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HomeMy WebLinkAboutMinutes - 20030915APPROVED 10121/03 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS WORK SESSION September 15, 2003 7:30 p.m. The Orange County Board of Commissioners met for a Work Session on Monday, September 15, 2003 at the F. Gordon Battle Courtroom, Hillsborough, North Carolina. COUNTY COMMISSIONERS PRESENT: Chair Margaret W. Brown, Moses Carey Jr., Alice M. Gordon, Stephen Halkiotis and Barry Jacobs COUNTY ATTORNEYS PRESENT: Geoffrey Gledhill and S. Sean Borhanian COUNTY STAFF PRESENT: County Manager John M. Link, Jr., Assistant County Managers Rod Visser and Clerk to the Board Donna S. Baker (All other staff members will be identified appropriately below). NOTE: ALL DOCUMENTS REFERRED TO IN THESE MINUTES ARE IN THE PERMANENT AGENDA FILE IN THE CLERK'S OFFICE. Chair Brown explained that this was a work session, and that work sessions were strictly for the County Commissioners to hear reports from the staff and to talk amongst themselves and that there would not be an opportunity for public comment at this particular meeting. 1. Change in BOCC Regular Meeting Schedule: The Board considered making two changes to their regular meeting calendar for 2003 by changing the locations of the two public hearings for the potential impacts of a passible school merger as follows: Thursday, October 16, 2003 Public hearing to be held at the Chapel Hill High School Auditorium at 7:30 p.m. Thursday, October 23, 2003 Public hearing to be held at the Cedar Ridge High School Auditorium at 7:30 p.m. A motion was made by Commissioner Gordon, seconded by Commissioner Carey to change the BOCC regular meeting schedule as stated above. VOTE: UNANIMOUS 2. An Analysis of Potential Impacts Resulting from a Possible Merger of the Orange County Schools and the Chapel HiIllCarrboro City Schools Chair Brawn said that this report would be available to anyone and it can be found at the County's website at www.co.orange.nc.us. It is also available at the library. County Manager Jahn Link made this PawerPoint presentation. He thanked the staff who worked on this report and bath superintendents for their contributions to the report. An Analysis of Potential Impacts Resulting from a Possible Merger of the Qrange County Schools and Chapel Hill-Carrboro City Schools Presentation of Staff Report September 15, 2003 BOCC Has Established Two Formal Public Hearings to Receive Public Comments ^ October 16, 2003 ^ Location: Chapel Hill High School Auditorium, 1709 High School Road, Chapel Hill ^ Time: 7:30 p.m. ^ October 23, 2003 . Location: Cedar Ridge High School Auditorium, 1125 New Grady Brown School Road, Hillsborough . Time: 7:30 p.m. Additional Ideas for Public Outreach ^ As discussions progress related to potential school merger, the BOCC could consider other mechanisms for additional public outreach . Additional formal public hearings . Panel or roundtable discussions . Facilitated focus groups . Presentations to civic or non-profit groups . Development of a Frequently Asked Questions {FAQ) document . Guest columns in local print media . Guest appearances on local radio/cable programs Decisions and Work to Date ^ January 2003 -Commissioner Moses Carey proposed that the BOCC consider whether the Orange County Schools and Chapel Hill-Carrbaro City Schools should be merged ^ March 2003 - BOCC adopted a goal for the 2003 calendar year that tasked staff to prepare an analysis of the implications of a potential merger of the two school systems . Appendix A of report contains BOCC Adopted Goat on School Merger Implications ^ April 2003 -Focus of merger evaluation narrowed after receiving input from County and school staff and boards of education Next Steps ^ September 2003 - BOCC receives staff analysis of potential impacts of school merger in Orange County ^ October 2003 - BOCC to conduct public hearings to receive public comment regarding potential school merger of the Orange County Schoals and Chapel Hill- Carrboro City Schools ^ November 2003 - BOCC work session to further discuss potential merger and consider citizen comments Analysis Is Tool For BOCC To Use in Deciding Whether or Not to Pursue Merger ^ Staff analysis focused an financial, organizational, programmatic and legal considerations of possible merger ^ Draws on statutory provisions and experience of other jurisdictions that have considered and/or implemented merger ^ Intent of analysis is to present factual information rather than opinion ^ Appendix A highlights elements that were examined Analysis Does Not Match Scope of Those Prepared by Outside Consultants ^ Report is not a formal merger plan or formal merger study ^ Examples of questions not addressed in analysis: ^ What school would my child attend in a merged system? ^ What programming {e.g. elementary foreign language instruction) would be available at individual schools? ^ Would savings be achieved by merging school systems and if so, how much? School Mergers in North Carolina ^ During the early 20t'' century, numerous NC municipalities received authority from State legislature to create special chartered school districts . These were often established to take advantage of larger tax bases that often existed in urban areas ^ Number of school systems in NC peaked in late 1950's at 174 ^ Currently, there are 117 local school administrative units in the State . One merger plan involving Cleveland County, Shelby and Kings Mountain school units was approved in 2000 by the State Board of Education but has not been implemented because of litigation First School Merger Occurred in NC in 1960 ^ MecklenburglCharlotte was the first approved administrative unit merger in the State ^ Since then, 45 mergers have been approved throughout the state . Appendix C of the report outlines the various mergers that have been approved in 11fC since 1960 Merger Discussions in Orange County ^ 1985 - BOCC empanelled School Merger Study Commission to examine potential impacts of merger . Recommendations of Study Commission . Equalize per pupil funding countywide . Fund construction of new schools based on cooperative facilities plan developed by both systems . Encourage school districts to investigate areas where economies may be affected by joint operations such as transportation, food service & maintenance . Encourage school districts to pursue areas of educational cooperation such as special services . Appendix E contains the Executive Summary of the 7986 School Merger Study Commission Report . 1986 School Merger Study Commission Report can be viewed in its entirety at the County's website (www.co.orange.nc.us) Successful Collaborations ^ Since 1988, funding for school construction and renovation projects has totaled $277 million . Includes four voter approved school capital bond referenda (1988, 1992, 1997 and 2001) BOCC approved policies, standards and funding . Capital funding policy that earmarks annual non-debt revenues available for school and County capital projects . Construction and funding standards far elementary, middle and high schools . School construction impact fees to offset cost of new school construction . Schools Adequate Public Facilities Ordinance and Memorandum of Understanding {SAPFO) to pace development with the County's fiscal ability to build new schools Joint venture in bus transportation! maintenancelfueling Funding Equity Between the Two Systems Remains a Challenge ^ In the early 1990's, after examining numerous approaches and tax rate impacts associated with achieving funding equity between the two school systems, BOCC adopted "Equitable School Funding Goal" ^ Funding equity remains a challenge for the BOCC . In accordance with State statutory formula, local current expense funding for schools is driven by the number of students in a school district . Historically, annual student growth in CHCCS has outpaced OCS . CHCCS special district tax has contributed to funding disparity Methods for School Merger in North Carolina North Carolina Statutes Provide Four Ways to Merge School Systems Merger of Units in Same County Initiated by boards of education Requires approval of board of county commissioners Merger of Units in Adjoining Counties Involves merger of county school units in one or more adjoining or contiguous counties with a city school administrative unit Requires approval of the "tax-levying body for the school units" Merger of units by local boards of education City school unit notifies State Board of Education that it is voluntarily dissolving itse If State Board required to adopt a merger plan for the administrative unit ^ County Commissioner Initiated Merger Board of County Commissioners adapts plan for consolidation and merger of local administrative units located wholly within the county into a single unit ^ Appendix F of report contains excerpts from North Carolina General Statutes explaining the types of school mergers in further detail County Commissioner Initiated Merger Preparation and approval of this type of merger consistent with a school administrative unit initiated consolidation and merger with three basic exceptions: 1. County Commissioners must provide local funding for all students at the highest level of any local school administrative unit in the county during the preceding five fiscal years before the merger 2. Boards of education "shall not participate in preparing, entering into, submitting, or agreeing to the plan" 3. "The plan shall not be contingent upon approval of the voters" In accordance with North Carolina General Statute 115C-67, after the plan of consolidation and merger is approved by the State Board of Education, the plan becomes final At that point, the plan "shall be deemed to have been made by authority of law and shall not be changed ar amended except by an act of the General Assembly." Implementation and Elements of Merger Plan Timetable ^ Individual merger plans detail their own timetable . State Board does not specify a schedule for implementation ^ For purposes of this analysis, the following hypothetical timeframe has been used: . Year 1 -Board of Commissioner decision regarding merger . Year 2 -Should the BOCC decide in favor of merger, Year 2 would be a year for transition activities to occur . Year 3 -Merger would take effect July 1 At this paint, Cocrnty Attorney Geoffrey Gledhill spoke. Merger Plan Must Include the Following Related to the New Board of Education: ^ Establishment and maintenance of a board of education which shall administer all the public schools of the newly created administrative unit ^ Termination of any terms of office proposed in the reorganization ^ Method of constituting and continuing the board of education ^ Manner of selection of members of the board of education including (I} number of board members, {ii) method of their election or appointment, {iii) whether members shall be nominated, elected or appointed from districts or at-large, (iv) manner of determining the nominee, {v) whether the election shall be partisan or non-partisan ^ Length of the board members' terms of office ^ Dates of induction into office ^ Organization of the board ^ Procedure far filling vacancies ^ Compensation to be paid members of the board for expenses incurred in performance of their duties School Board Composition and Roles Laws Authorizing Merger Offer Limited Flexibility in Creating Board of Education for New Unit ^ Election plan can allow for board of education to be elected one of three ways: . District method . At-large method . Combination of district and at-large method ^ Can be partisan or non-partisan ^ Election plan must comply with State and Federal Constitution and 1965 Voting Rights Act and be approved by the United States Department of Justice prior to State Board of Education approval Public Referendum ^ In accordance with NC General Statute 115C-68.1(c), BOCC initiated consolidation cannot be subject to a referendum ^ In the absence of authority from the General Assembly, such anon-binding referendum should not occur ^ Local act (example -Guilford County) Responsibility far Operation of Schools During Merger ^ In reviewing other jurisdictions' merger studies and plans, appears to be some variation and flexibility ^ Examples include: . Existing school boards continue to operate for some defined period . Either through the end of the current fiscal year or until the effective date of merger . Interim board may be appointed by BOCC far a period of time, perhaps one fiscal/academic year . Focus on decisions that must be made and implemented no later than the effective date of merger . Composition of board tailored to specific circumstances of individual mergers . Typical far merger plan to specify that certain number of interim board members will be appointed from existing boards and that the Board of Commissioners may decide to appoint one or more members of their choosing to the interim board Selection of Superintendent for Merged System ^ Merger plans reviewed by staff reserved selection of a superintendent for a newly merged system to the interim board of education and the newly created permanent board of education ^ No role for the Board of County Commissioners or the existing school boards State Funding of Merged System ^ Merged units continue to receive existing State allotments of funds for two fiscal years following the effective date of merger for the following functions: . Central office administration . Vocational education . Special needs . Limited English proficiency (LEP) ^ Far example, although there would be only one superintendent position in a newly merged unit, State funding would continue for two years for any other superintendent positions that may have existed in the other school systems prior to merger Role of State Board of Education in Commissioner Initiated Merger ^ State Board's critical role is to review and approve the merger plan ^ Process far approval ^ Board of Commissioners adopts a merger plan and transmits it to the State Board for consideration at its next meeting ^ Typically, merger plan reviewed and approved within two meetings of the State Board ^ Approval of merger plan has effect of law At this time, OCS Superintendent Dr. Shirley Garraway spoke. Programmatic Considerations Superintendent Garraway said that she met with Superintendent Pedersen and they realized that they first needed to establish a common understanding of what areas to address. They initially met with instructional staff to assist them in the template to report information in a consistent manner. After the initial meeting, one staff person assumed responsibility far developing the template that was shared with the two districts. They then developed a working timetable. The district counterparts then met to review the information. Superintendent Pedersen spoke at this time, Superintendent Pedersen said that the report primarily addresses differences in the school systems' operations. Comparison of Major Program Areas ^ Personnel OCS has mare favorable class size far elementary and middle schools and larger high school classes. CHCCS has more specialists. ^ Elementary Programs Differences were in the world language, science specialists in CHCCS, and more literacy collaborative specialists ^ Secondary Programs There were many differences in the graduation requirements. ^ Core Courses -High School There were many similarities in the advanced placement area. CHCCS offers Japanese and German. OCS offers more honors courses in Social Studies and Science and CHCCS offers mare AP studies in Social Studies in particular. ^ Career and Technical Education Wider array of offerings in OCS. ^ Core Courses -Middle School Differences in languages -German and Latin available in CHCCS. ^ Arts Courses -High School ^ Arts Courses -Middle School CHCCS offers more specific courses. OCS offerings are year long and more general. ^ Athletics Some sports only offered in CHCCS -field hockey, golf, and lacrosse ^ Exceptional Children Mare extensive program in CHCCS. ^ Supplements and Benefits Supplement system in CHCCS is more favorable. ^ Clubs and Activities More extensive list in CHCCS. Assistant Gounty Manager Rod Visser spoke at this time. Financial Considerations Context Of Financial Analysis ^ Most school funding {current expense, capital, State allotments) is now provided on a per pupil basis ^ Analysis focused on the funding difference between systems related to CHCCS district tax ^ Post-merger funding must be at highest five year historical per pupil upon effective date of merger Analysis based on reasonable assumptions, but other scenarios are possible Focus on "scope and scale" of potential financial impacts, not precise figures Tax Rate Impact Of Hypothetical School Merger ^ Major assumptions . Effective date of July 1, 2005 . Produce same $1,167 per pupil as CHCCS district tax does in 2003-04 ^ Uses certified student membership estimates derived from SAPFO forecasting models . CHCCS district tax proceeds replaced far 2005-06 with countywide funding proceeds; district tax rate at zero ^ Estimated Countywide tax rate increase of 17 cents per $100 assessed valuation Capital Investment Plan and SAPFO Implications ^ Schools Adequate Public Facilities Ordinance Memo of Understanding would need to be reworked among new parties to agreement ^ School Impact Fee Technical Report update needed to reflect student generation rates in a merged system ^ Combined available building capacity could allow unused space to be filled through student reassignment ^ With addition of new capacity already "in the works", further new school opening timelines could be delayed beyond current 10 year CIP cycle Other Potential Financial Implications ^ Affect on percentage of General Fund budget earmarked for education ^ Future disposition of CHCCS district tax unresolved ^ Not automatically abolished by merger plan ^ Could be discontinued as result of referendum, or by General Assembly legislative action ^ Could remain on the books but unlevied Other Approaches To Equalizing Funding ^ Countywide Supplemental Tax ^ Increase Countywide Ad Valorem Tax Rate ^ Implementation of Orange County Schools Supplemental Tax Hypothetical Countywide Supplemental Tax ^ Could be part of a merger plan, or an alternative thereto ^ BOCC may initiate, or may pursue in response to Board of Education-approved petition ^ In either case, subject to affirmative vote in referendum ^ Proceeds distributed on per pupil basis ^ General Assembly has previously approved legislation permitting implementation of a countywide tax without a referendum ^ Major Assumptions: . CHCCS district tax incrementally reduced to zero ^ CHCCS "held harmless" by continued funding of $1,167 per pupil . Tax base growth of 3°!° in non-revaluation years, 25% in revaluation years (2005, 2009, 2013} . Student membership based on certified SAPFO projections Estimated tax rate impacts . 3 year scenario - 16.9 cents . 5 year scenario -16.5 cents . 10 year scenario - 10.6 cents Hypothetical OCS District Tax ^ Requires majority vote in referendum ^ Would take effect fiscal year following vote ^ Board of Commissioners may initiate election; must call for election if school board petitions ^ Would operate simultaneously with CHCCS district tax; assumes CHCCS is "held harmless" ^ One cent an an OCS district tax would generate less than one cent on CHCCS district tax ^ Estimated 2003-04 tax rate needed to generate $1,167 per pupil would have been 22.4 cents This concluded the presentation. The foJJoWing was transcribed verbatim, by requesf Commissioner Carey: I just want to commend the County Manager and his staff, both school systems' superintendents and their staff for putting together this very thorough and clear report. I appreciate it. I read it aver the weekend and had an opportunity to scan it and then I read mare of it today. Yau all have done a great jab and I think this will provide a lot of clarity to the public. It won't answer all of the questions, but this process wasn't designed to answer every question at this stage. Before I get to the other questions, I'll say that I hope this board and the staff will take to heart the County Manager's suggestions about other public outreach opportunities because I think that the public needs that, and will demand it and I will certainly make myself available, as I have in the past, even before tonight, to do outreach, to meet with any group, and talk with civic groups and I hope our staff and other Commissioners will do the same. But I know that is not something that we can compel anybody to do other than ask the staff. Since the staff works for the Commissioners we can ask you all to make yourselves available to the public and non-profit and other types of civic groups to help provide some clarity to this information and I hope we will continue to do that as this process moves along. My questions relate to whether the staff had the opportunity to see any of the prior mergers that have occurred that were done with a phased zeroing out of the district tax if there was one in place in those areas. John Link: My recollection is that there is not an example of any merger phased-out process of the district tax because, as we've said, I think this State law is going to require that with merger, the effective date would require that the per pupil of the highest district be assessed on day one. There isn't any phase-in in terms of incrementally increasing the tax rate. Now of course there is, as we point out, when it comes to an equity model where you're pursuing, without merger, a reduction of inequity over time. I would say also that I don't believe, and again, remember that the closest merger process geographically and in time to Orange County is the merger between Durham City and Durham County and that was ten years ago or more. I think they had probably a significant difference between the two funding levels, but Durham is much larger so can't tell you what the tax impact was, but I'm sure it wasn't 17 cents; it probably was single digit. Commissioner Carey: OK, that is a question we can continue to examine. But my other question was, well actually it wasn't a question, but I would just like to ask the County Attorney to repeat what he said about the referendum process. Geoff Gledhill: In a County Commissioner initiated merger there is no referendum option. On the other hand, if there is a Board of Education initiated merger then the ultimate merger plan can include approval or not of the voters. Finally, there is always the possibility of getting the General Assembly to approve a merger plan which would be neither a County Commissioner initiated merger nor a Board of Education initiated merger, but a legislative initiated merger, if you will, that would include conditioning the merger on a referendum. Does that answer your question? Commissioner Carey: Well that's what I thought you said, that is helpful, I wasn't aware of that. Geoff Gledhill: Neither the board of education initiated merger nor the Board of Commissioner initiated merger envisions a straw vote referendum. Clearly, the General Assembly would have the power to authorize that. It is not something that is contemplated in the merger process; nor did we find any examples of that being used in the mergers that have taken place. Commissioner Carey: I did note that in the report that you prepared, I think it was about 50% of the mergers over the last 14 have been Commissioner initiated mergers. Geoff Gledhill: That is accurate and one of them, in the listing, one of the mergers that is attributed to a vote is actually a General Assembly merger plan that included, that is the Guilford County merger plan, that gave the voters a choice not to merge but to merge or to change the administrative boundaries of the existing school systems. The voters did not have the choice of saying yes we want to merge, no we don't want to merge, they had to do one of those two alternatives. John Link: What is confusing perhaps about that example, and this is the Guilford County Study in the blue binder, is that process was initiated by the Guilford Caunty Commissioners; they authorized and commissioned a study, but from that was created a lot of discussion between High Point/Greensboro and Guilford County and the result of that was the act by the General Assembly. It evolved from a county commissioner initiated study that was ultimately done by the General Assembly. Geoff Gledhill: There is one more interesting piece of trivia about that particular merger, and that is that in the bill that created the election process for the voters to choose to redistrict essentially among the school districts or merge, was the idea that if the Boards of Education of the three school systems in Guilford County got together with a merger plan that was acceptable to all three of them then there would not be this election at all. So it was kind of a carrot and stick approach with respect to merger, it is the way that I think I would describe what Guilford County ended up doing with the help of the General Assembly. Commissioner Carey: OK thank you very much, that is all I have right now. Commissioner Jacobs: One quick question and then some more questions. In the report on page 16 we talked about the estimated countywide tax rate increase of 17 cents per $100 assessed valuation. Are you referring there to the 40% of the county taxpayers who are not an the Chapel Hill-Carrboro system, or are you talking about the aggregate of the County when this would be completed. Rod Visser: Let me try and answer that the best way I can and ask for help here from someone else if it is not clear. With a countywide district tax, and again with the assumption that the Chapel Hill-Carrboro district tax would be zeroed out, the effect would be that somebody who lives in Orange County but outside of Chapel Hill-Carrboro district tax would be paying 17 cents more per $100 valuation than they are paying now. On the other hand, if your are in the Chapel Hill-Carrboro district tax and are paying 20 cents per $100 valuation now you would be paying 17 cents on a countywide tax rate and the district tax would be zeroed out. Commissioner Jacobs: So then, perhaps to make this a little clearer there would actually be a tax decrease for residents of the Chapel Hill-Carrboro system. Rod Visser: That is right, in that scenario. Commissioner Jacobs: There is some information that I would like to insert in the report when we came back in November. Some of it is just historical data and if you can, put this on the web page since people are going to refer to it and it is going to outlast all of us as the 1986 merger report is starting to do. I would like to see some historical data on funding for the Orange County Schools and the Chapel Hill-Carrboro Schools over the past. Pick a period, such as 15 years, that would be a goad period. How the enrollments have changed; haw the capital spending has gone, how much one cent on the tax rate currently equals -bath countywide and in the Chapel Hill-Carrboro system, the percent of the population of the county that is in each district, a map that shows where the district lines are just so we have same points of reference as historical information. I'd also be interested, if there is discussion of facility costs or facilities that would be utilized if there were a merger. But I would like to at least see or ask whether there is a calculation in here of the cost it seems at least of a middle school if the schools were merged, one middle school might not be required in the next ten year period which is an $18 million dollar plus expenditure. Is that included in your figures for how the tax rate would be calculated? If not, I would like to see that worked in because obviously that has some litigating impact on what taxpayers in Orange County might or might not have to pay in a merged system. I'm also interested in same data on students. Haw many students in each system are on free and reduced lunch? What are the percentages by school and by system? If you could disaggregate the students who do not take the SATs or that you can otherwise identify are more likely to be interested in the technical programs, and do that by district, and also graduation and drop out rates. Interestingly, some people say that they shopped all aver the state or country and decided to move to the Chapel Hill-Carrboro area because of the schools, so don't mess with them. Which, of course is a form of growth that is being generated by the Chapel Hill-Carrboro System based on those peoples own e-mails. Yet other people who are apposed to merger argue that if you merge the schools you are going to promote growth in Orange County outside of the Chapel Hill-Carrboro system. And we had asked to have some information about land use ramifications of possible merger, and I would just like to see our Planning Director have a go at that. I think that as a Commissioner I would say the answer is we have a strong land use planning and we have a history of abiding by our land use plan, but I think it would be goad to articulate that in writing far citizens who have those concerns because I think growth concerns are a major part of the political environment in Orange County. I would also encourage those people from the Orange County Schools who have been arguing that we don't need much money to please came to the public hearings and articulate that case because that is not what I hear at budget time when the parents come. So I would just like to hear that case made before I make any kind of decision because it is interesting to me and it is different than what the parents are saying. While I'm not necessarily unsympathetic to the argument "we can do with less", I would just like to hear it articulated. And similarly, one of the things that we skipped over, but I know is important to parents, is the issue of busing. And I know that there could be an innumerable group of qualifiers and variables but if we are talking about hypothetically merging a system that would require some children to go to a new middle school that was not in the Chapel Hill Carrboro system but was in fact in the Orange County System that is currently constituted, or a new elementary school number 10 that was in the Chapel Hill System that is not going to be just far the Chapel Hill System if there is a merged system. I would like for someone to take a shot at what percentage of students that might be affected just for that reason by merger and not for any other programmatic reason ar reasons of achieving any other kind of social goal. What manner of busing might be required? John Link: Commissioner Jacobs, I am assuming that shot would be taken by the school systems. Commissioner Jacobs: Yes, I saw Dr. Pedersen nodding his head; he didn't look too terrified or horrified. I assume that meant that he thought it was doable. Just for myself, I think the financial considerations of all this are very important. I certainly cringe every year when we come to deciding if we are going to raise taxes. But the most important thing is that every student in Orange County is given an equal opportunity. We live in a state where, because all this is based an property taxes, we have gross inequities. We have counties where there is $600 per pupil. We talk about equal opportunity but there is no way in the world, except through personal dedication, parental dedication, and teacher dedication that those kids are going to have an equal opportunity. They are going to have to overcome tremendous obstacles and that is not fair. If we have those kinds of disparities in our county, we need to address them. Ta me that is what this is all about. What kind of disparities do we have? It is not about the money, although I don't want to pay any more taxes than I absolutely have to. So that is why I am asking for that kind of information. And I do, as Commissioner Carey, I appreciate the work our staff has done and the school staffs have done and we look forward to getting more information. Commissioner Halkiotis: Just a couple of observations. All of this started on a cold January morning over at the Southern Human Services Center, and I cautioned everybody back then to be careful that this train must be watched as it went dawn the tracks because it could take off and I would still put that caution out there. This is still a Commissioner's goal that we take upon ourselves, and I might add, that we have a booklet probably twice the size of this one with our goals and objectives, some of which we have been working for 14 or 15 or 16 years, and we haven't fulfilled those yet. So I take this with a word of caution because sometimes people read into things more than may be there and before you know it everything starts spinning out of control rather quickly. Some of the public comments that have been made show me that some of that spin has already taken place. On page 20 of this presentation this evening that everybody should have in front of them, the top block, the Manager's staff, and by the way John I think this is an amazing document and if anybody on your staff is looking far a Doctoral Dissertation topic I think you have already completed a significant amount of the work right here and they should run off and get their degree immediately. It says the hypothetical countywide supplemental tax. I find those two words are really interesting but we don't have any more, other than those two words. It says it could be part of a merger plan or an alternative thereto. So that alternative thereto, Madam Chair, I'd like to know what that really is because it is a couple of banes that need some meat on it- it needs some flesh. So if we are into this goal of looking at all aspects of a passible merger, what is this "alternative thereto"? I would couple that with if we are going to start talking about alternatives thereto, how does that deal with the issue of capital needs, because we heard that the merger issue would take care of the capital plan because it would delay and postpone same of the construction. But what does the alternative thereto do to the capital plan? I want to have that against a backdrop of a bigger question, is bigger better? Or is smaller better? And I couple that with Governor Easley a couple of weeks ago shaking hands with somebody representing the Gates Foundation where the state got I don't know how many millions of dollars to look at the prospect of making high schools smaller in the state, just one piece of the puzzle. So which way are we going on this thing and if we are looking at all aspects of this, I think we need to be very careful. I know obviously the ten-year scenario for the hypothetical countywide supplemental tax is interesting because of the impact of the final analysis. But I think the alternative thereto needs to be investigated. And are we saying that, and I listened very carefully to Shirley Carraway, and I listened very carefully to Neil Pedersen, and I read the findings of their respective groups and so they have got twice as many club opportunities for children in Chapel Hill-Carrboro Schools than they have in Orange County Schools. There were interesting vocational opportunities for children in Chapel Hill-Carrboro and there were interesting vocational opportunities for children in Orange County. There is a rather interesting leveling of the playing field when it comes to honors courses and advanced placement courses, which I think some people, may have been surprised. Students are students, having spent most of my lifetime dealing with teenagers in one form or another. All parents should have at least one, some chose to have mare than one for their own peculiar reasons. But having been a principal for seventeen years, there is an amazing thing about watching high school kids get together from both ends of the county. There are more things that bring them together than divide them and set them apart. I think the kids need to be the focal point of all our deliberations and discussions as we study this topic. And adults may have one perspective and students have another perspective. I think we saw that very clearly in some earlier material we got at budget time last year. But once again I want to thank the staff. It is voluminous to say the least. I learned a lot about Kings Mountain, I think it is amazing that you have a group of people running around merging three school systems, either they did or did not realize that part of that school system is in another county. If they did a thorough examination of the program as we have done maybe they would have figured that out. But I just find that, where was their School Board attorney and where was the county attorney and everybody else in the county. I am glad we are not in that kind of situation. But I wanted to commend John and the staff. I told John I think this is one of the mare interesting things that the staff has put together along with the help of both school systems in a relatively short period of time. Chair Brown: Did you want any of your questions answered by Rod Visser? Commissioner Halkiotis: Not tonight, no, but I just think if we are going to talk about alternatives thereto, I think that is intriguing, it is provocative, it is almost spell binding. I would like to knave what this magical herb is that somebody is waving in front of me. John Link: I'm afraid you will be disappointed with the answer in terms of it being spell binding, but we will certainly respond. Commissioner Carey: Just describe the herb that you are waving in front of us. Commissioner Gordan: Yes, a couple of things. Thank you to the staff of the county and the two school systems for getting together and producing this. Just a couple of comments following up on what Commission Halkiotis said. I guess in particular, if you look at the commissioners' goals, this adopted goal, there are some things the staff tried to address and some things the staff didn't try to address. And I would like to see some emphasis given to the educational and student impacts, specifically number 2 -analysis of the impacts that a possible merger would have on current class size, and current curriculum offered in both districts. You have given a general overview, but I would like some more specifics, and what would likely happen to current class size and the curriculum. Answer it as well as you can. It might be easier to do class size actually and then curriculum. And then the next one, number three - a detailed analysis of the effects of a possible merger on students in both districts including potentially redistricting and the resulting transportation patterns far students in the two districts including the degree to which extensive additional busing will be necessitated. I believe both Commissioners Jacobs and Halkiotis referred to this and to the extent you can, you might please mention the schools you think will most likely be affected. What schools would likely be receiving students in a merged district? The other thing to talk about is following upon the "alternative thereto", and actually working an these various methods besides merger to equalize funding. I think that as you look at the various analyses, one of the things that stands out is the difference in the district tax that one system has and the other system doesn't. One could work on the disparity of funding, which is basically a subset of merger but a critical part of merger, without merging. And try to eliminate the disparity of funding without merging, as discussed in the report. One question I had about it was when we were talking about more gradual elimination of the district tax and more gradual phasing in of the countywide tax of some sort. The hold harmless marker would be $1,167 per pupil generated in the Chapel Hill system that we could generate countywide for all the students. But what I wondered is what it meant to hold Chapel Hill system harmless. It sounded like, in the more gradual phasing in, that the goal was to be sure to generate at least $1,167 per pupil because if you just did that, then you might be, I think you even put it in quotes "holding Chapel Hill harmless". I think you would hold harmless, but the question is are you actually not harming Chapel Hill-Carrboro Schools? I think that what we would like to see in any thing we do is some kind of win-win situation where both school systems come out better. So my question is could you do an analysis, look back at the past 5 years, which I guess is the 5 years spoken about in the merger report, and look at the trends on increase in the per pupil funding and the current expense funding. I think that the per pupil funding has increased each year. And work out, if you look at the past 5 years and in the past 5 years the trends of increase were such, whatever they were, and work out what that trend of increase would be in the next 5 years. And find out what you would actually do to not change the effect on the Chapel Hill-Carrboro system, while improving the Orange County system. In other words, if the effect is really to freeze the per pupil allocation of $1,167 which is sometimes the definition of hold harmless, you wouldn't protect the Chapel Hill System from harm because you would have essentially frozen the amount, the per pupil amount for each year. I just wanted you to work it out to see if the Chapel Hill system received the same increases over the next 5 years as they did the last 5 years, what would the the amount of tax increases in the two districts be to do that? Do you understand the question? John Link: I think I understand and of course I think it raises a good point. We will be happy to go back and look at it. What I understand your question to be, what were the relative increases in both systems an a per pupil bases including the district tax, and in the future, should the board pursue either merger or an equity funding process? The holding harmless for bath systems, of course, would be addressed in the general fund budgeting each year for current expense. That is, holding harmless or addressing additional new needs each year is of course done through the budget process where the Commissioners act presently on two school budgets where in the future if it were merged you would act on one. But as you do now you would take a look at what the requests are what the relative status of the rest of the County budget is and make a decision accordingly. But you raised a good question, so I think it is good for us to respond back to that question Commissioner Gordon: Just a general comment. One of the reasons that the district tax has been raised in the last few years has been to open the new schools in the Chapel Hill-Carrboro system. And I'm not talking about equipment, I'm talking about the opening expenses. Whenever you open a new school, I'm sure you are all aware that it casts more money in personnel because you generally would have a new principal, assistant principal, resource teachers. You don't necessarily have more teachers, except classroom teachers, to address growth because they can just be moved. You only have to address the growth in student enrollment. But when you open a new school you do have expenses and those can be large, I mean half a million to a million dollars. In the Chapel Hill Schools we have addressed that by increasing the district tax, so that only Chapel Hill taxpayers have paid the operating expenses to open schools. In the Orange County School System, there is no district tax so the operating expenses to open the schools have been paid by the countywide tax. So when they go back and do this analysis, I am not exactly sure how all this will play out, but I do want them to do the analysis. The other thing is I'm assuming that whatever we do we are going to hold bath districts harmless. I'm assuming in the operating expenses we will be holding the Orange County System harmless because the whole point is to give more money to the Orange County System, so I'm assuming they would be getting more money. I just want to make that point. I guess my point is that to me the key issue is funding, because if both school systems had equal funding, per pupil funding, then I'm not sure we would be here talking about merger. Merger is a bigger question than equality of funding and correcting of disparities. So I think whatever we do we would want to work on trying to make sure that all our students have opportunities in this County to get an excellent education. The question is how do we go about it. John Link: Commissioner Gordan, just as a clarification on your first two questions, as I recall, related to impact on students in terms of transportation, impact in terms of certain programming issues, those questions would need to be answered by the school systems. Commissioner Gordon: Well I'm sure you would be asking the school districts. John Link: I'm making a statement because that is something the County staff cannot do. Those are examples of questions that are very valid, but I would say if you asked the County staff to do that we would have to hire a consultant to assist the school systems to do that. So the reason I am raising the point is to make sure the two school superintendents can respond as to whether or not they can do that. Commissioner Carey: And it would have to be done between now and the first public hearing. John Link: We are assuming that all these items of information are to be brought back to the Commissioners for your November work session. Commissioner Carey: I had a couple of other comments I wanted to make, one was in response to Commissioner Cordon's requests, and I think we should try to provide the information to look back to see what the historical increases have been. But I'm not sure how instructive that is going to be for the future because, as she indicated, and I'm glad she made the point that over the last 5 years we made certain decisions related to opening of new schools and certain of those conditions for both school systems are not likely to repeat themselves over the next 5 years regardless of whether we merge or not. So we ought to take a look at those historical increases but I'm not sure they will be instructive because we don't know that the same set of scenarios will play themselves out over the next 5 years regardless of what we do, whether we stay the same or whether we merge. But we just need to take that into consideration as we view that information that you are putting together. The other question that I had and I think that you have answered it, relates to whether you took into consideration the land use plan and the growth that we expect in the County in both systems over the term of the 10 years ar the 5 years but I think you said you used the figures that were in the SAPFO, and that did take into consideration some of those, so you have answered my question. John Link: Yes Commissioner Carey: The other point I would like to make, and I agree with Commissioner Jacobs, that I think the best public policy-making arises out of the situation where you have many views taken into consideration, and he asked specifically to hear from those people who don't want any additional funding from the County school system. But I think we need to hear from everyone, on both sides of this issue and I have heard from some people on both sides and I have heard from people who haven't made up their minds yet, and I hope this report will help people make up their minds about this issue one way or the other because it is an excellent report and there is a lot of information in it. I learned something that I had forgotten, over the last 15 years. want to encourage members of the public to share their views and opinions with us and with the other members of the public because this is an educational process for all of us, we need to hear from people on bath sides of this issue, from both school systems as we have already. I think it needs to be more public sa that people who are not in the room and people who may be looking at the television when we have these hearings also have a flavor far what the opinions are in this Gounty. I also want to say that I raised this issue earlier in the year because I wanted us to have this kind of dialogue and the kind of dialogue we are having around this County about whether our current system of doing business and funding our schools is fair to every child. And, as a County Commissioner, I feel I have a responsibility to every child in this County and I have asked the question as I have gone about this County, whether if we had the opportunity to plan a system today, to start planning a new system that provides an equal opportunity for full educational achievement for every child regardless of where he or she lives and regardless of what their family income is, would we do it the way we are doing it now and design a system that has two separate systems that are unequally funded. I ask that question to people who are looking at us tonight and I have had only one person to tell me yes they would do it the same way since I have been asking that question. Chair Brown: Any other comments, questions? Commissioner Jacobs: I just wanted to make a few comments, first regarding what Commission Halkiotis said about this being a goal. I do think it is important to reiterate a few of the items of information that are in the report. But also to start with the point that Commissioner Halkiotis made. It is important for us to be open to ideas and to have a full discussion of ideas. That doesn't mean we are predisposed to an answer. That is what this process is about, that is why we have questions that we want to have answered, and that is why we want to hear from the public in public hearings and in others venues that may be offered in the future. This is a process of discovery to some extent; as Dr. Pedersen said, we have already discovered some perhaps surprising similarities in the two school systems that we might not have realized otherwise. I also think it is worth repeating for those who keep worrying about it that we are not going to cut funding for the higher funded system, that by law we will not do that and we would not do that anyway. As the numbers showed in the past 15 years the County spent $277 million dollars just on capital facilities for schools. Somewhere near three quarters of our capital spending has been on schools. Also that we have a target of 48.1 °~ of our budget for school spending. It is not a cap, it is not a limit, it is a goal and so far we have exceeded it every year since we adopted the 48.1 % target, and that was based on a ten year average of Caunty spending. It wasn't just an arbitrary number that we pulled out of a hat. I have also heard people say that if people cared about education they would move into the Chapel Hill-Carrboro System because people in the Orange County System have never been willing to vote for a district tax. I checked with Carolyn Thomas, our Supervisor of Elections, and at least since 1968, which is as far back as she had immediate records, that this proposition has never been put to the voters of Orange County. That is not to say that I don't think I know how they would vote, but it has never been put to them, so it is an inaccuracy to say they have rejected the idea. And finally, some people who are advocates of the Orange County System say that the district boundary isn't fair and that we don't have a large enough percent of the tax base and we carry an unfair burden financially. The way I calculate it, based on the charts we have in Appendix R, 35.9% of the tax base this year is located within the Orange County System boundaries and 37.8°l0 of the students. It is virtually identical. It is close enough so that it is almost identical. So it does not seem to me that the district boundary or the property tax base in the two systems is unfair based on the distribution of students at this time. Commissioner Gordon: I wanted to clarify for the Commissioners that if some other questions occur to us after tonight that we have a time period that we would be able to submit our questions to the staff in time for the November work session. Jahn Link: Certainly. Chair Brawn: Do we have enough time? John Link: Again, and my only reason for clarification in terms where the questions are being directed is that some of these questions by necessity will have to be answered by school staff and some answered by County staff. Certainly as the questions are provided to me I will submit them if I think they are appropriate to be answered by the school staff, and then see what their response is. Commissioner Gordon: I did some calculations similar to Commissioners Jacobs', and he is correct, rounding it off, 64% of the tax base is in the Chapel Hill-Carrboro City School district and 36°~ in the Orange County School District. Whereas, 62 °lo of the students are in the Chapel Hill school district and 38°fo are in the Orange Caunty School district. It is virtually identical in terms of generation. I also figured the amount generated per pupil from a tax and it is slightly more that would be generated per pupil in the Chapel Hill System than the Orange County system. That is correct and I think needs to be noted. The other thing, a question I would like to ask for people to at least speak to at the public hearing is when you are talking to the Commissioners, is your major goal equality of funding for the two systems or is your goal merger for all that it would bring? Because it is possible to approach equality of funding without merger. This follows up on Commissioner Halkiotis' question, is bigger better? When you speak, what I would appreciate knowing is if you want merger because you think it is the only way to get equality of funding or do you want merger for all that it brings? When we talk about equality of funding, I would assume that would mean, and we would pledge that it would mean, that it would be at the higher level -the level of the higher funded system, and that the higher funded system over time would not be disadvantaged because of this. In other words, the higher funded system would continue to expand and as growth expands they would get funds, but not only that, they would be able to achieve the goals that the Chapel Hill-Carrboro Schools have traditionally been able to achieve. In other words, what we would be doing is making all the school children in Orange County have the same opportunity, the same funding. However, if you had two separate systems then each school board in each area would pursue the particular mix that they felt most appropriate far the students. I do realize, over the time that I have been active in public education that the trend has been mare toward smaller, not just recently with the Gates Foundation, but also in what has been known as site based management. Our school governance committees have been in place in some of the schools and they really have a say, so that there is an effective unit of governance at that building level. So, the question is da you want equality of funding far two systems assuming that it would be at the higher level and that bath systems would be improved in their level of funding, and that includes both the Orange County system and the Chapel Hill system not being "held harmless" but actually not suffering any harm. Or do you want merger? I would be particularly very interested in knowing if you distinguish between those two things and if so, how you da sa? Chair Brown: Any other comments questions? I just had a few because everybody pretty much said what I was interested in. Maybe at the public hearings we could have a better understanding or description of SAPFO. We know it so well but I think a lot of people don't understand SAPFO and don't know how it works. They should because it is very much a part of school expansion and growth in the community. That was a big step far, certainly the Commissioners and all of the communities and the school boards to get together and put that in and it just went into effect last month. We will see how it will play out over the next few years. think a good explanation needs to be developed; I believe Commissioner Jacobs mentioned it too, about the effect that a merger might have outside the city limits of Chapel Hill-Carrboro in terms of growth. I think many people do not know the planning that the Commissioners already have in place to address growth issues and protection of natural resources and protection of watersheds, and so on. So we have our growth plan. When I read the part that the two school boards put together, which was excellent, but it occurred to me that it was also possibly leaving out some of the good things that both systems offer. I would have loved for it to be more specific. Perhaps if you have the time you could give us more meat on what you both offer. I know when we had the survey that was sent out a year and a half ago to both systems' students that they were very enthusiastic about being able to take courses that were provided in each other's districts. There were some very specific things from ROTC to the different chorus things that go on in Orange County Schools, participation in all sorts of things. If you could give us mare of an idea of those differences, the opportunity differences, I think that would be very good. Perhaps if you could come up with a clear explanation of the timeline that we are looking at in terms of - I think what Commissioner Gordon was talking about -how long would it take to actually raise the taxes in the Orange County system so that there is same equity. Would that take 10 years, then I guess it is the 1 Q-year plan. That to me is a lot of time. A lot of you in this audience will have children who will be out of the school system by then. So I would like to get a feel for that since it is not an eitherlor situation; they both have totally different ways to approach something and they each have their pros and cons. The other thing I would like to ask, and maybe the school boards could respond to this. I was very interested in the group that was put together back in 1986 -The School Merger Study Commission Report and their four proposals to make things more equitable in the county. The equalizing of funding, that is very difficult. I think their point was that the school boards need to work very closely together and very harmoniously and supportive of each other. And they talked about encouraging the students to be able to break that boundary of school districts and take the opportunities that other systems have. That has never really been done, to investigate the economies that could be worked out. Transportation has, Commissioner Halkiotis knows that a lot but there would be more opportunities far economies and sharing. It really hasn't been a top priority. I think the Commissioners over the last 3 years have consistently tried to put that forward as something that could really help the entire County have a sense of a strong community in the whole County and really address the issues of all of our children having access to the monies that all of us put in together to pursue really the best education in North Carolina. That would be a really interesting gap if more people could work together on pursuing that type of thing. We are going to adjourn in a couple of minutes, but I just wanted to say that all of the information that we have here is really factual and it is not speculation. Some of the 10- year proposals are just that, they are based on the strongest facts that we have. I hope that a lot of people will take advantage and read it. It looks large but it is really just 30 or 40 pages, and I think answers so many questions that people have emailed me about or called me about that I couldn't really answer confidently but it is here and if anyone reads it clearly and slowly that if they have a hardened view on something it might shake you a little bit because it is good data. I'm looking forward to the two public hearings and having everyone interested in this issue in the County come to those, listen to the presentation again and comment. It will be open to comments, questions, and clarifications. So those will be two excellent meetings. Commissioner Halkiotis: Just one quick comment, if I might. I have had a couple of people pose an interesting statement to me that they heard - and I want to say this publicly so we can put all of this myth out of the window quickly -that Governor Easley is pressuring the Commissioners to merge the two schools systems. And I chuckled, and I said, really, we sent the governor two registered letters and proclamations over the last two years since the September 11, 2001 tragedy, asking for National Guard troops to be stationed around Shearon Harris Nuclear Power Plant. He never responded to those letters, so the governor is not pressuring me, and any other Commissioner could certainly speak far himself or herself, but I have not heard from Governor Easley pressuring me to merge the two school systems. A motion was made by Commissioner Jacobs, seconded by Commissioner Carey to adjourn the meeting at 9:30 p.m. VOTE: UNANIMOUS Margaret Brown, Chair Donna S. Baker Clerk to the Board