Budget Committee DRAFT Minutes September 9, 2013

BUDGET COMMITTEE SPECIAL MEETING

OPTIONS FOR THE JR/SR HIGH

TOWN HALL AUDITORIUM

SEPTEMBER 9, 2013

MEMBERS PRESENT: Chair Ellen Snyder, Vice Chair Amy Thompson, Judy Ryan, Drew Kiefaber, Russ Simon, William “Blue” Foster (arriving at 7:37 p.m.), David Foltz, Michael Lang, Town Council Rep Larry Pickering, School Board Rep Cliff Chase

MEMBERS EXCUSED: Dana Glennon

ALSO PRESENT: Superintendent of Schools Jim Hayes, School Business Manager Christine Blouin

Chair Snyder called the meeting to order at 7:00 p.m. followed by the Pledge of Allegiance.  She announced that Mr. Glennon was excused from the meeting and Mr. Foster would be arriving about 30 minutes late.  The format of the meeting was discussed, and it was decided to go around the table, with each member having a chance to ask questions about the proposed tuition agreement with Oyster River.

Tuition Agreement

Prior to the question and answer period, Dr. Hayes announced that there had been a change in the basis of some of the data in “Analysis of Options for the Jr/Sr High’ “dated August 15, 2013. These had been updated and handed out in an analysis dated September 9, 2013.  There had been no changes to the “Suggested Structure for a Tuition Agreement” dated August 15, 2013.

Moving from left to right, School Board Rep Chase passed as he was familiar with the information, and wanted to give others a chance to ask questions.   Mr. Lang passed as he wanted more opportunity to look over the information.  Mr. Foltz said he had read in the paper that the tuition agreement could be negotiated and asked if there was a possibility that the $16K to $19K range per pupil might be lowered. Dr. Hayes said this tuition proposal included a combined rate for regular education and special education students, rather than a discounted rate for regular students and a rate one and one half times higher for special education (SPED) students.  He added that they could revisit the latter structure.  Oyster River used its historical 2% growth figure per year to predict gross expenditures for future tuition rates. However, there were other methods that could be used, such as basing tuition on actual expenditures.  Mr. Foltz said it might be conceivable that the tuition could be brought to the $15K+ level, but Dr. Hayes said there might not be a benefit in having 2 rates.

Dr. Hayes explained the changes in the data in the “Analysis” for “Projected Costs of a Tuition Agreement” on page 2 of both versions.  The blue in both charts represented the total costs for tuition, supplemental costs, primarily for out placement SPED students and additional transportation costs. The green in both charts represented costs for the Middle School. The change had been in the location of the red line, showing the combination of both Middle and High School budgets.  He said he had found an error in how he first did the comparisons.  He had at first compared the shaded region to the current Jr/Sr High School budget and portrayed that as an apple- to- apples comparison.  However, they realized the past week that the Out of District account is in the SAU, rather than the Jr/Sr High School budget.  The amount of between $500K and $600K shifted the red line up. Mr. Simon said he was going to ask why SPED was projected as being higher by approximately the same amount as shown in the original chart. He said it was already in the present budget and should not be expressed as an additional expense.  Dr. Hayes said he had originally put the figure in separately to show people the true costs, but he realized it was not a fair comparison unless added to both sides of the equation. He said he wanted people to know the costs of out-of-placement were different from regular SPED, and said that was part of what he was explaining to Mr. Foltz about discounted base tuition and higher SPED tuition. Mr. Simon said Out of District would not be an incremental expense as the result of the tuition agreement, as it was already a part of the SAU budget. Dr. Hayes said in the chart, the amount was in both the red line and the blue shaded part, which balanced out.  He said the gap between the red line and the top of the green area showed additional expenses from the tuition agreement, and raising the red line showed the additional expenses were lower than originally depicted. Mr. Foltz said his understanding was that the tax impact from the tuition agreement would actually be lower than originally thought, to which Dr. Hayes agreed. He pointed to the slide at the top of page 3, “Tax Impact Comparison”, which showed the resulting drop in tax impact.

Ms. Ryan said her question was about the $14,600 total tuition expense for 2015-16 as expressed in the original “Suggested Structure “presentation on page 9, showing a per pupil tuition rate of $16,324, and asked if the difference was solely from SPED.  Dr. Hayes said the $11,567,000 was a figure provided by Oyster River.  He said they took their operating budget for the current year, subtracted things that were not included, such as debt service, leaving them with the $11,567,000. They then multiplied that amount by 2% per year, based on their average budget increase per year, to arrive at the projected figures. Ms. Ryan asked the total of what he was estimating for Newmarket’s tuition for 2015/2016. Dr. Hayes said the $16,324 was the tuition rate and it included transportation.  The figure of $19,080 represented what Newmarket would be spending for grades 9 – 12 and included tuition, SPED out-of-district placements and transportation, but supplemental SPED costs had been subtracted to reach the tuition figure of $16,324, as they were already in the SAU budget.

 Chair Snyder asked to go back to page 3 of the original analysis and Figure 2, Per Pupil Cost, as some of this was very confusing to the public.  There were 2 lines in figure 2, a blue line showing the total per pupil cost under the tuition agreement ($19,080), and a red line representing the projected per pupil tuition rate($16,324).  She asked how these figures related to what they were paying now, as it was difficult to compare these costs with what it currently cost to educate the students.  She asked if he were to draw another line representing current costs, if it would be apples-to-apples to the red and blue lines.  Dr. Hayes said it was difficult to add a line just representing high school because it was so intertwined with junior high costs.  He said they were expecting to prepare estimated figures for the Department of Education.  He said some items would be determined by percentage, and costs would be broken into cost centers: elementary, junior high, high school, etc. Per pupil cost is calculated by the Department of Ed., and is based on prior year’s confirmed expenditures, so the latest cost they have would be for the 2011/2012 school year, as the 2012/2013 figures would not be available until November. That cost had been determined to be about $16,200 per pupil. He said growing that figure by the nearly 3% increase per year would bring the cost per pupil to the upper-middle $16 Ks.

Chair Snyder noted that the figure was close to that in the tuition agreement, and felt the information should be included to make it easier for the public to make a decision.  She said that with the figures so similar, then they could concentrate on the pros and cons of the decision. Dr. Hayes said they really had to compare the current cost with the $19,080, rather than the $16,324 to include all the costs of educating 9 – 12 students.  Ms. Ryan said that according to the chart on page 9 of the “Suggested Structure”, the per pupil tax rate is now $16,599, but she was not sure if this included SPED.  The projected rate for 15/16 with the tuition was $16,324, which is really the same amount within $200, as far as the public is concerned. Dr. Hayes said he could see there was some close proximity with the numbers, but the key element was enrollment.  Currently, if 10 students move into the district, the school absorbs them.  With a tuition agreement, 10 new students would mean the costs would be 10 times the tuition rate.  He said the yardstick was not the rate, but the total tuition as they were projecting increases in enrollment.

Ms. Ryan asked what the margin of error was for enrollment.  Dr. Hayes said the margin of error increases the further out the figures are projected.  The figures are provided by people who conduct studies and are based on live births, elementary enrollments and patterns of transition from grade to grade.  He said that currently there were 102 in the first grade and just over 50 seniors.  Ms. Ryan thought they were getting off the subject, and said the figure on page 9 was very close to the current per pupil cost.  Dr. Hayes said that figure did not include transportation or SPED expenses.  Ms. Ryan said they knew it did not include SPED, figure on page 8 did include transportation according to the report.  Ms. Ryan said that in “Suggested Structure” there was a note that the figure did not include transportation, debt service, or non-insured. The page depicted additional costs and gave the total on Table 4.  Dr. Hayes said in this part of the report not including transportation meant that Newmarket was not paying for Oyster River transportation, but later on additional costs for 3 more buses were added for Newmarket to send its students to Oyster River. Ms. Ryan said this was the difficulty in having 2 different documents where the numbers did not match.  Dr. Hayes said he included the “Suggested Structure” as he needed to present a document that was also applicable to Oyster River.  The “Analysis” was more to show Newmarket data.  Ms. Ryan said that the base costs would be the same, but Dr. Hayes said they represented different things. 

Chair Snyder said she wanted to return to page 3 and per pupil cost, as this was one item the public would have to understand in making its decision. She asked if it was fair to say that in 2015/2016, the $16,324 would be the amount Newmarket would pay per pupil to Oyster River, and the $19,080 would be the total Newmarket would pay including transportation, SPED and other costs. Dr. Hayes agreed.  Chair Snyder said she felt the figure should include more information in the differences between the 2 amounts to clarify the explanation for the public.

Ms. Thompson asked Dr. Hayes to outline how the Business Administrator had been involved in creating the documents.  Dr. Hayes said she had reviewed the logic of the approach and the correctness of the calculations.  Also the Town’s Finance Director was in the process of reviewing the documents.  She said she would be referring to the August 15^th analysis because she had not had a chance to review the updated one.  She said she had run the numbers for the past 5 years and found the 2.9% annual growth percentage for the Jr/Sr High budget on page 2 was accurate as an average. She said they were projecting the growth rate for the tuition on the basis of Oyster River’s 2% reported growth rate. Dr. Hayes said he had challenged them on the rate, and they had brought forth data that seemed to confirm the figure.  Ms. Thompson said she was waiting for confirmation from Durham on its school tax rate, so she could do the same thing. She continued on page 2, Comparison of Budgets, and said she would like to see that done for Newmarket as it currently stood, as that would be an apples-to-apples comparison. She said the figures had to be broken out for the Budget Committee as to what the high school costs are. She said comparing the tax impact of a tuition agreement and a new school was apples-to-oranges, because no matter which, there was a cost in educating students, and to her, a new school would be above that.

Ms. Thompson referred to the additional costs of $2,574,990, on page 3 of the slides in the “Analysis” and the explanation of its calculation on the next page. She said that figure is broken down in the explanation of Table 8 in the” Suggested Structure”, showing a figure of $2,475,000. She said that was the basis of the projection.  She said that $375,000 was included for unanticipated expenses, which she felt was high. She felt that maybe the figure should not be included as contingencies have to be probable or likely. She felt contingencies had already been built into staff positions. Dr. Hayes explained that the High School Principals had met to determine the staffing increases, etc. and then he and the Business Manager had met with their counterparts at Oyster River to put numbers on the items.  He said that the numbers and budget were Oyster River’s, and would not necessarily be the same numbers if the budget was only for Newmarket.  He said he had worked in districts that had a contingency fund in their budgets. He said the unanticipated expenses were originally $400,000, but even though the cost for staffing seemed high, Oyster River had a different pay scale and benefit package.  He had challenged the figure, and the CTE cost had been removed and became its own line item number.

Ms. Thompson questioned the $400,000 for SPED case managers.  Dr. Hayes said he had spoken about the other model for setting tuition: one discounted rate and a higher rate for SPED students.  He said that SPED services provided in the school were part of the tuition in this plan, but out-of-district placements were not.  He said Newmarket already had such students.  However, if Oyster River determined that a Newmarket student should be placed out of district, then Newmarket would assume those costs.  She said that she and others wanted to see how SPED is calculated. She said that regardless of whether a student is placed out of district or receives SPED services in the school, there would be a cost for educating that student. She wanted to ensure that the assumptions were more than assumptions and were accurate, because even small errors become larger as they are projected out.  She next questioned the enrollment trends on page 5 of the “Analysis”.  Dr. Hayes said  the red line represented  Newmarket’s actual and projected enrollments, and the blue line represented Oyster River’s actual and projected enrollments.  The black lines represented enrollment trends for each, lower for Oyster River and higher for Newmarket.  Chair Snyder said that clarification could be added to explain what the lines mean. Ms. Thompson said that in the last year of the projection, both the red line and the blue line were lower than the black line.

Mr. Kiefaber referred back to the question Ms. Thompson had asked about  Newmarket’s additional costs in the “Suggested Structure” which totaled $2,475,000.  He said these were estimates as they currently existed, and asked if they would be recalculated each year, or would be a basis that would grow each year without further calculation. Dr. Hayes replied that in the data presented, it grows.  He said the principals had calculated the number of additional teachers to keep the student/teacher ratio no higher than 22, by taking Oyster River’s schedule and overlaying Newmarket’s students and course selections. The SPED directors had taken their current year’s population and had asked Oyster River what students they could absorb, and the additional staff was needed to cover the remaining students.  Mr. Kiefaber asked if, in the case of an influx of SPED students or the opposite, the figure would be recalculated. Dr. Hayes said it would, but this was the staffing level considered appropriate, and with no large changes expected for the next few years, it might not be necessary.  However, it could be done if it was necessary.

Mr. Kiefaber said he was not looking for an immediate answer, but in the wording on the bottom of page 14 of the “Suggested Structure”, there was reference to the process and expenses that Newmarket would incur in the future if it was decided that it would join the Oyster River Cooperative  School District. He said he would like to see more about that in the future and get an idea on the expenses. Dr. Hayes said that Oyster River is a K – 12 cooperative, and Newmarket is considering only sending its 9 – 12 students there. Mr. Kiefaber asked that an analysis be done for K-12. 

Mr. Simon referred to page 8, Table 3 of the “Suggested Structure”, Additional  Costs to Newmarket, projected by Durham which he was looking at in conjunction with the costs for the Middle School budget on page 9 in the “Analysis” , and the reductions made for the 9 – 12 students moving out.  He felt that moving 60% of the grades out should result in more than a 40% savings.  He said that in looking at the staff reductions on Table 8 on the same page, the category of paraprofessionals was missing, but was included as a separate category in  Table 3 in the “Suggested Structure”.   Dr. Hayes said that paraprofessionals were included with the 12 SPED staff member reductions in the 1200 account that also included case managers and a transition coordinator.  Mr. Simon asked that this be more specific , as he felt they should be reducing proportionally to increases in Oyster River, and that chart showed the addition of 11 paraprofessionals, 11 teachers and 4 case managers.  Dr. Hayes said he would look at this, but it could be a difference in programs that Oyster River would have to add.  Mr. Simon felt the line items should correspond because people would ask this.

Mr. Simon noted that the report stated Oyster River could absorb Barrington at no additional cost.  Dr. Hayes had been told that Oyster River would not accept new Barrington students and would phase out existing students if Newmarket arrived in 2015/2016. However, when the presentation was made to Oyster River’s School Board in August, the Superintendent had presented a different case. Mr. Simon said that Barrington was not included on page 9 for 2013/2014, but the possible phased out students were. Dr Hayes said any existing students still at Oyster River when Newmarket began would make a difference in how tuition was calculated, but he wasn’t sure what the scenario was.  Dr. Hayes said that Oyster River had a policy that high school enrollment would not exceed 915 in order to retain its class size. He said that looking at Table 5 on combined enrollment that shows Barrington being phased out, also shows that in 2019/20 they would be gone.  However, Oyster River had a backfill policy, which allowed them to fill open seats up to 915 students.  Dr. Hayes said this could create a problem as when a 9^th grade student entered, there was really a commitment for that student to finish high school in the district. Mr. Simon noted that saving $2.4M on the expense side and adding $4M to the expense side, as he had mentioned earlier, would probably need a better explanation. 

Mr. Simon said he appreciated the updated figures, as earlier it had been said that a new school would not cost much more than a tuition agreement by the 7^th year, and the new calculation showed that would not happen for 15 – 20 years. He said there was mention of building a new Middle School and moving the 5^th graders up.  However, he said he and others felt it important to know what parts, if any, of the present school could be renovated and what those costs would entail. Dr. Hayes had asked the School Board to look at that question and for direction on how to proceed.  The Board gave him the direction to look into building, because even with addition/renovation, the present building would still have the same issues it had as a high school. The members did not think the cost difference was worth the disruption to the students. Mr. Simon said in general the town had supported what the school wanted with the exception of a new school. He felt people would want an explanation of why a school’s infrastructure that had supported 7 grades could not be adapted to support 3 – 4 grades, and what the costs could be to renovate versus build.  He added that some repairs would have to be done anyway by 2015, but he was not sure if those were included in the tax rate calculations.  He noted that the costs, including those for unexpected and undetermined asbestos removal, were adding to the amount that had been set aside for repairs.  He also wanted information about the operating costs of a new facility, and other costs beyond bond payments. He felt the true costs  and potential saving of a new structure would be necessary to make an informed comparison with renovating or adding to the current structure.  He said knowing all the information could actually build the case for building a new school or not if it was shown that the operating costs would increase. Chair Snyder said it would be important to think through and present all the costs for all the scenarios.

Mr. Foster said the original presentation to the School Committee showed a 60% increase for transportation for Newmarket according to the current contract, and asked if there had been discussion of Oyster River taking over all the high school busing.  School Board Rep Chase said that Newmarket was in a multi-year contract that ended in 2 years, but at that point they would want to talk to Oyster River. Mr. Foster thought they could begin to look at this now to see if there was the potential for future savings.  He read from the original “Analysis” that it shall be Newmarket’s responsibility to determine a student’s placement, and a Newmarket  SPED administrator will be present at all EIP meetings.  He asked if this meant that they would hire an additional person.  Dr. Hayes said that they had decided that Newmarket’s SPED Director would do this, travelling between the 2 schools.

Mr. Foster said he had listened to Oyster River’s District meetings, and asked if there was any way they could put language in the agreement as to how the District spent Newmarket’s revenue.  He said Newmarket’s tuition was revenue for Oyster River, and their August 14, 2013 meeting discussed distribution of revenue and how they spend money from each of the districts. He read that assuming 100 – 105 tuition paying students, 100% of revenue will go to taxpayer relief; assuming 180 students, 60% will go to educational needs,  and 40% to tax relief; assuming 240 – 290 students, 50% will go to education, 10% to capital improvement and 40% to taxpayer relief.  The latter would apply to Newmarket, and he said that basically meant that $1.6M of the $4M Newmarket would send them would go into their taxpayers’ pockets. He said he could maybe agree with a smaller percentage, but this was difficult because Newmarket was also trying to lower its tax rate.

Dr. Hayes said he had never seen language in a tuition agreement that specified spending of revenue, and he had spoken with Oyster River’s Superintendent about the issue. He said that next year the tuition for 9– 12 was roughly $4M, and the cost for staffing was just under $2.5M, and he was surprised that the money was used for other things.  Mr. Foster asked if they could specify that the tuition be used for 9 – 12 only, and Dr. Hayes said he had not seen that in any tuition agreement.  He said they had looked at budget surplus to determine if some would come back to Newmarket, but noted that Fremont did not get anything back when there was a surplus in the Sanborn district.  However, Oyster River would do an accurate count of students and do a catch up in the summer to make adjusts during the same budget year, but this would not apply to a surplus.

Mr. Simon suggested the possibility of keeping the high school separate from the rest of Durham’s education budget, and thought if 33% of the students were from Newmarket, then 33% of any surplus should revert to Newmarket. Mr. Foster said that Newmarket would be paying a higher proportion of the costs for Barrington’s 60, 40, 20 students than for its own if they were paying less.  Dr. Hayes said that would depend on Barrington’s tuition agreement.  He said the tuition from Barrington was embedded in Oyster River revenue and Barrington had a year-to-year contract, and although currently they were paying $13,500 per student, the amount was renegotiated every year. Mr. Foster asked if there was a way to keep the high school finances separate from the district, but Dr. Hayes said that would be very difficult. Mr. Simon said they do deserve the right to leverage their facility, and they would save about 13 % from bringing in Newmarket’s students.

Town Council Rep Pickering said that many of his questions had been answered, and stated that Dr. Hayes did not have an easy job. He asked what was negotiable in the tuition agreement other than a lower fee. School Board Rep Chase said they had discussed what to call this as it was not an agreement at this point, but a starting point that touched on all the concepts involved. Dr. Hayes said that most of the concepts in the agreement were good things that they wanted. He said they had negotiated the term of the agreement to 15 years as a compromise between Newmarket’s 20 years and Oyster River’s 10 years, and he did not expect that to change. The time-frame for discussions about Newmarket joining the Coop was negotiated to 5 years into the contract, as Oyster River wanted to make sure this was a good working relationship.  Mr. Pickering wondered if maybe it could be changed to even 3 years because a house in Durham equal to one in Newmarket was worth at least $100,000 more, and that was basically because of the school system.  He said that if voters in both towns agreed to the tuition arrangement, it seemed like 5 years was a long time to wait for Newmarket to get back the money it was spending.  He thought that 3 years could be suggested, and Dr. Hayes said he would ask at their next meeting, but Oyster River had said they didn’t want to make a decision until at least one class had gone through.

School Board Rep Chase said as he recalled the language said up to 5 years, and he hoped there would be efforts at laying the groundwork before the 5 years.  He agreed that uncertainty affected the real estate market, and that the community needed to know the long term solution for the schools. Mr. Simon said a 15 year agreement would help give some certainty, whether or not they had some control on the School Board.  To Town Council Rep Pickering’s question, the tuition agreement would be on the March ballot if Oyster River makes the offer.  The agreement would also be on Oyster River’s ballot. 

School Board Rep Chase said he agreed that he would not want Dr. Hayes’ job, but said he had done a fantastic job with putting the numbers together. He said that providing the full costs of all the scenarios was very expensive and included hiring engineers, etc., which could run to the tens of thousands of dollars. He said if renovation was not a probability he did not want to go too far down that road.  He said that completing the fire/safety requirements would not make the building an excellent education facility. He said there still would be problems with aging infrastructure, such as the furnace and classroom sizes that were below standards. He felt they needed a long-term solution, or they would be looking for one again in another 10 years.

Mr. Lang asked if there was a fallback plan in case there was no tuition agreement.  Dr. Hayes said there was a 2 part answer.  If the agreement was not offered in October, then construction of a new building would be on the March ballot. He was concerned that at the end of the 15 year period, Oyster River could decide that the agreement was not working for them, and the town would have built a new school for grades 5 – 8, and have no place to put the 9 – 12 students.  He thought they might have to build a middle school that would be adaptable to a junior/senior high. Mr. Lang asked if they had a group that was working on that possibility.  Dr. Hayes said that had started working on that, but it was going slower than he had hoped. He said it was up to them to provide data, but they also had to wait for the architects.  He thought they were about a week away from completing the data for a middle school, but then they would have to take the concept to the designer and ask that the building have flexibility so that it could be converted if necessary. School Board Rep Chase said that if the proposed agreement was not going to be renewed, Newmarket would need at least 5 years to solve the problem locally, so they stipulated that Oyster River give them 5 years notice of its intent.  Dr. Hayes said that the rollover period of the agreement was 8 years, which would lengthen the term of the agreement to 23 years.

Mr. Foltz asked what the costs would be to fix the fire/life safety issues in the building compared to building a new one, if the voters did not pass the agreement.  He said that they had taken a tour of the building and he felt that just fixing those issues would not be enough, as it wouldn’t address the other problems of an aging building. He wanted to know the long-term cost to the taxpayers of doing nothing beyond meeting the fire/life safety requirements. He knew that they had spent more than they had hoped because asbestos had been removed, and probably would be found elsewhere in the building. He realized they wouldn’t know all the costs at this time, but felt the town had to have an understanding of the long term costs of doing nothing.  Dr. Hayes said there were many unknowns.  Mr. Foltz said Dr. Hayes had done a good job, but he felt there were still a lot of unanswered questions.  He felt the voters would need more information to make an educated decision about this, or the issue would continue to be kicked down the road. Dr. Hayes said he had set up this meeting and 3 public hearings to get the questions answered and the information to the public.

Ms. Ryan agreed that the documents did lead to a lot of questions. She stressed the importance of transparency and full disclosure of all the potential options so that people would realize the issues they are facing. She knew it wouldn’t be possible to determine all the costs for any options, but felt that the possibilities should be listed.  Chair Snyder had a question about transportation costs, and said her understanding was that currently middle school and high school students get picked up by the same buses.  In the proposed agreement, the high school students would be taken to Durham and there would be separate buses for the middle school and for the elementary school students.  She asked if the times could be changed so that the middle school students and elementary school students rode on the same buses.  Dr. Hayes said they had explored this with the bus company, and the answer was no, because they would have to add more buses to make that happen.  He said it was a capacity issue, and also there would be the hurdle of getting over the problem of people who would not want their Kindergarteners on the same bus as eighth graders. He said there also was a timing issue.  He said they had tried to accomplish this by adding 2 buses but that was unworkable, but by adding 3, it would work.  He said some middle school and high school routes would be slightly longer, but they had minimized that by changing some bus stops. The model also had one of the 4 buses first going to Durham and then doubling back to pick up middle school students.  

Chair Snyder said the cost of the tuition agreement was high, adding approximately $2M to the school budget, and was rather like leasing, as at the end of the period Newmarket would not have a new school or a renovated school. She wanted to see the outcome of this scenario. She agreed that scenarios were important and they needed to know, if not full costs, then the risks of unpredictability of costs as they played out for the future.  She felt they needed enough information to decide what would be best for the community in the next 5 to 10 years. She said they might find they needed both the tuition agreement and a new middle school, if they found they old school could not be renovated, and needed to know costs of both.  She said they also would need to know the approximate, comparative costs of a new junior/senior high versus a new middle school.  Also, she felt they needed information about what could happen if they built a school and the enrollment went down.  She felt that the pros and cons of possible scenarios should be listed and then played out for a term of 10 years, so that people would have a way of assessing the risks and coming to a decision.

Ms. Thompson said that Chair Snyder had said that she had seen in the tuition agreement that they were adding $2.5M in education costs. She said she believed the fallacy was that this was an additional cost on top of what they already spend. She said if they took the $2,475,000 and backed out page 9 of the “Analysis”, the $2.2M, assuming that all the figures were correct, which she said she had not even begun to verify, she said the cost of a new building was not compared accurately to tuitioning. She said they needed to compare the costs, whether the money was paid to Durham or Newmarket. She said if they took page 9 of the “Suggested Structure” and $2.75M, in Table 5 the additional costs to Newmarket were said to be $2,475,000, a figure she said she had a problem with, but would leave alone for the moment for the sake of argument. She said that cost goes against Table 8 on page 9 of the “Analysis”, which is a reduction in Newmarket’s costs of $2.181M.  She said the net additional cost as the figures currently stand is $300,000 for students to go to Oyster River rather than staying in Newmarket. She asked why the cost reduction of $2.2M by not having high school students in Newmarket was not reflected in the figure. She said the 2 pieces had to be put together.  Dr. Hayes said they were together to some extent, as $2.2M is district money that is not going into the junior/senior high as it is only a junior high, but it is being directed toward the tuition agreement.  He said the problem was that the tuition agreement cost more than the $2.2M, and Ms. Thompson said it did, but by $300,000. Dr. Hayes said it was more than that.

Mr. Simon agreed there was a difference in the 2 numbers, but he said they were not being charged for Durham’s incremental costs. He said the incremental cost was being added to their base, and then the base was divided by the number of students.  He said the $2.2M was deducted from the $4M that Newmarket was paying for its share. He said the incremental cost would be determined by Durham and the additional cost of adding students would increase those costs. He said they were not charging Newmarket just for its students but setting tuition on the average costs of educating all the students. Ms. Thompson said then the figures should be broken down differently. She said the operating costs should be divided by the number of students, and now tuition was set at $16,300.  She wanted to go back to her earlier request to find out how much it currently costs to educate a high school student in Newmarket. She thought the cost was fairly close to the proposed tuition rate, and said that a new building would be a cost on top of each of those figures. Dr. Hayes said if they were spending additional money for a new school or additional money for tuition, it was additional expense. Ms. Thompson said she felt this was looking at the issue in a bubble, and the total cost for education, was the total cost. She said if they built a new building the $2.1M in savings would go away and they would have additional costs beyond the cost of building.  She did not think the analysis was accurate here, and this was one of the reasons that the community was not going for it.  She said if the cost per student was $16,300 for them to get a great education at a school with an excellent reputation, Oyster River, and Newmarket was already at $16,000, the best return on investment might not actually be a new building. She said they also had to take into account the best education for the students.

Business Manager Blouin asked that they return to the Projected Costs of a Tuition Agreement which had been updated on page 2 of the new “Analysis” dated September 9^th. She said she heard what the Budget Committee was saying, and they would fine tune the number.  She said that $16,324 was the base rate for tuition, and when they added in the costs of SPED and transportation, that made the rate $19,000. Newmarket’s per pupil cost in 2011 was $16,193, and she said they could project that figure forward by multiplying it by 3% a year to come up with a figure comparable to the one in the tuition agreement. That figure would include SPED as the MS25 reports it.  She said the junior and senior high budgets were intermingled because they did not have a recognized middle school.  She said at the end of the year when they prepare the form, they do an ADM and an estimate. She said when she did the ADM she would have to break out the figures, which they had started to do for the FY 13 school year. She said once that was done, she would come back with the figures, which would be more than $16K but less than $19K.

Ms. Thompson said this information was not just for her, but to respond to the majority of people who supported the tuition agreement, to show where the agreement could be whittled down, and to show that the Budget Committee was behind it.  She said there were ways to get things passed: honoring the taxpayers’ wishes, listening to them, but also to going back to Oyster River.  She said they didn’t have to give the impression that they were in a desperate situation; that would be a separate discussion when they considered what to do with the building. She said she was discussing finances and how they could help.  She said she understood educators sitting down to decide what additional staff they needed, but could also be a moving target, as it was a little like putting the fox in the henhouse. She said that Newmarket had things to offer to Durham as well, but she felt they had a responsibility to all the communities to tighten this up. She did not want Oyster River voters to get the impression that Newmarket didn’t want to work with them, as they were taking on additional responsibility.  She wanted to get the agreement down to where it was palatable and equitable, and to get this through on the voter side. She said they were in negotiations, but she did not want the voters to think they were behind the eight ball and felt they should pass it. She said if they could pull the $19K down to the $16K to $17K range that would help, and her notes offered ways in which she thought they could do that.  She thought if they started with tighter initial assumptions they would be a much more solid position to go forward with strength. She said there was a lot of good to be said in joining with community action here. Her concerns were in looking at information with a financial background.  She said she had a responsibility to the taxpayers and the students, and felt the figures could be tightened up to provide a great education and make the cost palatable to the voters. She thought that Newmarket had more to offer Oyster River than any of the other communities.

Mr. Kiefaber said that Oyster River does have a good reputation and Newmarket’s is not as good.  He said, however, when comparing recent test scores, Newmarket’s were very, very close to Oyster River’s. He said, as a parent of a recently graduated student, he knew his children were getting an excellent education.  He said it was true that the school was small, but there were opportunities that a motivated student could pursue, achieve and excel.

Mr. Simon asked if Town Finance Director Angell had looked at the data. Dr. Hayes said he was working on it.  The two had met the previous week and he had given Mr. Angell the materials.  Dr. Hayes said that once Mr. Angell had looked at those materials, he would provide him with the spreadsheets. Dr. Hayes said he would be meeting with Oyster River on the 11^th, and ways to reduce the costs was on the agenda.  Mr. Simon said he understood that combining resources allows for more diversity in programming than Newmarket could provide on its own so he looked at this as an opportunity.  He said his understanding was that 80 – 90% of Newmarket’s school budget was in salaries, which Dr. Hayes noted was closer to 75 – 80%, so that would leave 20 – 25% for operating costs.  He said that Newmarket had no debt.  He said whether they paid $16k to Newmarket or to Durham, the same percentages would apply.  He said if they built a $50M school, they would still have the tuition costs, and additional costs of $4M per year for a school.

FIRE & LIFE SAFETY and CONSTRUCTION OF A NEW MIDDLE SCHOOL

He said Newmarket had an older infrastructure, but Durham had already updated and had paid off its bonds. He added that regardless of whether they decided to maintain the present school or not, he felt they should have the information. To Mr. Chase’s earlier point, he didn’t think this had to just be a case of not spending money, as he had seen at least 3 plans that had not been implemented yet, and he assumed they must have cost between $200K and $300K. He said if the School Board didn’t want to spend $20K to get the figures for renovating or adding to the present structure, he felt, as a taxpayer, that it was a little shortsighted. He added that people needed to see the figures as a part of one of   the options in order to make a decision.  Mr. Chase said he was not suggesting they not spend $20K on something that was a highly likely scenario, but they could spend $10K on each of many scenarios and fritter the money away when only one or two of the options might make sense.

Chair Snyder asked if they had a tuition agreement, what would be their assessment of needing a new middle school, which seemed to be the conclusion that they had made.  She said in that case, the tuition agreement costs and new middle school would have to be tied together. Dr. Hayes said he had said this to the Board last April, and asked for a decision on direction by June. He said they had eliminated most of the construction possibilities, but he was not as far along in developing a concept for the middle school as he had hoped, but he agreed that they needed the data.  Chair Snyder said if they found they could build a new junior/senior high for 20% more than a middle school it could affect people’s thinking. Dr. Hayes said it could be that kind of a number, but by building for grades 5 – 8, there would be a benefit in not having to do something at the elementary level for quite some time.  Chair Snyder said she would like to see a schematic that said just that for the options.  She felt including the costs and benefits and outcomes would be very helpful in helping voters make decisions and to get this passed.  Mr. Foster said the charts on pages 10 and 11 in the new “Analysis” showed the middle school having grades 6 – 8 rather than 5 – 8, and asked if a decision had been made. Dr. Hayes said that was the intent, and there would be educational as well as long term financial benefits in moving the 5^th grade up. He said when they did the analysis, it was determined that they would need one additional staff member, and the cost of about $85K was a negligible amount in the total picture.  However, in speaking with architects, he would be looking for a 5 – 8 building that would have the flexibility of being converted.

Mr. Foster said he had watched Durham’s School Board meeting about the tuition agreement and heard the public comment. He noted that Durham was more affluent than Newmarket, and part of the reason their houses were more expensive was that they could pay for them.   One resident had expressed concerns that if Newmarket students were added, they might overcrowd Oyster River. He felt this was the objection that Newmarket had to realize, as Durham might be willing to spend a higher tax dollar amount to keep its school size the same. He said that Ms. Thompson wanted to go full stream in tightening figures, and while he agreed that some numbers did need to be tightened, he felt they should tread lightly. He said they already had an agreement with Barrington and if Newmarket became too demanding he was concerned that Durham could decide to not offer the agreement to Newmarket.

Mr. Kiefaber gave historical background on the Jr/Sr High: the oldest part of the building dated to 1924, an addition was put on in 1956, the part currently used for the middle school was constructed in 1965 and the gym was added in 1987-88, the same year the elementary school was constructed.  He noted that there were approximately 25 years between building projects, and it had been 25 years since the last project. He believed the last bond for the elementary school had been paid off in 2003. He said that anyone who assumed there would not be pending new construction or renovation costs would be mistaken; it was just a matter of when.

Chair Snyder said they would not have time to go over Fire and Safety issues, but asked Dr. Hayes to confirm the additional amount that would be needed, and he agreed that they would need approximately $900,000.  Chair Snyder said then they would be asking the voters to confirm the tuition agreement, raise $900,000 for fire and safety and perhaps to approve the building of a new middle school. He agreed this would be a challenge.  She thanked Dr. Hayes and Ms. Blouin for coming.

The School Board had invited the Budget Committee and Town Council to attend an informational meeting on an alternate fuel source, CNG, on September 30^th.  She asked if they should cancel the September 23^rd meeting. Mr. Kiefaber so moved and Mr. Foster seconded.  Motion passed unanimously.

Ms. Thompson said she would like to jump in with a comment or suggestion, or perhaps it was a challenge. She felt that there was nothing structurally wrong with the Jr/Sr High building, although it did have some problems.  She said she would like to see what could be done to renovate it for 4 grades instead of 7, using portables or whatever during renovation, and would like a quantitative view and a budget guideline item for between $8M and $10M. She said that if Dr. Hayes could do that she would do everything within her power to get the votes for it to pass. She said that would be palatable to the taxpayers, but she would like to see if it was possible. Dr. Hayes said he understood, but it was really a School Board decision.

Ms. Thompson said she thought Dan Beason (sp?), the architect, could do it.  Dr. Hayes said he had asked Dan, and he responded that he would not do it, nor would he put the company name on a renovation of that facility. He said they would have to hire all new consultants and have all new studies, which would become expensive. Mr. Kiefaber agreed.  Dr. Hayes said that would be a School Board decision, but he would not recommend it.  He said the engineering studies that had been done in 2005 and 2012 both said the building was beyond renovation, and that the first step was demolition.  He said he had taken the idea of renovation to Dan last April, and he said he would not do it and his company would have no part in it. He believed that if they spent money for another study, it would probably come to the same conclusion. He said the building was not prepared for sysmic and had no insulation making it very expensive to operate.  Ms. Thompson said this (renovation) was her business, and she believed it could be done, if not by this team then by another.

School Board Rep Chase thanked Dr. Hayes for taking the time to present this, and said the effort will be to increase the transparency.

Chair Snyder asked for a motion to adjourn.  Mr. Simon so moved and Mr. Lang seconded.  Motion passed unanimously, and the meeting adjourned at 9:29 p.m.

Respectfully submitted,

Ellen Adlington, Recording Secretary