HomeMy WebLinkAboutAgenda - 12-09-2003-9aORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: December 9, 2003
SUBJECT: Next Steps on Analysis of Potential School Merger
DEPARTMENT: County Commissioners/
County Manager /Attorney
ATTACHMENT(S):
As noted in "Background"
Action Agenda
Item No. 9 -a
PUBLIC HEARING: (Y /N) No
INFORMATION CONTACT:
Barry .Jacobs or Margaret Brown, 245 -2125
John Link or Rod Visser, 245 -2300
Geof Gledhill, 732 -2196
TELEPHONE NUMBERS:
Hillsborough 732 -8181
Chapel Hill 968 -4501
Durham 688 -7331
Mebane 336 - 227 -2031
PURPOSE: To discuss next steps regarding the examination of potential impacts resulting
from a possible merger of the Orange County Schools and Chapel Hill - Carrboro City Schools,
BACKGROUND: On November 11, 2003, the Board of Commissioners conducted a work
session on the potential implications of a possible merger between the Orange County Schools
(OCS) and the Chapel Hill - Carrboro City Schools (CHCCS), Commissioners discussed the staff
report on this subject that was presented on September 15, 2003, public input received since
the publication of the report, and additional background information compiled by County and
schools staff at the BOCC's request since September, Four Commissioners distributed and
briefly explained the major elements of specific proposals that each presented to their fellow
board members with regard to how the full Board of Commissioners should proceed on the
merger question and related issues. Copies of the four individual proposals are included (as
Attachments 1 — 4) for further discussion and direction from the BOCC to the Manager and
staff.
The Board may wish to organize its discussion at this meeting around the following elements:
Collaboration
For several years, the BOCC has encouraged the two school systems to examine opportunities
for greater cooperation between the systems in sharing resources, realizing operational and
capital efficiencies, and enhancing educational offerings provided to students throughout
Orange County, Three of the four Commissioner proposals include provisions to pursue greater
collaboration between the systems, as noted below:
Commissioner Brown proposal.,
Conclusions and recommendations of a task force should include:
o how each system could collaborate and share resources
o practical working models that both school systems could adopt to ensure collaboration
Commissioner Gordon proposal.,
• two school districts, in partnership with Commissioners, agree to work with a facilitator to
identify concrete steps for collaboration, and agree on funding /facilitator /other aspects of
collaboration study by February 2004
• collaboration study produces an interim report by May 2004, in time to initiate some
meaningful collaboration during the 2004.05 school year if at all possible
• final report will recommend significant collaboration that will take place during the 2005-
06 school year and beyond
Commissioner Jacobs proposal:
Charge CHCCS and OCS Boards of Education to return to BOCC by June 1, 2004 with
analysis /plan of action to implement collaboration in following areas:
• middle college program, preferably with Durham Tech
• single alternative school program for students in both districts
• plan to allow students in each district readily to access courses /programs not offered in
their district but offered in the other
• regular meetings of superintendents /school staffs on mutual educational interests and
potential cooperation, with annual report to public on progress
• joint early childhood program
• expose CHCCS parents to features of OCS year-round schools programs at Hillsborough
Elementary, Stanback Middle
• strategy for promoting ongoing contacts between children in respective systems that go
beyond athletics
In considering next steps concerning potential merger, the Board may wish to ask each school
board to participate in one or more facilitated discussions that might lead to concrete plans for
greater collaboration. For reference purposes only, a draft collaboration study proposal
prepared (but not undertaken) in Fall 2002 is included at Attachment 5.
Educational Excellence Evaluation Group
Both Commissioners Brown and Jacobs have proposed that some type of work group be
constituted to examine and report on educational excellence. The Board may wish to discuss
the composition of and elements of a potential charge to such a work group, along with specific
questions the BOCC would like the work group to examine and report on.
School Efficiency Study
The BOCC has discussed the desirability of providing assurance to the public and the
Commissioners that County appropriations for public education are being well and efficiently
expended, particularly before any commitments are made to providing additional financial
resources to the schools from a potential merger, supplemental taxes, or the like. As reflected
in the table below, the County Commissioners already appropriate substantial amounts of
funding — nearly half of the County's annual operating budget — for public education.
Education Funding
FY 2003 -04
Current Expense
$44,684,324
Recurring Capital
$1,777,284
Long Range Capital
$1,834,981
Debt Service
$14,304,364
School Health Nursing
Initiative
$292,206
Total Funding for
Education
$62,893,159
Total Budget 1$128,972,5221
$128,972,522
Total Funding for
Education as a % of
General Fund Budget
Despite the predominance of education funding in the County's annual budget process, the
North Carolina General Statutes provide that boards of county commissioners have limited
authority to specify the details on how these appropriations are actually expended by school
systems. Per NCGS §115C -429, "ft]he commissioners shall determine the amount of county
revenues to he appropriated in the county budget ordinance to the local school administrative
unit for the budget year. The board of county commissioners may, in its discretion, allocate part
or all of its appropriation by purpose, function, or project as defined in the uniform budget
format" The State Board of Education, in cooperation with the Local Government
Commission, is responsible for preparing and promulgating the uniform budget format for use
by all local school administrative units in the State. (An example of the uniform budget format in
use by local school administrative units is included in Attachment X which attachment is the
Orange County Schools 2003 -2004 fiscal year Budget Resolution, The Budget Director is trying
to obtain additional information regarding the experience of other counties that make school
current expense appropriations by purpose and function. This information may be available by
meeting time.) The limitation to "purpose, function, or project" level appropriations, therefore,
effectively precludes a board of commissioners from dictating specific uses of current expense
money — for example, whether to hire foreign language teachers, whether to fund a particular
extracurricular activity, or whether to pay teacher salary supplements. On the other hand, the
Board of Commissioners has not exercised its authority to appropriate current expense money
to the school systems by purpose or function. This has historically not been done in Orange
County out of respect for the fact that the Boards of Education are elected bodies with
responsibility for the operation of the public schools. If a board of commissioners elects to
allocate current expense appropriations to its school system by purpose or function, the county
budget ordinance would contain those allocations and, "the school budget resolution [must]
conform to that allocation." N.C.G.S. § 115C- 432(b). If the board of education proposes to
amend its allocated budget resolution, it may do so but must do so consistent with N.C.G.S. §
115C -433 (Attachment Y).
The school efficiency study would provide the basis for discussion and agreement among the
Boards of Education and the Board of County Commissioners concerning fiscal efficiencies that
can be realized through collaboration or otherwise.. It could also assure the public and the Board
of Commissioners that the County current expense appropriation is being spent effectively and
that there is no need for the Board of Commissioners to change its practice of making non -
designated appropriations of current expense money to the school systems. N.C.G.S. § 115C-
429(c) contemplates such an efficiency study. It provides: "[t]he board of county commissioners
shall have full authority to call for, and the board of education shall have the duty to make
available to the board of county commissioners, upon request, all books, records, audit reports,
and other information bearing on the financial operation of the local administrative unit."
At the Board's request, staff has prepared background information (Attachment 6) regarding the
experience of other North Carolina jurisdictions that have undertaken similar studies and
external consulting firms that might be available to perform this work under contract with the
County and /or school systems.
Countywide District Tax
As requested by the Board, the Attorney has prepared background materials regarding the
statutory workings of supplemental school taxes (Attachment 7). The September 15 report and
its appendices included analysis related to the financial implications of a hypothetical
countywide district tax.. The Board may wish to consider the aspects of Commissioner Gordon's
proposal that addressed conducting a referendum on a countywide district tax, or some other
related idea.
Next Steps
Commissioner Carey's proposal included a provision that making a "yes or no" decision on
merger should occur at the February 12, 2004 work session of the BOCC. The Board may wish
to make such a determination, establish some other timetable, or in the alternative list additional
steps of evaluation that might be pursued first, such as the aforementioned education
excellence evaluation group, school efficiency study, or some larger work group of
stakeholders.
FINANCIAL IMPACT: Potential financial impacts of a hypothetical school merger or from
alternatives such as supplemental school taxes were presented in detail in the staffs
September 15, 2003 analysis and report on this topic. If the Board were to determine to
proceed with facilitated discussion of collaboration between the school systems or with some
type of school efficiency study conducted by an external entity, there would be costs (yet to be
determined) that would need to be borne by the County, the school systems, or all three
entities.
RECOMMENDATION(S): The Manager recommends that the Board discuss the issues
surrounding potential merger, funding equity, or other alternatives that have been discussed,
and provide appropriate direction to staff.
Rt 0k.+N
o F 5
This proposal investigates the equal access of all Orange Co. children to all available
educational opportunities. The Commissioners should establish an Educational
Excellence Task Force by the end of this year 2003.
The Commissioners will ask former UNC systems' President William Friday, if he
will chair the Task Force and ask Madeleine Grumet, former Dean of the UNC
School of Education and currently UNC Professor of Education, to assist President
Friday in the formation of this Task Force.
Mission
The Task Force's mission would be to provide a review of both Orange County school
systems (Orange County and Chapel Hi1UCatrboro). It would investigate the educational
resources available in both school systems, make recommendation for improvement and
how these resources could become equally accessible to all Orange County students. The
aim would be to preserve and enhance the superior quality of education that we now
have.
1. Investigate the educational resources available to students and teachers in both
school systems.
2. Determine how these resources can be made equally accessible to all students
and teachers in Orange County.
3. Preserve the sustainable, cost effective spending of public tax monies that our
citizens provide for schools in Orange County.
The analysis /review may include:
1. Assessing the status of educational opportunities provided to all students in both
school systems.
2. Evaluating the resources in both systems.
3. Assessing the strengths and weakness of both systems.
4. Investigating the educational needs of both systems.
5. Analyzing what each system currently does not offer its students and teachers
and how this can be improved.
Conclusions and recommendations of the Task Force should include:
1. How each system could collaborate and share resources.
2. What educational resources could and should be shared to achieve equal
opportunities for all children in both systems.
3. Recommendations for increasing the accomplishments of under- achieving
students, enriching programming for all students and preserving and
sharing curriculum for academically advanced students.
4. Most importantly, the Task Force should recommend practical working
models that both school systems could adopt to ensure collaboration and to
achieve the goal of providing equal accessibility for all children to all the
educational resources that Orange County provides
The Commissioners would ask that both school systems commit themselves to
support the Task Force mission through cooperative and practical means.
The Commissioners would commit to at least $10,000, funds that may be needed by the
Task Force for its research efforts.
November 1, 2003
0
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ca «y
PROPOSAL FOR INSURING THAT EVERY SCHOOL AGE
CHILD IN ORANGE COUNTY HAS AN EQUAL
OPPORTUNITY TO REACH HIS/HER
FULL EDUCATIONAL POTENTIAL
I.. February 12, 2004 meeting: Consider and act on a decision of whether the
school systems should be merged
H. If the Board decides to merge the school systems, we should decide on
February 12, 2004 to set the Effective Date of Merger for July 1, 2006 or July
1, 2008.
III.. If the Board decides to merge the school systems, we should decide on
February 12, 2004 to appoint a Citizens Merger Advisory Task Force to work
for not more than twelve months (12) after appointment to develop and
recommend a Proposed Merger Plan to the BOCC for approval, The BOCC
approved plan would be submitted to the State Department of Education in not
more than five months (5) after submission to the BOCC by the Citizens Task
force. The board should also decide at this meeting to employ a consultant to
work with county staff and the Task force to develop a plan that is consistent with
state board of education policies. The task force members and the consultant will
be appointed within 90 days of the February 12, 2004 meeting.
IV. Decide at the February 12, 2004 meeting that one part of the Proposed
Merger Plan will include a provision that no student in either system will be
involuntarily transferred from the school he /she attends on the effective date
of merger within the first three years after the effective date of merger except
for those transfers necessary for occupancy of the new high school in southern
Orange County and the new middle school in central Orange County.
V. Decide at the February 12, 2004 meeting that the BOCC will begin with the
2004/05 Orange County budget to phase out the city school district tax over a
three (3) year or five (5) year period (period to correspond with the date
selected for the Effective Date of Merger) and increase the general property tax
proportionately to fund schools.
VI. Decide at the February 12, 2004 meeting to ask each school board whether, they
would participate in the development of a proposed merger plan if asked to do so.
Goraor,
S I I7NI)I1vtG 1 �Y
The commissioners should take the following steps to achieve funding equity between the
two school districts. (The date to take the step is given in parentheses.)
I. Decide to call an election to determine whether voters wish to implement a countywide
supplemental tax (ad valorem tax) for education. Instruct staff to bring back a report in
January 2004 concerning the recommended process for this vote. The process should
include the elements listed below. (November/December -2003)
A. After receiving the staff report, the commissioners will decide the maximum
rate at which the tax can be levied.
B. The vote on the tax will take place during the 2004 primary election (usually
held on the first Tuesday in May).
C. The proceeds of the tax will be used to "operate schools of a higher standard."
D. Upon a favorable vote in May, the tax will take effect on July 1, 2004.*
H. If the countywide supplemental tax is approved by the voters, the commissioners will
include the following items in the county budget for FY 2004 - 2005.* (May /June 2004)
A. Set the countywide supplemental tax rate as appropriate to address demonstrated
unmet needs for the schools. It is recommended that the rate be set at 4 cents
per $100 of valuation. This will increase fimding to the Orange County Schools
by approximately $1.5 million, which is about one -half of the amount that was
not funded in the FY 2003 -2004 budget.
B. Adjust the city district tax rate downward to compensate for the increase in the
countywide tax rate. This adjustment will be made so that the Chapel Hill-
Carrboro Schools will not only be "held harmless" in the narrow sense, but also
_ so that the total funding to the district will increase as appropriate to address
demonstrated unmet needs.
III. The commissioners will formulate funding guidelines and priorities for the
countywide supplemental tax. For example, the tax could be used for funding equity, to
promote collaboration, and for other purposes to allow the schools to operate at a higher
q fy intentions
concerning the total tax increase that. wilI be necess to achieve fundm
standard The commissioners will also define e w and identi t eu m
g equity between
the two school distracts and the tune penod for that increase. (Spring 2004)
STEPS TOWARD COLLABORATION -
I. The two schools districts, in partnership with the commissioners, will agree to work
with a facilitator to identify concrete steps for collaboration They will agree on the
funding, the facilitator, and other aspects of the collaboration study. (By February 2004)
H. The collaboration study will produce an interim report by May 2004, in time to
initiate some meaningful collaboration during the 2004 -2005 school year if at all
possible. The final report will recommend significant collaboration that will take place
during the 2005 -2006 school year and beyond.
Proposed by Alice Gordon for the November 11, 2003 BOCC Work Session
*If action cannot be taken by this date, the tax will be implemented as soon as legally possible.
'aCo)as
A PROPOSAL TO IMPROVE EDUCATIONAL
OPPORTUNITY IN ORANGE COUNTY
° ° t J- 4
1
TAI- EMM.
Create a Commissioners' Educational Excellence task force to provide a thorough,
unbiased review of the Orange County and Chapel Hill Carrboro City school districts.
Analyze the resources and programs available; address concerns regarding funding
disparities, cooperation, and other matters identified by the Board of County
Commissioners; and determine to what extent changes are necessary to assure that each
student in Orange County has an equal opportunity to achieve a quality education. Charge
the group with returning a report to the Board of County Commissioners by the end of the
2003 -2004 fiscal year, if possible.
ACTION BY THE BOARD OF COUNTY COMMISSIONERS
- -Hire a consultant to report to the BOCC who would examine the operations of each
school system from an efficiency and business standpoint, with the object of improving
education, reducing costs, and identifying areas of potential collaboration such as
purchasing.
-- Consider for adoption as part of the I0 -year Capital Investment Plan a resolution
stipulating that capital funds will be allocated to build a single proposed central office
shared by both school systems.
- -Have county staff analyze for possible adoption by voters a countywide supplemental
school tax that would be dedicated to school needs, scaled to reduce the CHCCS district
tax as appropriate, and that would serve to unify support for education in Orange County.
COLLABORATION:
Charge the Chapel Hill Carrboro City and Orange County school boards to return to the
Board of County Commissioners by June 1, 2004 with an analysis and plan of action to
implement collaboration in the following areas:
-- A-joint effort to coordinate the implementation of a middle college program; - preferably
in concert with Durham Technical College.
- -A single alternative school program for students in both districts.
- -A plan to allow students in each district to readily access courses and programs not
available in their district but offered in the county's other school system.
-- A plan to institute regular meetings between the superintendents and their respective
staffs to examine areas of mutual educational interest and potential cooperation, including
an annual report to the public on their progress at working together.
-- A,joint early - childhood program.
- -An effort to expose parents in the CHCCS system to the features of the OCS year -round
schools at Hillsborough Elementary and Stanback Middle School.
- -A strategy for promoting contacts between children in the respective school systems on
an ongoing basis beyond athletics (pen pals, joint projects, etc.).
11/11/03
,
DRAFT 10
Orange County Collaboration Initiative
2002-2003
Memorandum of Understanding
Purpose
This memorandum of understanding is between Orange County and the Institute of
Government, UNC - Chapel Hill. Its purpose is to secure the professional services of Dr.
Phillip Boyle, Associate Professor of Public Management and Government. Dr. Boyle
works closely with the N.C. Association of County Commissioners, the N.C. Carolina
School Boards Association, the N.C.. League of Municipalities, and with county, school, and
municipal governing boards in public problem solving and decision making, including
collaborative problem solving involving multiple jurisdictions.
Background
Representatives from Orange County, Orange County Schools, and Chapel Hill - Carrboro
Schools met on September 18th and October 31 st to discuss collaboration between their
respective governing boards. These meetings grew out of earlier discussions about
possible areas of collaboration, as outlined in a February 1st memorandum from the County
Board Chair. The three governing bodies have agreed to work together with the assistance
of the Institute of Government.
Issues and Interests Expectations and Concerns
In these meetings participants identified a number of issues, interests, expectations, and
concerns that both drive and restrain efforts to collaborate. These tended to fall into three
major themes: (1) conflicting interests, values, attitudes, and beliefs; (2) commitment to
collaboration and (3) potential benefits and outcomes.
Conflicting Interests, Values, Attitudes, and Beliefs
• Visible inequities in funding and opportunities are highlighted by rising expectations
for educational opportunity and outcomes for students in both school districts. For
example, the district tax by design creates inequity in per pupil local funding
prescribed by state law for school operations budgets.
• Simultaneous needs for new facilities and better use of existing facilities.
• Reducing class size while also trying to squeeze what we can out of the capital
budget.
• We need to recognize our own legitimate self- interests and those of the other parties
and then pursue common interests and common outcomes.
• Values and deeply held beliefs may help or hinder collaboration based on the
degree of consonance among the participating parties.
• There is a sense among the boards that they are individually responsible and
accountable for issues such as students' access to opportunities, which makes the
idea of collaboration difficult.
• The school systems have obvious differences, but the differences may be perceived
as being greater than they really are.
• It's old news that there are differences — let's focus on commonalities.
• That this is not a prelude to merger — that's not what this group is trying to resolve
• One participant has talked with a parent adamantly opposed to collaboration, almost
as if they'll be contaminated.
Commitment
• Collaboration is hard work - what will it take to keep people at the table long enough
to identify and act on real opportunities for collaboration?
• It is easier to tinker around the edges of collaboration than to tackle really important
issues. Achieving meaningful collaboration requires win -win outcomes for all
participants.
• Collaboration needs to be meaningful, not just something to say we're collaborating.
False collaboration could lead to mistrust of boards by constituents.
• The hope that something positive will come out of the process.
• Considerable ambivalence about jumping into the process because of doubts that
there will be a meaningful effort by all parties.
Potential Benefits and Outcomes
• We need to agree on the big picture outcomes for collaboration and to identify what
we want to accomplish (e.g., creating greater educational opportunities) before
deciding how to accomplish it (e.g., pursuing greater funding equity).
• We need to establish short-term objectives and achieve some initial short-term
progress yet keep in mind that collaboration is a long -term and ongoing process
• How do we measure success, what are the boundaries of this effort, and what are
reasonable timeframes?
• How might this effort contribute to student achievement?
• That all students in county have access to same programs.
• There should be measurable outcomes, such as student achievement, not just a
political exercise.
• Increase equitable educational opportunities that create a greater sense of
partnership among the jurisdictions and lead to more efficient, cost effective, and
better use of existing resources.
• Collaboration offers opportunities to share services that may be too expensive to
replicate, while also helping officials and citizens understand why it may be
important to replicate some services.
• This effort should result in real partnerships that benefit all students and jurisdictions
in terms of efficient use of resources and cost effectiveness, equitable educational
opportunities, and a sense of "being in this together."
Next Steps (March — August 2003)
1. Identify Participants and Schedule Initial Working Session
• Participants must include board chairs and executives. Key folks will need to
commit to participate, It's important that they be a part of conversations and
discussions about values, beliefs, and goals,
• We may want to consider including a second board member (e.g„ vice chairs,
past chairs, or an interested member) and some assistant or associate managers
and superintendents. In addition to building a greater sense of shared purpose,
the working group will benefit from having additional perspectives.
• Timing is a factor. Board chairs and executives need to be in place.
2. Identify Interests, Barriers, Values, and Goals
• Given the issues and interests identified above, the working group's first set of
tasks should be to discuss their individual interests, define criteria for what
successful collaboration looks like, describe what has worked well or not so well
in previous collaborative efforts, and identify barriers to successful collaboration.
• The working group can then identify the key values that reflect their interests in
public education, and create shared goals for this initiative,
3. Develop Recommendations and Evaluation Criteria
• Once this has been accomplished, the working group can use its goals and
values to identify the outcomes they agree to work together to achieve. These
will most likely be broad value -based goals.
• The next steps involve identifying, or engaging additional staff in identifying, a set
of specific recommendations that satisfy the values and goals agreed to by the
working group.
• The working group will also develop criteria or measures for evaluating the
success or outcomes of these recommendations.
4. Engage Governing Boards and Administrative Officials
• The respective governing bodies should be kept informed about the efforts and
progress of the working group,
• The working group should also coordinate with school administrators who are
proceeding with the charge from their boards to move forward on collaboration,
• Using its goals, values, and criteria for successful collaboration as a guide, the
working group should jointly select specific recommendations and present these
recommendations at a joint meeting of the respective boards.
�a -
Based on feedback from each governing board, the working group will identify
priority recommendations for implementation.
5. Implement and Evaluate Recommendations
• The working group will oversee existing or new task forces responsible for
implementing the final recommendations and evaluate how well implementation
satisfied the goals and values.
• The implementation task forces will engage other representatives and
stakeholders as appropriate.
Compensation for Professional Services
Dr. Boyle will work with Orange County, Orange County Schools, and Chapel -Hill Carrboro
Schools to carry out Steps 2, 3, and 4 as described above. He will work with the county
and school systems on this project for a period of six months, from March 2003 through
August 2003. Orange County agrees to pay the Institute of Government $20,000, which
includes an estimated 20 - 25 days of dedicated time and administrative expenses such as
copying, mailing, telephoning and local travel.
The Institute of Government shall submit invoices to the county outlining compensation and
reimbursement expenses pursuant to this memorandum of understanding. Contact
information for the appropriate financial official is provided below. Invoices shall be paid
within 30 days of receipt. The parties may modify, extend, or terminate this memorandum
of understanding by mutual consent.
Contact Information for County Financial Official
Name: Title:
Address:
Telephone: Email:
Authorizing Officials
For Orange County:
John M. Link, Manager
For the School of Government:
OR
Michael R. Smith, Dean Date
13
) -t
SCHOOL EFFICIENCY STUDIES
• Several Counties have had these performed over the past 10 years.
Organizations performing these studies in the past have included:
• KMPG formerly Peat Marwick — CPA Firm
• MGT America, Inc. , Florida firm specializing in Efficiency studies
• MAXIMUS, Currently prepares County cost plan (has not done these in
NC)
• State Auditor — has done these at the request of local School Boards.
• CHCCS had a study done several years ago as a class project of the UNC
Business School led at the time by Dr. Pannesi. CHCCS actually
implemented some of these recommendations.
The most recent studies have been performed by MGT America, Inc.. They have
performed studies and made recommendations for improvement in the following
school systems„ Executive summary/table of contents /scope of work from some
of the following undertakings are attached for reference..
Carteret County
Johnston County
Wake County
Henderson County
Union County
Bertie County
2002
2000
2001
1997
currently proposed
currently proposed
• Other Studies have been performed by KMPG in the Rowan Salisbury School
System as well as Wake County in the early 1990s.
• In some cases the School Board initiated the studies; others were joint initiatives
with the BOE and BOCC. The Wake County 2001 study was initiated by a citizen
advisory group.
• Costs of these studies have ranged from $40,000 to $200,000 depending on the
scope of work„ For example, the study could focus on all financial aspects including
local, state, federal and school food service funds or the focus could be limited to
just local. Consultants could also focus on programmatic cost benefit areas as well.
• Some studies have been fruitful while others did not provide significant
recommendations for improvement.
Table of Contents
Rowan - Salisbury Schools
Efficiency Study
Section
I.
Executive Summary
............................................. ...............................
-1
II.
Introduction and Background
Introduction and Background
U-1
Statistical Profile
11-4
Results of Customer Focus Groups
II -14
M.
Administration and Personnel
organizational Design and Management
III- 1
Personnel
III -10
IV.
Curriculum and Instruction
Curriculum and Instruction
IV -1
Special Education
IV - 21
V.
Technology
V-1
VI.
operational Services
VI -1
Financial Services
VI - 3
Public Safety
VI -10
Food Services
VI -16
9
Transportation Services
VI - 29
Facilities
VI - 39
Maintenance and Construction
VI -40
Custodial Services
VI - 56
Appendix A - I
Curriculum Development and Articulation Process A-2
Student to Teacher Ratio Analysis A-5
Remediation Program Comparison A-9
15
Rowan - Salisbury Schools
Efficiency Study
1. Executive Summary
BACKGROUND, PROJECT OBJECTIVES AND SCOPE
In August 1999, the Rowan - Salisbury Schools system asked KPMG LLP (KPMG) to conduct an
Efficiency Study of the Rowan - Salisbury Schools (RSS). The primary objectives of the study
were to:
• Improve cost efficiency in spending and administrative practices
• Improve management and organizational patterns
• Increase efficiency and effectiveness of delivery of services
The scope of the project included a review of the RSS' central office organization, including the
Departments of:
• Curriculum, Instruction and Administrative Services
• Personnel
• Operations
In addition to the review of the central office organization, KPMG also completed the following
optional tasks.
• Benchmarking local, State and Federal funding levels
• Analyzing and benchmarking the District's remediation programs
• Analyzing and benchmarking student to teacher and teacher to course ratios
• Reviewing the curriculum development and articulation process at the central office and
school level
It should be noted that this study represents an analysis of RSS during a specific time period,
from August 1999 through December 1999, and that the District is being examined based on
this timeframe. Therefore, we were able to capture the current status of the District with the
understanding that changes and new initiatives were being implemented during our review that
may have an eventual impact on some of our findings and recommendations.
In all phases of our work, KPMG found the RSS administrators and staff extremely helpful, and
we are grateful for their important contributions to our report.
PROJECT APPROACH AND METHODOLOGY
In conducting this review, KPMG used a variety of methods to collect information about the
operations of RSS. The KPMG team conducted numerous interviews with District
administrators and staff, facilitated focus groups with key stakeholders, and issued employee
survey questionnaires. We also reviewed many District documents, including financial data,
staffing and workload data, position descriptions, and student achievement data. In an effort to
put RSS' operations and activities in context with other similar school systems, the KPMG team
gathered information from peer school districts in North Carolina. In accordance with the project
workplan tasks outlined in our proposal, KPMG:
Mena
I - I
M
Rowan - Salisbury Schools 1
Efficiency Study
• Conducted more than 34 interviews with District administrators and staff.
• Conducted site visits at six key locations.
• Held six focus groups with randomly selected principals, teachers, parents and business
community members. The purpose of the focus groups was to determine where
stakeholders are particularly satisfied or dissatisfied with the efficiency and effectiveness of
the District's operations.
• Distributed 110 Job Analysis Questionnaires (JAQs) to the District's central office
administrators and staff, and analyzed the 100 surreys returned. The JAQs were useful in
assisting KPMG in compiling information on employee responsibilities, reporting and work
relationships, as well as identifying strengths and opportunities for improving the efficiency
and effectiveness of the District's operations.
• Benchmarked the District's operations with similar school distdos. Rowan - Salisbury
schools and KPMG identified four local education agencies (LEA): Johnston, Cleveland,
Kings Mountain, and Iredell as peer districts in North Carolina. The following table provides
an overview of those districts selected for comparison:
LEA
Number
of
Schools
Total
Enrollment
Per Pupil
Expenditures
Average
SAT
Score
Kings Mt.
8
4,340
$5,309
956
Cleveland
11
9,094
$5,022
955
Iredell
3
15,267
$4,830
986
RSS:
28 ]E0
;920-
$4,964-
857
Johnston
27
1 09
$4,742
960
Source: Statistical Profile - Public Schools of North Carolina 1998, State Board of Education, Department of
Public Instruction.
KPMG compared data from these districts to those of RSS to help evaluate the relative
appropriateness of RSS' resource allocation, expenditures, and service delivery
components, as well as to identify best practices.
• Reviewed and analyzed District data, including department descriptions, organization
charts, personnel payroll listings, budget documents, position descriptions, and examples of
management reports.
• Synthesized and analyzed data and information gathered in the previous tasks and
developed findings in the areas of organization structure and staffing, management
practices, and information systems and technology.
• Held a project kick -off meeting and two project status meetings during the course of the
study to ensure on -going communication between the KPMG review team and RSS
Ma
I -2
Rowan - Salisbury Schools ' 9
Efficiency Study
CURRENT SITUATION
Rowan - Salisbury Schools (RSS) is among the fifteenth largest school district in the State of
North Carolina, with approximately 20,091 students. The FY 1999 -00 General budget is $131.9
million. Many of the challenges currently faced by the District are not unique to Rowan County.
Some of them include:
• Enrollment Growth —The District's enrollment has been steadily climbing at a rate of five
percent between 1997 -98 and 1999 -2000. (Membership increased from 19,065 to 20,091)
• Poor Student Performance —On the composite scores of reading, math, writing grade 4
and writing grade 7 for the North Carolina assessments, 73 percent of RSS students
performed at or above grade level. SAT composite scores have increased by three percent
over the last four years.
• Outdated and Overcrowded Facilities — Currently, the District has 92 portable classrooms
and many of its permanent facilities are outdated and overcrowded. As enrollment
continues to rise, and the requirements for technology increase, the need for new and
updated facilities is becoming more critical,
• Teacher Shortage — Mirroring a national problem, RSS has had difficulty recruiting and
retaining teachers,
• Increased Accountability —Like all govemment agencies, school districts are being held
increasingly accountable for their operations. This demand for accountability requires
school districts to implement new statewide and local initiatives, and collect and report
performance data to stakeholders.
• Advancing Technology—New technologies offer the potential for new instructional
strategies and increased efficiencies, but require an up -front investment. RSS has
dedicated resources to ensure that all of its financial and student information systems are
Year 2000 compliant
SUMMARY OF COMMENDATIONS AND FINDINGS
During the course of our review, the study team found many pockets of excellence for which the
District should be commended, as well as opportunities for improving the efficiency and
effectiveness of its operations.
Overall, the strengths of the RSS include:
• Systematic alignment of curriculum standards, assessments, instruction, professional
development and textbooks
• A self-supporting food services operation
• Site -based management for its custodial services operations
Areas for improvement include lack of
A current strategic plan that establishes performance measures and ensures resources are
aligned with the overall goals of the District
A performance management system that links employee evaluation and compensation to
achievement of District goals
Open communications between all stakeholders
M
I -3
Rowan - Salisbury Schools '
Efficiency Study
The following section contains a brief summary of the commendations and findings for each
functional area.
Organizational Design and Management
There appears to be a good working relationship among the School Board, the Superintendent,
and the County Board of Commissioners, and the roles and responsibilities of each are clearly
and appropriately delineated. However, the District lacks core management practices that limits
the efficient and effective use of its resources. RSS does not have an effective:
• Strategic plan (working document)
• Performance management system
• Non - instructional employee evaluation program
• Communications with all stakeholders (internally and externally)
Furthermore, the District's current organizational structure does not meet some of KPMG's
criteria for effective organizational design.
• The spans of control of the Associate and Assistant Superintendents are either too broad or
too narrow
• Several key operational functions are organizationally misaligned (e.g„ Network Manager,
Grant Writer)
Department of Personnel Services
The Department of Personnel Services is responsible for providing leadership and support
needed to attract and retain high quality staff, developing clear performance expectations and
evaluation processes, and providing opportunities for staff to maintain and advance their
knowledge and skills Some of the key strengths /accomplishments of the Department include:
• Aggressive recruitment effort outside the state of North Carolina
• Listing of position vacancies and job application forms on the District's website
• Administration of school -level employee satisfaction surveys
Several core functions, for which the Personnel Department is responsible, are not being
performed:
There is no standardized evaluation program and accountability system for all central office
staff (the evaluation process is not systemic)
There are no formal mechanisms in place for determining employee promotions and
bonuses for all central office staff
Job descriptions are not routinely updated and kept current, and do not exist for all positions
in the central office
Ina.........
I -4
Rowan: Salisbury Schools p�V
Efficiency Study
Curriculum and Instruction
The effective design and delivery of educational services is the first and most important function
of any school district. The District is commended for making significant changes to address the
critical issue of improving student performance. It.
has focused on the alignment of state curriculum standards, assessments, textbooks,
professional development programs and instruction
provides scheduled hours of certified staff development for teachers that is 100 percent
above the peer district average
The District needs to address the following areas:
The Associate Superintendent of Curriculum, Instruction and Administrative Services has a
wide span of control
Lack of a formal process to evaluate educational programs to determine their effectiveness,
which limits RSS' ability to allocate its resources to achieve the strongest results
Staff development (instructional staff) is not systematically linked to either performance
evaluations or student achievement
Special Education
Special education services are costly, generally driven by a high level of educational resources
dedicated to the program, Special Education's efforts to reduce costs for the District include:
Active pursuit of Medicaid reimbursement by tracking and monitoring those students who
are eligible for Medicaid reimbursement from the Federal Government
Offers a full -range of special education programs, which reduces the number of students
sent out of district
The District should address the following:
Lack of a centralized student referral process in place (although RSS is meeting all Federal
requirements)
^RSS placesmvre,studentsdntospeoial education'thanathe peerdistcact:average
I -5
Rowan - Salisbury Schools
Efficiency Study
Technology
Technology is a critical strategy for improving teaching and teaming. Instructional technology
can be used to.
• Provide more frequent assessment of student skills
• Increase students' technological literacy in tools required to perform in post - secondary
education and the workforce, such as word processing, spreadsheets, and research
• Improve teachers' abilities to develop and share instructional materials and reduce
administrative paperwork
Notable accomplishments of the Technology Department include:
• The completion of Year 2000 compliance upgrades for all major information systems
• A low student/teacher ratio per school -based IT staff person
• A computer laboratory and computer teacher in every school
There is also room for improvement.
The Rowan - Salisbury Schools technology plan is limited and does not provide specific goals
on what students and teachers should know and be able to do
The extent of technology integration into the curriculum is unclear
There is limited coordination between the Offices of Instructional Technology and
Administrative Technology
Operational Services
Financial Services
KMPG identified several accomplishments in Financial Services for which the District should be
commended.
• 90 percent of staff participate in the Direct Deposit Compensation Plan
• RSS processes more vendor checks than peer districts
• RSS appears to be more efficient processing purchase orders than peer districts
Budget preparation cycle -time appears to be within peer district average
• RSS has a process to track vendor performance
There is room for improvement, however.
• The budgeting process is not driven by the District's long -term strategic plan
I -6
Rowan - Salisbury Schools a,2
.Efficiency Study
Public Safety
A goal of any school district is to provide a safe and secure environment so children can learn .
Last year, RSS reported fewer incidents of crime than peer districts and the state average.
Some of the steps taken by RSS to reduce crime in the District include:
Participating in a variety of crime prevention activities
+ District -wide availability of electronic monitoring systems
+ Developing a comprehensive System -wide Safe School Plan
Areas of improvement:
+ RSS does not have a centralized public safety coordinator at the central office
Food Services
The goal of any Food Services program should be to provide nutritious and tasty meals,
minimize waste and be self - supporting. RSS' Food Services achievements include:
+ A self - supporting food services program with a surplus budget (FY 1997 -98)
Use of state -of -the -art technology to enhance its operations (e.g., CompuCafe)
The Department shows an efficient span of control
The student cost per meal is in line with the peer district average
Some of the Department's management practices, however, need improvements
Cost- efficiency benchmarks are established, but their use is limited
Participation rates are low for school food services nutritional programs
Transportation Services
Rowan - Salisbury Schools provides transportation services to approximately 11,530 students on
a daily basis. Overall, KPMG found that the Department has efficient spans of control.
Compared to peer districts, RSS has:
• A lower percentage of students utilizing transportation services
• A lower transportation cost per student
• A higher cost per vehicle mile
Results of stakeholders' focus groups indicate a low level of customer satisfaction with the
District's transportation services, however. KPMG found. that:
• The District has a high bus- driver turnover rate and is unable to maintain a pool of
substitute bus drivers, causing frequent delays in service
• Although the Department has access to some state data, it has not identified key
performance indicators or cost - comparison benchmarks to help measure the overall
efficiency and effectiveness of transportation services
I -7
Rowan - Salisbury Schools a 3
Efficiency Study
Maintenance Operations
The Department of Maintenance is responsible for keeping all school facilities in safe condition
and good repair. The Department is responsible for the maintenance of 2,253,118 square feet
and over 467 acres of land throughout the District.
School principals and teachers expressed a high degree of satisfaction with the quality of
services provided by the Maintenance Department. Other accomplishments include the
implementation of an on -line maintenance work order system that has reduced the rate of
completion for all maintenance jobs.
KPMG identified the following areas of concern in Maintenance Operations:
• Preventive maintenance is a limited activity within the Department
• Roles and responsibilities are not clearly defined for staff members
• The Director of Maintenance has a wide span of control
Construction Services
Construction Services is responsible for construction services for all elementary, middle and
high schools in Rowan County, The Department oversees all new facilities, construction /capital
outlay projects and school renovations It is also responsible for ensuring that school facilities
are constructed to meet student needs, comply with state codes and are built timely and at a
competitive price. Some of the Department's accomplishments include:
• Established a five -year capital outlay /facility plan
• Frequent reporting on expenditures of its capital improvement projects to all stakeholders
Areas of improvement include:
• Construction Services does not have in -house support for all of its construction needs
• RSS does not have the funding to complete the requirements of its established five -year
capital outlay plan
"_na
Rowan - Salisbury Schools
Efficiency Study
Custodial Services
The Custodial Services program helps to ensure that school buildings provide a healthy
environment for students and staff. This program is a site -based management program used to
keep existing facilities safe, clean and comfortable so children can learn in a healthy
environment.
Major stakeholders expressed a high degree of satisfaction with the quality of services provided
by Custodial Services. Other accomplishments include the development and deployment of a
comprehensive formula to allocate custodial staff on a per- site - basis,
Areas of improvement for custodial services include:
Custodial Services does not use performance measures to monitor performance and identify
opportunities for savings
Custodial Services does not have a policy and procedure manual for its operations
In the following chapters we discuss these findings and many others, and present a number of
recommendations to help Rowan - Salisbury improve its operations. The remaining chapters of
this report include:
• Chapter 2 -- Introduction and Background
• Chapter 3 — Administration and Personnel
• Chapter 4 — Curriculum and Instruction
• Chapter 5 — Technology
• Chapter 6 — Operational Services
• Appendix
-11",
I -9
K 1 Z EDUCATION
MEDIATION SERVICES
CLIENT: UNION CouNTY BOARD of COMMISsIONEm, NORTH CARoLINA
The Union County Board of Commissioners in North Carolina contracted with MGT to provide
mediation /litigation support for a budget impasse with Union County Public Schools. MGT developed
a rationale to support the county's budget position.
PUBLIC ScxooL FINANCIAL. REvIE'W
CLIENT: CARTERET COUNTY BOARD of CommtssIONERs, NORTH CAROLINA
MGT conducted a financial review of federal, state, and local funding expenditures of Carteret County
Schools, North Carolina,This study included an in -depth analysis of related data and information to
assess how the school system used funds from these sources, with a focus on the use of local funding,
MGT compiled fund status reports by fund source, and utilized these findings to develop recommenda-
tions to improve the benefits realized from all funding sources,
CENTRAL OFFICE MANAGEMENT STUDY
CLIENT: JoHNsroN COUNTY ScHooLs, NORTH CAROLINA
The School Board of Johnston County, North Carolina, contracted with MGT to conduct a manage-
ment review of the Central Office.The study included reviewing the stated policies and objectives for
management and performance; identifying structural, management, or fiscal problems that could hinder
the implementation and achievement of the district's policies and objectives; reviewing the methods
used by the district to analyze its workload, staffing requirements, and staff productivity; and deter-
mining if there were ways in which the district could increase the efficiency and effectiveness of its
administrative structure.When completing the final report, MGT made comparisons between Johnston
County Schools and five other North Carolina school districts.
ADMINISTRATIVE SALARY STUDY
CLIENT: CHAPEL HII.L�CARRBORo SCHooLs, NORTH CAROLINA
MGT conducted an administrative salary study for the Chapel Hill - Carrboro City School System.The
components of the study included reviewing the central administrative organization and recommend-
ing job titles (e,g„ Assistant or Associate Superintendent, Executive Director, Director, Supervisor,
Coordinator) and reporting relationships and pay grades that reflected the different levels of respon-
sibility and professional preparation associated with each position. MGT also recommended adminis-
trative procedures for placing administrators on salary schedules and awarding annual salary increases
supported through the state and local pay- for - performance program.
a5
MGT recommended pay schedules for school and central office administrators that were competitive
within the state and at the national IeveLThe last recommendation of the salary study included imple-
menting the recommendations, recommending a salary for each administrator, and assessing the cost
G Tto implement the recommendations.
of.�A,a ua 14
K -12 EDUCATION (continued) a
COMPUTER TECHNOLOGY CONSULTANT SERVICES
CLIENT: ASHE.VIL.LE CITY SCHOOLS, NORTH CAROLINA
MGT contracted with Asheville City Schools, North Carolina, to assess the efficiency and effectiveness
of MIS computer technology support operations, MGT staff evaluated the current organization and
structure for supporting MIS, and determined the immediate and future need for administrative and
instructional technology enhancements. Consultants also reviewed the in- service requirements to
ensure adequate technology proficiency among administrative and instructional staff. MGT submitted
a report on the state of instructional and administrative technology in Asheville City Schools with
areas of improvement identified.
MANAGEMENT AND FACII.ITIES AUDIT
CLIENTS HENDERSON COUNTY PUBLIC SCHOOLS, NORTH CAROLINA
MGT conducted a management audit of Henderson County Public Schools, North Carolina.This in-
cluded a comprehensive review and analysis of organizational structures, staffing levels, and the effec-
tiveness of current operating procedures and support budgets; an identification of areas of strength
within the school district; and an evaluation of the potential for privatization of services. Henderson
County was in the process of transition from a rural, agricultural area to a more heavily populated,
diverse, urbanized economy.
MGT also assisted Henderson County Public Schools in the preparation of a long -range facility study.
MGT conducted an evaluation of the county's existing school facilities, including: condition assessment;
functionality; assessment; educational suitability and support for educational goals; appropriateness of
size; and efficiency of use.
MGT prepared a facility plan that incorporated an assessment of each facility and provided recommen-
dations and options for meeting the district's long -range needs.
I.GNG-RANGE FACB,ITY PLAN
CLIENTS ALEXANDER COUNTY SCHOOL SYSTEM, NORTH CAROLINA
The Alexander County School District, North Carolina, retained MGT to prepare a long -range facilk
ties plan. The planning process included condition, educational suitability, and technology readiness
assessments of each school and district facility. MGT developed enrollment projections to determine
future new facility needs.Alternative facility plans were prepared that included operational and capital
cost impacts. Community input for the alternative plans was gathered through a series of public meet -
ings.A key issue facing the district was whether to remain a one high school district or build an
additional high school to meet the growing enrollment. Each alternative facility plan approached this
issue in a way sensitive to the needs of the community.
op�" a'. ,
K -12 EDUCATION (continued) a �
Smool.. FACII.ITIES REVIEW
CLIENT: HENDERSON COUNTY SCHOOL BOARD, NORTH CAROLINA
MGT contracted with the Henderson County, North Carolina, Board of Commissioners in completing
an assessment and review of the physical condition and suitability of a selected number of high priority
elementary schools in the county. Consultants conducted site visits to assess the physical condition,
educational suitability, and program space requirements for each elementary school. MGT provided
alternative recommendations (including cost estimates) for meeting the facility needs at each of these
high priority elementary schools.
EVALUATION OF A REGIONAL EDUCATIONAL LABORATORY
CLIENT: SOUTHEASTERN REGIONAL COUNCIL FOR EDUCATIoNAI, IMPROVEMENT
The Southeastern Educational Improvement Laboratory (SEIL) is one of nine educational research and
development laboratories funded by the federal Department of Education to provide regional educa-
tion services, Southeastern Educational Improvement Laboratory serves six states: North Carolina,
South Carolina, Georgia, Florida, Mississippi, and Alabama, It is governed by a Board of Directors having
four members per state, Southeastern Educational Improvement Laboratory engaged MGT to per-
form an evaluation of the laboratory's first year of operations, The evaluation included:
• assessing 14 different meetings of various groups related to the lab;
• conducting telephone surveys of state -level lab service recipients;
• reviewing products developed by the lab;
• meeting with federal education officials to report on the evaluation;
• providing formative evaluation to lab management;
• producing a final evaluation report,
G-
o %r America
HIGHER EDUCATION
COMMUNITY COLLEGE SYSTEM STUDY
CLIENT: NORTH CAROLINA GENERAL. ASSEMBLY
MGT was selected to undertake an analysis of administrative costs in small colleges as part of a joint
investigation of the North Carolina General Assembly and the State Board of Community Colleges,
Issues to be explored included whether some type of consolidation of administrative activities should
be considered. Further, the current funding policies for both small colleges and branch campuses of
multicampus colleges was evaluated..
UPDATE OF PRESIDENTS' SALARY ANALYSIS
CLIENT: NORTH CAROLINA COMMUNITY COLLEGE SYSTEM
Based on an earlier project MGT conducted for the North Carolina State Board of Community Col-
leges, MGT was asked to conduct an update analysis of presidents' salaries,The analysis focused on
determining competitive salary rates at community colleges in states believed to have community
college systems with similar missions. MGT compiled and analyzed data for each of six enrollment size
categories for colleges in ten states.
PEER FACULTY SALARY COMPARISON
CLIENT: UNIVERSITY OF NORTH CAROLINA SYSTEM
The University of North Carolina General Administration retained MGT to conduct a peer faculty
salary comparison study in response to legislation passed by the North Carolina General Assembly.
MGT performed extensive intra -state, regional, and national comparisons,The final report presented
the analysis of the comparison data, summarized MGT's findings, and offered recommendations to
assist the University of North Carolina General Administration's goal of competitive faculty salaries
and compensation,
CLASSIFICATION AND PAY STUDY
CLIENT: MAYLAND COMMUNITY COII-EGE, NORTH CAROLINA
MGT assisted Mayland Community College with the preparation of new employee job descriptions
and the updating of existing employee salary scales to enable the college to compete effectively with
area private industry and other North Carolina community college member institutions,This project
required MGTto analyze administrative and academic job descriptions and salary information throughout
the North Carolina Community College System,
oM ricarica 17
i
HIGHER EDUCATION (continued) a19
FUNDING MODEL, IMPLEMENTATION ASSISTANCE
CLIENT: UNIVERSITY OF NORTH CAROLINA
Upon the successful completion of an analysis of funding equity at the University of North Carolina
and the development of plans for a revised funding model, the university retained MGT to assist in the
implementation of the planned funding model. Services included analysis and development of propos-
als for an enhanced database, assistance in determination of funding rates, and review of budget poli-
cies and procedures.
FUNDING FORMULA STUDY
CLIENT: NORTH CAROLINA COMMUNITY COLLEGE SYSTEM
MGT developed specific findings and recommendations in response to a legislative mandate related to
the funding level for the North Carolina Community College System.The findings and recommenda-
tions were based on a general assessment of all aspects of the current funding model for operations,
considering both equity and adequacy issues, and including policies and procedures regarding use of
the formulas.
FUNDING EQUITY ANAusis
CLIENT: UNIVERSITY OF NORTH CAROLINA
MGT assisted the General Administration of the University of North Carolina in a review of the equity
of current funding levels among the 15- member postsecondary institutions. Equity was considered
from four different perspectives, including benchmark analyses.The assignment required the devel-
opment of a revised funding model, based on equity and adequacy concepts, that could be integrated
into the broader state government budgeting process. Relevant experience gained from the project
included: development of peer institution funding comparisons; an analysis of long -term funding
trends within the system; and a design of a new funding model.
UNIVERSITY OUTSOURCING/PRIVATIZATION STUDY
CLIENT- UNIVERSITY OF NORTH CAROLINA
MGT conducted an outsourcing/privatization study for the University of North Carolina and its affili-
ated organizations. The study estimated the potential savings that could be achieved by outsourcing
services in the functional areas of housekeeping, ground maintenance, HVAC, system operations and
maintenance, trash removal, hazardous waste removal /disposal, central steam plant operations and
maintenance, and data processing operations.The study also developed an evaluation model and work
plan for determining whether services should be privatized at each campus. Relevant experience gained
from the project included: potential for effective outsourcing at a typical university campus; develop-
ment of potential cost savings and efficiencies; development of a time - phased work plan for assessing
potential outsourcing opportunities;and field testing of MGTs privatization /outsourcing analysis model.
MGT _i
ofd. j8
AUGUST 2003 @
PROJECTS CONDUCTED IN
THE STATE OFNORTH CAROLINA
TABLE OF CONTENTS
EXECUTIVE SUMMARY _ ............ ........ .. _. .......... ,., .111 .1............ ..... -- .....,,.:,I
1,0 INTRODUCTION....., - ..- ...... .... .......................... .... _..........,,,,....... .,.._.... 1-1
31
Z00 d lost 982 0£8 :lh tl91N30 d0 19N 8£:11 (3111)£020- 030
1,1
Overview of Johnston County Schools,,,,,,,,,,,,,,,,,,,,_,. _.11.1..1...,...
... 1.1
1.2
Study Methodology .. ...... --- ............. ..,.,......,,,..,.,_..... ,.. .......
,,, ..... 1-2
2.0
STATISTICAL PROFILE OF JOHNSTON COUNTY SCHOOLS _...........
......... 2 -1
21
School Membership ,,,,,,,,,,,,,, ....... .,, ........... ,.... .,.._ .............. .,,,.......
..... ,._2 -2
2.2
School Characteristics. - . ... - .. .............. .. ,,,..,,,,., _.,.,.,.,........,..,.,,.2-3
2.3
Personnel Comparisons'.. ... ..,.,...,......2-4
2.4
Expenditures ... ... ... .........._ ... ,,,,..,,, ..... ,.... .......
,,... ,.,,2 -4
2:5
Revenue and Budget-- .,-. ... --. --- ;.,.....,., .,..,- ,.,,,,,..,,,...,,,...,,..,.2
-9
2.6
Student Achievement and Outcomes.,.. ...._ . , ......................
,.,,,2 -10
2.7
Local Economic Characteristics ..... . ............................. _ ...... .........
,.2 -12
8
Central Office Organizational Structure... ..... rr- ... ...........
, :.2 -13
10
DISTRICT
ORGANIZATION, MANAGEMENT, AND GOVERNANCE . ............3
-1
3.1
District Organization and Office of the Superintendent -r
.......3.2
12
Deputy Superintendent's Office. ,...,_ ........... ..._., ,_..,..,,,.,_.,.,,,,,,,,.,..3.9
3.3
Public Relations ,,,..,,..._ ............... ............................... ....1.11....1...
,..,.3 -12
3.4
Technology Services ... .,.,,..,,__....,... ..... 11.1....1 ...... .. ....... ........ ..........:.3
-15
3.5
Strategic Planning ...... ,,,,.......... ...,..... ...,,,,,.,,,,.,,.,,.
..... 3.26
3,.6
Legal Services ... _ . .......... ...................... ,,,,,,,,,.,,.,3.29
37
Policies and Procedures-- ....... ........ ...... ........
,3-30
3.8
School Board issues.- .._ _ .............................. ..............................3
34
3,9
Relation to County Commissioners ...,..., . 1..........1 ....... ... ....... ..........3
-36
4.0
PERSONNEL MANAGEMENT ...,..,.._..1.1.11,... . 11...1..1 .. ... .. ............................
4 -1
4.1
Organization and Staffing-- .......... - . .. ..... ................ .. ,,_ _,.,.,,,,,,4
-1
4.2
Personnel Policies, Job Descriptions, and Personnel Records, .,,....,,.4
-17
4.3
Recruitment, Employment, and Retention ,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,4
-20
4.4
Employee Appraisal ._,.,..., ,.., _._ ._1...1.....1..1 ,..,. _ .................
. ...... .4 -25
4.5
Staff Development., ... ,.,.,,,,......... ,,,,,._ . .. ..... ...............................
. ..4-28
5.0
FINANCE
AND BUSINESS OPERATIONS- .,.,.. ..... .. ... ............................5
-1
5.1
Organization and Management ... ................. :......... .............. ,.,,,.,..,
.... 5 -1
5.2
Budgeting- ..:........................ ........... ...............................
.......5 -11
52
Finance and Accounting Services ..... ............................... . ... „,,,.....5
-21
5.4
Asset Management ........ ................ .. . ....... ... ......,....,,,.......5
-25
55
Purchasing Services .... .... 1....11.._...1.,, ...............
.... 5 -28
56
Risk Management- ........ ................. _.. ,.,,.,,..,.,...,..,,.., ...1...1.11..,..,
5 -29
51
Internal and External Auditing .. ,._ ..,.. 1 ......1......_1, ,,,,,,,,,,,,,,,,,,,,,,,,,,,5
-33
31
Z00 d lost 982 0£8 :lh tl91N30 d0 19N 8£:11 (3111)£020- 030
TABLE OF CONTENTS
PAGE
EXECUTIVESUMMARY,,,..._ ... ............ .. ........ ......- „ ,,..... ,, .,,_.. ...... , .I
1.0 INTRODUCTION. ......... ...... ..... ....... . _. __ .. ..,,..
District Organization and Office of the Superintendent.. ,....,.
1.1
Overview of Johnston County Schools...... ................ ............
_,...,..., 1.1
1.2
Study Methodology .. ................ ...... . __. ,_. ,, ......_ . ,.,. ,, ....,
.,,..., 1 -2
2,0 STATISTICAL PROFILE OF JOHNSTON COUNTY SCHOOLS ,, .....,...
__,.. 2 -1
21
School Membership ............. ._.,,, ....... ... .,....,. ......,.,..... .... ....
....,. -,, 2 -2
22
School Characteristics. _., ..... , _ ., .,- ..._..... ... ... .....,,.,..,.-
2 -3
2,3
Personnel Comparisons ............... . .... , , ..._ , ...... -,.,
..._.,.., 2 -4
2.4
Expenditures ....,._ ................. .. .... . .. _ _..,,,., ..,..._.......... _....
.... , 2 -a
2.5
Revenue and Budget ... .................. ....... .................. ..........................
2 -9
2.6
Student Achievement and Outcomes :. _,_,, .,...... • ... ,.._,,..,,.,..,.2
-10
2.'7
Local Economic Characteristics ..................... ....... .. .............._,._....:_..2•.12
Organization and Staffing., 1111. ,.,..... ._ ,........ ,1111.. 11 11,.
2.8
Central Office Organizational Structure .__ .......................... ..
......_2 -13
30 DISTRICT ORGANIZATION, MANAGEMENI AND GOVERNANCE,,...,, .... 3 -1
3.1
District Organization and Office of the Superintendent.. ,....,.
, .,. _..,..,,3 -2
3.2
Deputy Superintendent's Office __ ............._.. .,...., ,,...,.....,.,
,.., ,..3.g
3.3
Public Relations .,.,,...._ ....:..... ...... .... .. .........._ .,..,.. ,....,,- .....,...,.....3
-12
34
Technology Services ..................._,._.... ,.. ,,.-.,,,.,... ..,..,....,.,.,,,.......,.,3
-15
3.5
Strategic Planning—.- . ....... .... ................... . ....... . .
„ ...3 -26
3.6
Legal Services._......_...,__ ,....__ ......... ..............._...,...........
,, .,.,3 -29
37
Policies and Procedures..._....,_, . _ . _ ........ ........ . .......
.... .......3 -30
38
School Board Issues „ ... ........ . .:............ .. . _ „_,..., ..1.111,.,,
11.,3 -34
39
Relation to County Commissioners ., ., ......1 ,,,,,,,,,,,, ,, 1111.,.....,,
,,...,,3 -36
4,.0 PERSONNEL MANAGEMENT-- .........__ ... ...,......._,...._..,....,.,..,
.....4 -1
41
Organization and Staffing., 1111. ,.,..... ._ ,........ ,1111.. 11 11,.
11 ..... 11. 4 -1
42
Personnel Policies, Job Descriptions, and Personnel Records
-„ ,..,.,,4 -17
4.3
Recruitment, Employment, and Retention _ ..... ...............................
..4 -20
44
Employee Appraisal- ...... .. , ...,,,_,..,,,.,.,.,... ,. 111.1,
,.....,_,4 -25
4.5
Staff Development, .._, .,. ,, 1111 ,. ...__ _.,,
..,.....,,428
5.0 FINANCE
AND BUSINESS OPERATIONS-- .. ......
1111...._. 5 -1
5,1
Organization and Management.... ,111 1, ... ,. ___ ........... . ......
_ ... 5 -1
5,2
Budgeting .., r" .:.. ..... . . - 11 11 .._ 11 .11 .1 .,.,,,. 111. 11 1 ...,........,,.,15
-11
53
Finance and Accounting Services, 1111. .. _ 1111 ............... ...............
...5 -21
5.4
Asset Management. . .. ...... _ ...................... ......................... 1111..,
,..,5.25
5.5
Purchasing Services_ . ......... .......... ......................._......, ..._.....,...
5.28
5,6
Risk Management.,,,..._ . .......... ......... ................._..,.......,,
„ 1111. 5.29
51
Internal and External Auditing .., 1111... ........... ..........
. . _ , 5 -33
200 d 9 S J 1 h;1 i M1) 2tl ,Zo- DIU
TABLE OF CONTENTS
6.0 INSTRUCTIONAL SERVICES AND ACCOUNTABILITY . - .,..........— ...,.�., . 6 -1
61 Organization and Management of Curriculum and Instruction... .....6 -2
6.2 Curriculum and Instructional Services ................ 111. 6 -13
6.3 Special Programs ,,,,,,,,,, ,,,,,,,,,, ...... .... ......,,.,..,................
6.4 Student Services,,,. .............. ...................... ... 6 -20
7.0 AUXILIARY SERVICES .. . ................. . . .
7.1 Auxiliary Services Organization and Staffing ........ . .................. . .....7 -1
7.2 Plant Operations . .............. ........ . 1.111
_111.1 .., ..- .....................7.7
7.3 Transportation _, _ ,_ _.......,...........
....... . 1111 7 -16
74 Energy Management.,..., ,., 1111.._ -1-111111— .._ ............. ._.. -7-22
7,5 Child Nutrition._ .1111.,. _..... ... _ .....--- ... 7 -25
W d IOQM2098 :131 VOIN30 d0 ,LM
33
117: 11 (HIJ 20 ,ZO- 330
34
mlmlqffwl���M Ifflffiffill's �11- �
MGT
-0�7�nca
NO M m A
315-
The Carteret County Board of Commissioners contracted with MGT to conduct a financial review of Carteret
County Schools. In this study, MGT analyzed the current funding structure and assessed how the school
system is spending federal and state funds, and specifically analyzed how the school system uses local funds
provided by the County.
To gain an understanding of the financial situation in Carteret County Schools, MGT consultants collected
comparison data from peer North Carolina school systems, reviewed existing state and school system data,
and interviewed school system and county personnel. From these corresponding data, MGT consultants
were able to formulate findings, commendations, and recommendations regarding the current financial policies
and practices of Carteret County Schools.
----------------------- - - - - -�
MGT °s FINANCIAL REVIEW WAS DESIGNED TO:
• develop a detailed set of information about the status of each
district fund source;
• develop a summary report of the status of district financial
resources by fund source (federal, state, and local dollars);
• utilize findings to recommend strategies for improvements in
the use of funds in Carteret County Schools;
• prepare recommendations for improvement; and
• develop strategies and a time line for implementing each rec-
ommendation.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ J
STUDY METHODOLOGY
To assist the Carteret County Board of Commissioners in addressing financial issues related to the school
system, as a starting point we used the set of study procedures and guidelines that were developed by MGT
as a model for conducting effective management, education, and performance audits of schools and school
districts throughout the country.These guidelines have been used effectively in previous MGT independent
studies of schools and school districts in the states of Maryland,
Tennessee ,Wisconsin,Virginia,Texas, California, Colorado, North
Carolina, Ohio, South Carolina, Illinois, New York, Arkansas,
Mississippi, and Florida.
Prior to the formal on -site review, MGT' consultants were
provided with information about Carteret County Schools
operational structure and financial status. We then tailored
financial review guidelines to reflect local policies and admin-
istrative procedures; the unique conditions of Carteret County
Schools; and the input of county Rnd school system leaders.
Our on -site review included meetings with appropriate county
officials and staff, central office and school -level staff, and re-
views of documentation provided by these individuals.
CONDUCTING THE FINANCIAL REVIEW
Initially, the review focused on preparing a peer group
analysis of relevant financial data to include state, fed -
eral, and local revenues and expenditures. Similar North
Carolina school systems were selected to provide a
baseline for comparing the financial practices of Carteret
County Schools. The next phase of the review con-
sisted of developing a clear description of the use of
state, federal, and local funds in Carteret County Schools.
MGT constructed fund summaries as well as detailed
descriptions of school system revenues and expendi-
tures were constructed using common data. These data, along with additional information collected from
interviews and existing school system sources, comprised the primary source of information used to de-
velop recommendations to address the central issues warranting this review.
3Q2
THE RESULTS
Resulting analyses revealed significant potential cost - savings to the County. Our report detailed several
commendations and 36 recommendations, each with its own implementation plan with financial impact,
benefits, and operational implications. Additionally, we provided clear direction for future financial needs,
and guidance for interaction between the Board of Education and County Commissioners to maximize the
impact of local funding efforts. MGT was pleased to receive positive feedback from Carteret County
officials regarding overall report quality and the status of current implementation efforts.
Full implementation of the recommendations with quantifiable fiscal impact would generate five -year savings
of over $5.5 million that could be used to supplant current local funds.Through the implementation of our
recommendations, cost reductions and a formal budget process will be realized within the school system and
a better working relationship between the school system and the County Commissioners will be created.
TOTAL COST SAVINGS
The projected savings are shown below.The savings presented in this report are in 2002 -03 dollars and do not
reflect increases due to salary or inflation adjustments.
r------------- - - - - --
j Recommendation
Allocate Costs to Child Nutrition Fund*
Eliminate Small Job Shop Division
j Eliminate Three Trade Technicians
Implement Energy Management Program
j Reduce Three Assistant Principal Positions
Eliminate Special Supplement for Six Principals
Establish a Systemwide Copier Contract
Establish Sponsorship Program with Soft Drink Company
TOTAL. SAVINGS
L------------------
Total FiveVear Savings
$1,463,500
$892,815
$535,680
$990,000
$707,685
$421,810
$97,400
$445,000
$5,553,890
I
I
L
MGT is °gasser Partner
When you need sound, practical, and effective recommendations for
improvement, call MGT, We understand your needs. We have been
there. And we will be there for you. No matter how much the firm
has grown, the most important principles have remained unchanged:
a clear focus on the challenges facing the public sector, a dedication
from the very top to provide hands -on service, and a strong com-
mitment to being a valued partner of every client,
We are here to be of service to you.
MGT
or
www.MGTofAmerica.com
37
TALLAHASSEE, FLORIDA • SACRAMENTO, CALIFORNIA
AUSTIN, TEXAS • COLUMBIA, SOUTH CAROLINA • OLYMPIA, WASHINGTON
UNION COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: 11/03103
Action Agenda Item No.
(Central Admin. use only)
SUBJECT: Joint School Study
DEPARTMENT: Central Administration PUBLIC HEARING: No
ATTACHMENT(S): INFORMATION CONTACT:
- Goals for Study Joe L.esch
- Budget Amendment Kai Nelson
TELEPHONE NUMBERS:
292 -2591
292 -2522
DEPARTMENT'S RECOMMENDED ACTION: Approve study goals and approve budget
amendment
BACKGROUND: Part of the mediation agreement approved by both the Board of
Commissioners and Board of Education was to enter into a joint planning process as allowed for
in N.C. General Statute 115C- 426.2. The agreement states;" a study will be jointly
commissioned by both boards to develop a clear understanding of the program and facility
needs of the school system and a method of funding those requirements, given the resources of
the County, the expectations of its citizens, and the educational goals and policies of the State
and the Board of Education
The study will look at various issues that have been raised during the budget process including
Union County and UCPS finances, benchmarking against comparable successful school
systems, joint capital planning process, school size, and a method of funding of both current
expense and capital outlay needs.
Staffs for the schools and for the County have met several times and agreed on goals for the
study to present to their respective Boards. The study goals are designed to meet the intent of
the mediation agreement and will be used to solicit qualifications and proposals from
consultants to conduct the study.
FINANCIAL IMPACT: The mediation agreement also states that the County will fully fund the
joint study. After receiving preliminary estimates from consultants, staff believes that an
3CI
appropriation of not to exceed $175,000 will be needed. A budget amendment that appropriates
funds from the savings from school debt financing as recently recommended by the County
Finance Officer, is attached.
Legal Dept. Comments if applicable:
Dept. Comments if applicable:
Manager Recommendation:
School Study Goals
One important aspect of the agreement reached in mediation is the joint study of the program and
facility needs of the Union County Schools and a method of funding those requirements. This
study holds promise for a clearer understanding and improved communication between the
School Board and the Board of County Commissioners.
Specifically, the mediation agreement calls for the joint study of the program and facility needs of
the school system and a method of funding those requirements, given the resources of the County,
the expectations of its citizens, and the educational goals and policies of the State.
To achieve mutual understanding and improve communications, a thorough review and
discussion of those elements that frame the educational mission of the Board of Education and the
fiscal responsibilities of the Board of County Commissioners is required.. The scope of the study
should be comprehensive enough to thoroughly evaluate each of these elements to the satisfaction
of both Boards.
The study goals are as follows:
Review current status of Union County's and UCPS finances.
• Summary report of financial resources by funding source (local, state, federal)
• Analyze financial reporting (financial statements, LGC, DPI, etc,) to ensure that financial
resources by funding source are being properly and adequately estimated, budgeted,
reported and audited.
I Analyze state, local and federal funding levels and formulas to ensure that maximum
resources are being received and utilized by Union County and UCPS.
2 Benchmark the UCPS system and Union County with comparable successful school systems
and their respective counties in North Carolina with regard to:
• Revenues and expenditures
• Indicators /measures of educational achievement
• UCPS use of local funds to attain/improve educational achievement
• Union County's effort to fund schools in comparison to its ability to pay for schools and
school programs
• Number of UCPS personnel and local supplement program for both instructional and
non - instructional positions
3. Develop a process that provides for a clear understanding of the current expense needs of
UCPS and a method of funding those needs based on:
a. The fiscal policies and financial resources of Union County;
b. The expectations of its citizens;
c. The federal requirements imposed on UCPS;
d. The educational goals and policies of the Board of Education;
e. The educational goals and policies of the State;
f, The current expense requirements of UCPS, and
g. Other funding obligations of the County (i e. courts, sheriff, health & human services,
etc.)
i +(
4.. Develop a joint capital planning process and method of funding for facility needs, including
immediate, short-term (within 2 years) and long -term (2 — 5+ years) needs, and other capital
outlay needs of UCPS.
• Based on the development of a joint five -year plan and is periodically updated
• Assess school capital outlay needs in light of the joint five -year plan
• Identifies funding sources and a plan of finance that meet the scheduled needs of the joint
five -year plan
5. Evaluate growth related issues and their impact/effects on:
• Facilities.
• Tax base,
• Funding.
6. In order to ascertain the expectations of the citizens, the study will:
• Evaluate the educational expectations and aspirations of the community.
• Assess taxpayer willingness of various levels of County financial support for the UCPS
LAW OFFICES
COLEMAN, GLEDHILL, HARGRAVE & PEEK
A PROFESSIONAL CORPORATION
129 E TRYON STREET'
P.O. DRAWER 1529
HILLSBOROUGH. NORTH CAROLINA 27270
919732.2196
FAX 919 -732 -7997
w v gnndh com
Barry Jacobs, Chair
Margaret W. Brown
Moses Carey, Jr.
Alice M. Gordon
Stephen H. Halkiotis
Orange County Board
Post Office Box 8181
Hillsborough, North
December 2, 2003
of Commissioners
Carolina 27278
-�-
FROM THE DESK OF
GEOFFREY E. GLEDHILL
E�M�111L f.�'�rfire��l �IhiliLtlmnJh.com
RE: Supplemental Tax to Operate Schools of a Higher'
Standard
Dear Board Members:
During the Board's recent work session to discuss responses
to the school merger public hearings and the staff prepared
analysis of potential impacts resulting from possible school
merger, several supplemental tax questions were raised. This
letter answers those questions in the context of "no merger" of
the school systems. There are special rules related to
supplemental taxes in the context of the merger of school
administrative units. And, it is an analysis of the general law
only. Other options could be available through local act of the
General Assemblv.
A board of county commissioners has no inherent authority
to "call" elections. Any election called must be one authorized
by law. The law can be general or special /local. Subchapter
VIII, Article 36 of Chapter 115C of the North Carolina General
Statutes authorizes voter- approved supplements for school
purposes. N.C. Gen. Stat. 5 115C- 501(a) authorizes the board of
county commissioners to call an election to ascertain the will
of the voters as to whether there shall be levied and collected
a special tax to operate schools of a higher standard by
supplementing any item of expenditure in the school budget. Such
an election can be for one administrative unit /special tax
district, more than one administrative unit /tax district (with
I
43
Orange County Board of Commissioners
Page 2
December 2, 2003
the same or different authorized amounts less than the maximum
permitted for each of the districts) or county -wide. If an
election calling for a county -wide supplemental tax passes, the
taxes collected are apportioned among the local school
administrative units in the county pursuant to N.C. Gen. Stat. §
115C -430. N.C. Gen. Stat. § 115C -430 requires a current expense
county appropriation in a multi - school administrative unit to be
apportioned according to the membership of each unit. The total
money collected from a county -wide supplemental tax would
therefore be divided by the total school membership in the
entire county for each budget year, as determined by and
certified to the board of county commissioners by the State
Board of Education, and then appropriated, per pupil, to each of
the administrative units according to their membership.
P_ county -wide supplemental tax in Orange County could not
exceed sixty cents on each one hundred dollars of property
valuation (tax district equalling or exceeding 100,000
population). A supplemental tax for one or each of the
administrative units in Orange County could not exceed fifty
cents on one hundred dollars of property valuation (each tax
district would have less than 100,000 population). N.C. Gen.
Stat. § 115C -502.1 One of the ways the law provides for the
election to be called is as the result of a petition. Local
boards of education may petition the board of commissioners for
an election in their respective school administrative units.
There is also a provision for twenty -five percent (25 °s) of the
qualified voters who reside in a local school administrative
unit to petition the local board of education for an election.
N.C. Gen. Stat. § 115C -503. In the event there is a successful
voter petition, that is, one where 250 or more of the qualified
voters who reside in a local administrative unit signing the
petition, the board of education of the administrative unit
receiving the petition must give "due consideration to [the]
voter petition...." N.C. Gen. Stat. § 115C -505. That means, a
qualifying voter petition does not require the board of
education receiving it to petition the board of commissioners
for an election.
'The special district tax in effect in the Chapel Hill -
Carrboro City special tax district has an authorized maximum of
thirty -five cents on one hundred dollars valuation of property.
WMI
Orange County Board of Commissioners
Page 3
December 2, 2003
A petition requesting a special school election bearing the
approval of a board of education, when presented to the board of
commissioners, carries with it the requirement that the board of
commissioners call the election. It is therefore the "duty of
the board of county commissioners to call the election
petitioned for and fix the date for the election." N.C. Gen.
Stat. § 115C -506. A county board of election conducts the
election called by the board of county commissioners and, where
the election is the result of the board of education petitioning
for it, the board of education pays for the election. N.C. Gen.
Stat. § 115C -507. The board of commissioners sets the date for
the election regardless of the method by which the election
occurs. That is, even when the election is called because of the
petition to the board of county commissioners from the boards)
of education, the board of county commissioners sets the
election date.
The statutes authorizing local tax elections do not explain
what happens when, in the case of a multi - administrative unit
county, one board of education petitions the board of
commissioners for a county -wide supplemental tax and the other
does not. This is so notwithstanding the fact that the law
appears to make it mandatory for the board of county
commissioners to call a county -wide supplemental tax election
only within the administrative unit whose board of education
petitions for it, A question that further muddies this water is
what happens if the election is actually conducted and passes in
only one administrative unit? One answer to this question is
that the tax would be imposed only on property in the
administrative unit where the election is conducted but the tax
proceeds would be distributed county -wide on a per pupil basis.
I can't say that I think the General Assembly intended this
result. I can say that I would expect such an outcome to result
in litigation. Presumably, if the Board of Commissioners of
Orange County were to receive a petition from only one of the
boards of education in the County seeking an election on a
county -wide supplemental tax, it would use its authority to call
an election county -wide. If a board of education petitions the
board of county commissioners for an election, the board of
education may withdraw the petition 25 days before the election.
If the petition is withdrawn, the election is not held
4s
Orange County Board of Commissioners
Page 4
December 2, 2003
unless it is called by the board of county commissioners
pursuant to other statutory authorization.
There's one other important difference between a petition -
initiated election for a county -wide supplemental tax and one
called by the board of county commissioners pursuant to its
statutory power to call for the election. N.C. Gen,. Stat. §
11SC -504 contains the information which must be in the petition.
Subsection (5) states:
(5) If the petition for an election is to supplement and
equalize educational advantages, and if any school
districts in the area in which it is proposed to vote
such a tax have heretofore voted a supplementary tax,
the petition and the notice of election shall state
that in the event such election is carried, it will
repeal all local taxes heretofore voted in any
district except those in effect for debt service in
any district, unless such debt service obligation is
assumed by the county or otherwise provided for.
There is no comparable provision for a county commissioner -
called county -wide supplemental tax election. Thus, it seems to
me, that the General Assembly is providing a board of county
commissioners with similar flexibility in calling for
supplemental tax elections as it provides a board of county
commissioners in calling for school merger. Merger is
accomplished by a board of commissioners without a vote of the
people. Merger accomplished by initiation of boards of education
can be made subject to a vote of the people. County -wide
supplemental tax authorization can be approved by the voters
without impairing an already authorized district tax if the
election for a county -wide supplemental tax is called by the
board of commissioners on its own initiative.
If the voters approve a supplemental tax the board of
county commissioners is authorized to levy it, generally for the
purpose of supplementing the local current expense fund, the
capital outlay fund, or both. The ballot language will determine
the tax rate limit (not exceeding the statutory maximum) and
permitted uses of supplemental tax proceeds. N.C. Gen, Stat. §
115C- 511(a). If the tax is approved, the board of education in
Orange- County Board of Commissioners
Page 5
December 2, 2003
the annual hudget it submits tc the board of county
commissioners "shall request the rate of ad valorem tax it
wishes to have levied on its behalf as a school supplemental tax
not exceeding the rate approved by the rioters." The board of
county commissioners may approve or disapprove the board of
education recpuest in whole or in part, and mGr le-y a rate of
supplemer..�_al tax "as it me-/ find to be in the best interest of
the taxi-avers and the public schools, not in excess of the rate
requested b the board of education." N.C. Gen. Scat. § 115C-
511(b), And, it is unlawful for any part of a supplemental tax
to be used for purposes other than authorized by the election.
N.C. Gen. Stat. § 115C- 511(c).
The law requires interpretation as to the responsibility of
the board of commissioners in a multi - school administrative unit
county where there is a county -wide supplemental tax in effect.
Presumably each board of education would make a recommendation
for the county -wide supplemental tax- If the request of the two
boards of education for the rate of the county -wide district tax
are not the same, the lower rate requested is likely to be the
cap on the board of county commissioner levy for that tax.
The last important thing to mention with respect to
supplemental taxes is how they differ from appropriations of
county funds to boards of education for current expense and
capital. As you know, the board of county commissioners has wide
discretion in appropriating county funds to the boards of
education for both current expense and capital.` That discretion
allows "appropriation by purpose, function, or project as
defined in the uniform budget format" (a chart of accounts
promulgated by the State Board of Education). N.C. Gen. Stat. §
115.'- 427)(b). On the other hand, supplemental taxes collected are
not county appropriations to the board of education at all.
Rather, the taxes, once collected, are funds of the school
administrative units and "shall be remitted to the local school
administrative unit[s] within 10 days after the close of each
calendar month." N.C. Gen. Stat. § 115C- 511(b).
'This discretion is limited, however, by the per -pupil
allocation reauired for current expense and by statutory appeal
rights available to the boards of education concerning both
current expense appropriations and capital appropriations.
4-7
Orange County Board of Commissioners
Page 6
December 2, 2003
I have enclosed earlier correspondence to you concerning
supplemental school taxes. The letters enclosed provide some
additional information and some additional detail to the
information that is provided in this letter.
GEG /lsg
Enclosures
xc: John M. Link, Jr.
Very truly yours,
COLEMAN, GLEDHILL, HARGRAVE & PEEK, P.C.
r
lsg: letters \bdofcomsupplementalta:'. ltr
LAW OFFICES -48
COLEMAN, GLEDHILL &. HARGRAVE
A PROFESSIONAL CORPORATION
129 E. TRYON STREET June 8, 2001
P O DRAWER 1529
HILLSBOROUGH, NORTH CAROLINA 27278
919 - 7321196 FROM THE DESK OF
FAX 919 -732 -7997 VIA FACSIMILE GEOFFREY GLEDHILL,
WEBSITE W XrW CGANDH COM
Stephen H. Halkiotis, Chair
Margaret W. Brown
Moses Carey, Jr.
Alice M. Gordon
Barry Jacobs
Orange County Board of Commissioners
Post Office Box 8181
Hillsborough, North Carolina 27278
RE: Local Tax Election
Dear Board Members:
This letter is in response to an inquiry of me by
Commissioner Halkiotis in response to questions raised by
citizens at the June 7, 2001 budget public hearing. The subject
of this memorandum is local tax elections. In brief, the
question posed is how can there be an election in the Orange
County School District for a supplemental tax? The short answer
is the election can result in any one of the following ways:
11 The Board of County Commissioners can call for an
election on the establishment of the supplemental tax on its own
initiative.
2. The Orange County Board of Education may petition the
Board of County Commissioners for an election on its own
initiative.
3. The Orange County Board of Education may petition the
Board of County Commissioners by endorsing a petition received
by the Board of Education signed by 25% of the qualified voters
who reside in the Orange County School District which petition
calls for the election. In the event a petition of 25% of the
qualified voters in the school district is presented to the
Board of Education, the Board of Education must give the
petition "due consideration." Thereafter if, in its discretion,
the Board of Education determines that the voter petition should
be approved, the Board of Education endorses the petition and
presents it to the Board of County Commissioners.
Orange County Board of Commissioners
Page 2
June 8, 2001
The Board of County Commissioners must call an election in
response to petitions requesting local tax elections and bearing
the approval of the Board of Education. The law does provide,
however, for a period prior to the election for the withdrawal
of the petition by the Board of Education in which case the
election is not held.
Enclosed is previous correspondence related to this inquiry
which contains more detail. As you all know, I will be out of
town next week. I will check in with Commissioner Halkiotis
during the week for any follow up questions that I might be able
to answer while I'm away,
Very truly yours,
GLEDHILL & HARGRAVE, P.C.
Geoffrey Gledhill
GEG /lsg
/.
xc: John M, Link, Jr. ,^,-
Rod Visser
1sg: letters \bdofcomlocaltaxelection ltr
COLEMAN, BER,NHOLZZ,
BERNHOLZ, GLEDHILL. &- HARGRAVE
A-ITORNEYS AT L.4R'
P.O. DRAWER 1529
129 E., TRYON ST.
HIL,LSIBOR.OUGH, NC 27278
919-732-2196
919 - 942 -8000
FAX 919 - 732 -7997
CHAPEL HILL OFFICE
SUITE 3DO. THE CENTER.
1506 E. FRANKLIN STREET
CHAPEL. HILL, INC 27514
919. 9297151
FAX 919.929.3892
ALONZO B COLEMAN, JR
STEVEN A. BERNHOLZ
ROGER BERNHOLZ
GEOFFREY E. GLEDHILL
DOUGLAS HARGRAVE
G. NICHOLAS HERMAN
KINI K. STEFFAN
NATHANIEL E CLEMENT
MARILYN E. TOMEI
JOEL WEBSTER
TERRY G. HARK
JANET B DUTTON
REST SAVERY -JR
Of Counsel
BONNER D SAWYER.
(1902 1972)
January 4, 1990
Moses Carey, Jr., Chairman
Stephen Halkiotis
John Hartwell
Shirley E. Marshall
Don Willhoit
Orange County Board of Commissioners
Post Office Box 8181
Hillsborough, North Carolina 27278
Re: Supplemental School Tax
Dear Board Members:
5Q
Moses has requested our input into the idea of
equalizing, by means of a county -wide school district
tax, funding of the two school systems operating in the
County. In this letter, we will outline briefly the
school district tax enabling legislation both by
statute and by local bills and offer comments and
suggestions based on our discussion with Ellen Liston.
The Chapel Hill - Carrboro school district presently
has a supplemental tax in place. That tax came into
effect by virtue of the favorable result of an election
called by the Commissioners in 1951, which election was
authorized by the General Assembly by Chapter 1169 of
the 1951 Session Laws and a 1967 election authorizing a
higher tax rate. Prior to the ratification of Chapter
1169 of the 1951 Session Laws, a supplemental tax was
levied in the Chapel Hill- Carrboro school district by
authority of Chapter 2 of the 1909 Session Laws. The
1951 Act expressly terminated the authority created by
the 1909 Act to levy the supplemental tax.
The question is, then, whether a county -wide
supplemental tax could be created without first
abolishing the supplemental tax in Chapel Hill -
Carrboro; that is, whether the Chapel Hill - Carrboro
district may have two supplemental taxes in effect at
the same time. We see no statutory barrier. The
county -wide tax could be phased in as the Chapel Hill -
Carrboro tax is phased out. When the amount of the
Chapel Hill- Carrboro tax reaches zero, the Chapel Hill-
5f
Board of Commissioners Page 2 January 4, 1990
Carrboro supplemental tax could be abolished, either by vote
(as provided for by N.C.G.S. §115C- 501(e)) or by local act of
the General Assembly.
The statutory authority for the school district tax is
found in Article 36 of N.C.G.S. Chapter 115C. That article was
adopted by the General Assembly in 1955. Prior to that time,
supplemental taxes were customarily created by special act of
the General Assembly. Were the County to choose to create a
county -wide supplemental tax, such a tax could be established
in either of two ways: by the process set out by N.C.G.S.
Chapter 115, Article 36 or by obtaining special legislation
from the General Assembly. The statutory procedure is outlined
below.
To establish the supplemental tax by the statutory
procedure requires a majority vote of the people. only the
board of county commissioners may call such an election. The
board of commissioners may call an election of its own
initiative. N.C.G.S. §115C- 501(a). The board of commissioners
must call an election if it receives a petition from the board
of education in the district in which the tax is proposed,
which petition requests an election and is approved by the
board of education. N.C.G.S. §115C -506. The board of
education, in turn, has two ways of petitioning the board of
commissioners for an election. The board of education may
bring a petition to the board of commissioners on the former's
own initiative. The board of education may also receive a
petition from 25€ of the qualified voters residing in the
district, approve that petition and in turn petition the board
of commissioners. N.C.G.S. §1150 -503. The board of education,
however, has the authority to deny a petition seeking the
establishment of a supplemental tax.
North Carolina General Statutes §115C -507 provides for the
notice of the election and form of the ballot. Pursuant to
N.C.G.S. §1150 -507, the tax, which may not exceed 506 per $100
valuation by N.C.G.S. §115C -502, is effective the next fiscal
year following the election. N.C.G.S. §115C -506. The county
collects the supplemental tax in the same manner as county
taxes, and collections are to be remitted to the school
district within ten days of the close of each calendar month.
N.C.G.S. §115C -511, The county may, if it chooses, deduct from
the amount collected the actual additional cost to the county
of levying, computing, billing and collecting the tax. Id.
Board of Commissioners Page 3 January 4, 1990
A final comment on all of this relates to the time of
disbursement to the schools by the County of money appropriated
to the schools. By agreement with the schools, the County now
pays to the schools each month 1/12 of the -total annual per -
pupil appropriation. By statute, however, the County must pay
over supplemental tax receipts to the schools within ten days
of the close of each month. N.C.G.S. §1150 -511. If the County
chose to equalize funding for the schools by the regular County
per -pupil appropriation, the County may benefit from the
"float." The supplemental tax approach would obligate the
County to pay over the revenue generated by the supplemental
tax as the revenue is received. Typically, large sums are
received in the last calendar quarter of each year, much
smaller sums at other times. An analysis of this aspect of the
issue can probably be done by Finance.
If you have further questions, please call.
Very truly yours,
Geoffrey E. Gledhill
and Marilyn E. Tomei
GEG /MET /lsg
xc: John M. Link, Jr.
Ellen Liston
sa
Attachment X
ORANGE COUNTY SCHOOLS
BUDGET RESOLUTION
2003 -04
RE IT RESOLVED BY THE BOARD OF EDUCATION OF THE ORANGE COUNTY
SCHOOLS ADMINISTRATIVE UNIT_
SECTION I- The following amounts are hcrcby appropriated for the operation of the Orange
County Schools Administrative Unit in the LOCAL. CURRENT EXPENSE FUND for the
fiscal year beginning July 1, 2003, and ending June 30, 2004:
Instructional Programs
Regular Instructional Programs
4,447,879
Special Instructional Programs
129,310
Co- Curricular Instructional Programs
510,037
Student Services
455,216
Other Instructional Programs
3,945,634
Supporting Services
Pupil Support Services
30,352
Instructional Staff Support Senices
457,592
.Administrative Support Senices
422,861
School Administrative Support Sen ices
1,14] 114
Business support Services
5,268,651
Central Support Senices
683,967
Other Support Services
1;093,444
Community Services
90,754
Other Community Services
9,692
Charter Schools
636,251
Contingency
20,000
TOTAL LOCAL CURRENT EXPENSE FUND
J0,64q754
SECTION 2 -'lire following REVENUES are estimated to be available to the LOCAL
CURRENI EXPENSE FUND for the fiscal year beginning July 1, 2003, and ending
.June 30, 2004:
State Textbooks 386,176
County Appropriation 17,205,030
Local Revenues 1,374,804
Fund Balance Appropriated 679.744
TOTAL LOCAL CURRENT EXPENSE FUND REVENUES 9.612 U
SECTION 3 - The following amounts are hereby appropriated for the operation of the Orange
County Schools Administrative Unit in dte STATE PUBLIC SCHOOL FUND for the fiscal
year beginning July 1, 2003; and ending June 30, 2004:
Instruction Programs
265,594
Regular Instructional
15,377,796
Special Instructional
3,293,196
Student Services
1,635,616
Other Instructional
4,125;345
Supporting Services
28,652
Pupil Support Services
51,540
Instructional Staff Support Services
146,247
Administrative Support Services
261,936
School Administrative Support Services
1,696;254
Business Support Services
1,197,714
Central Support Services
122,197
Other Support Services
830,894
TOTAL, SIATE PUBLIC SCHOOL FUND APPROPRIATION
9.'738.737
SECTION 4 - The following REVENUES are estimated to be available to the SIATE PUBLIC
SCHOOL FUND for the fiscal year beginning July 1, 2003, and ending June 30, 2004:
State Public School Fund Allocation
29 7 ;R 777
SECTION 5 - The following amounts are hereby appropriated for the operation of the Orange
County Schools Administrative Unit in the FEDERAL. GRANTS FUND for the fiscal year
beginning July 1, 2003, and ending June 30, 2004:
Instructional Programs
Regular Instructional Programs
265,594
Special Instructional Programs
940,352
Student Services
123,459
Other Instructional Programs
316,999
Supporting Services
Pupil Support Services
28,652
Instructional Staff Support Services
15,111
Administrative Support Seniors
1,305
Business Support Sen'ices
5,090
Central Support Services
Other Support Services
9,091
Non - Programmed Charges
Payment to other Governmental Units
39,126
Unbudgeted Federal Grant Funds
122_59
TOTAL FEDERAL, GRANTS FUND APPROPRIATION
7 467 g3�
SECTION 6 - The following REVENUES are estimated to be available to the FEDERAL
GRANTS FUND for the fiscal year beginning July l; 2003, and ending June 30, 2004:
Federal Grants Allocation
SECTION 7 - The following amounts are hereby appropriated for the operation of the Orange
County Schools Administrative Unit in the CAPITAL OUTLAY FUND for the fiscal year
beginning July 1, 2003, and ending June 30; 2004:
Category I (Land, Building) 6.081,487
Category II (Furniture and Equipment) 80,000
Category III ( Vehicles) 0
Non - Programmed Charges 0
TOTAL CAPIT4.L OUTLAY FUND APPROPRIATIONS 6.161.487
SECTION 8 - The following REVENUES are estimated to be available to the CAPITAL
OUTLAY FUND for the fiscal year beginning July 1, 2003, and ending June 30, 2004:
County Bond
2,640,761
County Appropriation - Sales Tax
948,353
Installment Purchase
1,625,523
Projects In Progress from 02-0:3
90,000
County Appropriation - Recurring
684,254
Funds Remaining from 02 -03 Projects
172.596
TOTAL CAPITAL OUTLAY FUND REVENUES
64.61,487
SECTION 9 - The following amounts are hereby appropriated for the operation of the Orange
County Schools Administrative Unit in the SCHOOL FOOD SERVICE FUND for the fiscal
year beginning July 1, 2003, and ending June 30, 2004:
Supporting Services
Business Support Services
1,930,983
Other Support Services
221;909
Indirect Cost
140,000
Purchase of Equipment
30,000
TOTAL SCHOOL FOOD SERVICE FUNS 2,322,892
SECTION 10 - The following REVENUES are estimated to be available to the SCHOOL.
FOOD SERVICE FUND for the fiscal year beginning July 1, 2003; and ending .Tune 30, 2004:
Local Revenues 1,497,892
Federal Allocation 825,000
Fund Balance
TOTAL. SCHOOL FOOD SERVICE FUND REVENUES
SECTION 11 - The following amounts are hereby appropriated for the operation of the Orange
County Schools Administrative Unit in the COINDIUNITY SCHOOLS CHILD CARE. FUNT
for the fiscal year beginning July 1, 2003, and ending June 30, 2004:
Supporting Services
Regular Community Services 673,568
Other Community Services 110,778
Indirect Cost 150,000
TOTAL COINIT FUNITY SCHOOLS FUND 934,346
SECTION 12 - The following REVENUES are estimated to be available to the CONTIMIjN-ITY
SCHOOLS CHILD CARE FUND for the fiscal year beginning July 1, 2003, and ending June
30, 2004:
Local Tuition 6:39,828
Fund Balance 294,518
TOTAL COININIUNITY SCHOOLS FUND 934,346
SECTION 13 - The Superintendent is hereby authorized to transfer appropriations within a fund
under the following conditions:
A. He may transfer amounts between functions of the same fund with a report on such transfers
being required at the next regular meeting of the board of education
B. He may not transfer any amounts between funds.
SECTION 14 - Copies of the BUDGET RESOLUTION shall be immediately fumisbed to the
Superintendent and School Finance Officer for directions in carrying out their duties:
Adopted this 4th day of August 2003
8 -4 -03 8-4 -03
Superintendent Date Board Chairman Date
Attachment Y
51I5C -433 CH 1150 EDUC.ITIO .,\i §ll.3c -133
as it may prescribe. Any such exuencUture shall be reperted to the
board of ed:_)caticn at its next regular meeting and recorded m the
minutes.
14) Su f.,nsnt Etrds to meet the amcun—s t' be paid dull. ^ -y the Beal V'p-ar
under continuing contracts previously entered into shall be appropri
-
ated.
(o) The sum of estimated net revenues and appropriated fund balances in
each furs, shall be equal to appropriations in that fund
(6) No appropriation may be made that would require the levy ofsupple-
mental taxes pursuant to a local act or G S. 1150 -50I to 1150 -511 in
excess of the rate of tax approved by the voters, or the expenditure of
revenues for purposes not permitted by law-,
I Ia estimating revenues to be realized from the levy of school supple-
mental taxes pursuant to a local act or G.S I15C -861 to 115C -511. the
estimated percentage of collection may not exceed the percentage of
that tax actually realized in cash during the preceding fiscal year, or
if the tax was not levied in the preceding Fzcal year, the percentage of
the general county tax levy actually realized in cash during the
preceding fiscal year.
(5) Amounts to be realized from collection of supplemental taxes levied in
prior fiscal years shall be included in estimated revenues.
(9) No appropriation may be made to or from the capital outlay fund to or
from any other fund, except as permitted by G 115C- 4:33(d).
(c) If the local school administrative unit levies its oven supplemental taxes
pursuant to a local act, the budget resolution shall make the appr'opr'iate tax
levy in accordance with the local act, and the board of education shall notify the
county or city that collects the levy in accordance vvith G S 159 -11.
(d) The budget resolution shall -be entered in the minutes of the board of
education, and within five days after adoption, copies thereofshall be filed with
the superintendent, the school finance of icer and the county finance officer.
(1975, c 437, s 1; 1951, c 423, s 1,; 1937 (Reg. Sess., 1953), c. 1025, s 13; 1993,
c. 57, s 1.)
CASE NOTES
Cited in Sale our Schs.. of Bladen County.
Inc. v. Bladen County Ed. of Edue. 140 NC.
App. 233, 5.33:5 S E 2d 90E 12000)
§ 115C -433. Amendments to the budget resolution; budget
transfers.
(a) Subject to the prov-isicns of subsect rn (b) of this section, the board of
education may amend the budget resolution at any time after its adoption, in
any manner, so long as the resolution as amended continues to satisfy the
requirements of G S. 115C -425 and 1150 -432.
(b) If the board of county commissioners allocates part or all of its appro-
priations pursuant to G S, 1150- 429(b), the board of educatior, must obtain the
approval of the board of county commissioners for an amendment to the budget
that (i) increases or decreases expenditures fzom the capital outlay fund for
projects listed in G S 11,5C-426( NU or (2), or (ii) increases or decreases the
amount of county appropriation allocated to a purpose or functirr by twenty -
five percent (2590) or more from the amount contained in the budget ordinance
adopted by the board of county commissioners: Provided, that at its discretion,
the board may in its budget ordinance specify a lesser percentage, so long as
such percentage is not less than ten percent (10 ).
346
r. T,�rTT ! T
a A7 rNT' T111'�TL7 !-' ""Il
§1150 -434 ART 31 BUDGET AND FISCAL CONTROL §1150 -434
(c) The board of education may by appropriate resolution authorize the
superintendent to transfer moneys from one appropriation to another within
the same fund, subject to such limitations and procedures as may be prescribed
by the board of education or State or federal law or regulations. Any such
transfers shall be reported to the board of education at its next regular meeting
and shall be entered in the minutes.
(d) The board of education may amend the budget to transfer money to or
from the capital outlay fund to or from any other fund, with the approval of the
board of county commissioners, to meet emergencies unforeseen and unfore-
seeable at the time the budget resolution was adopted. When such an
emergency arises, the board of education may adopt a resolution requesting
approval from the board of commissioners for the transfer' of a specified
amount 0f money to or from the capital outlay fund to or from some other fund.
The resolution shall state the nature of the emergency, why the emergency was
not foreseen and was not foreseeable when the budget resolution was adopted,
what specific objects of expenditure will be added or increased as a result of the
transfer, and what objects of expenditure will be eliminated or reduced as a
result of the transfer. A certified copy of this resolution shall be transmitted to
the board of county commissioners for (its) approval and to the boards of
education of all other local school administrative units in the county for their,
information. The board of commissioners shall act upon the request within 30
days after it is received by the clerk to the board of commissioners or the
chairman of the board of commissioners, after having afforded the boards of
education of all other' local school administrative units in the county an
opportunity to comment on the request The board of commissioners may
either approve or disapprove the request as presented. Upon either approving
or disapproving the request, the board of commissioners shall forthwith so
notify the board of education making the request and any other board of
education that exercised its right to comment thereon. Upon receiving such
notification, the board of education may proceed to amend the budget resolu-
tion in the manner indicated in the request. Failure of the board of county
commissioners to act within the time allowed for approval or disapproval shall
be deemed approval of the request. The time limit for action by the board of
county commissioners may be extended by mutual agreement of the board of
county commissioners and the board of education making the request. A
budget resolution amended in accordance with this subsection need not comply
with G S. 115C -430. (1975, c, 437, s. 1; 1981, c. 423, s 1 )
CASE NOTES
Cited in Save our Schs. of Bladen County, Granville County Board of Educ , 242 F.3d 219
Inc v. Bladen County Bd. of Educ , 140 N (4th Cir 2001)
App, 233, 535 S E 2 906 (2000); Cash v
§ 115C -434. Interim budget.
In case the adoption of the budget resolution is delayed until after July 1, the
board of education shall make interim appropriations for the purpose of paying
salaries and the usual ordinary expenses of the local school administrative
unit for the interval between the beginning of the fiscal year and the adoption
of the budget resolution. Interim appropriations so made and expended shall
be charged to the proper appropriations in the budget resolution (1975, c, 437,
s. 1; 1981, c 423, s, 1 )
347