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ELEMENTARY SCHOOL�DISTRICT CONSOLIDATION

Pros and Cons of Consolidating the Five Elementary Districts that feed

Lake Park High School

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The LWV of Roselle-Bloomingdale

Nonpartisan, nonprofit organization
Never endorses a political party or candidate for office
Mission: Empowering Voters. Defending Democracy

Encourage informed and active participation in government

Education: increase public's understanding of major policy issues
Advocacy: Building relationships with and contacting elected officials

Teach voters to engage with fully researched, nuanced decision-making in government policies
Membership open to all regardless of gender, race or ethnicity

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The Study Question

The end of pandemic relief funding
Growing expectations for academic offerings
Costly accountability measures
Declining student populations
Lagging achievement
High property taxes

Are we getting the most out of every education tax dollar?

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LWVRB Study Position

Position: LWVRB supports the efficient and effective operation of school districts through both school district consolidation and intergovernmental agreements.

Will the Proposal result in:

Projected education cost savings?
Better use of administrative costs (apply to direct education)?
A reduction in Illinois taxing bodies?
A positive effect on long-term total taxation?
Consistent employee contracts?
Increase in professional development?
Increase social and economic justice?
Increase student learning and outcomes?

The League of Women Voters advocates for an issue only when we have a position on it. If members have not studied an issue and come to a consensus, the League has no position and therefore cannot take action. League studies are a defined process lasting one to three years. They involve a thorough pursuit of facts and details, both positive and negative. After a year-long study, The League of Women Voters of Roselle Bloomingdale established a position that supports the efficient and effective operation of school districts through both school district consolidation and intergovernmental agreements.

Our position established these criteria. Will the proposal result in:

Projected education cost savings

A better use of administrative costs

A reduction in Illinois taxing bodies

A positive effect on long-term taxation

Consistent employee contracts

And an increase in professional development, social and economic justice, and most important student learning and outcomes.

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Program Order

Background on school district consolidation
School district consolidation benefits
School district consolidation cons or considerations
LWVRB recommended advocacy
Q&A and Panel Discussion with education experts

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High Number of School Districts

More than 850 public school districts in Illinois

Third highest number of school districts in the nation

Illinois has lower enrollment

Illinois' small districts often cited as a driving factor for high property taxes

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Education is ~⅔ of your Property Tax Bill

ROSELLE BLOOMINGDALE

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District Size and Efficiency

2018 Illinois State analysis examined Illinois district size on:

District size matters in school finances

Student Achievement	District Expenditure
Low, positive effect on achievement (0.4% of variance)	Moderate effect on district expenditure (23% of variance)

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Optimum School District Size

Optimum school district size operates along an inverted U-shaped curve

Districts are inefficient when small
Efficiency drops off as districts get larger

A district with 2,000 - 6,000 students is optimal

Date	Researchers	Optimum Size
2002	Andrews, Duncombe, Yinger	6,000 students
2014	Journal of Education Finance	3,000 students
2013	Center for American Progress	2,000 – 4,000 students

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DuPage County School Districts

42 school districts in DuPage County

27 of the 42 have fewer than 750 students

Districts formed when DuPage was rural with small towns

Declining student enrollment:

In 2020, DuPage educated 180,000 students
In 2022 , enrollment declined to 150,000 students

Smaller districts with declining enrollment have the most to gain from consolidation

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No Unit District or School Consolidation

NO Unit district:

Unit districts not financially advantageous due to teacher salary match
Unit districts’ expense allocations: crayons vs football helmets?

NO school consolidation, boundary change or loss of identity :

No school consolidation or boundary changes
Each school will retain their unique personality and neighborhood feel

Solely focused on consolidating administrative expenses

No one will lose their local schools

Before we go much further, we want to emphasize that we are NOT in favor of a unit district. A unit district is when you combine an elementary district with a high school district. When we considered a unit district, we discovered that consolidation requires each consolidating district to match the teacher salaries of the highest-paid district. There’s a larger difference between the salaries of high school and elementary teachers, so moving to a unit district is not as advantageous from a financial standpoint. Another concern would be the difficulty for school boards to choose expense allocations between elementary and high school needs. In other words, crayons versus football helmets.

In addition, we do not recommend consolidating any schools or changing school boundaries. As part of our study, we talked with parents from larger school districts. We found that each elementary and middle school in these larger districts still had unique personalities and a neighborhood feel. We are strong supporters of local schools and local identity. Loss of local identity from elementary district consolidation is minimal. Our recommendation and panel discussion tonight is solely focused on consolidating administrative expenses. No one will lose their local schools.

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Troubling Financial Factors

(2/3) of district revenue come from Property taxes
Property tax rates at a relatively high level
Property tax funding for education produces unequal funding:

Home values are unequal between communities
Supply of commercial property tax revenue is unequal

Building maintenance funds often have deteriorating balances
Evidence-based state funding is based on total enrollment
Average enrollment decline of 3.2% in five feeder districts

As we investigated district consolidation, we found some troubling financial factors.

The majority of school district revenue (about 2/3) comes from property taxes – and property taxes are already at a relatively high level.

Just as important property tax funding among LPHS feeder districts is unequal because home values are unequal between communities. In addition, each district’s supply of commercial property tax revenue is also unequal.

Last, building maintenance funds often reflect deteriorating balances. Rising utility costs and other facilities expenses are not easily passed along to taxpayers. If a district cannot pass a referendum, it is faced with making potentially severe operating cuts that affect the classroom and our community’s students.

Last, declining enrollment can cause a reduction in state revenue. Student enrollment in our area has been declining, with an average decline of 3.2% among the five elementary feeder districts. So, expenses are going up while revenues are declining. And, asking more from property taxpayers to fund growing expenses is problematic.

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Significant Administrative Savings

Combined elementary feeder districts would be optimal size – 5,055 students

$3.29 million in excess administrative costs
Economies of scale potential in:

Purchasing, staffing, accounting, legal, construction, operations and transportation
Consolidation of district administration buildings or better use

Eliminating duplicative costs results in greater efficiency

Here’s the crux of the matter. Combining all the Lake Park High School feeder districts into a single district would result in a total student population of approximately 5,055 students - which would put us right in that sweet spot for optimum district size.

We looked at total administrative costs for a comparison district with similar enrollment, SD58 in Downers Grove. Look at the numbers. Elementary SD58 reported total administrative expenses in 2022 of approximately $1.5 million annually. The aggregate total administrative costs for all five elementary feeder districts is approximately $4.8 million. This suggests there are significant duplicate costs that could be eliminated for greater educational efficiency. I’m going to pause to let that sink in, $3.3 million in annual excess administrative costs.

In addition to administrative labor costs, economies of scale could also be realized in areas such as purchasing, staffing, accounting, legal, construction, operations and transportation. There may also be the potential to close some district administration buildings or make better use of buildings once they are open to a larger area.

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Administrative Costs Per Pupil

Illinois spends $631 per pupil on district administration

which is more than DOUBLE the national average

Administration for our five feeder districts costs an average of $992 per pupil �vs. only $321 per pupil for our comparison SD58

Source: Illinois Policy

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Significant Pension Savings

Superintendent retirement benefits based on a narrow earnings window
Superintendents can receive payouts equal to many times their contribution

Average annual pension salaries for four past Tier 1 superintendents:

Source: Taxpayers United of America

School District	Employee Deposits to Pension	Estimated Lifetime Payout	Deposit % of Lifetime Payout
SD10	$280,556	$3,552,953	8%
SD11	$332,731	$3,182,096	10%
SD12	$275,842	$5,106,946	3%
SD13	$169,926	$7,006,801	4%

There’s another potential for significant savings. Under Illinois’ pension plan system, pension payments are based on the highest average salary earned during 4-8 consecutive years out of the last 10 years of service. In contrast, social security calculates benefits based on your 35 highest indexed earning years. Those provisions give retiring school administrators a pension boost since their retirement benefits are based on a relatively narrow earnings window. As a result, some highly paid superintendents could receive pension payouts that total many times the contributions they pay into the system.

Using Taxpayers United of America data, we can look at pension data for four former superintendents in our study area:

Estimated lifetime payments range from just over $3 million to about $7 million. The critical number to look at, however, is the employee deposits as a percentage of a lifetime payout. It’s low, ranging from just 3% to 10%. While pension payments do not count toward district finances, they do contribute to the overall tax load of Illinois taxpayers. Since superintendent contracts tend to run from 3-5 years, educating school boards and the community on administrative cost savings should be done sooner rather than later.

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Lower Special Ed Costs and Risk Management

Special ed costs nearly 2x general education
Early education programs can reduce the need for special ed -- 39%
Education and financial benefits to lower special ed populations
2 special ed cooperatives, adds even more administrative layers
A larger district could bring services in house
Administrative savings could be redirected to early education
Spread the risk of educating students with very high needs

Next, let’s look at special education costs and risk management. Special education is expensive. Nationwide, special education costs almost twice as much as general education.

A Duke University study found that putting special needs children in early education programs reduced the likelihood that they would need special education in third grade by 39 percent.

In addition to educational benefits, fewer special needs students can have long-term financial benefits.

Our feeder districts currently use the services of two special education cooperatives (NDESC and SASED) because they’re too small to fund those services in house – requiring even more administrative layers. Consolidation could reduce the need for these expensive alternatives. A larger district could bring some of these services in house – and even turn it into a revenue generator. Last, the cost of educating one student with extraordinary special needs would not be concentrated in a single, small district. That risk could be spread across a larger tax base and a more efficient administrative structure.

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Redirecting Administrative Expenses

High-quality teachers are an important factor in student learning
Crisis-level shortage of principals, teachers and paraprofessionals
Competition for high-quality educational staff is high
A larger district can provide greater training and support

Redirect administrative expenses to increase front-line salaries to compete for high-quality teachers and paraprofessionals

Research shows that high-quality teachers are THE MOST IMPORTANT FACTOR in school-based student learning. As parents, we know how much we value a good teacher.

Across the country, education is facing a shortage of principals, teachers and paraprofessionals that is nearing crisis level. The pandemic, political, social, emotional and academic battles have together led to universal levels of exhaustion.

There are high rates of exodus from front-line education professionals -- and a lack of candidates to fill those positions.

These shortages mean competition for high-quality educational staff will be high. Redirecting salary expenses from administration to higher front-line salaries may be beneficial in attracting the highest-quality staff. High-quality staff leads to high-quality academic outcomes.

In addition, a larger district can provide greater professional development and support to attract, train and retain high-quality teachers.

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Other Value-Added Benefits

Improved consistency among LPHS feeder districts
Improved articulation to better prepare all students for high school
Broader student base = more curricular and extracurricular programming:

Advanced math and gifted education
Foreign languages and music
Reading specialists and differentiated curriculum
Tutoring and after-school programming
Technology and/or a STEM academy

Pockets of excellence studied and shared
Outstanding teachers can serve as shared instructional coaches

There are other value-added benefits. ✅ Consolidating all five, small Lake Park High School feeder districts will improve consistency among them as our children head to the same high school.

✅It will also improve articulation between the high school and our currently fragmented feeder districts. Education articulation is the continuity of curriculum, instruction, and assessment across a child’s entire academic experience from k-12th grade. Better articulation can greatly increase the quality of educational programming and learning progress for all students.

✅In addition, a broader student base can allow for increased offerings in both curricular and extracurricular programming. For example, additional teachers could be shared among schools for✅ advanced math and gifted education, ✅foreign languages and music, ✅reading specialists, differentiated curriculum, ✅tutoring and after-school programming, technology,✅ and even a STEM academy housed in a former administrative facility. The opportunities are endless.

In the study area, for example, Roselle SD12 is the only middle school with a marching band. Keeneyville SD20 has a thriving Gifted and Talented program.

✅Pockets of excellence can be studied and shared. ✅Every district has outstanding teachers who could be used as shared instructional coaches. Such cooperative staff development could maximize student outcomes at a lower teacher-training cost because you’re using in-house excellence.

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State Incentives Encourage Consolidation

Illinois contributes $15,125 to the cost of an expert consolidation study �AND may provide four state funding consolidation incentives:

Evidence-based funding differences
Teacher salary differences
Deficit fund balances
$4,000 per full-time certified staff

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L-T Debt and Facilities

The long-term debt liabilities of each elementary feeder district:

Not fair to pass on debt for facilities upgrades to taxpayers in other areas

Facilities upgrades should be addressed before consolidation

Item	SD10	SD11	SD12	SD13	SD20
L-T Debt Outstanding	$24,990,000	$5,235,912	$13,570,000	$2,782,712	$14,724,373
Enrollment	1,023	687	666	1,354	1,325
L-T Debt per Pupil	$24,428	$7,623	$20,375	$2,055	$11,113

Understanding what will occur with long-term debt and facilities within a consolidated district is critical.

In consolidation, the L-T debt of previously existing districts stays within the district that incurred the debt until that bond issue is paid off.

Let’s look at facility needs and L-T debt for each district.

In 2020, Itasca SD10 taxpayers approved the district borrowing about $27 million for school construction projects. Their remaining long-term debt of about $25 million would be taxed against original SD10 properties as they existed before consolidation and so on for each original district.

Now let’s look at Medinah. In 2011, for the third time in seven years, voters in SD11 rejected a multimillion-dollar tax increase for school improvements, which is why their debt is lower.

Now Roselle. In 2017, Roselle SD12 successfully passed an operating rate referendum that repaired the district's two 1960s-era schools and helped fix its finances after years of budget deficits.

Bloomingdale SD13’s low long-term debt reflects aging facilities that will need a significant infusion of capital funding. That district is expected to announce a capital spending referendum at some point.

Keeneyville Elementary District 20’s debt level reflects multiple investments in upgrading its facilities, including the the addition of an Innovation Center.

We do not think it fair to pass on debt for elementary school upgrades in one district onto property taxpayers in another district.

We believe facilities upgrades should be addressed before consolidation.

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Considerations and Cons

Considerations and Cons	Area-Specific Information
Drop in student achievement data in some elementary districts	Better early intervention for all low-performing students Better achievement at the high school level Individual elementary school report cards
Consolidation requires teacher salary match to highest paying district	Bachelor beginning salary ranges from $43,000-$49,000 We need to compete for scarce quality teachers
Loss of identity	Not closing schools; schools retain unique identities
Loss of local control	New school board includes proportional representation
L-T Debt fairness	Debt retained in area it was incurred pre-consolidation
Facilities upgrade	Upgrades may be needed at SD11 and SD13

Let’s talk about considerations and cons as they relate to our community.

A drop in average student achievement data in some elementary districts would occur if the testing base is broadened to include lower-achieving districts. However, redirecting administrative expense to early intervention could yield significant academic and financial results and lead to better achievement data at the high school level – where everybody ends up. Also, individual schools still have individual school report cards. So that one shouldn’t concern us too much.
When consolidating districts, teacher salaries need to be renegotiated to match the pay scale of the highest paying district. We looked at bachelor degree pay scales which range from $43,000 to $49,000 for the study area. Our districts are aware of and try to keep salaries consistent across the area. More important, as I mentioned before, with a crisis shortage of front-line teachers, redirecting expenses from administration to front-line educators can ensure our students get the best educators. So this consideration is a benefit in the present climate.
People may be concerned about a loss of identity. We’ve discussed that we are not closing schools and that individual elementary and middle schools retain their unique identities. So again, not a problem.
Loss of local control is an issue, however, the new school board that would be elected for a consolidated district could be chosen with proportional representation to mitigate loss of control. We explain this further in the next slide.
The biggest consideration in our view is L-T debt fairness and facilities upgrades. We believe upgrades in SD11 and 13 should be completed before consolidating those districts.

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Best Practices in Implementation

Minimum 1-year between approval of merger and effective date
Current administration

Housed under one roof
Held harmless for first 2 years

Better focus on merging districts’ strengths
Time for eliminated administrators to find another position

A new school board: 5 proportional representation seats and 2 at-large seats

How you consolidate is critical to generating desired outcomes. Best practice in implementation is to allow a minimum of one year between voter approval of the merger and the effective date. A slow transition would give districts time to engineer a smooth transition. In addition, current administrative employees should be housed under one roof and held harmless for the first two years. This allows for better focus on merging each districts’ strengths. It also gives eliminated administrators time to find another position or to eliminate through attrition. Such a timetable would allow all communities and individual school districts greater comfort in adjusting to the change.

Now for the school board. Consolidations are a form of reorganization where a new school district is created. Following consolidation, a school board for the new district is elected. To reduce loss of local control, a consolidated school board does not have to be elected at large. Proportional representation restricts the number of board members that can be elected from any given area. Reserving 5 seats for proportional representation will ensure that the consolidated school board will be representative of all areas in the high school attendance boundaries. The remaining two seats can be elected at-large.

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What are Intergovernmental Agreements?

In 2022, Governor Pritzker signed The Decennial Committees on Local Government Efficiency Act
Fosters intergovernmental agreements that lower costs
Annual report summarizes fiscal efficiency through shared services or outsourcing
Many Illinois districts engage in cooperative agreements to reduce expenses

Accelerate intergovernmental agreements to realize

cost savings sooner and smooth gradual implementation

What are intergovernmental agreements? In 2022, Governor Pritzker signed The Decennial Committees on Local Government Efficiency Act into law. This law fosters intergovernmental agreements that lower the cost of government. It does so by requiring an annual report that summarizes attempts to improve fiscal efficiency through shared services or outsourcing.

Rising school expenses have caused many Illinois districts to engage in such cooperative agreements to reduce expenses.

As the consolidation process can take years, intergovernmental agreements should be accelerated both to realize savings sooner and to smooth implementation. Quickly adopting Intergovernmental agreements are particularly important for districts that need funds to fix or upgrade their facilities.

I’m going to turn the podium back to Barb to conclude the presentation.

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Critical Understanding: We are One

Administrators with high salaries/pensions are chief opposition
Concerns tend to come from more prosperous systems
Redirecting administrative dollars to the classroom will raise all boats
Public schools educate the future workforce of the local economy
Pros outweigh the cons – commission a study

We are ONE Lake Park High School community!

As part of our conclusion, it’s important to note that administrators with high salaries and pensions are often the chief opposition to more efficient school districts. Please be aware that best practices in implementation can ensure that all administrators will be able to find jobs.

When districts of different socioeconomic profiles combine, concerns tend to arise from the more prosperous systems. Multiple research studies show that if a student does not perform at grade level by third grade, he or she will never catch up – and low-performing students can become behavior problems in elementary, middle -- and at 9th grade of high school – where all of our students end up. Redirecting administrative expenses to the classroom will raise all boats and raising all boats matters. We are educating the future workforce of our local economy and our country.

After completing our year-long study, we believe that the pros outweigh the cons and that all all five LPHS feeder school districts should jointly commission an expert consolidation study. To repeat, we believe the critical decision factor centers on the reality that all five elementary districts feed into the same high school. We are one community, the LPHS Community.

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Study Recommendation

All five LPHS feeder school districts jointly commission an expert consolidation study

Administrative savings
Economies of scale
Facilities considerations, including technology
L-T Debt
New property tax rates over 5 to 10-year period, plus estimated pension savings

Cost for a 5-district study from highly qualified Midwest School Consultants would be fully funded by the State of Illinois

None of the five elementary feeder districts would bear any cost to investigate reorganization

Contact your local school board to encourage them to investigate consolidation

In conclusion, the LWVRB recommends LPHS feeder district school boards undertake a joint, formal school district consolidation study to merge all five elementary districts.

The report should determine district consolidation impact on administrative savings, economies of scale, facilities considerations including technology, long-term debt and new property tax rates over a 5- to 10-year period. It should also provide commentary on estimated state pension savings.

As we mentioned, the state funds school district consolidation studies with grants of $15,125. The cost for a 5-district study from a highly qualified consultant would be fully funded by the State of Illinois.

None of the five elementary feeder districts would bear any cost to investigate reorganization. Please contact your local school board to encourage them to investigate consolidation.

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Thank you!

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Q&A with Our Panelists

Annie McGowan, Deputy Director of Research, Civic Federation

Nonpartisan government research organization
Works to maximize the quality and cost-effectiveness of government services in Illinois

Dr. William Phillips, Reorganization Consultant, Midwest School Consultants

Associate Professor of Educational Leadership U of Illinois – Springfield
Conducted over 60 school reorganization feasibility studies

Jack Bentley, Executive Director and Community Lawyer, Citizen Advocacy Center

Non-profit, non-partisan, free community legal organization
Works to strengthen citizenry's capacities, resources, and institutions for self-governance

Now, I’d like to introduce our panel of experts:

Annie McGowan is Deputy Director of Research at the Civic Federation. The Civic Federation is a nonpartisan government research organization that works to maximize both the quality and cost-effectiveness of government service in Illinois. Ms. McGowan can answer questions on government efficiency.

Dr. William Phillips is a reorganization consultant with Midwest School Consultants. He is an Associate Professor of Educational Leadership at the University of Illinois in Springfield. He has conducted over 60 school reorganization feasibility studies, authored numerous education articles and has addressed the Illinois House of Representative on school district consolidation. Dr. Phillips can answer any questions on school district reorganization.

Jack Bentley is Executive Director and Community Lawyer the Citizen Advocacy Center. The CAC is a non-profit, nonpartisan free community legal organization. The CAC works to strengthen citizenry’s capacities, resources and institutions for self-governance. As a lawyer, Mr. Bentley can answer questions about the legal steps to the consolidation process such as the petition, public hearings, and regional, state and referendum approval.

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THE CIVIC FEDERATION

League of Women Voters of Roselle-Bloomingdale:

Elementary School District Consolidation

February 13, 2024

@CivicFederation / civicfed.org

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The Civic Federation: What We Do

Independent, non-partisan government research organization founded in 1894
Provide analysis and recommendations on government finance issues for the Chicago region and State of Illinois
Membership includes business and professional leaders from a wide range of Chicago area corporations, professional service firms and institutions

Mission:

Champion efficient delivery of high-quality government services
Promote sustainable tax policies and responsible long-term financial planning
Improve government transparency and accountability
Educate and serve as a resource for policymakers, opinion leaders and the broader public

@CivicFederation / civicfed.org

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Multiplicity of Governments in Illinois

@CivicFederation / civicfed.org

Illinois has nearly 9,000 local government units, or nearly 7,000 per the U.S. Census Bureau. This is the highest in the nation.

6,100 of those are special purpose governments, including 852 school districts.

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The Number of Governments in IL is a Driver of High Property Taxes

@CivicFederation / civicfed.org

Illinois’ effective property tax rate is second highest in the country, following New Jersey.

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Since 1983, there have been 159 school district reorganizations.

Of those, 63 were consolidations.

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Why Consolidation is Important to the �Future of Illinois

Reduced costs

Reduces administrative costs over the long run

Simplified taxes and reduced property tax burden

Allows new school district to impose a lower tax levy

Improved accountability and efficiency

Simplified governance structures
Better government oversight

Get ahead of concerning trends

Declining enrollment
State Evidence-Based Formula funding is still short of school funding target

@CivicFederation / civicfed.org

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Contact Info:

@CivicFederation / civicfed.org

Annie McGowan

amcgowan@civicfed.org

(312) 690-8772

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Q & A