The O’Fallon-Shiloh Chamber of Commerce, working with the Village of Shiloh and the City of O’Fallon, commissioned a study on the issue of school district consolidation in our community. The study is available to download in PDF format here.
A virtual informational meeting was held on Tuesday, June 16th, 6-7 p.m. A recording of the meeting can be found on our social media and the Chamber website.
The recommendation of the consultants is to pursue a path of cooperation and collaboration among the districts rather than to pursue consolidation at this time.
This recommendation is not to say that there is no benefit to district consolidation. In fact, a good argument can be made that consolidation of the elementary school districts will be necessary at some point in order to ensure that students enter high school equally prepared. This is particularly the case if collaborative efforts fail to improve this weakness in our schools. Further, consolidation could prove much more efficient to taxpayers when it is time to build or expand facilities.
Most of the desired cost efficiencies of consolidation are in the form of reducing facilities or in reducing salary expense through a reduction in teacher staff. However, consolidation in O’Fallon and Shiloh would not involve the closing of facilities and is not likely to result in a reduction of salary expense. Based upon the financial analysis of the consultants and by the financial analysis of the Illinois State Board of Education, the consolidation effort will provide no significant relief regarding local property taxes. This is primarily due to the reduction in revenues from the State of Illinois’ Evidence Based Funding (EBF) model combined with increased salary expense from consolidation. Additionally, there is the possibility that after state incentives expire, or if the State does not fully fund these incentives, a tax referendum could become necessary to keep the newly consolidated district solvent.
This study was commissioned by the O’Fallon Shiloh Chamber of Commerce in order to provide an analytical approach to the question of school district consolidation in our community. The Chamber recognizes that a high-achieving school system is integral to a thriving community. It also is keen to ensure that the taxes that fund the districts are spent as efficiently as possible. This study was funded by the City of O’Fallon, the Village of Shiloh and by the Chamber. The Chamber facilitated this study, but will not have a role in implementing the recommendations or in taking an initiative to the voters.
A Summary of the Consolidation Study
This is meant to be a high-level summary of the consolidation study. For details and clarification, consult the study directly. The consultants first considered the effects of Unit consolidation, that is the consolidation of Districts 203, 90, 85 and 104. The call to consolidate is based upon several assumptions: (1) potential cost savings that could accrue from the combining of the districts; (2) greater administrative effectiveness and operational efficiencies; (3) fiscal benefits from economies of scale; (4) additional co-curricular activities; and most important (5) the educational advantages for all students. The study then highlighted the opportunities and consequences in the following categories: Transportation, Enrollment, Facilities, Curriculum, Extracurricular, Financial, Incentives, Tax Rate and Constituent Benefits. Those categories are highlighted within the framework of “Will It Be Good for the Kids?”
The districts have a cooperative approach to transportation and have achieved cost savings by negotiating collectively with Illinois Central Bus Service. This is seen as an example of efficiency through cooperation. There are more opportunities to secure transportation savings through aligning bell times, combining routes and focusing on Special Education transportation. Consolidation would have minimal impact on the transportation of students.
There are thirteen school facilities within the four districts in O’Fallon and Shiloh. All are found to be in compliance, and most are relatively new. Only the Fulton Junior High building in District 90 is considered to have a deficit capacity. The study concludes that the present facilities are meeting the needs of the districts. They have the capacity to meet the needs of any reorganization effort and no new facilities are needed to accommodate a consolidation.
School Enrollment Projections
Enrollments have been stable over the last ten years. The study projects small increases with District 90 growing the most. Enrollment is not considered an area of concern regarding consolidation.
Curriculum alignment is a weakness and if school consolidation is to be pursued this is the reason for it. The high school District 203 is acknowledged as a premier academic institution and compares well against state averages in Mathematics and in English Language Arts. Similarly, O’Fallon District 90 and Shiloh District #85 outperform state averages in Math and English Language Arts by a large margin. Central District #104 is lagging the other elementary districts in the community. From testing in 2018, 28% of Central students met or exceeded expectations in English Language Arts compared to a state average of 37%. In mathematics the results were worse as 19% of Central students were meeting or exceeding expectations versus the state average of 32%.
It should also be noted that Central has a much higher free or reduced lunch count, a higher English Language Learner count (2.3%) and a higher percentage of the enrollment considered low income (51.8%) than any of the other districts involved in the study.
The consultants state that articulation of the curriculum between elementary districts is a weakness and needs improvement. With an effective school district consolidation, a unity of curriculum will result, and overall test scores will improve. Consolidation would enable consistency of curricular offerings, honor roll, grading scales, expectations, electives and communication to parents. The consultants also noted that these consistencies could also be met without consolidation if articulation took place between the four districts.
The reduction of revenue from the Evidence Based Funding (EBF) model used by the State of Illinois combined with an overall increase in salary expense is the likely result of a consolidation effort. If a consolidation effort proceeds, the State of Illinois will reimburse the new school district for the loss of EBF revenue, for deficit fund balances and for increased salary expense for a period of four years. In addition, the state provides an incentive of $4,000 per certified staff.
In the case of a Unit consolidation, the increased expense and reduced EBF revenue amounts to $2,273,167 per year. That amount would be reimbursed by Illinois annually for four years. None of the school districts in the community are deficit spending (this is a very good thing) so no reimbursement will be forthcoming to reimburse a deficit fund balance.
It is the trend that in a consolidation the salary schedules will increase to the highest level of the subject districts. There are exceptions to this trend but for analysis purposes the consultants assume salary schedules will increase to the highest level. In the case of a Unit consolidation the highest salary schedule is District 203 and the increase in salary expense would be $1,892,697 annually. This is the largest single factor in the cost increase associated with Unit consolidation.
For Unit consolidation then, annual expenses are expected to increase by $2,237,167 per year. The state will reimburse those cost increases for a period of four years for a total cost reimbursement of $8,948,668. As a further incentive to consolidate the State will pay $3,696,000 within three years of the formation of the new district.
A second scenario would be for the three elementary districts to consolidate. The financial projections are less negative than a Unit consolidation. The forecasted increase in operating expenses is $882,146 annually, reimbursed by the State for a four year period. Additionally, the State will pay $4,000 per certified staff member, equating to $2,528,000 as an additional incentive to consolidate.
A third consolidation scenario was calculated which would combine O’Fallon District 90 with Central District 104. This scenario is the least costly of the consolidation scenarios, but still substantial. In this case, operating expenses are forecasted to increase by $613,580 per year, again with this amount reimbursed to the new district by the State for a period of four years. An additional incentive of $4,000 per certified staff member would generate a payment from the State of $2,216,000.
In any of the consolidation scenarios mentioned above, consolidation will not provide significant relief regarding local property taxes. In fact, there is a distinct possibility that after the state incentives end, a tax referendum will be necessary to keep the new district solvent. The new school board would need to find cost cutting efficiencies prior to the expiration of the State reimbursements in order to avoid an increase in the property tax rate.
As mentioned early in this narrative, the recommendation of the consultants is to pursue a path of cooperation and collaboration among the districts rather than to pursue consolidation at this time. It is recognized there are very strong reasons for consolidation, particularly as it would allow elementary students to enter high school at the same learning level throughout our community. There are also cost efficiencies and fewer redundancies that are difficult to quantify but can only be realized with consolidation of school districts. Outweighing those advantages are the following:
- Consolidation will have minimal impact on the property tax rate within the districts.
- After four years when the expense reimbursements from the State of Illinois expire, the district could face budget deficits unless substantial cost efficiencies are found by the new school board.
- Consolidation will likely raise the salary structure of the school district.
- All payments of Reorganization Incentives are subject to yearly adequate appropriations by the General Assembly of the State of Illinois. Less than full appropriations would result in a proration of incentive payments. This would aggravate the budget deficits created by the higher salary structure. The State has financial troubles that have been made more severe by the pandemic measures. This makes it difficult to rely on the promised reimbursements and incentives.
- The school districts have shown that they have the capacity to collaborate at a high level when working toward a common goal. They have achieved substantial cost savings by cooperative efforts on transporting students and in other areas.
The combination of the above factors will make a successful ballot initiative difficult.
It is believed that many of the benefits of consolidation can be achieved through a collaborative effort by the districts. The alignment of the curriculum between each of the elementary schools and between the elementary districts and the high school is of primary importance. The pursuit should be to balance the curricular offerings for all the students. Further collaborative efforts should bring additional cost efficiencies in transportation costs.