schools to share programs and staff and to expand student opportunities.

Provides a greater ability to effectively and efficiently meet the needs of students with special needs.

Improves quality and sustainability of all school buildings in the region, assuring ongoing maintenance.

Provides a more cohesive early childhood program—both PreK and early intervention.

Provides expanded learning opportunities and the ability to create or restore programs such as elementary school foreign language and the arts and to have exceptional technology resources for all students.

Provides a robust middle school program for all students.

Provides more expanded learning opportunities after school, during the summer, and otherwise to meet the needs of children with working families.

Provides better access to the career center and stronger collaboration with the business community.

Results in a high proportion of students being involved in extracurricular activities, sports, advanced programs (AP classes) including students who are disadvantaged.

2.     Assures ability to focus on the needs of the individual student:

Assures reasonable geographic access for all children (reasonable transportation distances).

Assures that students get individual attention, individualized programming, and don’t get lost in larger environments.

Provides for greater choice among public schools.

3.     Assures strong community connections

Maintains/expands community engagement in local schools.

Attracts a good number of strong school board members.

Maintains the culture and identify of particular schools.

4.     Provides the opportunity to function more efficiently, to put more resources into quality and equity of education and to address taxpayer concerns:

Provides for enhanced sharing of resources and for leveling out peaks and valleys in expenses. 

Results in reasonable and sustainable cost per student.

Results in reasonable and sustainable student/teacher ratios.

5.     Results in incentives for homestead taxpayers.

Weighting of Priorities

The group then weighted the criteria by each member distributing 100 points of value across the five criteria and then averaging the number of points given to each.    This exercise helped the group determine the relative value of each of these when assessing structural options.   The collective weights applied by the full group are as follows:

        Relative                                   Criterion

         Weight

          28.5       Strengthens educational opportunities for all students in the region.

          21.25     Assures ability to focus on the needs of the individual student.

          15.25     Assures strong community connections.

          24.25     Provides the opportunity to function more efficiently, to put more resources into    

             quality and equity of education, and to address taxpayer concerns.

          10.75       Results in incentives for homestead taxpayers.

The weighting process reinforced the perspectives shared during group discussions.   The boards of the Windham Central Supervisory Union are passionate about providing great educational opportunities for their students.   They are concerned about the effective use of resources and would like, if possible, to receive incentives for taxpayers, but are driven, first and foremost, by achieving quality, depth, and equity of educational opportunities.  Strong community connections remain an important consideration, as well.

Study committees which may be formed will investigate these criteria in greater depth.

Generation of Options

Act 46 provides a range of options for action.    On one end of the continuum, there is an option for quick action for a supervisory union to become a unified district.  This is not well suited to a supervisory union such as Windham Central, given its blend of operating and tuitioning districts.  On the other end of the spectrum, districts can make the case that the goals of Act 46 can be met within the current structure.   Given the challenges in the region, justifying the status quo across the entire SU does not seem like a good option.  All options have their pros and cons.  Some come with incentives, protections and supports.  Others do not.  Some prevent any further action by the state.  Others leave open the option for the State Board of Education to order a restructuring of the region effective July 1, 2019.   

The WCSU Act 46 Exploratory Committee has focused on options that will best achieve educational objectives, increase efficiency, maximize incentives for taxpayers, and allow the region to progress on its own terms and avoid an imposed state plan later on.  These options would fall under the category of the merger options provided for under Act 153 and Act 156, including structures such as a Regional Education District (RED) or various other configurations such as “side-by-side” districts that involve the unification of school districts.

If current districts receive approval from voters by July 1, 2017 for new unified districts, those types of actions carry four years of homestead tax incentives ($.08, $.06, $.04, $.02).   The newly formed districts will be able to keep their small schools grants as “merger support grants” and can keep the “ADM hold-harmless” provision.  They will also qualify for the $150,000 transition grant.   

The group brainstormed several categories of structural changes that might be considered.

Single, Union District

All current districts in the WCSU unify as a single district and agree on a common system for delivering education (requires similar patterns of operating schools or tuitioning  students). 

Side-by-Side Union Districts

a.    Four Side-by-Side Union Districts

Leland and Gray Districts create a single PreK-12 District**

Dover and Wardsboro create a single PreK-6 (with 7-12 tuition) Side-by-Side District

Marlboro joins with a neighbor from outside of the WCSU as a PreK-8 (with 9-12 tuition) Side-by-Side District  

Stratton joins with a neighbor from outside of the WCSU as a Non-Operating Side-by-Side District  

**(If one or two districts choose to remain independent, this could possibly be a MUUD)

b.    Three Side-by-Side Union Districts

Same as above, except Marlboro decides to join Dover and Wardsboro and the three towns agree on the grade levels to be operated and those to be tuitioned.

NOTE:   Any of the above side-by-side models can have fewer or more union districts depending on whether a particular town joins with a neighbor outside of the WCSU and chooses to move to the other supervisory union.  At a minimum, the Leland and Gray districts would need to create a unified union district (grades PreK-12) in order for any of the others to be considered a side-by-side.

Ten Districts

Select the Act 46 option of “self-evaluation, meetings, proposal”.    Make the case to achieve the goals of Act 46 while retaining the status quo, structurally.

Added Option:

Multiple Districts in a new Merged Supervisory Union within an area currently covered by 2-3 current supervisory unions

NOTE:    Developing such a plan could be done, but would require substantial planning with a much broader group beyond the scope of the current study.

Recommendations

After considering the criteria and reviewing the various structural options, the committee makes the following recommendations to the district boards of the WCSU.

Recommendation Number 1--     Study the advisability of creating three new districts.

It is recommended that the districts of the SU decide to join one of three study committees “to study the advisability of forming new union school districts”.   (Note:  each district can be a member of only one formal study committee at one time).

The three study committees would be focused on creating the following types of districts:

Prekindergarten – Grade 12 Unified Union District, operating in all grades. (It is expected that this will involve the districts that currently comprise Leland and Gray Union High School).

This type of district would operate all grades for all students.  

Notes:

a.     If these districts ultimately come together to create such a district, it would be a Regional Education District (RED) and would be eligible for incentives for the involved towns, and would not require a “side-by-side” partner.

b.     Creation of this PreK-12 operating district would make possible “side-by-side” designation for other new districts and would provide incentives for all districts involved in “side-by-side” activities.

c.      If only three or four of the five towns ultimately approved the new district, resulting in a Modified Unified Union School District (MUUSD), it is not entirely clear whether the new district would qualify as the PreK-12 operating district needed for others to qualify for “side-by-side” designation.   Over time, this matter needs further clarification from the Agency of Education or State Board.

d.     Creation of either a RED or a MUUSD protects involved districts from further action by the state board.  It does not protect a district that remains independent.

Prekindergarten-Grade 12 Union District that operates elementary grades and tuitions older students

This type of district would oversee all education of students, grades PreK-12, with common grades being operated (K-6) and with common tuition options being offered for grades 7-12.   It must involve at least two current districts.  Based on discussions to date, Dover and Wardsboro would likely be part of such a study.  

Notes:

a.     If the group involved in such a study has fewer than four towns and has fewer than 1250 students, it would require a “side-by-side” vote, in conjunction with the first group in order to qualify for incentives and protections from later state board action.

b.     Marlboro could consider joining, as well.   If they do, it would need to be understood that any recommendation by the committee would require that all three current districts align their delivery pattern—either operating PreK-6 or PreK-8 and having common tuitioning practices— before proposing action to the voters.

Non-Operating District 

This type of district would not operate any schools, but rather would tuition all students to other schools.  The district would have to have one set of tuitioning policies covering all students.  Stratton is the only non-operating district in the SU and would need to come together with at least one other non-operating district from another SU to consider this study. 

Notes:

a.     If the new district is comprised of four or more current districts, it could be a RED and not require a positive vote by another area in order to qualify for incentives.  If it has fewer than four districts and fewer than 1250 students, it would require a “side-by-side” vote with the first group in order to qualify for incentives.

b.     This study committee would need to decide which SU any new district may want to join.

A special note about Marlboro

Marlboro has unique challenges.  It is the only district in the SU that operates grades PreK-8. It has some logistical challenges in considering connections with districts in other supervisory unions.   Some possible choices for action include the following:

1.     As described above, join a study committee with Dover and Wardsboro to study the advisability of forming a union school district that creates a “side-by-side” with a PreK-12 operating district.    You can simultaneously seek informal involvement with a second study committee (see option 3).

2.     Connect with a PreK-8 operating district from another supervisory union and study the advisability of forming a union school district that would be a “side-by-side” with a PreK-12 operating district in Windham Central, Windham Southwest, or Windham Southeast.  You can simultaneously seek informal involvement with a second study committee (see option 3).

3.     Ask to be an informal participant in one or more of the study committees which may be created in any of the three SUs.    This would allow Marlboro to keep open its options to be included as an “advisable district” in a proposal to create a new, larger district which may qualify for “side-by-side” status.  

4.     Involvement in 1, 2, or 3 may strengthen any later case to propose an “alternative structure”.  Formal participation in a study committee may be helpful in qualifying to retain the small schools grant as Act 46 indicates that one consideration will be “the district’s participation in a merger study and submission of a merger report to the State Board pursuant to chapter 11 of this title.”            

Recommendation Number 2--  Coordinate the design, implementation, and timing of the study committees to maximize benefits for students and to maximize incentives for taxpayers.

Although decisions to join study committees are ultimately made by district school boards, it is critical that these efforts be designed, implemented, and timed to provide maximum benefit for students and taxpayers and to give them all the best chance of success with voters.

As has already been mentioned, if any new district is created with four or more current districts or has a new combined ADM of 1250 students, the new entity will be considered a RED and will stand alone for incentives.   If not, a newly merged district would be eligible for incentives only as one side of a “side-by-side”.    If the process results in a “side-by-side” proposal, it requires the following to qualify for incentives (quote from Sec. 16, Act 156 of 2012):  

1.     each new district is formed by the merger of at least two existing districts;

2.     each new district meets all criteria for RED formation other than the size criterion;

3.     one of the new districts provides education in all elementary and secondary grades by operating one or more schools and the other new district or districts pay tuition for students in one or more grades;

4.     each new district has the same effective date of merger;

5.     the new districts, when merged, are members of one supervisory union; and

6.     the new districts jointly satisfy the size criterion of Sec. 3(a)(1) of No. 153.*

Note:   The size criterion in Act 153 states “shall have an average daily membership of 1,250 or result from the merger of at least four districts, or both”.

In order to create “side-by-side” districts, all three new districts would need to be created on the same day.    This does not mean that study committees all need to begin on the same day. Some groups of districts may be ready very soon to vote to begin a study committee.

Recommendation Number 3--    Create a mechanism for ongoing coordination of Act 46-related study committees.

It will be critical for the efforts of any Act 46-related study committees to be well-coordinated.   We recommend that the Executive Committee of the WCSU be assigned to coordinate the efforts with the following considerations in mind:

To be sure that all new districts are created in a manner that respects the ongoing role of the supervisory union structure.

To assure the process and timing for creating new districts are well coordinated to provide the best possible chance to receive RED incentives, the protections relative to small school grants and the ADM hold-harmless provision, and protection from State Board action in 2019.

Next Steps

The committee has agreed that there needs to be a sense of urgency—RED incentives cease to exist if communities do not take action through a vote prior to July 1, 2017. 

Ideally, study committees will be created during the month of June, 2016, with work beginning by the end of summer.   This gives each committee adequate time to complete the work of a study committee by early January for possible votes on Town Meeting Day, 2017.   

Appendix B is a sheet outlining recommended “next steps for boards”.   Possible language for board motions is included in Appendix C.     We recommend that each board use these documents in determining its course of action relative to this collective effort.

APPENDIX A

COMPARATIVE HOMESTEAD PROPERTY TAX RATES

The chart below is drawn from an Act 46 Financial Modeling Tool developed by the District Management Council for the Vermont Superintendents Association, the Vermont School Boards Association, and the Vermont School Boards Insurance Trust.     The purpose of the information is not to show the exact tax rates in the current year (numbers shown are those before CLA adjustments are made), but only to show the relative impact on homestead tax rates if the particular local districts were to lose their small schools grants and “ADM Hold-Harmless” protection.      This chart does not model the impact of possible merged budgets nor does it reflect any savings which might be achieved through any merger.

The chart shows the 2015-2016 Homestead Tax Rate, pre-CLA, for each town in the WCSU, and then shows what that rate would have been had there been no small schools grants or ADM hold-harmless protections.

Town School District	Current Homestead Education Tax Rate Pre-CLA		Current Homestead Education Tax Rate, Pre-CLA, w/o small schools grant and ADM hold harmless	% CHANGE
Brookline	1.5536		1.5664	0.82%
Dover	1.5643		1.6087	2.84%
Jamaica	1.6129		1.6906	4.82%
Marlboro	1.6811		1.7674	5.13%
Newfane	1.5977		1.6093	0.73%
Stratton	1.5363		1.5363	0.00%
Townshend	1.7373		1.8354	5.65%
Wardsboro	1.5420		1.6124	4.57%
Windham	1.6488		1.9411	17.73%

APPENDIX B

RECOMMENDED NEXT STEPS FOR SCHOOL BOARDS

It is recommended that all boards engage in this discussion as soon as possible to decide whether to become part of a committee.   Specific language for board motions can be found in Appendix C. 

As soon as a board makes a decision to move in the direction of creating a particular study committee, notify the Superintendent.    When two or more boards have responded that they are prepared to move forward, the Superintendent will poll other boards, not yet committed to a direction, to determine their interest and their timetable.    The Superintendent will then meet with the involved boards to design the structure of a committee that meets statutory requirements for membership based on number of equalized pupils.   The involved districts will also decide on a budget needed to support their work.    Each board will need to vote on a motion to create the committee with representation and budget as recommended and will need to appoint members to the committee. The law requires that at least one school director from each participating district be on the committee.   The district may appoint residents who are not school directors to the committee.  

As soon as a study committee is created, the Superintendent will apply for a support grant.   At its first meeting, “the members of the study committee shall elect a chair who shall notify the Secretary of Education of the appointment”.

Note:    The goal is for all districts within the Windham Central Supervisory Union to move forward in a coordinated way to provide maximum benefit for students and for taxpayers.  It is understood that some boards are prepared to move forward more quickly than others.  It may make sense for some study committees to begin before others.    Ultimately, each district board needs to make its decision, but needs to be aware of the limited timeframe for this entire endeavor.    It is strongly recommended that all study committees be operational as soon as possible, but no later than the end of July, 2016.

APPENDIX C

PROPOSED LANGUAGE FOR MOTIONS

Study Committee to consider a unified district operating all grades PreK-12.

I move that we join together with the other school districts which currently operate the Leland and Gray Union High School to study the advisability of forming a union school district that will operate schools serving grades PreK-12.     We authorize our board chair to work with other involved boards and the Superintendent to determine the make-up of the study committee and a budget to support the work in accordance with provisions of law and to seek a financial grant from the Agency of Education to support the work of the committee.   This motion does not authorize the expenditure of more than the amount of the AOE grant.  The board will provide final approval to proceed with the committee when all districts are identified and when it appoints members to the committee.

Study Committee to consider a unified district operating specific grades and tuitioning others.

I move that we join together with other school districts within the Windham Central Supervisory Union to study the advisability of forming a union school district that will operate schools in elementary grades and tuition students in the high school years.    We understand that to create a unified district, all involved districts will need to agree on grades to be operated and grade levels to be tuitioned.  We authorize our board chair to work with other involved boards and the Superintendent to determine the make-up of the study committee and a budget to support the work in accordance with provisions of law and to seek a financial grant from the Agency of Education to support the work of the committee.  This motion does not authorize the expenditure of more than the amount of the AOE grant.  The board will provide final approval to proceed with the committee when all districts are identified and when it appoints members to the committee.

Study Committee to consider a unified district that tuitions all students.

I move that we join together with other school districts which tuition all of their students to study the advisability of forming a union school district.    We authorize our board chair to work with other involved boards and the Superintendent to determine the make-up of the study committee and a budget to support the work in accordance with provisions of law and to seek a financial grant from the Agency of Education to support the work of the committee.  This motion does not authorize the expenditure of more than the amount of the AOE grant.  The board will provide final approval to proceed with the committee when all districts are identified and when it appoints members to the committee.

*Notes:   This is general information.   Language should be adapted to specific circumstances.  If you know the other districts that will participate before taking the initial vote, feel free to specify them.   This is not to be considered legal advice.