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Newbury – Berkshire Public Meeting March 18, 2014 Newbury Auditorium Berkshire - Newbury Consolidation Overview • Talks began in Feb. 2013 at Geauga ESC • Resulted in discussions between Newbury and Berkshire • Both districts have experienced decline in enrollment of approximately 3% per year over the past decade • Census figures show continuing decline in school age population over next decade Newbury - Berkshire Consolidation Overview • Both districts are currently in operating deficit: • Newbury will have negative fund balance in fiscal year 2015* • Berkshire will have negative fund balance in fiscal year 2017* * According to 5-year forecasts • April 2013: Berkshire & Newbury Boards retain legal counsel for consolidation advice • December 2013: Both Boards pass resolutions asking State Board of Education to consider consolidation • January 2014: Superintendents, Treasurers and both Board Presidents attend meeting in Columbus with State Board of Education • February 2014: Public meeting of both districts and representatives of State Board of Education Capacity Committee at KSU Geauga Campus Facts & Figures (The Nitty Gritty Details) Census Data of Combined Berkshire-Newbury School Districts The school-age population has decreased by 13.01% from 2000 to 2010. Consolidated Historical & Projected Enrollment Head Count Enrollment 2,500 2,000 1,500 1,000 500 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Berkshire-Newbury 2,13 2,16 2,15 2,09 2,05 2,01 1,86 1,77 1,73 1,68 1,54 1,52 1,43 1,37 1,29 1,24 1,19 Annual Percentage Change in Expenditure (EFM) Enrollment for District 2.00% 0.00% -2.00% -4.00% 1.27% -0.14% -1.63% -3.01% -2.24% -2.25% -4.56% -1.55% -3.22% -5.46% -6.00% -8.00% -10.00% -7.36% -8.20% -4.73% -3.57% -5.84% -4.02% -3.53% Where Do We Go From Here? Timeline: • End of March 2014: Both School Boards submit joint resolution containing financial report and analysis to State Board of Education committee. This report will be publicly released at that time. • BOE Committee votes on April 14, 2014 • Full State Board votes in May, 2014 • No later than Aug. 6, 2014: State Board of Education certifies proposal to County Board of Elections to be placed on ballot for November election Timeline (continued): • If majority of electors approve consolidation, the new district will be created prior to July 1, 2015 • The State Board will appoint five electors as initial members of the Board of Education • Students will attend new district in Fall of 2015 • New Board of Education members will be elected in November, 2015 What are the advantages of consolidation? • Cost Savings Projected to be >$2MM during first two years of operation • One Superintendent • One Treasurer • Administrative and Support Staff • Maintain optimal class size of 22-25 students • Improve long-term financial stability with addition of Newbury’s property values and earned income revenues • Extracurricular Activities, such as Band, Music, Drama, Academic Fields of Study • Athletics: Ability to field competitive JV and Varsity teams • MOST IMPORTANT: Not only maintaining EXCELLENT RATING of both districts, but enhancing and expanding educational opportunities for our students Frequently Asked Questions • Do we get to vote on consolidation? YES: If State Board approves, issue will be placed on Nov 4, 2014 ballot. • Who will be on the new Board of Education? The State Board will appoint initial members of the new Board. New Board members will be elected in the November 2015 election. NOTE: We are requesting the State Board appoint the new Board from members of the current Boards of Education. The tax structure will be part of what both Boards jointly recommend. • Who decides the new district’s tax structure? The newly appointed Board will determine the tax structure. Residents of all communities in the new district will pay the same tax rates. • What will the new tax structure be? Analysis shows the the new district would require the equivalent of about 32.4 mils to operate. It is anticipated that Berkshire’s current earned income tax of 1% would comprise part of the 32.4 mills. Since a 1% earned income tax collects approximately 7.67 mills, the property tax rate under consideration would be about 24.73 mills. Various scenarios are still being analyzed and more information will be forthcoming. • What income is taxed with an earned income tax? Only earned income and self-employed income of residents of the school district is subject to taxation. This would exclude income such as that earned from interest, dividends, capital gains, pensions, etc. • When would the new tax rates take effect? Newbury residents would be subject to the earned income tax on July 1, 2015. New property tax rates for all residents would begin on Jan 1, 2015. Payment on these taxes would begin in January 2016. • What does deficit spending mean? Although both schools currently have a surplus cash balance, expenditures have been outpacing revenues for both districts. Newbury’s cash balance will be exhausted prior to Berkshire’s. This does not mean that either district has been lax in controlling expenses; it is a reflection of the cost of educating our students despite extensive efforts to control spending. • Why would a Berkshire resident support consolidating with Newbury, knowing that Berkshire’s taxes will probably increase? Although it is anticipated that Berkshire property owners will experience an increase of approximately 3.4 mills, adding Newbury’s property values and earned incomes to the mix will actually have a mitigating effect on potentially larger future increases that Berkshire residents would face without consolidation. Although Newbury residents would experience a decrease in property tax rates, they would be subject to an earned income tax, which Newbury does not currently have. Some Newbury residents would experience a tax reduction (for example, retirees); some would see little or no change in their overall tax outlay; some could have a net increase. Population Statistics from Most Recent U.S. Census When possible statistics for the individual townships have been supplied. In some cases the US Census Department has advanced information listed by zip code. Therefore, Newbury always stands alone, Burton and Troy (44021) are listed together when * appears under Troy, and Claridon has incomplete information. All of these statistics are accessible through the U.S. Census Bureau. The most recent Census Bureau data is presented. Newbury Burton Troy Claridon Population 5537 4412 2801 3200 Median Income $80,391 $68,290 $69,623 $70,455 Median Home Value $206,600 $184,300 • Why doesn’t Newbury just merge with Berkshire? What are the advantages of consolidation vs merger? Consolidation offers the opportunity to create a totally new school district, to offer enhanced educational opportunities, thinking “outside the box,” while providing better financial stability on a longer-term basis. Merger would require going to the voters asking for a larger increase in funding in the near future. Failure to consolidate also would require going to the voters and asking for larger increase in funding. According to State Law (RC 3311.37), foundation payments would be guaranteed for 3 years at level of funding received in year the new district is created. • Will Newbury close its buildings? Where will students attend classes? Plans are being made for students in grades 712 to attend classes in the current Berkshire High School building. Newbury grades K-6 will probably remain in Newbury for the next several years. • Will there be a new building right away? We are working with the State Facilities Commission and State political leaders in seeking favorable avenues of funding for a new school structure. • What will happen to teachers? Administrators will review class offerings and optimal class sizes in order to decide the number of teachers to effectively provide instruction for our students. It is anticipated that the consolidated district will require 1215 fewer teachers than the two separate districts. RECAP • • • • Declining Student Population Financial Pressures Aging Facilities Opportunity to combine two EXCELLENT districts’ resources and provide long-term stability and enhanced educational opportunities Open to Q&A Session • This is a forum to exchange polite, respectful points of view. • Feel free to ask questions of the Boards of Education, the Superintendents and Treasurers of both school districts. • Please state your name and residency when offering brief statements or asking questions. • We’ll do our best to answer your questions, or research the issues and release our findings. Thank You For Attending! Regardless of what you ultimately decide, we want you to make an informed choice based on the facts.