Ross Valley Charter Cost-Benefit Analysis:
RVC FINANCIAL IMPACT TO RVSD
Ross Valley Charter (RVC) will have a significant financial impact on our five district schools. The revenue loss is largely dependent on the number of in-district students that enroll in RVC. The best enrollment information we have is RVC’s own Proposition 39 request. In their request for classroom space, RVC estimates they will enroll 189 in-district students. These students are a mix of current TK-4 RVSD students (118), incoming kindergarteners (22), students who are currently attending private schools and being home schooled (37), and students RVC still intends to recruit (12). RVC has communicated high confidence in hitting their 189 in-district student projection: “RVC will do significant outreach and marketing in December through March when parents at pre-schools and other schools are more seriously focused on their choices for the fall of 2017. If we do not have a waiting list for all grades by March, we will continue our marketing through the start of school in August 2017 to ensure that we have a wait list long enough to ensure enrollment of 189 in-district students for 2017-2018” (Source: Prop 39 request).
Our analysis assumes revenue loss associated with 152 of these students. We do not include the 37 students attending private schools or being home-schooled as the district does not currently receive revenue for them. The loss for 152 students is over $1.1 million dollars, resulting in a net decrease of over $500,000 after offsetting teacher reductions. Additional savings are minimal as most other expenses are operational and will now be shared across fewer students.
Many have been surprised by the scale of the loss believing that both funding and expenses follow a child from school to school. However, each child’s funds also help cover substantial operational costs such as principals, PE teachers, librarians, janitorial staff, school nurses, counselors, psychologists, special education teachers, district office employees as well as utilities, facilities maintenance, insurance, legal fees, computers, IT support, and equipment. These operational costs will now be shared across a smaller group of students.
This is an especially hard blow to RVSD since we are a small district that is already budget-constrained. We simply cannot absorb this loss without substantial impact. Teacher and staff salaries & benefits are the largest portion of RVSD’s budget (over 80%) and the main lever to cover the revenue loss. The district may have no alternatives other than laying off some of our teachers. Average teacher salary + benefits = $85,000. This could result in the loss of up to six teachers to cover the net revenue loss of $528,000 ($528,000/$85,000=6.2). These teachers would be in addition to the former MAP teachers who we anticipate will resign to teach at RVC.
Note: RVSD will lose revenue for all students except kindergarteners (116) in 2017/18. Due to the ‘soft landing’ policy, the revenue loss for kindergarten students begins in 2018/19.
Impact is calculated on 152 students. RVC’s Proposition 39 request for classroom space projects 189 in-district students. Of these 189 students, 37 are coming from private schools or are currently being home-schooled. The remaining 152 represent lost revenue to RVSD.
Teacher salaries and benefits are actual salaries and benefits of former MAP/future RVC teachers. These are senior teachers with higher than average salaries. Benefits are lower than average as some decline medical insurance through the district.
District average daily attendance (ADA) to enrollment standard = 96%.
We know many in the community are confused by the lower loss estimate of $250,000 that RVC has communicated on their website, at public meetings, and in a recent article in the Marin IJ Readers’ Forum by their CFO Conn Hickey. This loss of $250,000 represents less than half of full financial impact and is extremely misleading. RVC does not include incoming kindergarten students most of whom would have otherwise attended RVSD schools in their calculations. While RVC projects enrollment of 36 kindergarteners, they do not include their associated revenue loss due to a budget policy called ‘soft landing’. ‘Soft landing’ helps protect districts during declining enrollment periods. It enables districts delay the financial impact of lost kids for one year, except when a student transfers from a district school to a charter school. An adjustment to prior year enrollment must be made for each of these charter ‘transfer’ students. Since most kindergarten students are new to the district (not transfers), they do not need to be deducted from prior year enrollment in 2017/18 (except current district TK students transfer to RVC).
However, starting in 2018/19 (and every year after), RVSD loses the revenue tied to those 36 kindergarten students (36 X $7,930 = $285,480). And, there are no additional cost reductions as the associated teachers will leave in 2017/18 when we experience the enrollment decline
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