EMPLOYEE PRESENTATION

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EMPLOYEE PRESENTATION

• Consolidation Information for consideration and
  input opportunity

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What is the difference?

• Consolidation
• A school no longer exist
• State aid for the merger
• Teacher guaranteed seniority
• Non certified seniority
• Negotiate points of concern
• Land boundary
• Asset/Liability
• Public vote on acceptance or rejection

• Dissolution
• A school no longer exist
• No aid for the merger
• Teacher guaranteed seniority
• No non certified rights
• No negotiations
• McLeod Commissioners assign land plat
• MDE assigns asset and liabilities

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Comparison of process

• Consolidation
• State 200/ADM first year.
• State 100/ADM second year
• Schools involved negotiate boundaries and
  liabilities

• Dissolution
• No State Incentive
• MDE Commissioner sets liabilities and assets
• County Commissioners set boundaries

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• 123A.46 DISSOLUTION AND ATTACHMENT.
• Subdivision 1. Dissolution. Any district may
  be dissolved and the territory attached to other
  districts by proceeding in accordance with this
  section.   
• Subd. 15. Current assets and liabilities. If the
  dissolved district is not divided by the order of
  dissolution and attachment, all of its current
  assets and liabilities, real and personal, and
  all its legally valid and enforceable claims and
  contract obligations must pass to the district to
  which it is attached, except as provided in
  section 123A.75. If the district to be dissolved
  is divided by the order of dissolution and
  attachment, the commissioner shall, within 30
  days after the order is issued, issue an order
  for the distribution of its current assets and
  liabilities, real and personal. If the
  commissioner's order provides for the transfer of
  an interest in real estate to a district, this
  order may also impose a dollar amount as a claim
  against that district in favor of other
  districts, and this claim shall be paid and
  enforced in the manner provided by law for the
  payment of judgments against a district. The
  obligations of districts to the teachers employed
  by the dissolved district shall be governed by
  the provisions of section 123A.75.

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Consolidation effects on reorganized school

• All teachers of the consolidated schools will be
  assigned to a MASTER SENIORITY LIST and fill the
  available positions by seniority and licensure!
• SAME procedure for non-licensed employees (Para,
  Drivers, Cooks, Custodians, etc)

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Effect on School and Current Employees

• MCW offered an incentive for resignation at end
  of 2008-09 school year.
• No non-licensed staff remain for inclusion at any
  host school.
• BLH has 3.75 fte staff that will cause
  termination or URL of current teachers.
• That number may change to a lower fte count.

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Fiscal Effect

• Reorganized district is larger so district Net
  Tax Capacity is larger, lowering our individual
  school tax bill.
• More students in the levy authority - Increase of
  124,000 per year for BLH

• Combine the two district referendum amounts and
  recalculate by MDE formula - New Levy Authority
  is 764 per student - but more total .

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Dissolution effects on reorganized school
personnel

• Same as in Consolidation for TEACHERS
• No employment rights for non-licensed staff.
• No finance support from the state

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What is the projected Debt of McLeod West

• June 30, 2009 anticipated debt level is 1.75 to
  2.0 million in operations debt
• Severance/resignation incentive equals not to
  exceed one year of salary (no benefits
  considered).
• All employees of MCW offered
• Grand Total of incentive 900,000
• Interest plus principal repayments will be 3.4
  million to be paid back in five (5) years.

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Who pays the debt?

• According to MDE the debt is classified as a
  liability and is assigned by the level of assets
  assigned.
• GSL - 50 (1.7M) BLH - 35 (1.4M) GFW-15
  (300K)
• Special legislation being sought to provide no
  cost, no interest and little effort by the
  reorganized districts!
• No cost differences between Consolidation and
  Dissolution process.

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Repayment Plans - options

• The three options require the passage of special
  legislation and signature by the governor!
• Loan by MN and repayment in 5 yrs
• Loan by schools and MN pays interest
• General Obligation Funding Bill

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3.0 million loan

• Legislation to pass a one time payment of the
  full amount and former MCW taxpayers pay full
  amount to MN MDE in five years.
• Tax, interest and repayment would be established
  in a trustee type of account.

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Interest only legislation

• The three reorganized schools would add the MCW
  debts to their budget and continue to borrow from
  MSBAIT Pooled Fund through MSBA.
• Repayment for loan would continue by each school
  as is currently practiced, with MDE paying the
  portion of MCW loans interest.

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General Obligation Fund

• MN Legislature passes permission for MCW to
  borrow 3.4 million prior to June 30, 2009.
  Repayment would be from the current MCW residents
  through special levy authority granted to the
  reorganized school district. (Trustee for MCW)
• Only MCW residents pay the debt in five years.
  No cost to reorganized districts.

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G O Bond (Investopedia)

• General obligation bonds are issued with the
  belief that a municipality will be able to repay
  its debt obligation through taxation or revenue
  from projects. No assets are used as collateral.
• A municipal bond backed by the credit and "taxing
  power" of the issuing jurisdiction rather than
  the revenue from a given project.

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Where are we with the process?

• Monday, February 15, 2009 at 300 pm a meeting
  was held in St. Paul. Senators Dill and Sharon
  along with Rep. Koenen, et.al. met to consider
  the General Obligation legislation.
  Rep./Senators and MDE representatives were
  supportive of the plan for a G.O. Bond issuance.

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Need for Speed!

• If a consolidation election is to take place on
  May 5, 2009 the legislation for G.0. Needs to be
  immediate!

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Why Consolidation?

• Financially it will assist the three reorganized
  school district during these financial times.
• MCW students have little option during this time.
• Stewart and Brownton will not leave their
  histories and agree on NOTHING!

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IT IS BEST FOR STUDENTS!!!!!!!

• No Single School District Can REORGANIZE with MCW
  and Expect Have a Good Transition

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Consolidation Allows US to plan our own futures!

• Dissolution forces our schools to be done to us!

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What do you think?

• Board response for the record