/

In Analysis: The Western Mountains Regional School Unit’s cost sharing plan

7 mins read

STRONG – The Western Mountains Regional Planning Committee narrowly approved a plan on Sept. 4 to help reduce the impact of a cost shift, which was discovered by the state Department of Education roughly a month ago.

Before that meeting, if MSAD 9, MSAD 58, Coplin and Highland Plantation were to merge, MSAD 9 could be responsible for hundreds of thousands of dollars of additional funding in the first year. The cost sharing plan seeks to mitigate that impact, by phasing the shift in over time.

The chart below illustrates the nature of the shift, by displaying the funding each community currently is expected to provide, and how much they would have to provide if all 16 communities were consolidated. As shown here, the MSAD 58 towns, as well as Highland Plantation, would be responsible for $1,217,013 less than they are now. MSAD 9 communities, as well as Coplin Plantation, would see substantial increases in their local shares.

Community Local share for 2008-2009 Local share for 2008-2009 if consolidated Change in local share, if consolidated
Coplin
$146,381
$174, 580
$28,199
Highland
$121,734
$71,086
$(50,648)
Chesterville
$574,192
$638,791
$64,599
Farmington
$3,495,139
$3,887,648
$392,509
Industry
$612,922
$681,797
$68,875
New Sharon
$609,319
$677,786
$68,467
New Vineyard
$463,407
$515,557
$52,150
Temple
$287,771
$320,118
$32,347
Vienna
$438,637
$487,805
$49,167
Weld
$537,873
$589,835
$51,962
Wilton
$1,873,441
$2,084,058
$210,617
Avon
$350,817
$265,782
$(85,035)
Eustis
$1,317,241
$997,825
$(319,416)
Kingfield
$954,222
$723,020
$(231,202)
Phillips
$686,991
$520,459
$(166,532)
Strong
$633,300
$479,738
$(153,563)

This cost shift is partially caused by MSAD 58 currently spending far more than what is required by the state’s Essential Programs and Services formula. This extra expenditure is chiefly because of geographical reasons; MSAD 58’s large size requires more money for transportation, more schools, more specialists to staff those schools and so forth. EPS, critics say, doesn’t address the needs of large districts adequately, forcing those districts to spend money in excess of what is required.

However merging the communities of MSAD 58, which mostly have lower valuations, with comparably high valuation towns in MSAD 9 such as Wilton and Farmington, shifts this cost south. To try and reduce the impact of single communities absorbing nearly $400,000 in additional expenditures, such as Farmington, the RPC’s finance subcommittee proposed a more gradual phasing in process.

To illustrate this, the below chart shows what percentage of the local share the member towns would be expected to pay with an unmodified cost sharing plan. The subcommittee then recommended that those percentages be altered, as shown in the second column in order to reduce the impact for the first year.

Community Town’s percentage of the total local share in 2008-2009, if consolidated Town’s modified percentage of the total local share in 2008-2009, if consolidated Change in local share, if consolidated (from the first chart)
Change in local share, if consolidated, utilizing the modified cost sharing plan
Coplin
1.53%
1.31%
$28,199
$17,882
Highland
0.53%
1.62%
$(50,648)
$0
Chesterville
4.77%
3.38%
$64,599
$0
Farmington
29.02%
20.56%
$392,509
$0
Industry
5.09%
3.60%
$68,875
$0
New Sharon
5.06%
3.58%
$68,467
$0
New Vineyard
3.85%
2.73%
$52,150
$0
Temple
2.39%
1.69%
$32,347
$0
Vienna
3.64%
2.58%
$49,167
$0
Weld
4.40%
3.16%
$51,962
$(5,384)
Wilton
15.56%
11.02%
$210,617
$0
Avon
2.15%
3.98%
$(85,035)
$0
Eustis
8.07%
14.96%
$(319,416)
$0
Kingfield
5.85%
10.84%
$(231,202)
$0
Phillips
4.21%
7.80%
$(166,532)
$0
Strong
3.88%
7.19%
$(153,563)
$0

As shown in the final column, the modified percentages make most of the towns pay the same local share they would have paid had the school districts not consolidated. This would apply for only the first year of the new district, namely the 2009-2010 fiscal year.

In the second year of operation, 2010-2011, the cost sharing plan reduces its effect by 20 percent. This is calculated by giving an 80 percent weight to the modified percentage (in the second column) and a 20 percent weight to the actual 2010-2011 percentage (which, given absolutely no changes in enrollment, state funding, expenditures and valuation would theoretically be the first column). Strong, for instance, would be responsible for 6.53 percent of the total local share, down from the 7.19 percent the year before.

Then, in 2011-2012, the modified percentage is given an 60 percent weight and the actual local share for that year is given a 40 percent weight. This process continues from year to year, until 2014-2015, when the modified percentages are not used at all. Theoretically, should every other aspect of the district remain the same for six years, Strong would be putting forward 3.88 percent of the local share, paying $153,563 less than it is now in MSAD 58.

Of course, as RPC members and administrators pointed out at the meeting on Sept. 4, the idea that the district remains financially static from year to year, let alone over six years, is impossible. Enrollment numbers continue to decline, valuation rises, district expenses, such as fuel, differ dramatically from year to year, and the DOE constantly reevaluates and alters its EPS formula.

Supporters of the cost-sharing plan believe that those five years of mitigating the cost shift will allow the new 25-member school board time to find ways to reduce the budget through sharing personnel, merging positions and so forth. No one at the local level believes that significant cost savings will be created in the near future however.

Those who do not support the plan worry that the only way larger towns like Farmington and Wilton, who would bear the majority of the cost shift and also would have a large percentage of the new school board’s weighted votes, could prevent the shift would be to remove positions and close facilities. This is not allowable within the first year of consolidation by law.

In the end, the vote at the RPC meeting which passed with 13 in favor, 9 in opposition, and 2 abstentions, fell mostly along the lines of those who supported the consolidation of MSAD 9 and MSAD 58 and those who didn’t. The massive cost shift, if it were to occur in a single year, could doom the plan in MSAD 9. If either school district rejects the consolidation plan at the polls, the plan itself instructs that it is at that point null and void.

According to representatives of DOE if a district is not part of either a Regional School Unit or the school union-esque  Alternative Organizational Structure by Jan. 30, 2009, will be subject to penalties, even if they had previously rejected a consolidation plan at the polls. Those penalties would affect the state subsidies and would roughly equal $400,000 for MSAD 9 and $100,000 for MSAD 58.

Print Friendly, PDF & Email