Anyone wishing to provide written testimony to the DESE representatives prior to the needs conference can send that testimony electronically to email@example.com or firstname.lastname@example.org or drop off hard copies at the central office.
DESE (Department of Elementary and Secondary Education) NEEDS CONFERENCE
(Based upon Chapter 97 of the Acts of 2014)
Wednesday, December 3, 2014
Introduction: On January 13, 2010, the Gateway Regional School Committee voted 13 to 3 in favor of consolidating the district’s elementary schools. The vote followed a 9-month process, which included public hearings in each Gateway town and the formation of an Elementary Advisory Committee (EAC)--comprised of two parents/community members from each of the seven Gateway hilltowns--tasked with studying issues around consolidation. In the 2009-10 school year, Gateway had five elementary schools serving a combined total of fewer than 500 students; four of the five schools had less than 100 students; two of those served fewer than 60 students. Elementary education was strained by efforts to hold costs down, resulting in multi-grade classrooms at every school and itinerant staff (therapists, music, art, and PE teachers, counselors and administrators) traveling between schools in this 205 square mile region. Parent and staff surveys were conducted and the EAC presented a SWOT (strengths, weaknesses, opportunities and threats) analysis to the school committee in November 2009. The January vote resulted in the closing of Blandford Elementary School, Russell Elementary School, and the R. H. Conwell Elementary School in Worthington. Students were reassigned to the two remaining elementary schools: Littleville Elementary School in Huntington and Chester Elementary School.
The following information is provided to the DESE as part of its ‘needs conference’ under the assumption that Worthington will be allowed to withdraw from the Gateway Regional School District, despite having failed to pass an amendment to the regional agreement that would have allowed Worthington to withdraw (the vote was 6 towns against, 1 town in favor). With the school committee voting to join the lawsuits against Worthington as a plaintiff with the intent of determining through the courts that this legislation is unconstitutional, we offer this information despite our belief that this legislation was not legal and will be overturned through litigation.
- Introductions of DESE Personnel
Christine Lynch, Governance & Facilities Program Manager
Jay Sullivan, Executive Director, School Finance & District Support Center
- Overview and Comments by DESE
- Solicitation of information on the impact of the withdrawal of the Town of Worthington from the Gateway Regional School District on the District and its remaining member towns:
- Current & future enrollment in the district
As you can see from the following enrollment charts, the district continues to lose children with the K-12 population of district students being reduced by 65 students from the 2013/14 school year to the 2014/15 school year. As indicated in the educational plan submitted to the DESE, Worthington students leaving the district would exacerbate this loss of students with a potential reduction of an additional 41 students for FY’17. Just the discussion of Worthington leaving the district has caused the number of choice students from Worthington to increase from 36 in FY’14 to 57 this FY (many of whom were not accounted for previously, most likely due to the fact that they were enrolled in private school).
This loss of students from Worthington is distributed over the Pre-K through 12th grade with the largest grade-level loss of only 5 students. This is not a significant enough number of students to allow reduction in staffing at any grade level in the district, does not impact the curriculum revision, fixed costs of running the buildings, or any other items that must be accomplished whether Worthington and their 41 students are in the district or not.
While Gateway’s loss of students is not an anomaly for Western Massachusetts, the fact is that the state faces an increase in residents over the age of 65 (see following chart). In Gateway’s towns, the largest increase in children is occurring in our Mennonite population who do not attend public schools (they are ‘homeschooled’).
- Inventory of all educational facilities under the jurisdiction of the remaining communities in the district (the facilities of the Gateway Regional School District)
The DESE has all of the plans for the facilities in the district. In summary, the district has two elementary schools and a main complex that houses grades 5 through 12. Even with this small number of buildings, the district has the requisite space to house the highest student population we’ve had in the past decade and, in fact, could currently house all of our students on the main complex.
Chester Elementary School - Grades PK-4 - Located in Chester
Littleville Elementary School - Grades PK-4 - Located in Huntington
Gateway Regional Main Complex - Grades 5-12 - Located in Huntington
- Plans for the reimbursement of the Commonwealth’s capital facilities located in the Town of Worthington
We anticipate that the R.H. Conwell school would be opened as a public school which should cause the MSBA to reduce Gateway’s payments to the state for the state’s portion of funding that school’s renovation. Assuming that the MSBA does not change their current protocol related to the opening of closed schools, this reduction will not happen until FY’17 (one year after reopening as a public school). Until the MSBA eliminates the repayment amount for R.H.Conwell Elementary School, Worthington should be paying their share of this cost based upon enrollment percentages at the time of withdrawal.
- The requirements for continued assessments to the Town of Worthington for district facilities previously paid for by the Town of Worthington
We anticipate that Worthington will continue to pay their share of the remaining capital debt and MSBA repayments at the percentage of students they have in the district upon their withdrawal (as of the Oct. 1, Census, this would amount to 9.484% of the total).
- The administrative structure of the new district
As per the educational plan submitted to, and approved by, the DESE, the administrative structure of the district would remain as it is with the two elementary and the middle school (grades 5-6) sharing a principal and assistant principal, and the junior high school (grades 7-8) and high school sharing a principal and assistant principal. District staff would remain as well, including the superintendent, business manager, director of pupil services, director of academics, and a grantwriter/PIO.
- The long-term fiscal impacts of the withdrawal of the Town of Worthington, including detailed analyses of;
Based upon Worthington leaving the district, and not providing any transportation if the district allows choice students from Worthington, the district would be able to cut Bus #119 (71 passenger) and Bus #126 (22 passenger). The elimination of these runs could result in the savings outlined in the Worthington withdrawal cost estimates of $85,298. We do not see any other major changes resulting in bussing operations from the withdrawal.
- Special Education
We anticipate a reduction of $20,000 in special education contracted services. Additionally, we expect reduced costs in out-of-district special education transportation of $36,886 and special education in-district transportation of $23,125.
- Vocational Education
Vocational education costs, including transportation, are not a function of the district or the district budget, we see no major changes in vocational education based simply upon the withdrawal of Worthington, as long as the education at Gateway remains nearly identical after the withdrawal.
- Personnel Costs
Because the withdrawal only minimally impacts the number of students at each grade level and does not eliminate any state or federal mandates, we see no significant changes in personnel costs. However, if the towns refuse to pass a budget, and the state forces the district to cut hundreds of thousands of dollars so that there is a minimal impact on town assessments because of no or limited mitigation of the loss of revenue, the district would see significant cuts in staffing leading to a decrease in overall personnel costs with a resulting increase in class sizes, potential multi-age classes throughout the district, increased costs in unemployment, a reduction in student activities (both athletic and extra-curricular), and a decrease in course offerings at the 7-12 grades.
As an indication of what reductions could look like, take a look at the potential reductions developed for the FY’10 budget in the following chart and the percentages of those reductions in the second chart.
Potential Reductions from FY’10 Budget Process
FY’10 Potential Reductions as percent of staffing across employee groups
- Fiscal recommendations to hold harmless the remaining communities
Due to State Aid to Education not being adequate to meet the needs of schools across the Commonwealth, the lack of consistent and adequate funding for the promised 100% reimbursement of regional transportation costs, and the number of unfunded mandates initiated by the state since the education reform act of 1993, the Gateway District has made substantial reductions in their budget. These reductions have had a negative impact on course offerings throughout the district, but are especially telling at the high school level; have resulted in the implementation, and significant increases, in user fees and parking fees for students; and have caused the workload of administrators to increase (discipline laws, reporting requirements, bullying investigations, etc.) while at the same time resulting in a decrease in the total number of administrators. In fact, these are some of the factors that led to the decision to close three elementary schools, including the R. H. Conwell school in Worthington--which brings us to this day. A further decrease in state aid or a failure to provide a means to avoid additional increases in town assessments due to the loss of revenue from Worthington, will result in the further eroding of educational services to the students in the district.
Because of the significant impact on tax rates (see chart) throughout the remaining six communities (ranging from $0.45 to $1.36) most of our towns would be required to have a Proposition 2 ½ override in order to maintain town services, something that is historically difficult to do in our communities. To alleviate that situation, most, if not all, of the financial loss would need to be made up from the state. This could include:
(1) Holding Gateway harmless for Chapter 70 with the argument that the state has held the district harmless in prior years when we’ve lost even more students than through the withdrawal, with a potential of making up $147,000 under the DESE’s latest projections;
(2) The state could, without any extra expenditures, forgive the MSBA repayment--a yearly savings to the district of $327,655 for FY’16 and beyond. These two items could be authorized as a permanent change in funding.
(3) This would leave $155,351 in mitigation costs from the original cost estimate approved by the DESE which could be provided in a decreasing amount over a five year period (decreasing by 20% per year) allowing the towns to increase their assessments over this time without necessarily exceeding their annual levy limit.
In addition, the district looked at a number of potential ways to maintain services for students while saving money. These could also be factors that the state may wish to consider in providing support that would help mitigate the financial impact on the remaining towns while allowing the district to improve/expand educational services to our students. These items are:
(4) Allow the district, if needed and based upon continuing declines in student population, to repurpose buildings without incurring MSBA repayments.
(5) Provide legislation that would allow Gateway, or any other school district in the Commonwealth, to move to a longer school day with fewer days in school (Gateway proposed a 150 day schedule in 2009).
To truly hold the district’s remaining six towns ‘harmless’ in terms of financial obligations both today and in the future, the issue of Other Post Employment Benefits (OPEB) for insurance costs of retirees (currently $14 million) and the ongoing payment of unfunded retirement costs through the Hampshire County Retirement System has to be resolved in the District’s favor. Worthington, a member of the district since 1959, has logically and legally incurred costs, based on the percentage of students they had in the district for each year these obligations have occurred, for the staff that were employed by the district and serving the seven member towns and their students. Currently, Hampshire County Retirement has a payment plan for unfunded retirement costs that extends through 2035 and which we would expect Worthington to continue to pay for based upon their percentage of students upon withdrawal. The unfunded costs of retiree insurance for the towns would be determined using an actuarial study (estimated cost of $20,000) and we would expect that, as part of the withdrawal process, Worthington would agree to pay their share of these costs at the time that the remaining towns begin funding their own obligations, including the suggestion by a town finance member that the district borrow money to create a trust fund for covering this unfunded liability.
These fiscal recommendations are based upon the assumption that, as part of the withdrawal agreement, the Town of Worthington agrees to pay, on an ongoing annual basis, the costs of the bond repayment and the MSBA payment. It also assumes that the Town of Worthington, on an ongoing annual basis, will pay its share of the Hampshire County Retirement accrued until the date of the withdrawal and tentatively scheduled for completion in 2035. These figures are also based upon Worthington’s agreement to fund their share of the OPEB costs accrued to the time of the town’s withdrawal (currently a total of $14 million) when and if the remaining towns establish a trust and begin paying into the trust to cover this obligation.
Failure to ‘hold harmless’ the remaining six towns for both the incurred liabilities and the loss of operational funding would adversely impact the school committee’s ongoing efforts to improve student educational outcomes, particularly in the areas of the “whole child” aspects including 21st Century Skills, the performing and visual arts, physical education, extracurricular and athletic opportunities. Current and future Gateway students should not be punished educationally because one town wishes to overlook reasonable operating and educational decisions made as a district which resulted in three elementary schools being closed.
The following chart provides information related to the ability of towns to pay due to the financial impact of Worthington leaving the district.
Tax impact on towns due to the loss of Worthington revenue.
- Closing Comments
As indicated on the following charts, the district has been very prudent in managing costs, in reducing the impact of the district’s budget on the towns, and in respecting the financial indicators of our member towns. Despite this, the impact of such a large decrease in revenue to the district due to Worthington’s withdrawal is difficult to comprehend and brings back memories of the $1.8 million loss in state aid in FY’04 that the district is still recovering from. Gateway shouldn’t have to face another devastating loss because of a single town electing to override the regional agreement through potentially unconstitutional special legislation which negated the opposing vote of six member towns. The following information provides some interesting facets related to our towns’ financial situation in relation to the district’s financial position.
Note that despite the Gateway budget decreasing as a % of the town budget, the towns have had to increase spending to maintain town services, and in some cases, start capital projects that have been put off for years.
While the district has used E&D to offset the budget, we have been unable to maintain a 5% E&D and moving forward will be able to use even less to offset assessments. Without significant mitigation efforts by the state to offset Worthington’s withdrawal, town reserves will erode quite rapidly despite being a good percentage of the town budgets and growing over time.
This chart clearly shows that the housing values, tax rates, and tax bills in the Gateway Regional School District cannot be directly correlated to the district assessments and that the Gateway budget decreased to alleviate pressure on town assessments while absorbing decreases in total state aid for education/transportation.
We can also see that town revenues generally exceed expectations when completing their recap sheets for DOR.
In 2009, the district looked at ways to minimize costs - unfortunately these were not allowed or approved.
This forecast essentially was correct - we have kept, or lowered, the average cost of education for GRSD over the past years leading to a significant decrease in budgets for the schools. If we’re forced to continue this, and the cuts are exacerbated by Worthington’s withdrawal because of a lack of mitigation by the state, then the district will be forced to severely curtail student services or dramatically increase local assessments.
This chart shows the problem with increasing education assessments to member towns due not to improving education, but maintaining services based upon the desire of one town.