The boards of two El Dorado County school districts, Mother Lode Union School District and Placerville Union School District, came together at a special Wednesday night board meeting to explore the idea of consolidation.
The idea of consolidating two or more small school districts into one, larger district has been on the El Dorado County Office of Education radar for the past two years. As districts and schools deal with increasing cuts to their budgets, every cost savings method is being examined.
In 2010, EDCOE commissioned a study from Schools Services of California, Inc (SSC). to do a revenue analysis of consolidation for different combinations of school districts in the county . EDCOE Superintendent Vicki Barber and Deputy Superintendent Terena Mendonca presented the information to school superintendents and board members throughout the county. Interested districts could pursue further exploration.
In response to interest from Mother Lode and Placerville, a second study, specific to consolidation of Mother Lode and Placerville, was completed by SSC and presented to both boards on Sept. 26. All board members of each school district were present, with one attending by phone from Arizona, and there were about 20 people in the audience.
Robert Miyashiro, Mike Ricketts and Lewis Wiley of SSC began the analysis by answering the question of whether the two school districts were good candidates for consolidation.
“No two school districts are identical, but these two are like twins,” said Ricketts. “They have a common community interest, almost identical enrollment with very similar demographics, both are high academically performing and exceeding the state’s academic performance index target and both are financially sound and well-managed.”
Another consideration for consolidation is whether the districts’ reorganization would meet the state’s nine criteria for reorganization: adequacy of size; substantial community identity; equitable division of property and facilities; does not promote racial/ethnic discrimination or segregation; no substantial increase in state’s cost; no disruption of educational programs; no significant increase in housing cost; not designed to result in significant increase in property values and not cause a substantial negative impact on the fiscal management/fiscal status of the districts.
“According to our analysis,” said Ricketts, “the reorganization would meet all nine criteria and these two districts would be good candidates for consolidation.”
The cost savings was next analyzed and the blended revenue limit was calculated and adjusted based on the average salary and benefits of classified and certificated employees, weighted by the average daily attendance. “There would be a newly generated revenue of approximately $425,000 — a revenue gain of 3.6 percent,” said Wilkes. “But there is a difference in the salary schedules and in the way the districts look at compensation.”
Mother Lode employees have lower salaries, but higher levels of benefits. Placerville has high salaries but lower benefits. To bring the two districts into alignment with Placerville’s salary and Mother Lode’s benefits would cost about $1.2 million — negating the $425,000 cost savings of reorganization. “Then we looked at total compensation, instead of salary and benefits separately,” said Wilkes, “and found that it would cost about $500,000 to align the total compensation package.”
The two biggest areas of cost savings through consolidation are in pupil services, which includes transportation, and general administration. “There are obvious potential savings with one superintendent, one board and reduction of duplicate administrative support positions,” said Ricketts. “Revised bus routes to reduce duplication, coordinated bell schedules and consolidation of fleet maintenance, would result in cost savings, we believe.”
Other areas were analyzed, but no significant cost savings was anticipated.
A possible wrinkle in consolidation of the two districts is debt service. Placerville has $5.1 million in outstanding General Obligation bonds, while Mother Lode has no General Obligation bonds. “This is a gray area of confusion,” said Miyashiro. “The Attorney General’s opinion is that if two districts consolidate, they share the debt burden equally. Placerville residents pay $27 to $29 per $100,000 assessed value now, while Mother Lode residents pay nothing. According to the Attorney General, and it’s only an opinion, residents in both districts would pay $12.41 after consolidation.”
The most asked question by board members and the audience was what were the startup costs to merge two districts. “We don’t have a handle on that,” said Miyashiro. “We are involved in the front end, but we haven’t been engaged in shepherding districts through the process.”
“It’s critical to know what the one-time expenses would be for rebranding the district, legal costs…” said John Parker, president of the Mother Lode Union School District Board.
Another question was how long the process might take. “The quickest it would happen would be about two years,” said Miyashiro.
“How do I tell teachers they are losing salary and benefits?” asked Daniel O’Connor, president of the Placerville Union School District Teachers’ Association.
“Consolidation shouldn’t take anything away from anyone because it brings more money into the district. How the salary schedules are shaped by the new district is what matters, ” said Miyashiro.
“When we did our analysis, every employee had at least what they had before consolidation or better,” said Ricketts.
Janet VanderLinden, Mother Lode board member said, “It’s an interesting idea and worth looking at. We need to know more about the initial costs of putting it together and whether it would be worth the expense.”
Placerville Union School Board President Sean Martin said, “The numbers go back and forth and the study uses data that is two years old. Is this beneficial for students? We haven’t discussed this with the teachers yet and we don’t know what is going to happen with Proposition 30.”
The two boards agreed to meet in October after regularly scheduled school board meetings to discuss questions each has, gauge the level of interest in consolidation and the direction they want to go.
“This is a step in progress,” said Martin. “It’s important for our kids that we look at every possible way to put money back into the classroom. It’s a little scary, because each district has their own community. We need all the facts and we need to make sure it’s best for the kids.”
Contact Wendy Schultz at 530 344-5069 or email@example.com. Follow @wschultzMtDemo on Twitter.