City hires firm to analyze financial, educational impact of withdrawal

By Ben Holbrook | Feb 11, 2014

Belfast — City councilors gave their consent to hire an independent consultant to begin evaluating the financial and educational impact of withdrawing from Regional School Unit 20.

After interviewing the two firms that responded to an initial Request for Proposals from the city on Thursday, Jan. 30, councilors ultimately decided to move forward with Portland-based Planning Decisions Inc. (PDI). The company then submitted a revised proposal to the city that outlines five tasks PDI would undertake to assess the costs of withdrawing with different scenarios.

The firm estimated the total cost of the analysis would be about $25,000, but do to the exploratory nature of the work, costs could run higher.

Task 1

Planning Decisions Inc. would estimate mock budgets for fiscal year 2014 using different organizational structures in the district. The first option would be to create a budget for a stand-alone Belfast district that would assume middle and high school students from Belmont, Morrill, Northport, Searsmont and Swanville would tuition in.

Another scenario would be to create a budget for a kindergarten through 12th-grade district that includes Belfast, Belmont, Morrill and Searsmont, as well as tuitioned high school students from Northport.

The third scenario would create a budget for a K-12 district comprised of Belfast, Belmont, Morrill, Searsmont and Swanville.

Finally, the last scenario would involve creating a budget for a K-12 district comprised of Belfast, Belmont, Morrill, Northport, Searsmont and Swanville.

In the proposal, PDI notes Task 1 would involve reviewing work already completed by the withdrawal committee and former School Administrative District 34 Superintendent Bruce Mailloux. Specifically, PDI states it would “deconstruct” the fiscal year 2014 RSU 20 budget.

The deconstruction of the 2014 RSU 20 budget would allow PDI to identify the costs attributed to each set of individual schools in the above listed options; the range of staff and facility capacity related to current enrollment totals, how per pupil costs would increase significantly with lower enrollment numbers and how exceeding current enrollment numbers would impact the ability to maintain current program quality; and the amount of system-wide expenses attributed to each of the above listed options.

Once Task 1 is completed, PDI will be able to provide an estimate of what the cost of education would have been under each of the above listed options, both in total budget and in payment amounts received from local minimum tax commitment, the state Essential Programs and Services funding, local extra tax commitment and tuition revenue.

The cost estimates would assume that capital expenses with a particular school will be paid by whatever educational unit the school is in, according to PDI's proposal.

According to the proposal, PDI estimates Task 1 would cost about $7,000 to complete by the end of March.

Task 2

This task would involve working with the Maine Department of Education officials to look at the fiscal year 2015 preliminary state subsidy figures. In the past, PDI said the Department of Education has run hypothetical preliminary state subsidy figures for the company, and if the officials would do so again, PDI would include those findings in its report. However, if the state cannot provide the numbers, PDI will use school-specific enrollment data to estimate potential subsidy figures.

The company will then summarize the enrollment, Essential Programs and Services allocation, the state subsidy, the local extra tax commitment and the tax cost to Belfast for each of the options selected by the withdrawal committee.

The cost to complete work on Task 2 is estimated to be between $2, 000 and $4,500.

Task 3

The goal of Task 3 is to estimate the likely costs of completing the withdrawal process. According to PDI's proposal, this step would involve reviewing the 22-step process for leaving the district, as well as talking to the RSU 20 director of finance and the city treasurer to determine property ownership and estimate the staff time needed to meet the withdrawal statute requirements.

According to PDI, the work for Task 3 is estimated to cost $2,400 and would be completed by April.

Task 4

The work for Task 4 involves developing data to use to help determine the demographic and economic environment for the new Belfast area school system. Using a school enrollment projection model, PDI will make a 10-year enrollment projection for each grade in all of the towns included in the various withdrawal scenarios.

During discussion, Councilor Mike Hurley questioned if it would be better to to have Task 4 completed after the withdrawal vote, which could also save money on the overall cost of the work that would be completed by PDI.

“Basically, I don't want to spend $25,000 right now if we can cut it down,” he said.

However, Councilor Eric Sanders disagreed and stated he felt the work that would be done with Task 4 is very important because the information will be useful as the city begins forming a new school unit if the withdrawal vote is successful.

Sanders also noted that the cost of the analysis could be negligible compared to what the city could potentially save by withdrawing.

Task 4 is estimated to cost about $12,000 to complete by May.

Task 5

The final piece of the report to be completed by PDI would be to compile all of the information and then present its findings to the public to help residents understand their options and make an informed decision when they vote.

The cost for the final report, which would be completed by June, is estimated to be about $2,400.

Councilors unanimously approved hiring PDI to analyze the financial and educational impact on Belfast of withdrawal.

Speaking to The Republican Journal Wednesday, Feb. 5, City Manager Joseph Slocum said the money to pay for the analysis would be taken from the city's undesignated fund balance. He said work should begin in the next few weeks once an agreement is signed with PDI and the scope of work that the city wants completed is clearly laid out.

“This study is really to help the council understand the short- and long-term implications of withdrawing or not withdrawing,” Slocum said.

 

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Ben Holbrook
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Ben Holbrook is a reporter for The Republican Journal covering general news.

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