Shared Services and School District Regionalization: Plans, Proposals and Potential Impact
The Uniform Shared Services and Consolidation Act, requires each Executive County Superintendent to promote "operational efficiencies and cost savings," promote "shared services" and joint purchasing arrangements, and recommend plans to the Commissioner of Education to consolidate, or "regionalize," local school districts into all-purpose regional school districts. Those regionalization plans are required by the Act to be submitted by March 2010. Plans approved by the Commissioner would be presented to the voters in each affected school district in September 2010. Plans approved by the voters of each affected district would result in creation of new school districts, and new boards of education, replacing existing districts and boards as of a date set by the Executive County Superintendent. Any plan rejected by the voters of any affected district would not be adopted. All districts, whether proposed for regionalization or not, are required to implement any and all potential "efficiencies" in their administrative operations.
This School Law Update will summarize statutory and regulatory provisions pertaining to shared services and regionalization and their potential impact on school districts, boards of education, employees, students and taxpayers.
Section 49 of the Act, N.J.S.A. 18A:7-8, states that each Executive County Superintendent shall: ...
d. Promote administrative and operational efficiencies and cost savings within the school districts in the county while ensuring that the districts provide a thorough and efficient system of education;
e. ... Recommend to the Commissioner ... that certain school districts be required to enter arrangements with one or more other school districts or education services commissions for the consolidation of the district's administrative services ...;
g. Have the authority to eliminate districts located in the county that are not operating schools ..., in accordance with a plan submitted to the Commissioner no later than [April 2008];
h. No later than [April 2010], recommend to the Commissioner a school district consolidation plan to eliminate all districts, other than county-based districts and other than preschool or kindergarten through grade 12 districts in the county, through the establishment or enlargement of regional school districts;
l. Review all school budgets ... and may ... disapprove a portion of a school district's proposed budget if he or she determines that the district has not implemented all the potential efficiencies in the administrative operations of the district or if he or she determines that the budget includes excessive non-instructional expenses. The Act also requires each Executive County Superintendent to promote coordination and regionalization of transportation services, cooperative purchasing of textbooks and other instructional materials, and shared special education services.
Chapter 23A of the New Jersey Administrative Code entitled Fiscal Accountability, Efficiency and Budgeting Procedures, adopted by the Commissioner of Education to implement the Uniform Shared Services and Consolidation Act, provides further detail;
N.J.A.C. 6A:23A-2.5(a) states:
The Executive County Superintendent ... shall study the consolidation of local public school districts within the county, other than county school districts and existing all purpose regional school districts (pre-K or K to grade 12), into one or more all purpose regional school districts. The study shall to the greatest extent practicable focus on the consolidation of existing local public school districts that receive students from school districts on a tuition basis with those sending school districts, and the consolidation of limited purpose regional school districts that receive students from constituent municipalities to create enlarged all purpose regional school districts....
N.J.A.C. 6A:23A-2.5(b) states:
Based on the study required in (a), the Executive County Superintendent shall submit a plan to the Commissioner to achieve this purpose no later than March 15, 2010. Each consolidation plan shall address the following:
- A description of the proposed all purpose regional school district or school districts, including constituent local districts, school buildings and grade levels by school district, and the area of the total proposed regional school district;
- The proposed structure of the new board of education;
- Administrative staffing, collective bargaining agreements and compensation guides of the constituent school districts, with recommendations and guidance [pertaining to staffing, administrative structure and collective bargaining] for the proposed regional district;
- Each constituent district's educational program, with recommendations and guidance for the educational program of the proposed regional school district;
Potential opportunities for greater effectiveness and efficiency, including:
- Consolidation of special education programs and services;
- Maximization of pupil transportation cost savings and other efficiencies;
- Consolidation of computer networks and administrative systems such as finance and human resource systems;
- Food service operations;
- Other areas of consolidation and economies of scale such as staff development, curriculum development, health services, guidance services, media services, extra- and co-curricular activities and operation and maintenance of plant.
- Socio-economic and demographic information (e.g., enrollment data and attendance areas);
- Advantages and disadvantages of forming an all purpose regional district for each constituent school district.
If the recommendation is to form a regional district, additional information must be included:
- A comparison of the estimated state aid and property tax impact for the proposed regional school district and the sum of state aid and property taxes for the constituent districts;
- An impact assessment of property tax apportionment among the constituent districts;
- A comprehensive financial analysis of current and projected spending, local community wealth, debt limit and current debt burden;
- A long-range facilities plan for the regional district, if new schools and/or additions are recommended that are not currently reflected in the existing plans of constituent districts.
The regulations also require each Executive County Superintendent to conduct a "transportation efficiency study," promote shared special education services by creating a database of available in-district programs and working with school districts to create new programs, and "investigate the feasibility" of two or more districts sharing special education staff.
Potential Impact of Regionalization:
Existing school districts and boards of education would be abolished, and new districts and boards would be established. In new regional districts with nine or fewer constituent districts, each constituent district would have at least one board member, with any additional members apportioned based on population. In new districts with more than nine constituent districts, the number of board members would equal the number of constituent districts plus one, with voting rights apportioned based on population.
Current employees (other than superintendents) would be employed by the new district, and their rights to tenure, seniority, accumulated sick leave, leave of absence and pension would not be affected. All periods of employment in the previous districts would count toward acquisition of tenure and seniority in the new district. Superintendents could lose jobs.
Terms and conditions of employment established through collective bargaining or past practice in the largest affected constituent district would apply until a successor agreement is negotiated with the majority representative of the new school district.
Schools and students would not be affected unless a plan calls for new facilities or consolidation of programs, services or transportation routes.
Taxpayers could be affected positively or negatively. Any plan presented to the voters must propose to apportion costs among constituent districts based on equalized valuation of property, pupil enrollment, or a combination of the two. Apportionments based on equalized valuation favor districts with low property values relative to those in other constituent districts; those based on pupil enrollment favor districts with relatively low populations. Until specific plans and configurations are proposed, it is impossible to predict the impact on taxpayers in any particular community, in the county or the state as a whole.
Potential Impact of Shared Services:
Existing school districts and boards of education would remain in place. Governance structures would be unaffected.
Current employees could have their positions eliminated or reduced as a result of consolidation of services. Tenure rights do not protect employees if their positions are abolished as a result of a reduction in force or reorganization. If positions are eliminated, the rights of teaching staff members would be determined by seniority. They and other employees may also have rights provided by their collective bargaining agreements.
Students should not be affected, since the objective of the Act is to promote efficiency and cost savings "while ensuring that the districts provide a thorough and efficient system of education." However, bus routes may be affected, special education placements may change, and students may notice staffing changes.
Taxpayers should benefit from shared services and joint purchasing arrangements, since the point is to enter into such arrangements in order to achieve cost savings. Most school districts already participate in various sharing and joint purchasing arrangements. Whether additional measures, such as consolidation of administrative services, will result in significant additional savings remains to be seen.
The attorneys in Riker Danzig's School Law Group have extensive expertise in all aspects of education governance, including regionalization, shared services and school district accountability. If you have any questions about the issues discussed in this newsletter, please contact Lance J. Kalik, Esq. or Brenda C. Liss, Esq., of our School Law Group.