The Fort Edward and South Glens Falls school districts could save $3.13 million in the first year of a merger and $40 million over the next 15 years, according to a consultant’s analysis.
Deb Ayers, of Castallo and Silky Educational Consultants, said taxes could be reduced by 32% for Fort Edward homeowners and 7% for people in Moreau and Wilton.
Ayers presented the figures at the Feb. 22 meeting of the committee.
The merger, technically an annexation of Fort Edward by South Glens Falls, would save the combined district $1 million through the reduction of two elementary positions and seven secondary school positions. There would be another $650,000 in savings in other efficiencies.
However, there would be additional costs. A merger would require nearly $300,000 in additional salary and benefit costs for the Fort Edward teachers to “level up” to the South Glens Falls salary schedule. In addition, there would be another $516,000 in transportation costs.
Also, the combined district would lose $350,000 in BOCES aid because there would be some services that the district no longer needs and the district would not get state aid for them. For example, Fort Edward does not have a business manager and contracts with BOCES for that service. South Glens Falls has that position to fill that role in the combined district.
However, the state provides incentive aid to encourage districts to merge. The combined district would receive almost $50 million over a 15-year period, with the payments gradually getting smaller each year.
The combined district would receive $5.22 million in the first year.
Ayers said the consultants recommend splitting that incentive money three ways and using one-third for the operating budget, one-third to reduce taxes and one-third to fund reserves.
The district could use an additional $1.74 million in the first year to offer new electives, replace equipment, add student support services, provide new extracurricular activities and increase professional development staff, according to Ayers.
Another $1.74 million could be used to reduce taxes. The district would receive $541,000 in additional building aid and another $360,000 in transportation aid. That totals $2.64 million in new revenues.
Even factoring in the additional costs, it would be a net positive of $3.13 million to the district.
Taxes would go down
The savings and additional revenue would allow the tax rate to be reduced, according to Ayers.
Ayers said it is a complicated discussion because of different assessed values. Fort Edward properties are only at 70% of assessed value. The district’s tax rate is currently $29.28 per $1,000 of assessed value. If all properties were at full value, the rate would be $21.37 per $1,000. That would be reduced to $19.99 under a merger.
South Glens Falls has three different communities — Wilton, Moreau and Northumberland — which all have their own equalization rates. The rate for Wilton would go from $17.64 per $1,000 of assessed value to $16.43. The rate for Northumberland would drop from $17.21 to $16.04 and the rate for Moreau would go from $15.66 to $14.59.
The owner of a home assessed at $100,000 in Fort Edward would see their tax bill drop by nearly 32%, from $2,928 to $1,999.
A Moreau resident with a house assessed at $100,000 would see their tax bill go down 7%, or $107, from $1,566 to $1,459. A Wilton property assessed at $200,000 would see the taxes also drop by 7%, from $3,528 to $3,286.
One concern expressed by committee members is the loss of jobs.
Fort Edward Teachers Association President Marianne Stark said that at the end of the day, Fort Edward would technically be annexed by South Glens Falls. The staff rosters would not be combined. Rather, Fort Edward staff would have the opportunity to obtain positions.
South Glens Falls Superintendent Kristine Orr said when there is a need to cut positions, the district always looks at reducing them through attrition. That is especially true during the pandemic, where the district has been trying to be understanding to people’s situation and avoid layoffs.
“You’re looking at other ways and other avenues,” she said.
So, Orr added that while this study mentioned cutting certain positions because of the current numbers, that doesn’t necessarily mean those teachers would be let go.
“I know we want this hard-fast guarantee that no people would lose their positions,” she said.
The nearly $300,000 cost to level up the salaries is relatively low compared to some other merger studies, according to Orr.
“When that number becomes gigantic, it becomes hard to talk about not losing people,” she said.
Consultant Alan Pole said that given the rate of retirements and normal attrition on an average year, he would be surprised if anybody lost a job involuntarily.
“You’re going to have many more vacancies than you’re going to have position reductions,” he said.
Another topic that came up was the idea of Fort Edward paying tuition to send its students in grades 7-12 to South Glens Falls.
Orr said it would not be financially feasible. Her district would have to hire staff and the tuition the district would charge Fort Edward would not make it worth their while.
Pole agreed that tuitioning does not make a lot of sense. The idea of tuitioning students inevitably comes up during merger studies. However, the district would not receive additional incentive aid in this scenario.
“We’re not going to get the $50 million that you’re looking at. Why would we do that?” he said.
The committee met again on Wednesday to discuss the issues further. Its next scheduled meeting is April 12 at 6 p.m., when the draft report will be presented.