EXECUTIVE SUMMARY
Feasibility Study
For a Merged School District
Submitted to the Board of Directors of
Pottsville Area School District
And Saint Clair Area School District
Prepared by
The Civic Research Alliance
The Pennsylvania Economy League, Central Office
Thompson Associates Architects and Planners
February 2015
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Feasibility Study
For a Merged School District
Introduction
This analysis was prepared for the Boards of the Pottsville Area and Saint Clair Area School
Districts, who have joined forces to address the collective educational needs of their students and
communities. Accordingly, this report presents a set of viable options for consideration by the
respective School Boards. The term “viable options” was carefully chosen. First and foremost,
all options focus upon students and their educational needs. Other considerations, such as cost
savings, curriculum matters, and school building capacity/renovations are analyzed but with the
rationale that they support the best educational program possible. What makes an option
“viable” or “not viable” is based upon its probability of success. For instance, raising taxes in
only one existing school district to support a combined effort is not viable, as those voters may
not support it. Similarly, all options that negatively affect the existing educational programs are
not viable if the main goal of a merged district is to improve educational opportunities. Options
that might require larger class sizes, fewer course offerings, or significant changes to existing
collective bargaining agreements were also deemed not viable.
Combined efforts are not without risk, pitfalls, and controversy. It requires additional effort
from administrators and teachers to ensure its success and a commitment from the general
community to support the goals of a merged district. Hence, options that cannot earn
professional, community, or taxpayer support were deemed not viable.
Both School Boards have been receptive to the spectrum of ideas/options placed before them,
including a physical merger of districts. A twenty-five year history of providing a mutual high
school program provides visible reality that additional cooperation is viable. For the Pottsville
Area School District, merger is an extension of its current educational program to students of all
grades in the Saint Clair Area School District. The district must take responsibility for all
student programs, staffing, facilities, debt, and financials. For the Saint Clair School District,
merger signifies termination of its local district, and placing all student services, tax decisions,
and academic policies/requirements in the hands of another school district. Residents in the
Saint Clair Area School District would continue to vote for Board members.
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Background
Enrollment
In the 2013/2014 school year, Pottsville Area School District enrolled 2,842 students in three
buildings: John S. Clark Elementary Center (grades K-4, 980 students), D.H.H. Lengel Middle
School (grades 5-8, 822 students), and Pottsville Area High School (grades 9-12, 1,040 students).
Saint Clair Area School District enrolled 590 students at its Saint Clair Area Elementary/Middle
School (grades K-8). High school students from Saint Clair Area School District attended
Pottsville High School under an agreement to pay tuition for those students.
Community Demographics
Pottsville Area School District serves six municipalities with a population of about 21,000 and
covers 12 square miles. Saint Clair Area School District also serves six municipalities with a
population of about 7,000 living in an area of 48 square miles. The districts are adjacent. Each
district has similar levels of wealth in terms of family income and property values. Hence, the
tax base is comparable; no advantage would be observed for either existing district in a merger.
Enrollment Trends
For the 11 years prior to the 2013/2014 school year, enrollment for the Pottsville Area School
District declined by about 9 percent (275 students). Enrollments over the same 11 years
increased at Saint Clair Area by 7 percent (39 students). It is expected that a merged district will
continue to see declining enrollments. One outcome of continued enrollment declines is no need
for additional buildings or increases in faculty/staffing.
Options
Two primary options were identified by this feasibility study. The first was a full physical
merger of the two existing school districts. The second was extending tuition for all students in
the Saint Clair Area School District to attend another district.
Viable Option #1
The first, and best, option supported by this analysis is the merger of Pottsville Area and Saint
Clair Area School Districts. A merged district in 2013/2014 would have included twelve
municipalities with 3,432 students attending four school buildings, which is an average sized
district in Pennsylvania.
Expected outcomes of this option upon district academics,
administration, and finances follow.
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Summary of Advantages and Challenges of Academic Change under Option #1
Advantages
The curriculum of both districts are similar at
the Elementary and Middle School level; Saint
Clair Area students already attend Pottsville
High School
District plans, policies, and calendars are
similar
Academic rigor is similar for both districts,
though Pottsville Area has a stronger
mathematics program
Both districts share many curriculum
approaches and materials, and they continue to
move closer to the same curriculum
Both districts have similar comprehensive
plans and strategies to design and implement
curriculum goals
Pottsville Area could accept and accommodate
special needs students with disabilities from
Saint Clair Area; the district now has adequate
facilities and meets ADA standards
Special needs students presently attending
Saint Clair Area Elementary/Middle School
could continue their education at that school;
increased cooperation among building
professionals can provide a better flow of
students into the high school
No additional busing is necessary if existing
special education classes at the Saint Clair
Area Elementary/Middle School continue to be
offered in that building
Challenges
There will need to be a complete transition to a
common curriculum
There will be minor adjustments to the daily
schedule at the existing Saint Clair Area
Elementary/Middle School
A merged district should achieve comparable
academic performance scores at elementary
and middle school buildings, while increasing
performance at all grade levels
The existing districts may need to more rapidly
implement technology-based instructional
components
Saint Clair Area has a full inclusion model for
special needs students; additional interaction
among special education professionals in each
building will be needed if a merger takes place
Both districts and a merged district might
experience growth in the number of special
education students and the number of students
requiring an IEP
Administrative Changes
A merger, at least in the short term, will place additional demands upon administrators. The
need for administrators will be increased during this time as needed planning (curriculum,
staffing, preparation of facilities, etc.) takes place with no decrease in the day to day
responsibilities for district operations. Further, as the merged school district begins to function, a
re-evaluation of administrative positions and staffing will be necessary. It is not the setting of
the number of administrators that is the first priority; it is putting together the best administrative
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team for the merged district. However, as the following table shows, there will be cost savings
for administrative changes.
Summary of Advantages and Challenges of Staffing Changes for Option #1
Advantages
A merger will eliminate one superintendent
and one business officer position for an annual
savings in the range of $165,000 to $281,217
(the higher number is based upon average
salaries for school administrators in
Pennsylvania); actual savings will follow board
decisions regarding administrative staffing
Changes will be possible for certain positions;
for instance, two special education directors
can be split by building, by type of special
need, or by elementary/secondary schools
Based upon a review of peer school districts in
Pennsylvania, the merged district could
maintain programs with about 225 teachers,
down 11 positions from the 2013/2014 school
year, and in line with reductions instituted by
the Saint Clair Area School District in
2014/2015
The existing faculty collective bargaining
agreements for Pottsville Area School District
and Saint Clair Area School District will expire
in 2015, easing the way for a new contract with
the merged district
Challenges
There will need to be a review of current
finance office staffing to maintain the best
team for the merged district
Existing professional special education faculty
and support may be reorganized
The pupil/teacher ratio of a merged district
with 3,425 students and 225 faculty will be
15.3:1, up from 14.5:1 in 2013/2014 for the
existing districts
A change in the number of teachers must be
made within the collective bargaining
agreement and take into consideration specific
experience and teaching credentials
Financial Changes
The following table summarizes the primary financial changes for a merged school district. As
seen, a merger by itself does not reduce debt or change current employee salaries and benefits.
Any changes in revenue and expenditures will be determined by the new Board of the merged
district.
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Advantages and Challenges of Option #1 Financial Changes
Advantages
A merged school district has a more stable tax
base provided by twelve municipalities
Saint Clair Area and Pottsville Area School
Districts have seen annual increases in local
revenues; Saint Clair has been increasing
8 percent per year
Some adjustments in annual expenditures are
possible in a district merger; these include
fewer professional employees and some
economies of scale for employee benefits
Projected revenues show most revenue growth
in the next five years will come from state
sources
Some expenditures can be reduced by a school
district merger; these areas include
administrative staffing and use of centralized
services
Challenges
Tax rates must be made equal across all
municipalities
These increases will not avoid budget deficits
each year through 2018/2019 for the existing
districts
Current expenditures by both districts are not
sustainable
Property taxes for both districts have been
sufficient in past years but are now growing
more slowly than expenditures; both districts
can expect growing annual budget deficits over
the next five years
The primary reason for increasing expenditures
is retirement payments, but increases will also
be seen for instruction, support services,
personnel, and employee benefits
Local Taxes
Millage rates, set by each of the existing school boards, have a direct influence on taxes
anticipated and taxes collected (these numbers are not the same). However, both districts now
enjoy a high rate of tax collection; Saint Clair Area School District collects about 91.5 percent of
levied property taxes; during the historical review period, Pottsville Area School District
collections were reported at 93 percent. However, for the current year and projection period,
Pottsville Area’s budgets anticipate a 90 percent collection rate.
A significant challenge is introduced when there is a difference in millage rates. One option for
the merged district is to apply the lower tax rate to all residents; hence, taxpayers in all twelve
municipalities would pay the same number of mills. A second option is to treat the millage as if
the districts had merged during the 2013-14 school year. This allows the calculation of mills for
a merged district without the use of assumptions or projections.
Option #1 requires leveling the millage rate at about 34 mills for the merged district. There will
also be an estimated $2.0 million adjustment of local revenue to account for high school, special
education and vocational education student tuition paid to Pottsville Area School District by
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Saint Clair Area School District. Saint Clair Area School District currently levies taxes to pay
this tuition. The cost of educating the students will continue. Rather than paying tuition, the
revenue collected by Saint Clair Area will be used to directly provide education.
Expected Changes in the State Aid Ratio
The aid ratio is defined and calculated by the state Department of Education (PDE). No dollars
are gained or lost by a merged district, as shown in the main report.
Collective Bargaining Agreements for a Merged District
Merging the Pottsville Area and Saint Clair Area teacher salary scales was calculated by placing
the Saint Clair Area staff on the Pottsville Area matrix. The analysis used the 2013-14 salaries
and step/column placement. Placement on the Pottsville matrix was done because the Saint Clair
Area collective bargaining agreement does not provide a schedule; rather it uses equal raises for
district staff.
There are 35 professional staff members in Saint Clair Area School District following the
reduction at the end of the 2013-14 school year. Thirty-three of the current staff fit within the
salary schedule. Two of the staff members have a current salary that exceeds the available steps
on the Pottsville matrix. These two staff members are considered off scale. The two individuals
off the salary schedule would be frozen until the matrix catches up with the salaries. Placing the
Saint Clair Area School District staff on the Pottsville Area School District schedule with the
staff reductions at the end of 2013-14 will reduce the salaries in Saint Clair Area School District
by $371,675 over the current cost using the 2013-14 matrix and 2013-14 actual salaries.
The Pottsville Area collective bargaining agreement contains the follow language: “Article VIII
Section E. … The steps on the salary schedule no longer have any relation to an employee’s
years of service or to the steps reflected on the Salary Schedules under prior agreements between
the parties.” This language is consistent with the placement methodology used in the analysis.
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Specific Financial Challenges
Pottsville Area School District
The district continues to run deficits-- $1.8
million in 2011/2012 and $1.7 million in
2012/2013
Since 2008, annual revenues have grown by 3
percent and expenditures by 9.5 percent
State revenue growth has outpaced local
revenue with the district receiving 7.8 percent
more state funds in 2012/2013 than in
2008/2009.
Mills have not changed for the past nine years,
remaining at 34.0 mills in 2014/2015
Annual debt service dropped from $891,804 in
2008/2009 to $763,951 in 2012/2013; this
represents a debt payment of 2.08 percent of
total expenditures
Total outstanding debt is $4,035,000 and will
be fully paid in 2027
Saint Clair Area School District
The district is running significant deficits-$774,697 in 2011/2012, $1.2 million in
2012/2013
Since 2008, annual revenues have grown by 7
percent and expenditures by 24.5 percent
Local revenue has outpaced state revenue with
the district receiving 0.2 percent more state
funds in 2012/2013 than in 2008/2009
Mills increased from 26.05 in 2008/2009 to
32.35 in 2014/2015
Annual debt service increased from $375,000
in 2008/2009 to $733,000 in 2012/2013, for a
debt payment that is 6.86 percent of total
expenditures; this will increase to $1.022
million annually in 2017/2018
Total outstanding debt is $12,520,000 and will
be fully paid in 2031
At $15,935, Saint Clair Area School District has a higher annual cost per student than the
$14,032 for Pottsville Area School District. These annual costs have been adjusted to remove
tuition costs paid to Pottsville Area School District by Saint Clair Area. Saint Clair Area has
significantly higher Instructional and Debt Service costs per student while Pottsville Area’s costs
for Support Service and Non-Instructional Expenses are higher.
There will also be an estimated $2.0 million adjustment of local revenue to account for tuition
paid to Pottsville Area by Saint Clair Area. Saint Clair Area is currently levying taxes to pay this
tuition. A detailed explanation of these expenditures is found in the full report.
The following projections are presented to show what will happen over the next five years by the
merged district if no actions are taken by the new school board. These projections can change if
the number of personnel is reduced, if collective bargaining agreements are changed, if local
revenues increase (EIT through higher incomes or increased mills for property taxes), pension
costs are modified, or if state revenues increase. The sole purpose of this analysis is to show a
prediction that needs to be addressed in the present.
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Projected Revenues and Expenditures for a Merged District, 2014-2015 to 2018-2019
Budget
Merged District
Projected
Projected
Projected
Projected
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
$46,514,819
$47,478,809
$48,665,623
$50,142,542
$51,947,344
363,812
363,812
363,812
363,812
363,812
Less Tuition
-2,000,000
-2,000,000
-2,000,000
-2,000,000
-2,000,000
Net Revenues
$44,878,631
$45,842,621
$47,029,435
$48,506,354
$50,311,156
Combined Expenditures
$52,946,485
$58,281,565
$64,349,470
$72,180,185
$82,399,673
-2,000,000
-2,000,000
-2,000,000
-2,000,000
-2,000,000
101,621
101,621
101,621
101,621
101,621
Net Expenditures
$51,048,106
$56,383,186
$62,451,091
$70,281,806
$80,501,294
Surplus/(Deficit)
-$6,169,475
-$10,540,565
-$15,421,656
-$21,775,452
-$30,190,138
Combined Revenues
Plus Increased RE Mills
Less Tuition
Plus Salary Benefit Adjustments
In summary, the decision whether to merge the existing school districts is based upon several
factors:
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The opportunity to expand student services and instruction for all students (both existing
districts have unique or special skills to bring to the mix)
The absence of need to change student busing or building assignment (students now
attending Saint Clair Area Elementary/Middle School would continue to do so)
The ability of Pottsville Area School District to use, if needed, unused space in the Saint
Clair Area Elementary/Middle School
The renegotiating of existing collective bargaining units into a single agreement within
the next one or two years
Use of the expanded tax base to retain as many faculty and academic services as possible
Pottsville Area’s acceptance of the existing Saint Clair Area debt
Expected PlanCon contribution by the PDE to Saint Clair Area to help offset the
construction expenses of the Elementary/Middle School upgrades/addition
Public acceptance of one school district in place of the two existing districts
A shift and centralization of administrative staffing
Acceptance of the one-time expenditures needed for a long-term solution.
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Viable Option #2
A second viable option is to retain the Pottsville Area and Saint Clair Area School Districts as
separate entities, but to extend the secondary student tuition program by Saint Clair Area to
include all grade levels. In this scenario the remaining 590 students in the Elementary/Middle
School would also attend Pottsville Area, with Saint Clair Area paying tuition for all students.
For this option, Saint Clair Area School District continues to exist with an independent School
Board that sets tax rates and pays tuition. The purpose of adopting Option #2 could be to retain
control of district students or to help transition to a merged school district in the future.
In reality, most consequences of adopting Option #2 fall upon the Saint Clair Area School
District. The district would have no students and its primary purpose would be collecting taxes
to pay tuition for its students attending other school districts.
There will be restrictions set by the Department of Education. First, attendance by students is
allowed in a ten-mile radius of the Saint Clair Area School District. This could cause
considerable student transportation expenses, although about 50 percent, or possibly more, of
such expenses will be reimbursed by the state. Second, according to state policy, students will
not be allowed to attend school districts in that 10 mile radius that fall in the bottom 15 percent
of standardized test scores.
A major consideration is administration of the existing Saint Clair Area Elementary/Middle
School. Expanding the existing agreement for high school students to attend Pottsville High
School to sending all current district students to Pottsville Area schools requires the student
capacity of the Saint Clair Area Elementary/Middle School. The school would need to be leased
to Pottsville Area or made available in some formal arrangement.
For the 2012/2013 school year, Saint Clair Area School District paid about $2.0 million for
student tuition. The cost of paying tuition for all students is presented in the following table. It
should be noted that one school district in Pennsylvania does pay tuition for all students to attend
other school districts, so the precedent exists to implement Option #2. These tuition amounts
could change depending upon the annual number of special education students.
Estimated Tuition Payments for Option 2
Level
Grades
Tuition Amount
High School
Middle School
Elementary School
Special Education
9 - 12
6-8
K-5
—
$9,669.04
$9,669.04
$8,942.49
—
Number of
Students
About 145
168
402
—
Total Annual Tuition
$1,400,000
$1,624,399
$3,594,881
$500,000 to $600,000
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In addition to tuition payments, Saint Clair Area School District will have administrative
expenditures related to the School Board, tax collection, central office, and reporting
requirements. The ongoing administrative costs are estimated to be $500,000 annually, which
added to the needed annual tuition payments results in a range of about $7 million to $8 million.
This amount is favorable to the $9,448,421 in 2012/2013 revenues for the district. It is
especially favorable compared with expenditures of $10,690,504 for that year. A summary of
advantages and challenges is presented in the next table.
Advantages and Challenges of Adopting Option #2
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Advantages
If desired by the communities in the
district, keeping a local School Board
Ability of the Saint Clair Area Board to
set local tax rates
Signing a formal agreement with
Pottsville Area School District to
accept by tuition all students enrolled in
the Saint Clair Area School District
Saint Clair Area could continue with a
part- time superintendent. Financial
administration could be contracted to
Pottsville Area (or another school
district)
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Challenges
Sudden changes in policy by evolving
School Boards
The need to collect taxes for the sole
purpose of supporting administrative
costs and paying tuition to other school
districts
Saint Clair students, by PDE policy,
can attend schools by tuition in a ten
mile radius; transportation costs may
be prohibitive if more than one school
district accepts students by tuition
Pottsville Area will need access to the
Saint Clair Area Elementary/Middle
School; further, Pottsville Area may
need to maintain the building
Paying tuition for students requires
careful budgeting for the Saint Clair
Area School District. However, it is
somewhat difficult to budget tuition
payments because tuition amounts are
set by the state and issued in May or
June for the previous school year
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There are general challenges and benefits for a merged school district, as summarized in the
following table.
Opportunities and Challenges of a Merged School District
Opportunities
Challenges
Combining of districts offers:
 Long-term cost savings by avoiding new
construction or building renovations; further,
the cost of future construction/renovation per
student is lowered through economics of scale
 An increased attention to exceptional students
of all types (challenged, disabled, advanced,
talented, etc.)
 Expanded academic and student support
programs that combine the very best of each
existing district’s instructional program
 An ability to operate within a common tax
base structure that includes twelve
municipalities; a larger tax base brings
increased stability of that tax base
Physical combining of districts is challenged by:
 Any public perception that all communities
and schools have not been treated fairly in
the merger of districts (no one benefits more
than others)
 The necessity for the merged district to
negotiate differing salary scales contained in
professional or staff collective bargaining
agreements
 The need to smooth and equalize millage
differences that currently exist in each
district in order to equally tax all residents in
a combined district
 Establishing a common schedule and
identifying a single scheduling program
 Parents who may pursue other schools rather
than remain in a merged district
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