COMMONWEALTH OF PENNSYLVANIA …...the Dauphin County Court, docket number 2014-CV-7500. (Sec Rec 1).4 2. The Petition seeks to transfer territory consisting of the Borough of Highspire

February 2, 2018

Vincent L. Champion, Esquire 1 Irvine Row Carlisle, PA 17013

Jeffrey D. Litts, Esquire 24 North Lime Street Lancaster, PA 17602-2913

COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF EDUCATION

Brian W. Carter, Esquire W. Darren Powell, Esquire 301 Market Street Lemoyne, PA 18043

RE: Petition for Formation of Independent School District Consisting of the Borough of Highspire, Dauphin County, Pennsylvania

Dear Counselors:

I write in regard to the above-mentioned Petition to Establish an Independent School District seeking to transfer territory from the Steelton-Highspire School District to the Middletown Area School District. The Court of Common Pleas of Dauphin County asked that the Secretary of Education determine whether the proposed transfer has merit from an educational standpoint. The matter was delegated to me, as the Deputy Secretary for the Office of Elementary and Secondary Education, for consideration and issuance of a pre-adjudication determination.

Enclosed, please find the pre-adjudication determination. The record is available upon request from the Department for inspection.

Requests for a formal administrative hearing may be made to the Secretary pursuant to the General Rules of Administrative Practice and Procedure (1 Pa. Code Chapters 31, 33, 35). Specifically, 1 Pa. Code § 35.20 provides: "Actions taken by a subordinate officer under authority delegated by the agency head may be appealed to the agency head by filing a petition within 1 0 days after service of notice of the action." If a written appeal is not received by the Secretary within 10 days of the date on which the pre-adjudication determination is mailed, the pre-adjudication determination will become final. Once there is a final decision, the Department will advise the Court of Common Pleas.

s~2.~ MatthewS. Stem, Deputy Secretary Office of Elementary and Secondary Education

Enclosure cc: M. Patricia Fullerton, Assistant Chief Counsel

Sara M. Hockenberry, Assistant Counsel

Office of the Deputy Secretary for Elementary and Secondary Education 333 Market Street I Harrisburg, PA 17126-03331717.787.21271 Fax 717.214.27861 www.education.state.pa.us

INRE:

COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF EDUCATION

OFFICE OF ELEMENTARY AND SECONDARY EDUCATION

Petition for Formation of Independent School District Consisting ofthe Borough of Highspire, Dauphin County, Pennsylvania

BACKGROUND

The Public School Code of 1949 (School Code), 24 P.S. § 1-101 et seq., provides a

mechanism for the majority of the taxable inhabitants within a geographic territory to transfer

territory from one school district to another adjacent school district which is contiguous thereto.

See 24 P .S. § 2-242.1. Here, Petitioner seeks to transfer the geographic territory located within

the Borough ofHighspire (Highspire), Dauphin County, from the Steelton-Highspire School

District (SHSD) to the Middletown Area School District (MASD). As required by Section

24 2.1, 1 Petitioner filed a Petition for Formation of Independent School District Consisting of the

Borough ofHighspire, Dauphin County, Pennsylvania (Petition) with the Court of Common

Pleas of Dauphin County (Dauphin County Court). The Dauphin County Court determined that

the Petition complied with the requirements of Section 242.1 and forwarded the Petition to the

Secretary of Education (Secretary) to evaluate the "merits of the petition ... from an educational

standpoint" in accordance with Section 242.1.

If the Secretary finds the proposed transfer has educational merit, the Dauphin County

Court must proceed with the creation of the independent school district.2 !d. For reasons set

forth more fully below, the Pennsylvania Department of Education's (Department) Deputy Secretary

1 All statutory references herein are to the School Code unless otherwise noted.

2 This decision constitutes a "pre-adjudication determination." In Re: Petition Independent Sch. Dist. Appeal of Riegelsville Tax and Education Coalition, 17 A.3d 977 (Pa. Cmwlth. 2011) (Riegelsville II).

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for Elementary and Secondary Education (Deputy Secretary)3 fmds that the proposed transfer of

territory is not meritorious from an educational standpoint.

FINDINGS OF FACT

Procedural History

1. On August 15, 2014, the Highspire Education Coalition (Petitioner) filed the Petition with the Dauphin County Court, docket number 2014-CV-7500. (Sec Rec 1).4

2. The Petition seeks to transfer territory consisting of the Borough of Highspire from SHSD to MASD. (Sec Rec 1).

3. On October 15,2014, the Dauphin County Court held a hearing to consider whether the Petition complied with the preliminary requirements of Section 242.1. (Sec Rec 7).

4. By letter dated October 17, 2014, the Dauphin County Court deemed the Petition complied with the requirements of Section 242.1 and forwarded the Petition to the Department to determine the educational merit of the Petition. (Sec Rec 7).

5. The October 15,2014 Order and October 17, 2014letter from the Dauphin County Court was received by then Acting Secretary, Carolyn C. Dumaresq, on October 21,2014. (Sec Rec 7).

6. By letter dated October 29, 2014, then Acting Secretary Dumaresq forwarded an Educational Impact Projection Questionnaire (Questionnaire)5 to Petitioner, MASD, and SHSD (collectively referred to as "the parties") seeking information related to the educational merit of the proposed transfer and informed the parties that upon receipt of written submissions the matter would be delegated to the Department's Deputy Secretary for a pre-adjudication determination. (Sec Rec 8).

3 Consistent with .Riegelsville II, the Department is required to develop a record of its review of the educational merit of a petition for the formation of an independent school district and does so through issuance of a "preadjudication determination." The Deputy Secretary is making this ''pre-adjudication determination." Requests for a formal administrative hearing may be made to the Secretary pursuant to 1 Pa. Code§ 35.20, which provides: "Actions taken by a subordinate officer under authority delegated by the agency head may be appealed to the agency head by filing a petition within 10 days after service of notice of the action."

4 "Sec Rec _"refers to the indexed documents consisting of the record considered by the Deputy Secretary. A copy of the index entitled "Record before the Deputy Secretary of Education" is attached hereto for reference.

5 The Department applied the standards set forth in the Commonwealth Court's decision in Riegelsville II, regarding the definition of educational merit, to develop the Educational Impact Projection Questionnaire.

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7. By letter dated November 17, 2014, MASD requested an extension of time to respond, citing several reasons including an awareness that a change in the Department's administration would occur on January 20, 2015, recognizing that the Department's Deputy Secretary tasked with reviewing the responses would likely not be the same individual currently holding the position, to which SHSD concurred, and sought to have until February 15,2015, to submit written responses to the Questionnaire. (Sec Rec 9).

8. By letter dated November 24, 2014, Petitioner expressed no opposition to MASD's request for an extension of time to submit its response by February 15,2015, provided that Petitioner was also given an extension of time to provide its reply no later than March 16, 2015. (Sec Rec 11).

9. On November 25, 2014, the request for an extension was granted and MASD and SHSD were directed to submit written responses by February 15, 2015, and Petitioner was given an extension of time to provide its reply until March 16, 2015. (Sec Rec 12).

10. On February 13, 2015, the Department received MASD's written submissions providing · information in response to the Questionnaire. (Sec Rec 13).

11. On February 17, 2015, the Department received SHSD' s written submissions providing information in response to the Questionnaire. (Sec Rec 14).

12. On March 16, 2015, the Department received Petitioner's reply to the responses ofMASD and SHSD. (Sec Rec 15).

13. By letter dated March 20,2015, MASD submitted a rebuttal reaction to the responses provided by SHSD. (Sec Rec 16).

14. SHSD did not submit written rebuttal reaction to the responses provided by MASD.

15. On March 20, 2015, Petitioner submitted an objection to the written rebuttal reaction MASD submitted in reaction to the responses provided by SHSD. (Sec Rec 17).

16. Neither school district submitted rebuttal in reaction to the responses provided by Petitioner.

17. Beginning on or about September 3, 2015, Petitioner periodically inquired as to when to expect a decision on the Petition to which the Department responded. (Sec Rec 18, 19, 20, and 38).

18. On or about July 20, 2016, the parties were informed that Department staff were working to respond to requests made by the Deputy Secretary for additional data and analysis, the school districts would be asked to provide additional information and clarification, and that further communication would be forthcoming and provided to all parties. (Sec Rec 20).

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19. On August 2, 2016, the Department informed the parties that it was reviewing information recently submitted by the parties and sought clarification from the districts on the information provided related to graduation rates and further information evidencing levels of, and opportunities for, parental involvement that support learning. (Sec Rec 22).

20. On August 15,2016, and August 23,2016, the Department received MASD's and SHSD's submissions, respectively, providing information on levels of parental involvement. (Sec Rec 25 and 27).

21. On August 30, 2016, the Department and the parties participated in a conference call during which the parties were informed that a meeting was scheduled with the Deputy Secretary on September 15, 2016, at which time it would be determined if further information was necessary, and the Department indicated it would inform the parties of the next steps. (Sec Rec 28 and 29).

22. On or about September 13, 2016, the parties were informed that the meeting scheduled for September 15, 2016, was re-scheduled for the following day, September 16,2016. (Sec Rec 32).

23. On September 19, 2016, the Department informed the parties the Department was reviewing and analyzing the parental involvement information supplied by the districts, the Department intended to seek additional information, confmn/audit information already provided, and conduct a site visit. (Sec Rec 33).

24. By letter dated September 30, 2016, Petitioner expressed its opposition to any site visits. (Sec Rec 34).

25. On November 2, 2016, the Department notified the parties of its intention to proceed with the site visits and explained that the additional information gathering and analysis was expected.to provide the context and support necessary to render a thorough decision on the educational merit of the proposed transfer. (Sec Rec 37).

26. During November of2016, the individuals tasked with conducting the analysis/audits made introductory telephone calls to the districts informing them of efforts to be undertaken in performance of financial and classroom audits, requested additional information and data from the school districts, and met with superintendents and business administrators. (Sec Rec 45).

27. On or about November 29, 2016, the Department informed the parties that the Department engaged individuals to conduct a financial audit and a classroom audit of both school districts, that the individuals tasked with conducting these audits had already reached out to both school districts, and that arrangements for site visits would be made after the review of preliminary material was completed. (Sec Rec 39).

28. On February 16, 2017, the Department informed the parties that site visits at the school districts would commence during the month of March 2017; and that upon completion of

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the site visits and receipt of a report, the Department would provide the parties with a copy of the report and allow them 30 days in which to review and provide comments. (Sec Rec 40). .

29. By letter dated March 2, 2017, the Department responded to concerns raised by Petitioner acknowledging to the parties that the Department's review in this matter constituted a departure from the past practice as it is the byproduct of the current Deputy Secretary's experience, insight, and coinmitment to a thorough deliberation of a determination that will impact generations of present and future school-aged children; and explaining the Deputy Secretary's review is only a divergence from past reviews to the extent it reflects progressive gradations of inquiry to refme and further examine factors impacting and influencing educational outcomes which are relevant to the review and within his discretion to consider. (Sec Rec 42).

30. On July 24, 2017, the Deputy Secretary notified the parties that on July 18, 2017 he received a Report on Proposed Transfer of Territory prepared by the PFM Group (Report), and enclosed the Report for the parties' review and response within 30 days. (Sec Rec 45).

31. By letter dated August 7, 2017, Petitioner requested that it be provided with the data, information and materials relied upon by the PFM Group and an extension of time to submit a response to the Report after receipt of the requested data, information, and materials. (Sec Rec 45).

32. The Department responded by letter dated August 25, 2017 providing a comprehensive list of all data, information and materials the PFM Group requested from the Districts (itemized a through x) and informing the parties that the Department would make available any specific information the parties identified from the list. (Sec Rec 48).

33. By letter dated September 21,2017, the Department contacted the parties indicating that it had not received a request for information identified in the August 25 list, set a September 25, 2017 deadline for the parties to seek listed information, and further directed that if no requests for listed information were received, the parties must provide any responses to the Report on or by October 16,2017. (Sec Rec 49).

34. The parties did not request any information identified in the August 25, 2017list.

35. On October 6, 2017, Petitioner submitted a response to the Report. (Sec Rec 50).

36. On October 11, 2017, MASD submitted a response to the Report. (Sec Rec 51).

3 7. SHSD did not submit a response to the Report.

Background: SHSD and Highspire

38. SHSD encompasses approximately 2 square miles and is entirely located within Dauphin County. (Sec Rec 13).

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39. The Borough of Highspire encompasses approximately .7 square miles and is located entirely within the territory of SHSD. (Sec Rec 14).

40. SHSD is a small urban school district located along the Susquehanna River just south of Harrisburg, Pennsylvania. (Sec Rec 14 and 45).

41. SHSD is entirely comprised of two municipalities: the Borough of Steelton and the Borough of Highspire. (Sec Rec 14).

42. SHSD directly employs approximately 130 individuals in academic and support roles. (Sec Rec 45). 6

4 3. SHSD provides K -12 education at a campus located on Reynders Street just inside the boundaries of Swatara Township.

44. SHSD's campus is comprised of two school buildings: Steelton-Highspire Elementary School for grades K-6 and Steelton-Highspire Junior-Senior High School serving grades 7-12. (Pub Rec 1).

45. SHSD does not have any school buildings located within Highspire. (Sec Rec 14).

46. For the 2014-2015 school year 1,359 students residing in SHSD were enrolled in SHSD:

a. A total of 1,124 students, or approximately 83% of SHSD's total enrollment, resided within the Borough of Steelton.

b. A total of2357 students, or approximately 17% of SHSD's total enrollment, resided within Highspire.

(Sec Rec 14).

47. For the 2014-2015 school year 166 students residing within SHSD were enrolled in nonpublic schools:

a. A total of 116 students enrolled in nonpublic schools resided within the Borough of Steelton.

6 According to the 2015-2016 reports on Professional Staff and Support Personnel from the Department's website, there was a total of 96 professional staff including 79 teachers, 8 administrators, and 9 employees in Coordinated Services roles. In addition, SHSD employed 37 individuals in full-time and part-time support positions.

7 MASD reports that 229 students residing in Highspire would be subject to the transfer. (Sec Rec 13). Petitioner recognizes the inconsistency and agrees that the difference is insubstantial and that such inconsistences do not substantially impact the within analysis of educational merit. (Sec Rec 15).

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b. A total of 50 students enrolled in nonpublic schools resided within Highspire.

(Sec Rec 14).

48. For the 2014-2015 school year 138 students residing in SHSD were enrolled in charter schools:

a. A total of 89 students enrolled in charter schools resided within the Borough of Steelton.

b. A total of 49 students enrolled in charter schools resided within Highspire.

(Sec Rec 14).

49. For the 2014-2015 school year one home-schooled student resided within Highspire. (Sec Rec 14).

50. Considering all enrollment data for 2014-2015, the number of school-age children residing in Highspire that could be potentially affected by a transfer is a total of335. (Sec Rec 14).

51. The number of affected students residing in Highspire and enrolled in SHSD during the 2014-2015 school year was relatively evenly distributed across the grade levels with 94 students attending the SHSD Junior-Senior High School and 141 students attending SHSD Elementary School. (Sec Rec 14).

52. Of the 94 students residing in Highspire and attending the SHSD Junior-Senior High School during the 2014-2015 school year, 60 students were enrolled in grades 9 through 12, specifically. (Sec Rec 14).

53. For the most recent school year, 2016-2017, SHSD had 1,755 school-age students at the time of its annual report to the Department in early Octob,er 2016:

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oa nro men- ee on- Ig s p_Ire c oo IS riC T tIE II t St It H' h . S h I D' t . t District- Vocational Out -of-District Non-Public Charter Total Operated Schools Placement Schools Schools Schools

K 113 0 1 9 4 127 G1 111 0 2 6 3 122 G2 126 0 1 15 7 149 G3 146 0 2 12 5 165 G4 124 0 1 10 7 142 G5 125 0 2 9 9 145 G6 118 0 0 5 10 133 G7 121 0 2 8 15 146 G8 112 0 2 14 5 133 G9 118 0 4 11 15 148 G10 105 5 4 8 7 129 G11 78 5 3 4 11 101 G12 82 16 4 8 5 115 Total 1,479 26 28 119 103 1,755 %of 84.3% 1.5% 1.6% 6.8% 5.9% 100.00o/o Total

(Sec Rec 45- Table 6: Total Enrollment- Steelton-Highspire School District).

54. For the 2016-2017 school year 1,479 students residing in SHSD were enrolled in SHSD operated schools:

a. A total of 1 ,23 0 students, or approximately 81.3% of SHSD' s total enrollment, resided within the Borough of Steelton.

b. A total of276 students, or approximately 18.7% ofSHSD's total enrollment, resided within Highspire.

(Sec Rec 45 -Table 8: Enrollment By Category- Steelton-Highspire School District).

55. For the 2016-2017 school year, 119 students residing within SHSD were enrolled in nonpublic schools:

a. A total of 78 students enrolled in nonpublic schools resided within the Borough of Steelton.

b. A total of 41 students enrolled in nonpublic schools resided within Highspire.

(Sec Rec 45- Table 8: Enrollment By Category- Steelton-Highspire School District).

56. For the 2016-2017 school year, 103 students residing in SHSD were enrolled in charter schools.

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a. A total of 68 students enrolled in charter schools resided within the Borough of Steelton.

b. A total of 35 students enrolled in charter schools resided within Highspire.

(Sec Rec 45 -Table 8: Enrollment By Category- Steelton-Highspire School District).

57. Considering all enrollment data for 2016-2017, the number of school-age children residing in Highspire that could be potentially affected by a transfer is a total of363.8 (Sec Rec 45-Table 8: Enrollment By Category- Steelton-Highspire School District).

58. Based on enrollment data at SHSD-operated schools, the student population at SHSD is comprised of approximately 70% of students categorized as economically disadvantaged, and 3.9% of the total enrollment are English Language Learners. (Sec Rec 45- Table 9: Steelton-Highspire Student Population: District-Operated Schools).

59. Highspire exhibits higher percentages of special education students, English Language Learners and economically disadvantaged students compared to the Borough of Steelton. (Sec Rec 45- Table 9: Steelton-Highspire Student Population: District-Operated Schools).

60. Comparing the demographics for the municipalities that comprise SHSD and SHSD, as a whole, to Dauphin County:

a. SHSD is younger than the County, as a whole, with nearly 29% of the population under the age of 18; and

b. 30% of families with children residing in SHSD have income at or below the poverty line, nearly twice the rate in MASD and the County, as a whole.

(Sec Rec 45).

61. SHSD is identified as a fmancially distressed school district, under financial watch.9 (Sec Rec 14).

Background: MASD

62. MASD encompasses 17 square miles and is entirely located in Dauphin County. (Pub Rec 9).

63. MASD is a suburban school district that is located along the Susquehanna River approximately ten miles southeast of Harrisburg, Pennsylvania. (Sec Rec 45 and Pub Rec 9).

8 This figure also includes Highspire students enrolled in vocational school and Out-of-District Placements.

9 By letter dated March 15, 2013, the Department notified SHSD of its designation in Financial Watch Status pursuant to Section 611-A of the School Code, 24 P.S. § 6-611-A. (Pub Rec 10).

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64. MASD is comprised of the entirety of three municipalities: Middletown Borough, Royalton Borough, and Lower Swatara Township. (Pub Rec 9).

65. For the 2014-2015 school year, 2,305 students residing in MASD were enrolled in MASD.10 (Sec Rec 13).

66. For the 2014-2015 school year, 155 students residing within MASD were enrolled in nonpublic schools. (Sec Rec 13).

67. For the most recent school year, 2016-2017, MASD had 2,627 students at the time of its annual report to the Department in early October 2016:

Total Enrollment- Middletown Area School District District -Operated Vocational Out -of-District Non-Public Charter Total

Schools Schools Placement Schools11 Schools K 176 0 2 -- 0 178 G1 196 0 1 -- 6 203 G2 185 0 0 -- 3 188 G3 197 0 1 -- 3 201 G4 200 0 0 -- 1 201 G5 191 0 . 1 -- 2 194 G6 195 0 1 -- 1 197 G7 170 0 2 -- 3 175 G8 163 0 4 -- 2 169 G9 177 27 2 -- 4 210 GlO 156 15 6 -- 5 182 Gll 168 16 6 -- 9 199 G12 156 17 3 -- 11 187 Total 2,330 75 29 - 143 50 2,627 %of 88.7% 2.9% 1.1% 5.4% 1.9% 100.0% Total

(Sec Rec 45 -Table 3: Total Enrollment- Middletown Area School District).

68. Of the 2,330 MASD-resident students enrolled in district-operated schools, 15.5% are special education students, 2.1% are English Language Learners, and 51.2% receive free or reduced lunch. (Sec Rec 45).

10 This figure does not include 72 MASD students who attend Dauphin County Technical School, however, the enrollment fluctuates and as of January 2015, there were 67 students enrolled.

11 Enrollment in non-public schools was provided as a total rather than by grade.

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69. MASD directly employs 355 individuals in professional, administrative, and support roles. 12

70. MASD provides K-12 education at three elementary schools, a middle school, and a high school comprised of five school buildings:

a. Lyall J. Fink Elementary School b. John C. Kunkel Elementary School c. Robert G. Reid Elementary School d. MASD Middle School e. MASD High School

(Sec Rec 13).

71. Three of the five schools are located on a campus at North Union Street and Oberlin Road just north of Interstate 76, which includes the Reid Elementary School, the middle school serving grades 6-8, and the high school serving grades 9-12; Fink Elementary School is located on Race Street in Middletown; and the Kunkel Elementary School is located on Fulling Mill Road in Middletown.

72. Comparing the demographics for the municipalities that comprise MASD and MASD, as a whole, to Dauphin County:

a. MASD is older than the County, as a whole, with just under 20.5% of the population under the age of 18 compared to 22.6 % in the County; and

b. sixteen and one-half percent of families with children residing in MASD have income at or below the poverty line, about the same as the countywide average of 16.2%.

(Sec Rec 45).

The Petitioner's Reasons for Seeking Transfer

73. The Petition filed with the Dauphin County Court on August 15, 2014 states that Petitioner seeks the creation of an independent school district in order to transfer the territory of Highspire from SHSD to MASD for the following reasons:

a. The transfer would be in the best educational interest of present and future schoolage children living in Highspire;

12 As of January 2017, there were 202 teachers, 17 administrators and 136 in operational roles including clerical, custodial, maintenance, instructional aide, and paraprofessional positions.

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b. SHSD fails to achieve annual yearly progress as assessed by the Pennsylvania Department of Education, while MASD regularly achieves annual yearly progress; 13 ·

c. SHSD continually underperforms on Pennsylvania System of School Assessment tests when compared to the Commonwealth, as a whole;

d. MASD students consistently perform above the state's proficiency level according to the Pennsylvania System of School Assessment;

e. SHSD continually underperforms on the SAT exams when compared to the Commonwealth of Pennsylvania, as a whole;

f. MASD continually outperforms on the SAT exams when compared to the Commonwealth of Pennsylvania, as a whole;

g. MASD provides a more diverse array of extracurricular programs; h. Due to severe budget constraints, in recent years SHSD has reduced teacher

staffing and education programs; 1. Significant noncompliance by SHSD with relevant requirements, as found by the

Pennsylvania Auditor General in its February 2014 Performance Audit report, including: possible teacher certification deficiencies; school bus driver qualification deficiencies and serious financial challenges including a $2,680,400 general fund deficit that prompted the Auditor General to state: "If the District's fmancial situation continues to deteriorate, it is possible that the Pennsylvania Department of Education may declare it to be in fmancial recovery status."

(Sec Rec 1).

General Viewpoints and Opinions of the Districts and Taxpayers Residing within Highspire

74. Petitioner argues that the majority of taxable inhabitants, "includirig the vast majority of parents of public school students, are in favor of relocating Highspire students to Middletown." (Sec Rec 15).

75. Both SHSD and MASD are opposed to the proposed transfer. (Sec Rec 13 and 14).

13 It is assumed that Petitioner's reference to annual yearly progress is meant to refer to Adequate Yearly Progress (A YP), which was a measurement defined under the No Child Left Behind Act (NCLB). In order to have achieved A YP, school districts and schools must have, in part, achieved prescribed performance measures on the math and reading portions of the Pennsylvania System of School Assessment. Under NCLB, the Department was an:imally required to identify whether each school district and public school in the Commonwealth met A YP and, if it did not, to identifY the school district or school to be in one of the following statuses: Warning; School Improvement I; School Improvement ll; Corrective Action I; or Corrective Action ll. The 2011-2012 school year was the last school year for which A YP was calculated. Pursuant to the ESEA Flexibility Waiver that the Department was granted by USDE and beginning with statewide assessment results from the 2012-2013 school year, the Department stopped determining whether school districts and public schools met A YP and instead designated Title I schools as Reward; Focus; Priority; or No Designation based upon Department developed performance measures and annual measurable objectives.

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76. SHSD is "opposed to this transfer based on the negative impact to educational quality this transfer will have on the remaining Steelton students and on the Highspire students, were they to transfer to the Middletown Area School District." (Sec Rec 14).

77. SHSD is "strongly opposed to this transfer" because:

a. The financial ramifications of this transfer will negatively impact the educational quality of the non-transferring/remaining SHSD students; and

b. The fmancial ramifications of this transfer will negatively impact Highspire students if they leave SHSD and go to the MASD based on the fmancial impact to MASD.

(Sec Rec 14).

78. SHSD contends that the district's ability to operate an effeCtive education program for students remaining within the district will be negatively impacted. Specifically, a reduction in financial resources and loss of revenue will make it more difficult for SHSD to maintain and/or continue improving the resources necessary to properly educate students:

a. SHSD projects that if Highspire is transferred from SHSD to the MASD, then SHSD would realize a reduction of approximately $2 million dollars in taxable revenue or approximately 34% ofSHSD's total taxable revenue.

b. The.reduction in $2 million dollars realized by SHSD would be offset by not serving the students residing within Highspire, or 17% of SHSD' s total enrollment. However, an analysis of the cost reduction estimates indicates that SHSD would still have to cut expenditures by $800,000 in order to achieve a balanced budget.

c. To maintain a balanced budget, SHSD anticipates a reduction in staff and estimates that approximately one staff member per grade level would need to be cut.

d. A reduction in school staff would likely increase the existing class size from 18 to 26 students to 30 or more students per teacher and also create a need to curtail programs.

e. Based on an enrollment analysis, approximately 8 teachers would need to be furloughed. Based on tax base revenue analysis, the transfer would impact instructional programs. .

f. There would be a 34% loss in tax base while only 17% of the population served comes from Highspire.

g. A few empty classrooms in each building may open up. They could be offered to the IU or Head Start or be utilized for an expanding mental health clinic in the school.

h. The Highspire student numbers are low enough that extracurricular activities will not be impacted.

1. Increased class size would have a significant negative impact on student achievement across all grade levels.

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(Sec Rec 14).

79. SHSD contends that MASD's ability to operate an effective education program for students residing in Highspire impacted by a transfer to MASD will, likewise, be negatively impacted:

a. SHSD estimates that the amount of debt to be transferred to the MASD would be approximately $5,405,310 dollars;

b. The escalating costs for MASD to educate Highspire students would limit educational resources and impede its ability to maintain quality educational programs.

(Sec Rec 14).

80. SHSD disagrees with Petitioner that the transfer would be in the best educational interest of present and future school-age children living in Highspire. (Sec Rec 14).

81. On December 30, 2014,225 parents and/or guardians of Highspire students received a phone survey to which 64 responded, or 28% of those surveyed; and 31 of those pressed the accurate keys so that responses could be counted for a total of 13.8% participation. (Sec Rec 14).

82. Three questions were a.Sked and a number to be pressed was given to respond to the first two questions. 14 Results of the 13.8% of those surveyed that could be counted are listed below per question:

a. "Prior to this call, were you aware of the Highspire initiative to transfer from Steelton Highspire SD? "If your answer is yes, please press 1; if your answer is no, please press 2." 90% were aware of the initiative, a total of 12.4% of those surveyed.

b. Are you in favor of Highspire students leaving the Steelton-Highspire SD to join Middletown School District? "If your answer is yes, please press 3; if your answer is no, please press 4." 74% responded that they were in favor of this transfer, a total of 10.2% ofthose surveyed.

c. "If you would like to leave a comment, please press 5 and leave a message when prompted. If you would like to repeat this message, press 9. If you got this message as a voicemail and would like to call back to leave your responses in person, please call 717-704-3837 and leave a message with your responses to the questions. Thank you for your time."15

83. SHSD reports that since the Petition was initiated, the Superintendent has had parents call to speak on the issue:

14 The third question was open ended; however, no responses were received.

15 No parent or guardian called back the number to leave further information.

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a. Two parents stated emphatically that the Petition upset them, that they were pleased with their children's education and that they had children at both the elementary and the high school and did not want to see SHSD separate.

b. One of those parents also indicated that she had been told that if she signed the Petition, her yearly taxes would go down $300.00.

(Sec Rec 14).

84. SHSD contends that the opportunities presently enjoyed by students enrolled in SHSD would be greatly diminished. (Sec Rec 14).

85. MASD strongly believes that the proposed transfer would adversely impact its student class size, special education service delivery model and overall academic achievement, particularly at the elementary level. (Sec Rec 13).

86. MASD believes that current students would be adversely impacted if this proposed transfer occurred because it would result in the large influx16 of new students that would drain existing facilities, staff and programs. (Sec Rec 13).

87. The Board of School Directors of MASD contend that "incorporating Highspire Borough into ... [MASD's] existing public school system would have a detrimental educational impact on the School District for several reasons, including, but not limited to":

a. creation of overcrowding in the district's elementary school buildings; b. elimination of a Head Start program housed in a district elementary school due to

a lack of sufficient space; c. substantial increases in the district's special education, career and technical school

tuition, school personnel, and school transportation costs because of an influx of new students; and

d. elimination and/or curtailment of supplemental educational initiatives at the secondary level as a result of increased expenditures on other mandated areas.

(Sec Rec 13).

88. Both MASD and SHSD expressed concern about any impact on class sizes as both districts believe that class size is directly related to educational outcomes and work to maintain lower class sizes. (Sec Rec 45).

Educational Facilities

89. The proposed transfer of Highspire students from SHSD to MASD will have an impact on building utilization in MASD. (Sec Rec 13).

16 MASD anticipates the influx of over 200 kids in grades K through 12th. (Sec Rec 13).

15

90. MASD reports that if the Petition is granted, the addition of Highspire students would adversely impact MASD's facilities because the proposed transfer of elementary students would result in one of two scenarios:

a. an addition of one ~lassroom per grade level at Grades K-5; or b. class sizes approaching 30 students in some grades.

(Sec Rec 14).

91. As a current practice, MASD assigns elementary students to schools outside of their attendance area in order to maintain smaller class sizes. (Sec Rec 45).

92. The targeted class ratios for both districts are similar, with a difference noted at the Middle School:

a. Elementary School: 17-26 students per class in MASD compared to 16-26 per class in SHSD.

b. Middle School: 13-26 students per class in MASD compared to 12-30 per class in SHSD.

c. High School: under 20 stud~nts per class for core courses at MASD compared to 20 students per class for core courses in SHSD.

(Sec Rec 45).

93. Petitioner does not dispute that adding elementary-age students from Highspire would likely prove challenging for MASD as nearly half of MASD' s current student population is in grades K through 5. (Sec Rec 15).

94. MASD ~ticipates the following issues related to educational facilities:

a. Because there is no additional classroom space available in the three elementary schools for additional teachers or classes and the addition of Highspire students is projected to result in the need for additional teaching staff, it could be challenging to find instructional space for additional teaching staff. 17

b. MASD would most likely need to remove the Head Start program in order to accommodate additional teaching staff at the elementary leve1. 18

c. MASD may be forced to consider changing the elementary buildings into centers with a change in grade configuration.19

17 MASD anticipates potentially needing to add classes to accommodate an increase in elementary school enrollments. (Sec Rec 13).

18 MASD anticipates needing to remove an existing Head Start program from its elementary schools potentially resulting in the lack of available space in the community to host such a program. (Sec Rec 13).

19 MASD anticipates a major educational program alteration and the potential need to reconfigure the elementary schools from the current Grades K through 5 model to a center-based model in order to accommodate the additional elementary level students and preserve class size parity. MASD endeavors to balance class size and ensure that

16

d. The increase in class sizes to accommodate transferring students would have a detrimental impact on the academic achievement of all students.

(Sec Rec 13).

95. MASD reported that it was building a brand-new high school building to replace its existing 50-year-old building which was anticipated to be completed in the fall of2016; and the new building has been completed. (Sec Rec 13).

96. MASD contends that the plans to build a new high school building began prior to the filing of the Petition; thus its design did not and could not contemplate the potential influx of Highspire students, and the addition of Highspire students may result in a lack of space in a brand new high school. (Sec Rec 13).

97. On August 27, 2012, the Board of Directors for MASD submitted Project Justification and Schematic Design to the Department for a new high school; on November 18, 2013 an Act 34 Public Hearing was held as required by the Department to allow the public to comment on the proposed project; project bids opened in April2014; and bids were awarded in May 2014 with groundbreaking beginning in June 2014. (Pub Rec 11).

98. Petitioner acknowledges that MASD began the new high school project in 2012, several years prior to Petitioner's filing the Petition. (Sec Rec 15).

99. Petitioner contends that by the time MASD sent the project out for bids in 2014 there was "considerable public discussion on transferring Highspire to Middletown, including news reports of Highspire's active efforts on withdrawing from ... [SHSD] and its intention to transfer to Middletown." (Sec Rec 15).

100. MASD may have been aware ofthe possibility of needing to add Highspire students in the future. (Sec Rec 15).

101. MASD's new high school plans for 10% growth over existing enrollment, but Petitioner asserts that MASD could have accounted for more growth since there are undeveloped areas within the district zoned for residential use which could result in new home construction. (Sec Rec 15).

102. School facilities in both districts reflect supportive learning environments. (Sec Rec 45).

primary (K-2) class sizes do not exceed 20 students and intermediate (3-5) class sizes do not exceed 25 students. However, current enrollment and staffing do not allow this achievement, and numerous classrooms have class sizes exceeding those goals. Approximately 160 students are placed in elementary schools outside of their elementary school's normal attendance area in order to balance class size; so the additional Highspire students would cause MASD to reconfigure the structure of grade levels in the elementary buildings. (Sec Rec 13 ). Petitioner recognizes that "such a realignment may not be popular with some Middletown residents but may serve the greater purpose of educating Middletown students" and challenges MASD's "unsupported opinion that such a [realignment] scenario is not good for student learning." (Sec Rec 15).

17

103. A classroom audit found that based on the current enrollment expected if Highspire students transfer to MASD, it may be possible for MASD to absorb at least some of the Highspire students with fewer additional resources. (Sec Rec 45).

104. Elementary class sizes at MASD indicate that most Highspire students20 could be absorbed within existing classrooms with MASD elementary class sizes increasing by more than two or three students. (Sec Rec 45).

105. IfMASD needed to add elementary classrooms to accommodate the Highspire students, the current configuration may provide limited opportunities for new space. (Sec Rec 45).

106. The high school has more flexible class scheduling and sizes and is more able to absorb the smaller per-grade numbers of Highspire students.21 (Sec Rec 45).

107. The addition of Highspire students would increase building capacity utilization at the MASD elementary level to over 90%. (Sec Rec 45 -Table 30 Estimated Changes in Enrollment Based on.PDE Projections).

108. There is a negative impact of marginally larger class sizes. However, the impact on existing MASD students might be somewhat ameliorated by devoting some of the additional Highspire revenues to academic supports of various types. (Sec Rec 45).

109. SHSD reports that all its buildings will continue to operate, but the proposed transfer might cause a few empty classrooms per each of the two buildings; however, those classrooms could be offered to the IU or Head Start program. (Sec Rec 14).

Geography: Distance Traveled22

110. The following are approximate distances traveled by students residing in Highspire, based on driving one direction, from hypothetical bus stops23 to the SHSD School Complex:24

20 In 2016-17 there were 27-37 Highspire students in each grade from K-8.

21 No conclusive evidence was found to ascertain whether the middle school has the physical capacity to absorb the Highspire student transfers.

22 Travel times are not reliable in comparing travel between districts because they are easily influenced by variables including: the location of the first bus stop on a particular route, the total number of stops on a particular route, the time it takes to load students at a particular stop, the number of traffic signals, railroad crossings, and other traffic devices that exist on a particular route, the presence of hills and/or curves that limit the speed of a bus, and weather and other speed-limiting conditions on a particular route. Travel distance, therefore, although not a perfect indicator, provides a more concrete measurement tool for comparing travel to the districts.

23 To determine driving distances, locations of hypothetical bus stops, as set forth in SHSD's response to the Secretary's Educational Impact Projection Questionnaire, were used to reflect driving distances. (Sec Rec 14).

24 Petitioner does not dispute the appropriateness of the three locations designated for bus stops. Like the districts, Petitioner provided the potential distances traveled from each of the designated locations to schools located in both

18

SHSD School Complex Bus Stop Second /Mumma Streets 3.22 miles (3 .4 miles) Second/ Ann Streets 4.62 miles (4.1 miles) Eshelman/Crescent Streets 4.68 miles (4.7 miles)

(Sec Rec 14).

111. SHSD transports students from the SHSD School Complex to the Dauphin County Technical School which is 6.81 miles away. (Sec Rec 14).

112. If the Petition is granted, the following are approximate distances to be traveled by students residing in Highspire, based on driving one direction from three hypothetical bus stops to schools located in MASD:25

MASD Schools Bus Stop Kunkel Fink Reid MASD MASD Dauphin

Elementary Elementary Elementary Middle High County School School Technical

School Second /Mumma 2.18 miles 4.25 miles 4.17 miles 3.82 miles 4.58 miles 8.83 miles Streets (2.1 miles) (4.5 miles) (3.8 miles) (3.8 miles) (4.6 miles) Second/Ann 1.80 miles 3.56 miles 3.97 miles 4.05 miles 3.88 miles 9.37 miles Streets (2.6 miles) (3.8 miles) (4.4 miles) (4.4 miles) (5.1 miles) Eshelman! Crescent 2.44 miles 2.95 miles 3.35 miles 3.44 miles 3.27 miles 10.03 Streets (3.3 miles) (3.2 miles) (2.8 miles) (2.8 miles) (2.8 miles) miles

113. The proposed transfer would overall decrease slightly the distance traveled by some of the affected students from Highspire to MASD schools with the exception of a slight increase in distance for some students from the 2nd and Mumma Streets bus stop.

114. If the Petition is granted, MASD anticipates distributing Highspire elementary students to Reid, Fink or Kunkel Elementary School. (Sec Rec 13).

115. If Highspire students were transported to Kunkel Elementary School, they would experience on average a reduction in distance traveled. (Sec Rec 15).

MASD and SHSD. To the extent the distances traveled as provided by Petitioner vary from the distances traveled as provided by the districts, the Petitioner's estimates are included in parentheses within the chart. (Sec Rec 15).

25 To determine driving distances, locations of hypothetical bus stops, as set forth in MASD's response to the Secretary's Educational Impact Projection Questionnaire, were used to reflect driving distances. (Sec Rec 13) To the extent the distances traveled as provided by Petitioner varies from the distances traveled as provided by the district, Petitioner's estimates are included in parentheses within the chart. (Sec Rec 15).

19

116. SHSD transports 473 school-age children residing within SHSD to either SHSD or to nonpublic schools. (Sec Rec 14).

117. SHSD transports 285 students from Highspire to either SHSD or to nonpublic schools:

a. Public Students: 72 school-age children residing in Steelton Borough and 235 school-age children residing within Highspire are transported.

b. Nonpublic Students: 116 school-age children residing in Steelton Borough and 50 school-age children residing within Highspire are transported.

(Sec Rec 14).

118. No students residing within Highspire walk to SHSD schools. (Sec Rec 14).

119. SHSD utilizes four buses to transport school-age children residing in Highspire. (Sec Rec 14).

120. SHSD anticipates a reduction in the amount of$150,000 for transportation expenses if the proposed transfer is approved. (Sec Rec 14).

121. MASD offers bus transportation to and from all its schools.26 (Sec Rec 13).

122. During the 2014-2015 school year, MASD transported 2,345 public school students, including charter school and Dauphin County Technical School students as well as 156 nonpublic school students at $1,270,227. (Sec Rec 13).

123. All incoming school-age students residing within Highspire would need to be bused to MASD schools which would require between three and five additional school buses depending upon configuration of bus routes and buildings that Highspire students would attend.27 (Sec Rec 13).

Key Educational Programs and Course Offerings

124. Core Courses

a. Both SHSD and MASD's core course offerings provide high school coursework ranging from a standard level through Honors and Advanced Placement.

26 A majority of students attending Fink Elementary School walk to and from school. However, outside of those students all other MASD students are transported to and from school by MASD.

27 Petitioner agrees that all Highspire students will continue to be bused notwithstanding the potential move. (Sec Rec 15).

20

b. SHSD offers additional opportunities through electives, blended learning, Roller Cyber Academy28 and dual enrollment.

125. Advanced Placement Courses

a. SHSD offers 9 Advanced Placement courses. 29

b. MASD offers 11 Advanced Placement courses.30

126. Honors Courses

a. SHSD offers 9 Honors coursesY b. MASD offers 9 Honors courses. 32

127. Career and Technical Centers

a. SHSD is not a participating school district in the Dauphin County Technical School (DCTS), but SHSD pays tuition for students to attend on a tuition basis. 33

b. MASD is a participating school district in DCTS and allows its students in grades 9-12 to attend.

128. Kindergarten Programs

a. SHSD offers a half-day kindergarten program.

28 Roller Cyber Academy is a full-time cyber option offering classes for grades K through 12 online.

29 SHSD offers the following Advanced Placement Courses: World History, US History, AP English 12, Calculus, Chemistry, Biology, French, Spanish and English Literature. There is some discrepancy in the total number of Advanced Placement Courses offered at SHSD. Although SHSD indicated that it offered eleven Advanced Placement Courses, the review of the Course of Study information provided by SHSD yielded a count of nine Advanced Placement Courses. (Sec Rec 14).

30 MASD indicated it offered the following Advanced Placement Courses: Literature and Composition, Language and Composition, Human Geography, Macroeconomics, Microeconomics, Government and Politics, US History, World Geography, Calculus, Biology, and Chemistry. There is some discrepancy in the total number of Advanced Placement Courses offered at MASD. Although MASD indicated that it offered eight Advanced Placement Courses, review of the 2015-2016 Curriculum Planning Guide provided by MASD yielded a count of eleven Advanced Placement Courses. It is noted that AP World Geography was listed as being available for 1Oth grade students; however, a course description was not included in the Curriculum Planning Guide. (Sec Rec 13).

31 SHSD offers the following Honors Courses: English 9, 10, and 11, Civics, Geometry, Biology, Algebra II, Chemistry and Problems ofDemocracy/Economics. (Sec Rec 14). Again, there is some discrepancy in the total number of Honor Courses offered at SHSD. Although SHSD indicated that it offered eight Honors Courses, the review of the Course of Study information provided by SHSD yielded a count of nine Honors Courses. (Sec Rec 14).

32 MASD offers the following Honors Courses: English I, II, III and IV, US History I and II, World History, Econo¢cs and Government. (Sec Rec 13).

33~ Student may apply to attend DCTS and may participate if they meet district eligibility requirements.

21

b. MASD offers a full-day kindergarten program.

129. Special Education

a. Both SHSD and MASD offer a wide and similar array of special education classes and services to meet the needs of their students with disabilities.

b. Both SHSD and MASD are within the Capital Area Intermediate Unit and are member districts.34

130. World Languages

a. SHSD offers coursework in five world languages: Spanish I through IV, French I through IV, Chinese I & II, German I & II, and Latin I & II, with some of the foreign languages classes being offered through the Roller Cyber Academy and as blended learning opportunities:

b. MASD offers coursework in two world languages: Spanish I through IV and French I through IV.

131. Graduation Requirements

a. SHSD requires 21.7 5 credits to graduate. 35

b. MASD requires 22.25 credits to graduate.36

132. Dual Enrollment and Distance Learning Opportunities

a. Both SHSD and MASD offer multiple pathways for students to earn college credit while in high school through dual enrollment partnerships with local colleges and universities.

b. SHSD students are eligible to receive credit from Harrisburg University and Harrisburg Area Community College.

c. SHSD partners with Hershey Medical Center and Penn State University to provide additional research activities and mentorship programs.

d. SHSD offers blended learning alongside the Roller Cyber Academy to offer extensive course offerings: Middle and High School Math; Middle and High School Studies; World language; High School Science; Social Sciences; Veterinary Courses

34 SHSD contracts with the Capital Area Intermediate Unit on a per-student fee basis. Seven SHSD students attend the Capital Area Intermediate Unit classes, however, no Highspire students are among the attending students. (Sec Rec 14 and 15).

35 SHSD students participating in graduation must also complete the following: 60% average in all core classes, apply to a post-secondary school or submit two completed employment applications, take an independent assessment based on appropriateness for their career choice (i.e., PSAT, SAT, ASV AB or Accueplacer) and successfully complete Keystone Assessments or Keystone project based assessments.

36 MASD requires all students to submit a career portfolio and participate in an interview to meet the graduation project requirements.

22

e. MASD has agreements with seven area post-secondary institutions where students gain college and high school credits for course work completed during grades 11 and/or 12.

f. MASD high school students have access to post-secondary education via Harrisburg Area Community College through "College in the Classroom" opportunities and dual enrollment.

g. MASD dual enrollment opportunities are also available through Harrisburg University of Science and Technology, Penn State Harrisburg, Kaplan Career Institute, Elizabethtown College, Messiah College and Clarion University, at the parents' or guardians' expense.

h. MASD partners with Capital Area Intermediate Unit and other school districts to offer online courses.

133. Supports

a. While both districts offer English as a Second Language (ESL) programming, SHSD reports extensive interventions/remediation K-12.

b. SHSD offers courses referred to as "Selectives," which are assigned by the Guidance Department and include the following: Keystone Remediation/Enrichment, Math, Reading and/or Science Acceleration, and also

·offers: 1. Intervention during blocked instruction time at the Elementary School

K-6 and grades 7 and 8; ii. Remedial courses at the high school level in math and reading, and

also for Keystone remediation in literature, algebra and biology; 111. Enrichment courses and other opportunities for students that are not

in intervention programs; and 1v. ESL classes, consultation, assessments, monitoring and

accommodations. c. MASD provides elementary reading support and remediation for high school

students in the Keystone courses (algebra I, biology, literature) and also offers: 1. Elementary Reading Interventions;

11. ESL Instruction; 111. Keystone Remediation; and iv. Project Based Assessment.

d. MASD provides the Study Island Program which is a diagnostic, prescriptive software program for self-paced instruction that will provide remediation to students in the areas of math, reading and writing and the Keys2Work which helps build skills in reading, writing, and math and provides students with workplace relevance by connecting skills to careers.

134. Electives a. SHSD offers a HACC/Healthcare Academy and HACC/Nurse Aide program or

class.

23

b. MASD offers a nurse aid training program, a 120-hour training for seniors who wish to become certified nurse aides, via the Dauphin County Education Consortium of the Partnership for Career Development.

c. SHSD offers Journalism I and II and Creative Writing, Unified Arts, Advanced Art, 3-Dimensional Art, Art Appreciation, Fine and Practical Arts and Graphic Design, Photography, and Accounting and Business Survey.

d. MASD offers Journalism and Creative Writing, Art I through IV and Arts and Crafts, and a Science and Health Pathways option that includes Agriculture, Food and Natural Resources which is designed to cultivate students' minds in the life, physical and behavioral sciences.

135. Curriculum Planning Guide

a. SHSD's curriculum guide is a traditional course selection document that sets out credit requirements, required courses, elective programs, and suggested course progressions through to graduation.

b. SHSD partners with Harrisburg Area Community College and Hershey Medical Center (Penn State) to offer health care training and mentoring; additionally, an agricultural technology program is in developmentP

c. MASD offers a Curriculum Planning Guide to all students to assist in the selection of courses related to their interests, skills, values and personality, and students select a course designed to best prepare them for post-secondary success.

d. MASD' s Curriculum Planning Guide includes the traditional course information, but also identifies "The 5 Pathway Options" for students, along with coursework to meet the selected pathway, which includes the following: Arts and Communications; Business, Finance, and Information Technology; Engineering and Industrial Technology; Human Services; and Science and Health.38

(Sec Rec 13, 14 and 45- Table 15: Secondary Curriculum).

136. Technology Education

a. SHSD lacks technology education facilities; a portion of the former technology education lab is dedicated to a mini-aquaponics greenhouse. (Sec Rec 45).

b. SHSD's secondary level programming includes an aquaponics initiative, which is a greenhouse ecosystem on site allowing students to participate in a "school-to-

37 SHSD is developing a high school agricultural technology program which will afford district students with additional opportunities that include: STEM research that incorporates state of the art agricultural technology; collaborative research with a university partner; college courses within the high school; apprenticeship and mentoring programs; agricultural technology certificates; entrepreneurial programs; and career training and college entry/technical jobs upon graduation from high school.

38 Upon reviewing Table 15: Secondary Curriculum, it was observed that the fourth pathway listed was "Transportation, Distribution and Logistics Human Services." (Sec Rec 45). MASD's 2015-2016 Curriculum Planning Guide, however, clearly identifies Human Services as a pathway and Transportation, Distribution, and Logistics as a cluster area within the Engineering and Industrial Technology pathway.

24

table" program whereby harvested vegetables and herbs are sold to local restaurants.39 (Sec Rec 14 and 45).

c. MASD middle school students engage in technology education and subsequently have many elective opportunities at the high school level, ranging from CAD to architectural design. (Sec Rec 45).

d. At MASD, all students in grades 6-12 have an iPad; thus they have ratios of 1:1 in their secondary buildings. (Sec Rec 45).

e. MASD students are able to take the iPad devices home daily as they are used for homework and projects. (Sec Rec 45).

£ SHSD has a 1:1 technology ratio in place at the Junior-Senior High School for grades 7-12, and grade 6 is in the planning stages. (Sec Rec 45).

13 7. Both districts have libraries in all schools and are working to move to a more technologically/personalized leaining environment. (Sec Rec 45).

138. MASD has strong district leadership in place to support curriculum and instruction with a curriculum that is standards-aligned and textbooks that are aligned to standards. (Sec Rec 45).

139. MASD elementary level:

a. the curriculum is aligned to the Pennsylvania Early Learning Standards; b. math and ELA through Grade 5 are supported by the Pearson and Journeys

programs, respectively; c. science and social studies instruction is provided (approximately 45 minutes

per day); d. an extended learning opportunity focuses on small group instruction with

grouping across grade-level classrooms and across grade levels; e. an intervention specialist at the elementary level also assists in increasing

student achievement; and f. elementary school reading specialists (one at Fink, two at Kunkel, and three at

Reid) support literacy both as "push ins" and "pull outs" as appropriate.

(Sec Rec 45).

140. SHSD has an assistant to the superintendent and Penn State University consultant working to improve the curricula. (Sec Rec 45).

141. SHSD elementary level:

a. classrooms focus on guided reading, with use of data (DIBELS and DRA) to guide literacy instruction;

b. small group instruction is a priority to address low-achieving readers;

39 Enrollment/participation in the program appeared to be in the single digits, but the SHSD reported that it anticipated adding an aquaculture elective. (Sec Rec 13).

25

c. teachers utilize adaptive technology-based programs designed to identify skill gaps and provide customized resources;

d. there is a lack of reading specialists; e. Title I funds are employed for class size reduction; and f. resources for science and social studies are less than adequate given what is

directed to math and reading.

(Sec Rec 45).

School Districts' Anticipated Impact on Educational Programs and Course Offerings

142. If the petition is granted, MASD anticipates the following impact on educational programs and course offerings:

a. no impact on configuration of grades at the middle and high schoollevels;40

b. the need to hire additional reading specialists to provide services, or reduce the amount of services already provided to existing students to accommodate the needs of newly enrolled students;

c. the need to hire support and special services staff, including a new school psychologist, social worker, learning support teacher, possibly two or three additional paraprofessionals and a half-time speech and language therapist to address increased demand for services;41

d. compromise in the level of nursing services currently provided to students;42

e. the need to expand existing remediation programs thereby taxing staffing, scheduling and financial resources and detracting from the educational services provided to currently enrolled students;

40 MASD does not anticipate increased enrollment to impact the configuration of grades at the middle school because it spans the 6 through 8 grades and contains ample classroom space; likewise, the courses in high school are organized by discipline rather than true grade level. (Sec Rec 13).

41The increased student case load and nature of the work needed may have a significant impact upon the following staff positions:

• Two school psychologists employed by MASD, so an additional school psychologist would need to be hired to maintain the current level of service despite MASD having recently reduced the number of school psychologists in recent years to conserve financial resources for direct classroom instruction.

• One social worker employed by MASD would be impacted as MASD has seen a marked increase in the demands placed upon its social worker to help families obtain services; and there is concern about the impact of adding more families and students to the existing caseload.

• One home and school visitor employed by MASD, who is responsible for enforcing all residency requirements and ensuring that truancy and attendance concerns are addressed, would have a diminished ability to adequately address concerns in a timely and efficient manner if the incoming students demonstrate a pattern of inconsistent school attendance or present residency concerns.

• Seven guidance counselors employed by MASD depending upon the emotional and academic needs of students who would transfer.

42 MASD anticipates that the transfer of additional students may compromise the level of nursing services currently provided to students, but staff could continue to provide adequate services if Highspire students do not require specialized care. (Sec Rec 13).

26

f. compromise ofMASD's ability to offer courses of higher rigor; g. negative impact on MASD's ability to continue to offer high school elective

course opportunities without adding staff to deliver the courses;43

h. impact the ability to deliver high quality and effective remedial instruction to prepare students to succeed on Keystone Exams and would also have a negative impact on the staffmg and scheduling of Project-Based Assessment courses;

1. it may be necessary to open additional special education classrooms for teacher caseloads to stay within the maximum caseload limits specified by the Department;44

J. it is unknown how many students with IEPs currently enrolled in private, parochial or charter schools would enroll in MASD thereby increasing the number of students with IEPs by more than the 34 projected and affecting existing programs to the degree that the quality of service delivery could be compromised;

k. transferring students could be absorbed into existing Advanced Placement courses with no additional staffmg needed;

1. there will be an impact on the availability of educational resources such as iPads for students and SmartBoards, projectors and computer equipment for additional teachers, and additional textbooks and instructional materials would need to be purchased to accommodate the needs of transferring students;

m. additional students would result in an increase in supervisory and administrative responsibilities and possibly the need to hire additional administrators due to increased enrollment in school buildings; and

n. an inability to determine the impact that the transfer of Highspire students would have on the MASD's food service program because some school buildings might be able to incorporate additional students into existing lunch periods; however, it might also be necessary to create an additional lunch period resulting in potential cost increases for food service operations and requiring a change to the building's instructional schedule.

(Sec Rec 13).

143. If the Petition is granted, SHSD anticipates the following impact on educational programs and course offerings:

43 MASD anticipates a negative impact on MASD's ability to continue to offer high school elective course opportunities without needing to add staff to deliver courses or increasing the budgeted amount of money to support the course offerings. (Sec Rec 13).

44 With regard to special needs students, MASD anticipates that the greatest impact Highspire students would have on the special education department would be the need for additional staff including: a part-time speech and language therapist, an additional learning support teacher at the elementary level; and potentially two or three paraprofessionals at an approximate cost of $99,696.09 for three paraprofessionals. Petitioner asserts that after the initial integration of students, MASD will not face challenges or burdens that vary greatly year-to-year over those it already faces with delivering special education.

27

a. furloughing approximately eight teachers, which include five elementary school teachers and three high school teachers;

b. the district anticipates that the transfer would have an impact on instructional programs;45

c. teacher assignments will change based on enrollment figures at the elementary level;

d. at the high school level, some of the content teachers in the four majors will need to cross grade levels and courses due to reduction in sections needed;

e. an increase in class size to go beyond 30 per class;46

f. the necessary supervision and administration will remain the same; and g. the food service contractor would have to furlough approximately 1 to 2 staff

members while the district would remain responsible for the balance of the contract for those students transferring out of the district.

(Sec Rec 14).

Extracurricular Programs

144. At the middle school level, MASD students may choose from band, band front, chorus, musical, and intramural sports. (Sec Rec 45).

145. At the middle school level, SHSD students may choose from art, library, band, chorus, 4-H, Big Brothers and Sisters, Student Council, Salvation Army's 7-8 week character development program, Student Council, and Girls on the Run. (Sec Rec 45).

45 Petitioner asserts that SHSD did not discuss the "anticipated major educational impact of the proposed transfer, focusing instead on the fmancial impact without adequately explaining how the fmancialloss to SHSD would directly impact the district." (Sec Rec 15). Petitioner challenges a study SHSD conducted, which estimated "the loss of Highspire tax revenue and offsets from not serving Highspire students" and the corresponding conclusion that "SHSD would fall $800,000 short of revenue after considering the offsets" largely because SHSD failed to include a copy of the study showing the offsets. (Sec Rec 15). Petitioner "does not dispute that increasing the average class size can negatively impact a student's education;" however, Petitioner refutes SHSD's use of an unknown report to conclude that SHSD would be required to reduce staffing and eliminate programs, which would negatively impact educational programs. (Sec Rec 15). I recognize SHSD did not adequately explain how the potential financial loss to SHSD would directly impact the district's ability to educate its students, and, as such, do not rely exclusively on SHSD's statements without support. I am, however, not foreclosed from considering this issue by reason of SHSD not including a corroborating report. Under Section 242.1, I directed the Department's own investigation, which was included in the Report.

46 SHSD 's current class sizes range from 18 in kindergarten to the upper 20s in some of the high school classes. (Sec Rec 14). ·

28

146. At the secondary level, athletics are available in both districts:

MASD SHSD Interscholastic Sports Soccer (Boys & Girls) Football- Varsity and Jr. High

Football (Boys) Volleyball Volleyball (Girls) Basketball- Boys and Girls N Field Hockey and Varsity Cross Country (Boys & Girls) Baseball Tennis (Boys & Girls) Softball JV and Jr. High Basketball (Boys & Girls) Track and Field- Jr. High and Wrestling Varsity Softball Cheer leading Baseball Track (Boys & Girls) Golf Cheerleading

(Sec Rec 45- Table 17: Secondary Extracurricular Offerings).

14 7. SHSD concedes that MASD may provide more extracurricular programs, but SHSD has a process in place to add extracurricular programs (i.e., additional sports teams, competitions, and clubs) based on student or faculty interest. (Sec Rec 14).

148. The proposed transfer would not present any significant changes to SHSD's extracurricular activities. (Sec Rec 14).

149. The proposed transfer may impact MASD's extracurricular activities in two ways: (1) increase the number of advisors needed to be hired; and (2) the number of extracurricular activities offered may need to be expanded to account for increased student enrollment which may also increase costs to MASD. (Sec Rec 13).

Student Performance: SAT

150. For the three years (2013-2015) reflected by the data below, the SAT scores for each subject area achieved by students in MASD exceeded the SAT scores achieved by students in SHSD resulting in MASD having an average composite SAT score of 261 points higher than SHSD (see the highlighted scores in the table below):

29

2013

2014

2015

Mean Score

MATH READING WRITING COMPOSITE

SHSD MASD SHSD MASD SHSD MASD SHSD MASD

380 499 366 491 371 481 1117 1471

410 498 412 482 368 472 1190 1452

428 487 439 485 403 464 1270 1436

406 495 406 486 381 472 1192 1453

(Sec Rec 13 and 14).

151. When comparing the average percentage of students participating in the SAT for both districts, as reflected by the data below, the average percentage of students participating in the SAT for MASD exceeded the percentage of students participating in the SAT for SHSD by 3.2 percentage points:

Number of 11th and 12th Number of students Percentage of grade students who took the SAT students who .

took the SAT SHSD MASD SHSD MASD SHSD MASD

2013 153 332 33 70 21.6% 21.1% 2014 153 318 48 100 31.4% 31.4% 2015 159 314 30 91 18.9% 29.0% Mean 155 321 37 87 24.0% 27.2%.

(Sec Rec 13 and 14).

152. As reflected by the data above, SHSD slightly exceeded MASD in the percentage of students participating in the SAT; however, in 2014 both school districts experienced an increase in SAT participation by approximately 10 percentage points so that both districts reported the same percentage of SAT participation, and, in 2015, MASD exceeded SHSD's percentage of participation by 10.1 percentage points. (Sec Rec 13 and 14).

153. As reflected by the data above, both school districts experienced a decrease in SAT participation in 2015; however, SHSD's percentage decreased by 12.5 percentage points and MASD experienced a 2.4 percentage point decrease. (Sec Rec 13 and 14).

30

.·

154. Indicators of post-secondary readiness are detailed in the table below:

Other Academic Indicators Data elements MASD High School SHSD-High School (7-12) 2015-2016- Percent of 21.69% 1.30% Grade 12 Students Scoring 1550 or Higher on the SAT 2014-2015- Percent of 10.49% 9.59%. Grade 12 Students Scoring 1550 or Higher on the SAT 2015-2016- Percent of 1.20% 0% Grade 12 Students taking test Scoring 22 or Higher on the ACT 2014-2015- Percent of 8.39% 0% Grade 12 Students taking ACT test Scoring 22 or Higher on the ACT 2015-2016 Percent of Grade 12.05% 1.30% 12 AP Students Scoring 3 -

or Higher on any AP Exam or 4 or Higher on any IB · Exam 2014-2015 Percent of Grade 8.39% 1.37% 12 Students Scoring 3 or Higher on any AP Exam or 4 or Higher on any IB Exam 2015-2016 Percent of 0% 0% Students taking ACT Plan47

2014-2015 Percent of 0% 0% Students taking ACT Plan 2015-2016 Percent of Grade 83.13% 51.95% 12 Students Taking the PSAT 2014-2015 Percent of Grade 37.06% 71.23% 12 Students Taking the PSAT 2015-2016- Percent 3 or 30.12% 3.25% Higher on any AP exam or 4 or Higher on any IB Exam

47 The ACT Plan assessment program is administered in Grade 10 to provide students with an "early indication of their educational progress in the context of the post-high school educational and career options they are considering" through "four multiple-choice tests_:_English, Mathematics, Reading, and Science." (Pub Rec 24).

31

2014-2015- Percent 3 or 20.98% 3.42% Higher on any AP exam or 4 or Higher on any IB Exam 2015 -2016 SAT/ACT 57.23 3.25 College Ready Benchmark 2014 -2015 SAT/ACT 47.2 23.97 College Ready Benchmark

(Sec Rec 45- Table 21: Other Academic Indicators).

155. Most of the academic indicators for post-secondary readiness favor MASD; but notably the percent of Grade 12 students taking the PSAT in 2014-2015 was higher for SHSD at 71.23% and lower for MASD at 37.06%. In the following year SHSD student participation in the PSAT decreased by approximately 20 percentage points whereas MASD increased its test participation to over 80 percentage points. (Pub Rec 7 and Sec Rec 45).

Student Performance: PSSA and Keystone Exams48

156. MASD had a higher percentage of students who achieved proficient or above on the PSSA when compared to SHSD.

157. The data below shows the percentage of all students scoring proficient or above on the PSSA (Grades 3-8) and the Keystone Exams (High School) in each of the two districts:49

PSSA (Grades 3-8)/Keystone (High School) All Student Data

Table 1-Percent Proficient/Advanced Mathematics/Algebra 1: 2013

Grade District MASD SHSD

3 81.5 67.0 4 77.2 41.9 5 70.1 27.8 6 74.3 34.7 7 81.7 40.2 8 84.5 28.4

11 53.4 33.3

48 Keystone Exams are end-of-course assessments to measure proficiency in Algebra I, Literature, and Biology. Students are permitted to take the Keystone exams multiple times prior to end of 11th grade and the students' highest score achieved in each subject is retained by end of grade 11. Keystone results for all three years (2013-2015) are provided.

49 PSSA results for 2013 and 2014 are provided for mathematics, reading and science. In 2015, the PSSA was aligned to the new more rigorous PA Core Standards, changing the Reading assessment to English Language Arts, and for Mathematics. The PSSA Science assessment was not changed from previous years.

32

Table 2- Percent Proficient/Advanced Mathematics/ Algebra 1: 2014


3 70.5 57.4 4 73.0 50.0 5 66.7 14.0 6 85.2 37.9 7 74.8 30.1 8 83.5 33.3 11 54.1 27.4

Table 3 -Percent Proficient/ Advanced Mathematics/ Algebra 1: 2015 *frrstyear ofPSSA aligned to PA Core Standards


3 55.6 21.4 4 30.0 16.2 5 41.3 4.2 6 42.5 7.5 7 35.7 3.4 8 29.6 1.1 11 45.4 27.6

Table 4- Percent Proficient/Advanced Reading/Literature: 2013


3 78.1 44.6 4 70.1 29.8 5 62.3 17.8 6 64.7 36.8 7 67.5 39.8 8 76.4 41.9 11 76.3 41.9

33

Table 5- Percent Proficient/Advanced Reading/Literature: 2014


3 68.8 41.0 4 64.4 43.5 5 59.0 18.6 6 63.4 32.2 (

7 75.5 37.0 8 80.0 52.1 11 70.5 43.5

Table.6- Percent Proficient/Advanced English Language Arts/Literature: 2015 *first year ofPSSA aligned to PA Core Standards


3 66.1 23.5 4 51.1 20.2 5 62.6 20.2 6 55.5 19.6 7 54.1 15.9 8 52.8 6.3 11 54.9 27.4

Table 7- Percent Proficient/Advanced Science/Biology: 2013


4 78.1 46.5 8 61.2 16.8 11 43.5 6.4



4 82.3 63.3 8 66.5 21.9

11 49.3 15.9

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4 76.1 44.0 8 58.2 7.4 11 48.3 10.8

158. The data presented in Tables 1-9 above shows that in 2013, 2014, and 2015 in all grade levels and content areas, the percentage ofMASD students scoring proficient or above was higher than the percentage of SHSD students in all 51 comparisons.

159. The data presented in Tables 10-18 below reflect the achievement scores for Economically Disadvantaged students scoring proficient or above on the PSSA (Grades 3-8) and the Keystone Exams (High School) in each of the two districts:

PSSA (Grades 3-8)/Keystone (High School) Economically Disadvantaged Student Data

Table 10- Percent Proficient/Advanced Mathematics/Algebra 1: 2013


3 73.0 62.2 4 71.6 37.7 5 56.8 24.7 6 63.0 32.1 7 74.4 37.7 8 81.9 21.7

"11 32.6 29.4

Table 11 -Percent Proficient/ Advanced Mathematics/ Algebra I: 2014


3 60.2 58.8 4 64.0 41.9 5 60.5 14.7 6 81.4 33.8 7 74.3 28.6 8 74.0 30.8 11 34.7 19.5

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Table 12- Percent Proficient/Advanced Mathematics/Algebra I: 2015 *first year of PSSA aligned to P A Core Standards


3 48.9 20.3 4 24.4 13.9 5 29.3 4.3 6 35.4 5.7 7 20.7 3.4 8 20.6 1.6 11 32.1 19.6

Table 13-Percent Proficient/Advanced Reading/Literature: 2013


3 67.6 40.0 4 63.0 25.4 5 50.0 14.8 6 57.5 34.6 7 61.5 30.8 8 70.8 37.0 11 57.8 32.7

Table 14 -Percent Proficient/ Advanced Reading/Literature: 2014


3 59.8 42.9 4 51.2 43.2 5 48.7 17.6 6 50.0 28.4 7 75.7 32.5 8 68.8 48.7

11 61.2 34.1

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Table 15-Percent Proficient/Advanced English Language Arts/Literature: 2015 *first year ofPSSA aligned to PA Core Standards


3 55.6 21.6 4 41.1 16.5 5 51.2 15.9 6 45.1 15.7 7 40.2 8.5 8 47.1 4.8 11 29.3 22.7



4 69.5 40.6 8 48.6 13.3 11 20.0 5.9

Table 17-Percent Proficient/Advanced Science/Biology: 2014


4 75.9 58.3 8 55.8 17.9 11 38.8 7.1

Table 18 -Percent Proficient! Advanced Science/Biology: 2015


4 71.1 40.5 8 50.7 4.8 11 26.8 8.9

160. When comparing the percentage of economically disadvantaged students achieving proficient or above, the data indicates that in 2013, 2014, and 2015 the percentage of MASD students exceeded the percentage of SHSD students in all 51 comparisons.

37

Pennsylvania Value Added Assessment System (PV AAS)50 Data

161. The data for SHSD demonstrates the district/school did not meet the standard for PA Academic Growth in 50 of 69 (72.4%) calculations; the data for MASD demonstrates the district/school did not meet the standard for PA Academic Growth in 20 of 120 (16.7%) calculations, as summarized in the chart below:

PV AAS Growth Measure Calculation Totals -Indicated in Three-Year and One-Year Calculations- 2013-2015

School SHSD Jr.-Sr. HS total SHSDES

Reid

23

69

15 36 23 23 23

TotalMASD 37 11 34 18 20 120

(Pub Rec 19).

50 PV AAS is a statistical analysis of state assessment data, and provides districts and their schools with growth data. PV AAS is used to measure a district's or school's influence on the academic growth rates of groups of students from year-to-year and is not typically related to students' socioeconomic or demographic background. (Pub Rec 20).

Whereas achievement data captures student academic performance at a single point in time, is highly correlated with a student's demographic, and compares student performance to PA Academic Standards, PV AAS (or growth data) captures the change in student achievement data from year-to-year, has typically little to no relationship with students' demographics, and compares performance of a student group to their own prior performance. The valueadded, or growth, information in PV AAS analyzes available data from previous years (looking back) to help districts and schools evaluate how much groups of students have gained academically in a school year (Pub Rec 21 ).

PV AAS value-added (or growth) reporting is available in the grades and subjects/courses assessed in Pennsylvania's statewide assessment system. This includes reporting for math and ELA (grades 4-8), science (grade 4 and 8), and Keystone content areas (Algebra I, Literature, and Biology). Data is calculated at a one-year and a three-year growth average.

In reviewing the data, the following is the PV AAS category and description legend: DB (Dark Blue)- Significant evidence that the district exceeded the standard for PA Academic Growth LB (Light Blue) - Moderate evidence that the district exceeded the standard for P A Academic Growth G (Green) -Evidence that the district met the standard for PA Academic Growth Y (Yellow)- Moderate evidence that the district did not meet the standard for PA Academic Growth R (Red) - Significant evidence that the district did not meet the standard for the P A Academic Growth

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PV AAS Growth Measure -Three Year Average

162. Based on the three-year average middle school and high school levels in Algebra I, Biology and Literature, the data indicates as follows:

Three Year Average (2013-2015)- Growth Measure School Name Algebra I Biology Literature

SHSD Junior-Senior HS -6.9R -9.2R -4.1 R MASDHS -7.6R -0.9G -1.7 y MASDMS 10.3 DB

163. Based on the three-year average for content areas tested at the elementary school level, the data indicates as follows:

Three Year Average- Growth Measure School Name Math Growth Reading/ELA

Measure over Growth Measure Science Grades relative to over Grades (Grade 4) Standard for P A relative to the Academic Growth Standard for P A

Academic Growth SHSD Elementary School (Grades 4-6) -.29R -0.7R -37.8 R Fink Elementary School (Grades 4-5) 4.8DB 2.1 DB 33.1 DB Kunkel Elementary School (Grades 4-5) -0.6Y 0.1 G 6.7G Robert Reid Elementary School (Grades 4-5) -0.1 G -1.1 R -16.0 R

164. Based on the three-year average for Math and Reading/ELA at the middle school and high school level, the data indicates as follows:

Three Year Average- Growth Measure School Name Math Growth Measure Reading/ELA Growth Science (Grade 8)

over Grades relative to Measure over Grades Standard for P A relative to Standard for Academic Growth P A Academic Growth

SHSD Junior High School (Grades 7-8)

-2.6R -3.5R -52.4 R MASD MS (Grades 6-8) 1.1DB 0.2G 21.1DB

PV AAS Yearly Growth Measure by Grade- 2013-2015

165. The PV AAS Math data for elementary schools in both districts shows:

39

PV AAS PSSA Math- Growth Measure by Year SHSD Elementary Fink Elementary Kunkel Elementary Robert Reid

Grades Grades Grades Elementary Grades

4 5 4 5 4 5 4 5 2013 -9.5 R -6.7R 7.8DB 9.5DB -0.5 G -3.3 R -0.6 G 0.8 G 2014 -3.1 R -5.7R -4.9Y 2.4LB -6.6R 0.4G -2.2 y 2.9DB 2015 -1.9 y -3.1 R 4.0DB 10.1 DB -2.7Y 9.4DB -2.2 y 0.6G 3-Yr Avg. -4.8R -5.2R 2.3LB 7.3DB -3.3 R 2.1DB -1.7Y 1.4LB

166. The PV AAS data for Math for SHSD High School and MASD Middle School indicates the following:

PV AAS PSSA Math- Growth Measure by Year SHSD Junior-Senior HS MASDMS Grade 7 & 8/Elementary Grades 6-8

Grade6 6 7 8 6 7 8

2013 -3.8 R -7.1 R -2.2 y 1.6 LB -1.1 y 4.0DB 2014 5.0DB -0.4 G 0.9G 5.5DB -2.1 R 1.8DB 2015 2.9DB -4.0R 2.7R -0.1 G -1.8 R 1.9DB 3-Yr Avg. 1.4DB -3.9R -1.4R 2.3DB -1.7R 2.6DB

167. The PV AAS Reading/ELA data at the elementary school level shows:

PV AAS PSSA Reading/ELA- Growth Measure by Year SHSD Elementary Fink Elementary Kunkel Elementary Robert Reid

Grades Grades Grades Elementary Grades

4 5 4 5 4 5 4 5 2013 -3.2R -2.3 y 12.0 DB 2.8LB -3.0Y 3.8DB -1.9 y 2.2LB 2014 3.7DB -3.3 R -3.4 y -6.5 R -5.4R 1.7LB -1.4 G -0.4 G 2015 -4.9R -9.3 R 2.4LB 5.5 LB -1.3 G 4.6DB -4.7R -0.2 G 3-Yr Avg. -l.SY -S.OR 3.7DB 0.6 G -3.2R 3.4DB -2.7R 0.5 G

168. The PV AAS Reading/ELA data for Middle School and High School level shows:

PV AAS PSSA Readin_g/E_LA- Growth Measure by Year SHSD Junior-Senior HS MASD Middle School

Grades 7 & 8/ Elementary Grades 6-8 Grade6

6 7 8 6 7 8 2013 4.0DB I -3.8 R I -0.7 G 2.8DB I2.2DB 12.1 DB 2014 5.0DB I -4.0 R I -1.0 G -1.4 y j-0.9 G I 0.1 G

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3.7DB 4.2DB

169. The PV AAS data for Science Grade 4 shows:

PV AAS PSSA Science (Grade 4)- Growth Measure by Year

SHSD Fink Kunkel Robert Reid Elementary Elementary Elementary Elementary

Grades Grades Grades 2013 -54.5 R 37.5 LB 4.0G -10.9 G 2014 9.3 G 15.9 G 5.6G -6.1 G 2015 -68.1 R 45.9 DB 10.4 G -30.9 R 3-Yr Avg. -37.8 R 33.1 DB 6.7 G -16.0 R

170. The PV AAS data for Science Grade 8 shows:

PV AAS PSSA Science (Grade 8)- Growth Measure by Year

SHSD Junior-Senior HS (Grade 8) MASD MS (Grade 8) 2013 -53.5 R 24.5 DB 2014 -44.2R 26.5 DB 2015 -59.6 R 12.2 LB 3-Yr Avg. -52.4 R 21.1DB

171. The PV AAS data for Algebra I the Middle School and High School level shows:

PV AAS Keystone Algebra I- Growth Measure by Year SHSD Junior-Senior HS MASDHS MASDMS

2013 -6.1 R -6.8 R 1.0 G 2014 -8.5 R -4.3 y 9.6DB 2015 -6.1 R -11.8 R 20.4 DB 3-Yr Avg. -6.9R -7.6 R 10.3DB

172. The PV AAS data for Biology at the Middle School and High School level shows:

PV AAS Keystone Biology- Growth Measure by Year SHSD Junior-Senior HS MASDHS

2013 -11.7R -8.5 R 2014 -12.7 R -0.0 G 2015 -3.1 R 5.9DB 3-Yr Avg. -9.2R -0.9 G ·

41

173. The PV AAS data for Literature at the Middle School and High School level shows:

PV AAS Ke vstone Literature- Growth Measure by Year SHSD Junior-Senior HS MASDHS

2013 -3.2 y -2.9Y 2014 -14.4 R -3.3 y 2015 5.3 LB 1.3 G 3-Yr Avg. -4.1 R -1.7Y

Graduation Rates51

174. When comparing the graduation rates at the district level52 from 2010-2011 to 2013-2014, the data reflects that SHSD's graduation rates exceed those ofMASD; but SHSD experienced a sharp downturn in 2014-2015, putting its graduation rates 8 percentage points lower than MASD:

Graduation Rate Percentage of Students53

2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 SHSD 95.18% 93.83% 86.67% 90.59% 81.94% MASD 89.50% 92.72% 86.25% 89.35% 90.37%

(86.17%) (89.7%) (86.17%) (88.82%)

(Sec Rec 13, 14, and 45 and Pub Rec 4 and 7).

17 5. MASD 's efforts to increase graduation rates include career counseling, mental health support, communication with parents, credit recovery programs, diagnostic assessments and providing modules to meet academic needs, remedial programs and flex period. (Sec Rec 45).

51 A high school graduate is defined as a student who has received a diploma and does not include the receipt of a General Educational Development diploma. (Pub Rec 3).

52 The Department began implementing a new methodology. Cohort graduation rate, to calculate graduation rates starting in the 2010-2011 school year. The cohort graduation rates are a calculation of the percentage of students who have graduated with a regular high school diploma within a designated number of years since the student first entered high school. Consequently, graduation rates prior to the 2010-2011 school year are not included.

53 In MASD's response to the Department, the graduation rates for 2010-2011 to 2013-2014 were inconsistent with the data published on the Data and Statistics section ofthe Department's website. By letter dated August 12, 2016, MASD acknowledged and sought to clarify a slight discrepancy between graduation data as reflected in PIMS, which is self-reported by school districts, when compared to the same data listed on the Department's website. MASD responded to the Department's Educational Impact Projection Questionnaire with data taken directly from PIMS. MASD has no objection to the Department using the 4-year cohort high school graduation rate data. As such, the Department chose to use the published data from the Data and Statistics website. (Pub Rec 4). To the extent the graduation rates as provided by MASD vary from the graduation rates provided by the Department's website, the Petitioner's estimates are included in parentheses within the chart. (Sec Rec 15)

42

176. SHSD's efforts to increase graduation rates include using online resources to provide remediation, credit recovery options, intervention and advisory periods for assistance, as well as creating a better-articulated curriculum, using data to diagnose student needs, engaging students, teachers creating professional learning communities to support professional growth, and implementing multi-tiered systems of support. (Sec Rec 45)

Drop-out Rates54

177. When comparing the drop-out rates reported55 by SHSD and MASD from 2010-2011 to 2014-2015, the data reflects the following:

Drop-out Rate Percentage 56

2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 SHSD 0.42% 0.74% 0.88% 1.46% 3.27% MASD 2.22% 0.88% 0.73% 1.91% 2.47%

(7.98%) (1.82%) (7.98%) (4.71%)

(Sec Rec 13 and 14, Pub Rec 5 and 7).

178. MASD's drop-out rates exceeded SHSD's drop-out rates in three of the five school years reviewed. (Sec Rec 13, 14, and 15).

179. SHSD's drop-out rate has demonstrated a slight increase annually with an increase in 2014-2015. (Sec Rec 14 and 15).

54 A drop-out is defined as a student who, for any reason other than death, leaves school before graduation without transferring to another school or institution. The drop-out rate is defined as an annual or "event" rate that measures the proportion of students enrolled who drop out during a single school year. The total number of drop-outs for the school year is divided by the fall emollment for the same year. (Pub Rec 5).

55 In MASD' s response to the Department of Education, the drop-out rates for 20 1 0-20 11 to 20 13-2014 were inconsistent with the data published on the Data and Statistics section of the Department's website. The Department chose to use the published data from the Data and Statistics webpage. (Pub. Rec. 5). To the extent the drop-out rates as provided by MASD vary from the drop-out rates provided by the Department's website, the Petitioner's estimates are included in parentheses within the chart. (Sec Rec 15).

56 The Petitioner also supplied the Department with the drop-out rates for each district "according to numbers posted on the Department's website." (Sec Rec 15). Petitioner conceded that the drop-out rate reported by SHSD matches the rates shown on the Department's website, yet for the 2012-2013 school year Petitioner notes a drop-out rate of 1.24% compared to the .88% reported by SHSD which matches the percentage indicated on the Department's website. (Sec Rec 14 and 15). Petitioner supplied drop-out rates for MASD that neither matched the percentages supplied by MASD nor the percentages contained within the Dropout Data and Statistics page found on the Department's website. (Sec Rec 13 and 15). These inconsistencies support the need for the Department to use the published data from the Department's Data and Statistics webpage to enable comparison between the two districts. (Pub Rec 5).

43

Post-graduation Plans57

180. As reflected in the data below, the percentage ofMASD graduates that are post-secondarybound58 exceeded the percentage of post-secondary-bound graduates from SHSD by, on average, 12.5 percentage points (see the highlighted scores in the table below):

School SHSD MASD Difference Year

#of #of %of #of #of %of Graduates Graduates Graduates Graduates Graduates Graduates

Post- Post- Post- Post-Secondary Secondary Secondary Secondary Bound Bound Bound Bound

2009-2010 73 55 75.3% 148 117 79.1% 3.8% 2010-2011 74 53 71.6% 170 136 80% 8.4%

·.

2011-2012 81 57 70.4% 159 132 83% 12.6% 2012-2013 56 34 60.7% 142 113 79.6% ·. 18.9% 2013-2014 83 54 65.1% 156 131 83~97% 18.9% Mean 73 51 68.6% 155 126 81.1% 12.5%

(Pub Rec 3).

Attendance Rates

181. When comparing the attendance rates by school at the elementary and high school levels for SHSD and MASD from 2011-2012 to 2014-2015, the data reflects that MASD reported higher attendance rates than SHSD:

57 In the responses to the Department, both districts indicated percentages of graduates that were post-secondary bound that were inconsistent with the percentage of graduates post-secondary bound as reported on the Data and Statistics section of the Department's website. (Sec Rec 13 and 14). The Department utilized the results published on the Data and Statistics website to enable the comparison. (Pub Rec 3).

58 The phrase "graduates that are post-secondary bound" includes those students that are college-bound, either to a two- or four-year college/university or to a specialized associate degree-granting institution, or those students planning to enroll in a nondegree-granting postsecondary school. (Pub Rec 3).

44

Average Daily Attendance 2011-2012 2011-2012 2012-2013 2013-2014 2014-2015 to 2014-2015 SHSD -Elementary School 92.18% 92.32% 90.85% 89.59% SHSD- High School (7-12) 90.33% 90.28% 90.29% 84.74% MASD -Kunkel Elementary School 95.36% 95.32% 95.24% 95.66% MASD - Robert Reid Elem School 94.35% 95.29% 95.43% 95.15% MASD - Fink Elementary School 94.98% 94.91% 94.70% 95.04% MASD - Middle School 94.28% 94.33% 94.10% 94.76%% MASD -High School 93.21% 93.35% 93.81% 93.22%

(Pub Rec 7, Sec Rec 45- Table 13: Average Daily Attendance).

182. While SHSD attendance rates dropped in 2014-2015 at the elementary level, MASD attendance rates have remained steady. (Pub Rec 7, Sec Rec 45).

183. Elementary and middle school attendance rates at MASD exceeded 94% in the four years compared, and MASD High School was above 93%. (Sec Rec 45).

184. In SHSD, attendance declined over the period, dipping just below 90% in the elementary school in 2014-2015 and just below 85% in the junior/senior high school in the same year. (Sec Rec 45).

185. When comparing the habitual truancy rates59 reported by SHSD and MASD :from 2010-2011 through 2014-2015, the data reveals MASD has lower truancy rates (see the highlighted areas in the table below):

2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 Truancy Rates Percentage of Students

SHSD 40.15% 35.41% 19.72% 12.6% 72.82%

MASD 1.30% 1.09% 3.75% 3.56% 3,88%

(Pub Rec 7).

School Safety

186. When comparing the overall percentage rate of arrests per 100 students for SHSD and MASD for the period of2010-2011 to 2014-2015, SHSD's rate of arrests is higher than MASD's in three out of the five years compared; however, both districts' rate of arrests

59 The calculation of the overall truancy rate uses the total habitual truant population only of students of compulsory school age (Grades 1 to 11) and does not include grade 12, as most students have attained the age of 17. School Districts self-report the data through PIMS. Generally, a student is provided with a first notice from the district after three unlawful absences. Once a student reaches six unlawful absences, the district reports the student as a habitual truant.

45

were comparatively close during the 2010-2011 and 2014-2015 school years, and MASD's rate of arrest was higher for the 2013-2014 school year:

Percentage of Arrests

(Pub Rec 6).

2010-2011 2011-2012 2012-2013 2013-2014 2014"2015

School Year

-.-steelton-Highspire

-IIi-Middletown

187. When comparing incidents of reported student misconduct between SHSD and MASD from 2010-2011 to 2014-2015, MASD reported a lower percentage of incidents in each year. (Pub Rec 6).

188. When comparing incidents of reported student misconduct between SHSD and MASD from 2010-2011 to 2014-2015, SHSD reported a lower percentage of total arrests during the 2013-2014 and 2014-2015 school years (see the highlighted areas in the tables below):

2010-2011 Enrollment Incidents Offenders Incidents Total Assignments School Year involving Arrests to

Local Law Alternative Enforcement Education60

SHSD 1,213 3.79% 4.12% 1.81% 1.07% 0.16% MASD 2,309 2.38% 2.47% 1.13% 1.04% 0.04%

60 Assignments to Alternative Education is limited to Alternative Education for Disruptive Youth, also known as AEDY programs.

46

2011-2012 Enrollment Incidents Offenders Incidents Total· Assignments School Year involving Arrests to

Local Law Alternative Enforcement Education

SHSD 1,316 6.69% 7.07% 3.80% 1.37% 0.08% MASD 2,297 3.22% 3.27% 1.48% 1.13% 0.04%



SHSD 1,450 7.03% 7.17% 2.76% 1.93% 0.27% MASD 2,321 1.94% 2.33% 1.16% 1.72% 0.17%



SHSD 1,341 5.29% 5.82% 3.36% 0.52% 0.07% MASD 2,359 1.61% 1.61% 0.04% 0.95% 0.13%



SHSD 1,332 2.33% 2.93% 1.35% 1.20%··. 0.23% MASD 2,293 2.09% 2.22% 1.53% 1.26% 0.31%

(Pub Rec 6) ..

189. When comparing particularly egregious student misconduct categories including acts of aggravated assaults on students, aggravated assaults on staff, and fighting, MASD had a lower number of incidents during the 2012-2013 and 2013-2014 school years. SHSD indicated a significant decrease in the number of acts of misconduct during the 2013-2014 and 2014-2015 school years, and both districts were comparably equal for the 2014-2015 year (see the shaded areas in the tables below):

2010-2011 Aggravated Aggravated Assault on Fighting Assault on Student Staff

SHSD 0 1 12 MASD 2 0 22

47


SHSD 0 4 42 MASD 0 0 7


SHSD 2 5 49 MASD 1 1 11


SHSD 1 6 10 MASD 0 0 5


SHSD 0 0 7 MASD 1 0 7

(Pub Rec 6).

Levels of Parental Involvement

190. SHSD reports some challenges with parental involvement, citing difficulties with transportation to their school buildings that limit involvement; but they report working to improve the home to school connection, expanding volunteer efforts and have created a website to increase parent engagement. (Sec Rec 45).

191. SHSD received a Consolidated Review Monitoring61 in 2013-2014 which yielded one parental involvement finding, demonstrating that it was out of compliance on the federal requirement. (Pub Rec 13).

192. SHSD received a Consolidated Review Monitoring in 2015-2016 which yielded two parental involvement findings, demonstrating that it was out of compliance on two federal requirements. (Pub Rec 13).

61 The Consolidated Review Monitoring, conducted by the Department, includes a Subgrantee Risk Assessment, through FedMonitor for PA which is completed on all Local Education Agencies that receive federal funds to verify compliance with federal program requirements.

48

193. SHSD evidenced parental involvement predicated upon the following sched-qled Parent Teacher Organization meetings:

SHSD: Parent Involvement Meetings

School Year Total Number of Meetings 2011-2012 7 2012-2013 10 2013-2014 11 2014-2015 11 2015-2016 14

(Sec Rec 27).

194. SHSD held a Daybreak with Dad event in 2012-2013,62 2013-2014, 2014-2015, and 2015-2016. (Sec Rec 27).

195. SHSD held a Morning with Mom event in 2013-2014,63 2014-2015 and 2015-2016.64 (Sec Rec 27).

196. In 2013-2014, SHSD introduced a Bedtime Story Hour event with 50 attendees reported. (Sec Rec 27).

197. In 2013-2014, SHSD held a Title I Parental Advisory Council workshop with 51 attendees providing an opportunity to attend four mini-sessions consisting of Drug and Alcohol awareness, Mental Health Counseling, a session for grandparents, and a session focusing on the overall health and well-being of the child. (Sec Rec 27).

198. In 2013-2014, SHSD held a Title I Pasta Night, which addressed curriculum, data, assessments, test scores, and initiatives at SHSD and the event was held again in 2014-2015 to address alcohol and anger management and in 2015-2016 to provide training materials, explanations of the Title I program, curriculum, test scores and assessment information. 65 (Sec Rec 27).

199. From 2013-2014 through 2015-2016, SHSD held monthly S.H.I.R.T (Steelton-Highspire Initiative Roll Together) meetings that involved a local church, school staff, parents, and other members of the community. (Sec Rec 27).

62 The Daybreak with Dad event was first introduced in 2012-2013. No attendance numbers were reported for 2012-2013. In 2013-2014 and 2014-2015, attendees totaled over 70 each school year.

63 The Morning with Mom event was first introduced in 2013-2014. No attendance numbers were reported.

64 The event was retitled to Muffins with Mom. No attendance numbers were reported.

65 Attendance totals at Title I Past Night has varied: 32 attended the first program, no attendance was reported for the second program and the most recent one in 2015-2016 reported less than 10 attendees.

49

200. In 2014-2015, SHSD held a Title I Southwestern BBQ dinner66 to provide training materials for the parents, homework help ideas, and an explanation of the curriculum. (Sec Rec 27).

201. In 2015-2016, SHSD continued the Title I Southwestern BBQ dinner67 to discuss aspects of the Title I program. (Sec Rec 27).

202. In 2014-2015, SHSD conducted a S.T.E.A.M. (Science, Technology, Engineering, Arts and Mathematics) Night.68 (Sec Rec 27).

203. In 2013-2014 through 2015-2016, SHSD held regular PAC meetings, approximately six per year. (Sec Rec 27).

204. MASD characterized its relationship with the community and involvement of parents in their children's education as strong. (Sec Rec 25).

205. MASD Middle School has a parent advisory and Parent, Teacher, Student Organization. (Sec Rec 25).

206. MASD's Middle School had the following annual parent meetings: eight Parent Teacher Organization Meetings, Open House, 6th Grade Parent Orientation and Student Welcome Picnic.69 (Sec Rec 25).

207. MASD High School has no parent advisory, but parent support is identified for extracurricular programs. (Sec Rec 25).

208. At the elementary school level, MASD described parent engagement at Kunkel Elementary School as high and parent engagement at Reid and Fink Elementary Schools as growing. (Sec Rec 45).

209. MASD received a Consolidated Review Monitoring in 2013-2014 and 2015-2016 and was found to be in compliance with all parental involvement federal requirements. (Pub Rec 13).

66 Attendees totaled 18.



69 No attendance numbers were reported for any events at MASD Middle School.

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210. MASD evidenced parental involvement at Fink Elementary School predicated upon the following Title I meetings:

MASD: Fink Elementary School Title I Meetings

School Year Total Number of Meetings Total Attendees 2012-2013 2 13 2013-2104 4 14 2014-2015 6 28 2015-2016 5 28

(Sec Rec 25).

211. MASD's Fink Elementary School conducted regular Parent Teacher Organization meetings, averaging nine per year between the 2011-2012 and 2015-2016 school years and reported attendance averaging approximately five to fifteen attendees. (Sec Rec 25).

212. MASD evidenced parental involvement at Fink Elementary School based upon the following organized meetings from 2011 through 2016: Open Houses, Book Fair nights, and Reader Theater Performances. (Sec Rec 25).

213. MASD evidenced parental involvement at Kunkel Elementary School based upon the following scheduled Parent Teacher Organization meetings:

MASD: Kunkel Elementary School PTO Meetings '

School Year Total Number of Meetings Total Attendees 2011-2012 1 10 2012-2013 1 21 2013-2014 4 89 2014-2015 6 51 2015-2016 4 33

(Sec Rec 25).

214. MASD's Kunkel Elementary School held multiple Parent Teacher Organization events including Fall and Spring Book Fairs, Secret Santa Shop, Fall Festival, Laps for Learning, Kunkel County Carnival, Restaurant Nights, Bowling Night, and Sneak Peak Open House. (Sec Rec 25).

215. MASD evidenced parental involvement at Reid Elementary School based upon the following scheduled Parent Teacher Organization meetings:

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MASD: Reid Elementary School PTO Meetings

School Year Total Number of Meetings Total Attendees 2011-2012 2 13 2012-2013 3 21 2013-2014 5 50 2014-2015 3 36 2015-2016 2 19

(Sec Rec 25).

216. MASD's Reid Elementary School held multiple Parent Teacher Organization events including Fall and Spring Book Fair, Talent Show/Silent Auction, Family Movie Night, Secret Santa Shop, and Color Fun Run (Sec Rec 25).

Financial Projections: MASD

217. The ability to provide a quality academic experience is dependent on stable fmances that allow for sufficient recurring expenditures for teacher and support staff costs, curriculum resources, facilities and related items. (Sec Rec 45).

218. ·Financial Projection Models were created to understand MASD's current finances and examine three scenarios 70 to forecast what is likely to happen if students from Highspire are transferred to MASD:

a. First Scenario- Baseline Projections: Shows the period from 2016-2017 to 2021-2022 under the current MASD enrollment configuration, carrying forward current budget practices.

b. Second Scenario -With Highspire: Shows the same period from 2016-2017 to 2021-2022, assuming the transfer of Highspire students to MASD.71 This second scenario assumes that no Basic Education Funding (BEF) or Special Education Funding (SEF) state subsidy will be transferred from SHSD to MASD with the movement of Highspire students in 2018-2019, but does assume that MASD will receive its share oflocal tax revenue from Highspire.

c. Third Scenario- With BEF and SEF related to Transferred Students: Shows the estimated financial impact ofthe transfer of Highspire students, as outlined in scenario two, with the proportional amount ofBEF and SEF attributed to Highspire students transferred from SHSD to MASD.

70The slightly different second and third scenarios were prepared to show the full range of the potential financial impact of the transfer and to specifically highlight the potential impact of alternative approaches to handling state subsidies.

71 Additional costs to educate students from Highspire are considered in this second scenario, based on estimated staffing needs provided by MASD in the 20 14-15 filings related to the Petition.

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2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Forecast Projected Projected Projected Projected Projected

Baseline Projections Total Revenues $43,749,073 $45,016,147 $45,869,952 $46,543,068 $47,125,972 $47,618,432 Total Expenditures $43,631,387 $46,178,251 $47,732,249 $48,431,357 $49,829,825 $50,724,554

Surplus/ (Deficit) $117,686 ($1,162,104) ($1,862,296) ($1,888,288) ($2, 703,853) ($3,106,122) Fund Balance $11,529,860 $10,367,756 $8,505,460 $6,617,171 $3,913,318 $807,196

Scenario -With Highspire Total Revenues $43,749,073 $45,016,147 $48,686,467 $49,657,100 $50,290,980 $50,803,574

Total Expenditures $43,631,387 $46,178,251 $51,227,369 $51,682,404 $53,161,740 $54,330,768

Surplus/ (Deficit) $117,686 ($1,162,104) ($2,540,902) ($2,025,304) ($2,870,759) ($3,527,193)

Fund Balance $11,529,860 $10,367,756 $7,826,854 $5,801,550 $2,930,790 ($596,403)

Scenario -With BEF and SEF related to Transferring Highspire Students Total Revenues $43,749,073 $45,016,147 $50,701,459 $51,700,633 $52,363,462 $52,905,418 Total Expenditures $43,631,387 $46,178,251 $51,227,369 $51,682,404 $53,161,740 $54,330,768 Surplus/ (Deficit) $117,686 ($1,162,104) ($525,911) $18,229 ($798,278) ($1,425,350) Fund Balance $11,529,860 $10,367,756 $9,841,845 $9,860,074 $9,061,797 $7,636,447

(Sec Rec 45- Table 22: Summary of Financial Projections- Middletown Area School District).

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2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 CAGR

Forecast Projected Projected Projected Projected Projected

Baseline Projections Local Sources $27,634,735 $28,152,103 $28,593,036 $29,000,122 $29,294,635 $29,534,407 1.3%

State Sources $15,317,362 $16,067,068 $16,479,940 $16,745,971 $17,034,361 $17,287,049 2.4% Federal Sources $796,976 $796,976 $796,976 $796,976 $796,976 $796,976 0.0% Total Revenues $43,749,073 $45,016,147 $45,869,952 $46,543,068 $4 7,125,972 $47,618,432 1.7% Revenues per $16,654 $17,136 $17,461 $17,717 $17,939 $18,127 1.7% student

Scenario - With Highspire Local Sources $27,634,735 $28,152,103 $30,635,302 $31,235,910 $31,565,175 $31,807,955 2.9%

State Sources $15,317,362 $16,067,068 $17,098,862 $17,468,887 $17,773,503 $18,043,317 3.3% Federal Sources $796,976 $796,976 $952,303 $952,303 $952,303 $952,303 3.6% Total Revenues $43,749,073 $45,016,147 $48,686,467 $49,657,100 $50,290,980 $50,803,574 3.0% % Difference 0.0% 0.0% 6.1% 6.7% 6.7% 6.7% --Revenues per $16,654 $17,136 $16,283 $16,608 $16,820 $16,991 0.4% student % Difference 0.0% 0.0% (6.7%) (6.3%) (6.2%) (6.3%) --

Scenario - With BEF and SEF related to transferring Highspire Students Local Sources $27,634,735 $28,152,103 $30,635,302 $31,235,910 $$31,565,175 $31,807,955 2.9%

State Sources $15,317,362 $16,067,068 $19,113,854 $19,512,420 $19,845,985 $20,145,161 5.6% Federal Sources $796,976 $796,976 $952,303 $952,303 $952,303 $952,303 3.6% Total Revenues $43,749,073 $45,016,147 $50,701,459 $51,700,633 $52,363,462 $52,905,418 3.9% % Difference 0.0% 0.0% 10.5% 11.1% 11.1% 11.1% --Revenues per $16,654 $17,136 $16,957 $17,291 $17,513 $17,694 1.2% student % Difference 0.0% 0.0% (2.9%) (2.4%) (2.4%) (2.4%) --

(Sec Rec 45- Table 25: Comparison of Revenue Sources- Middletown Area School District).

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2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Forecast Projected Projected Projected Projected Projected

Baseline Projections Revenues per Student $16,654 $17,136 $17,461 $17,717 $17,939 $18,127

Expenditures per $16,609 $17,578 $18,170 $18,436 $18,968 $19,309 Student Surplus/ (Deficit) per $45 ($442) ($709) ($719) ($1,029) ($1,182) student

Scenario -with Highspire Revenues per Student $16,654 $17,136 $16,283 $16,608 $16,820 $16,991

Expenditures per $16,609 $17,578 $17,133 $17,285 $17,780 $18,171 Student Surplus/ (Deficit) per $45 ($442) ($850) ($677) ($960) ($1,180) student

Scenario -with BEF and SEF related to transferring Hiehspire Students Total Revenues $16,654 $17,136 $16,957 $17,291 $17,513 $17,694

Total Expenditures $16,609 $17,578 $17,133 $17,285 $17,780 $18,171 Surplus/ (Deficit) per $45 ($442) ($176) $6 ($267) ($477) student

(Sec Rec 45- Table 28: Summary of Financial Projections per Student- Middletown Area School District).

219. Petitioner takes a position aligned with the third scenario by submitting that MASD would receive an increase in state and federal funding as a result of the increase in student population due to the transfer ofHighspire students. (Sec Rec 17).

220. The baseline scenario analysis reveals that MASD is projected to have a budget shortfall over the five-year projection period, ranging from 2.5% to 6.1% of expenditures in the final projected year; however, given MASD's relative size, it appears likely that MASD could manage its fmancial position through a combination of tax increases and program adjustments, as it has been able to do in recent years. (Sec Rec 45 -Table 22: Summary of Financial Projections- Middletown Area School District).

221. The second scenario analysis (where the Highspire students transfer to MASD with taxes following them but not state BEF or SEF funding) reveals that MASD's annual shortfall is expected to increase in 2018-2019, then diminish before reaching $400,000 more than baseline in 2021-2022, which reflects that the additional cost of providing services to students from Highspire will exceed new revenues in each year. (Sec Rec 45 -Table 22: Summary of Financial Projections- Middletown Area School District).

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222. The third scenario analysis (when BEF and SEF are included in the transfer of Highspire students) reveals that approximately $2.0 million is eliminated from the annual deficit; and that annual deficits range from 1.0 to 2.6 percent of expenditures but are routinely less than the amounts in either of the first two scenarios. (Sec Rec 45- Table 22: Summary of Financial Projections -Middletown Area School District).

223. Two of the scenarios include estimations of the fmancial impact on MASD of absorbing the students transferred from Highspire beginning in 2018-2019; but significant variables in that analysis include the total number of current SHSD Highspire resident students who would attend schools operated by MASD, as well as the distribution of students among the various grades. (Sec Rec 45).

224. To perform a comparative analysis utilizing the scenarios, the following reasonable assumptions were made:

a. that the entire population of Highspire students attending district-operated schools in SHSD would continue to enroll in district-operated schools after the transfer to MASD;

b. that the distribution of Highspire students enrolled in nonpublic and charter schools would reflect the current proportions of students residing in MASD who attend nonpublic and charter schools (5.4% and 1.9% of total enrollment, respectively); and,

c. remaining students would remain enrolled in district-operated schools.

(Sec Rec 45- Table 24: Highspire Borough Students Transferred).

225. If the proposed transfer of students occurs, it is recognized that the full transfer of nonpublic and charter school students from Highspire to MASD is likely to happen over a few years rather than immediately.72 (Sec Rec 45).

226. The transfer of Highspire to MASD would result in a corresponding transfer of additional revenue to MASD by means of new local tax revenue streams from Highspire with real. estate taxes and earned income taxes from Highspire representing the largest source of increased local revenue to MASD. (Sec Rec 45).

227. In the first year of the transfer, identified as 2018-2019, MASD would receive approximately $1.5 million in real estate taxes, including the impact ofthe real estate tax

72 The rationale behind this conclusion is that certain students currently residing within Highspire might move from a nonpublic or charter school at slower pace. For example, rising 11th or 12th grade nonpublic or charter students may not want to transfer for their last one or two years before graduation. Likewise, parents may wish to have their children finish K-8 in the nonpublic or charter school they have attended for some time before transferring to MASD for high school. The two or three years before transfer occurs in these cases would provide MASD with additional planning time to accommodate the students. However, it was assumed that within a relatively short span, the proportions will mirror those of the existing MASD population and the analysis was simplified to assume that the full transfer of students would occur in year one (2018-2019).

56

increases, and nearly $0.7 million in earned income taxes from the new Highspire portion of the district. (Sec Rec 45).

228. Under the second transfer scenario, MASD may be able to accommodate the increased costs of educating students from Highspire through a combination of real estate tax increases and program adjustments; however, the initial impact of the transfer will strain existing resources absent corrective action or increased revenues from BEF and SEF. (Sec Rec 45).

229. Under the third transfer scenario, the shift ofBEF and SEF from SHSD to MASD in the analysis improves the annual financial results for MASD. (Sec Rec 45).

230. The baseline budget projections indicate a small, but growing structural deficit; and, on a per student basis, this represents a gap of approximately $442 per student in 2017-2018, which is expected to increase to $1,182 at the end of the 5-year projection period. (Sec Rec 45- Table 28: Summary of Financial Projections per Student- Middletown Area School District).

231. Under the second scenario, in which associated tax resources are transferred to MASD with the Highspire Borough, but not the associated BEF and SEF Funding, the annual deficit per student rises, then minimizes, and then at the end of the 5-year projection period is about the same as the baseline budget projection with a projected $1,180 per student deficit. (Sec Rec 45- Table 28: Summary of Financial Projections per Student- Middletown Area School District).

232. Under the third scenario, where BEF and SEF subsidies are transferred to MASD with the Highspire students, the per student deficit is projected to be closed in 2019-2020, and, although the structural deficit does return, it returns at a much lower level, a $477 per student deficit, then the other scenarios. (Sec Rec 45- Table 28: Summary of Financial Projections per Student- Middletown Area School District).

233. At the end of the five-year projection period under the second transfer scenario, MASD's total revenues are expected to increase at a compound annual growth rate of approximately 3.0%, which is approximately 6.0 to 7.0% higher than MASD revenues without the transfer of Highspire students. (Sec Rec 45- Table 25: Comparison of Revenue SourcesMiddletown Area School District).

234. At the end of the five-year projection period under the third transfer scenario, when BEF and SEF subsidies are included with the transfer of Highspire students, the compound annual growth rate in revenue and the change relative to the baseline projections are expected to increase. (Sec Rec 45- Table 25: Comparison of Revenue SourcesMiddletown Area School District).

235. Although total MASD revenues increase at a faster rate under the third transfer scenario, revenues are expected to decline on a per student basis under both the second and third transfer scenarios because at MASD total student emollment would increase at a higher

57

rate than total revenues, which increases the denominator in the calculation of per student revenues. (Sec Rec 45- Table 25: Comparison of Revenue Sources·- Middletown Area School District).

236. The transfer of students residing within Highspire to MASD will generate costs for MASD: there would be marginal costs for students attending district-operated schools including expenditures for technology, textbooks, supplies and student activities, but additional costs are reasonably anticipated including tuition payments to charter schools and payments for out-of-district special education placements, student transportation and debt service. (Sec Rec 45).

23 7. The actual needs of students residing within Highspire may not be fully known until a transfer occurs and each student is evaluated; it is possible that a higher proportion of Highspire students may require additional instructional supports for several years. 73 (Sec Rec45).

238. If the resources provided with the transfer of Highspire are lower than expected or if the costs to educate Highspire students requires the investment of additional academic resource, MASD has the ability to raise additional revenues through real estate taxes. (Sec Rec 45).

239. If more students residing within Highspire choose to attend MASD, MASD could face additional major capital costs related to classroom space. (Sec Rec 45).

Financial Projections: SHSD

240. Financial Projection Models were created to understand SHSD's current fmances and examine three scenarios to forecast what is likely to happen if students from Highspire transfer to MASD:

a. First Scenario- Baseline Projections: Shows the period from 2016-2017 to 2021-2022 under the current enrollment configuration, carrying forward current budget practices.

b. Second Scenario- SHSD after Transfer: Shows the same period from 2016-2017 to 2021-2022 assuming the transfer of Highspire students to MASD in 2018-2019. The second scenario shows financial projections for the same period assuming the departure of Highspire students and related tax revenue, but assumes that BEF and SEF amounts for SHSD would be unchanged.

c. Third Scenario - SHSD after the transfer without BEF and SEF related to transferring Highspire Students: Shows the estimated fmancial impact ofthe transfer of Highspire students, as outlined in scenario two, with the proportional amount of BEF and SEF attributed to Highspire students transferred from SHSD toMASD ..

73 For example, "[Petitioner] recognizes and SHSD admits its students entering high school are often up to 2.5 years behind grade level." (Sec Rec 15)

58

I I

2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 Forecast Projected Projected Projected Projected

Baseline Projections Total Revenues $20,496,234 $20,862,679 $21,529,474 $22,077,121 $22,616,723

Total Expenditures $20,659,627 $21,516,472 $22,427,379 $23,209,818 $23,978,164 Surplus/ (Deficit) {$163,392) ($653,793) ($897,905) ($1,132,697) ($1,361,441) Fund Balance ($1,529,313) ($2,183,106) ($3,081,011) ($4,213,708) ($5,575,149)

Scenario - SHSD after Transfer Total Revenues $20,496,234 $20,862,679 $19,126,042 $19,112,034 $19,580,642

Total Expenditures $20,659,627 $21,516,472 $19,494,551 $20,206,029 $20,900,226 Surplus/ (Deficit) ($163,392) ($653,793) ($368,509) ($1,093,995) ($1,319,584)

Fund Balance ($1,529,313) ($2,183,106) ($2,551,615) ($3,645,610) ($4,965,194)

Scenario - SHSD after the transfer without BEF and SEF related to transferring Highspire Students Total Revenues $20,496,234 $20,862,679 $17,111,050 $17,055,898 $17,482,504

Total Exp_enditures $20,659,627 $21,516,472 $19,494,551 $20,206,029 $20,900,226 Surplus/ (Deficit) ($163,392) ($653,793) ($2,383,501) ($3,150,130) ($3,417,722) Fund Balance ($1,529,313) ($2,183;106) ($4,566,607) ($7,716,737) ($11,134,459)

(Sec Rec 45 -Table 31: Summary of Financial Projections- Steelton-Highspire School District).

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2021-2022 Projected

$23,136,819

$24,731,802 ($1,594,983) ($7,170,132)

$20,024,881

$21,580,026 ($1,555,145)

($6,520,339)

$17,883,865

$21,580,026 _($3,696,161) ($14,830,621)

2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 CAGR

Forecast Projected Projected Projected Projected Projected

Baseline Projections Local Sources $6,978,314 $7,163,303 $7,335,340 $7,521,637 $7,722,651 $7,928,328 2.6%

State Sources $12,587,450 $12,909,379 $13,404,137 $13,765,487 $14,104,076 $14,418,494 . 2.8% Federal Sources $930,410 $789,997 $789,997 $789,997 $789,997 $789,997 (3.2%) Total Revenues $20,496,234 $20,862,679 $21,529,474 $22,077,121 $22,616,723 $23,136,819 2.5% Revenues per $11,679 $11,888 $12,268 $12,580 $12,887 $13,183 2.5% student

Scenario- SHSD after Transfer Local Sources $6,978,314 $7,163,303 $5,293,132 $5,416,606 $5,549,562 $5,681,782 (4.0%)

State Sources $12,587,450 $12,909,379 $13,198,239 $13,060,758 $13,396,410 $13,708,429 1.7% Federal Sources $930,410 $789,997 $634,670 $634,670 $634,670 $634,670 (7.4%) Total Revenues $20,496,234 $20,862,679 $19,126,042 $19,112,034 $19,580,642 $20,024,881 (0.5%) % Difference 0.0% 0.0% (11.2%) (13.4o/o}_ (13.4%) (13.5%) --Revenues per $11,679 $11,888 $13,740 $13,730 $14,067 $14,386 4.3% student % Difference 0.0% 0.0% 12.0% 9.1% 9.2% 9.1% --

Scenario - SHSD after the transfer without BEF and SEF related to transferring Highspire Students Local Sources $6,978,314 $7,163,303 $5,293,132 $5,416,606 $5,549,562 $5,681,782 (4.0%)

State Sources $12,587,450 $12,909,379 $11,183,247 $11,004,622 $11,298,272 $11,567,412 (1.7%) Federal Sources $930,410 $789,997 $634,670 $634,670 $634,670 $634,670 (7.4%) Total Revenues $20,496,234 $20,862,679 $17,111,050 $17,055,898 $17,482,504 $17,883,865 (2.7%) % Difference 0.0% 0.0% (20.5%) (22.7%) (22.7%) (22.7%) --Revenues per $11,679 $11,888 $12,292 $12,253 $12,559 $12,848 1.9% student % Difference 0.0% 0.0% 0.2% (2.6%) (2.5%) (2.5%) --

(Sec Rec 45- Table 32: Comparison of Revenue Sources- Steelton-Highspire School District).

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2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Forecast ·Projected Projected Projected Projected Projected

Baseline Pro.iections Revenues per Student $11,679 $11,888 $12,268 $12,580 $12,887 $13,183

Expenditures per $11,772 $12,260 $12,779 $13,225 $13,663 $14,092 Student Surplus/ (Deficit) per ($93) ($373) ($512) ($645) ($776) ($909) student

Scenario - SHSD after Transfer Revenues per Student $11,679 $11,888 $13,740 $13,730 $14,067 $14,386

Expenditures per $11,772 $12,260 $14,005 $14,516 $15,015 $15,503 Student Surplus/ (Deficit) per ($93) ($373) ($265) ($786) ($948) ($1,117) student

Scenario - SHSD after the transfer without BEF and SEF related to transferring Highspire Students Total Revenues $11,679 $11,888 $12,292 $12,253 $12,559 $12,848

Total Expenditures $11,772 $12,260 $14,005 $14,516 $15,015 $15,503 Surplus/ (Deficit) per ($93) ($373) ($1,712) ($2,263) ($2,455) ($2,655) student

(Sec Rec 45 -Table 35: Summary of Financial Projections per Student- Steelton-Highspire School District).

241. Several variables will influence the ability of SHSD to reduce costs if Highspire is transferred to MASD, but there will certainly be a reduction in enrollment such that there may be a reduction in staffmg to achieve some savings;74 however, even without students from Highspire, it is not feasible for the district to consolidate into one building. (Sec Rec 45).

24 2. SHSD staff reductions are likely to be achieved primarily from grades 1-6 and core courses in grade 9-12, based on the loss ofthe Highspire students, without creating large class sizes. (Sec Rec 45).

243. SHSD is projected to continue to experience a persistent structural deficit with or without the transfer of Highspire students. (Sec Rec 45 -Table 31: Summary of Financial Projections- Steelton-Highspire School District).

74 There i!l an assumption that SHSD may be able to reduce staffmg headcount by approximately one professional staff member in grades one to twelve based on the number of students transferred from Highspire, but still maintain current student teacher ratios. Staffing at the kindergarten level was not reviewed, so there may be an opportunity to restructure staffing in the kindergarten classrooms.

61

244. Under both the baseline budget projections and the transfer scenarios, SHSD is expected to have an operating deficit for each school year in the five-year projection period. (Sec Rec 45- Table 31: Summary of Financial Projections per Student- Steelton-Highspire School District).

245. Under the third scenario, where BEF and SEF subsidies are transferred to MASD with the Highspire students, the per student deficit considerably increases in 2018-2019. (Sec Rec 45- Table 35: Summary ofFinancial Projections per student- Steelton-Highspire School District).

246. SHSD is projected to be able to maintain current class size at a lower cost after Highspire students are transferred, but SHSD will not be able to provide the level of academic support that is needed in the district. (Sec Rec 45).

24 7. If SHSD' s state aid levels were to be reduced proportionately to its enrollment reduction, SHSD's revenues decline to a level that would make it very difficult to maintain a balanced budget. (Sec Rec 45- Table 32: Comparison of Revenue Sources- Steelton-Highspire School District).

248. Under the third scenario that assumes that BEF and SEF are transferred to MASD with the Highspire students, revenues decline by a compound annual rate of nearly 2. 7% over the five-year projection period. (Sec Rec 45- Table 32: Comparison of Revenue SourcesSteelton-Highspire School District).

249. Revenues would remain approximately the same on a per student basis in the first year of the transfer; however, the loss of approximately $2.0 million in BEF and SEF to SHSD results in slower revenue growth and lower per student revenues when compared to the baseline scenario. (Sec Rec 45- Table 32: Comparison of Revenue Sources- SteeltonHighspire School District).

250. The shift of Highspire Borough to MASD would eliminate over $1.6 million in tax revenue -30 percent of current real estate tax revenue and 40 percent of current earned income tax revenue. (Sec Rec 45).

251. Total SHSD expenditures are projected to increase at a compound annual growth rate of 0.9% if the transfer occurs, compared to 3.7% in the baseline budget projections. (Sec Rec 45- Table 34: Comparison of Expenditures- Steelton-Highspire School District).

252. If the transfer occurs, growth in SHSD expenditures is constrained by the reductions in staffheadcount, contracted transportation services, tuition payments, and debt service; and expenditures per student are expected to rise as total expenditures are divided among a smaller base of students. (Sec Rec 45- Table 34: Comparison of Expenditures- SteeltonHighspire School District).

62

253. The transfer of students from Highspire will have an impact on the cost structure of providing academic programs for students in the remaining portion of SHSD. (Sec Rec 45).

254. To some degree, SHSD eventually will be able to reduce fixed costs, such as contracted transportation services and debt service payments. (Sec Rec 45).

255. SHSD currently has $23.68 million outstanding debt principal issued over the last 14 years to renovate existing buildings, refund prior debt issues, and fill operating budget shortfalls and has net debt payments of approximately $2.3 million per year over the next few years. (Sec Rec 45 ~Table 38: Steelton-Highspire School District Debt Service, 2016-2017 to 2021-2022).

256. SHSD will be unable to sustain current class sizes if Highspire students exit, even if the BEF and SEF revenues are not shifted. (Sec Rec 45).

257. SHSD currently experiences a number of financial pressures in the management of cash on a monthly basis, and the loss of revenues from Highspire may adversely affect SHSD' s ability to manage ongoing obligations:

a. SHSD annually defers PSERS payables; b. In five of the last seven years SHSD has requested and received multiple BEF

advances of over $1.0 million each to provide short-term cash to meet obligations; c. The timing of SHSD's debt service payments places financial pressure on the

management of cash in August and February when SHSD makes semi-annual debt service payments on four of the six fixed-rate debt issuances; and

d. SHSD has regularly had to defer bills payable to vendors at the end of the fiscal year into the next fiscal year to conserve cash.

(Sec Rec 45).

63

DISCUSSION

The Independent School District Process

The procedure for creating an independent school district and ultimately transferring

territory from one school district to another is a multi-step process involving the county court of

common pleas, the Secretary of Education, and the State Board of Education (State Board).

Washington Twp. Indep. Sch. Dist. v. Pa. Bd ofEduc., 153 A.3d. 1177 (Pa. Cmwlth. 2017)

(Washington Twp). This three-part process "is procedurally unusual because it must be acted

upon both by a court of common pleas and by state agencies." Riegelsville II, 17 A.3d at 981.

Initially, the county court of common pleas reviews the petition for creation of an independent

school district to determine whether the petition satisfies the preliminary requirements of Section

242.1 of School Code, 24 P .S. § 2-242.1. The court of common pleas confirms that the petition

was submitted by a majority of the taxable inhabitants within the territory, the petition properly

describes the territory, the territory involved in the proposed transfer is contiguous to the

proposed new school district, and the petition sets forth the reasons for seeking the transfer.

Thereafter, the court of common pleas refers the petition to the Secretary for a determination of

"the merits of the petition ... from an educational standpoint." 24 P.S. § 2-242.1(a). The court

of common pleas may not approve a petition "unless approved" by the Secretary. Id

By statute, the Secretary's role is limited to a single issue: Whether or not the proposed

transfer of territory from one school district to another has merit from an educational standpoint.

24 P.S. § 2-242.1. If the Secretary finds that the proposed transfer has educational merit, the

court of common pleas must proceed by ordering the establishment of an independent school

district. Id Such order "must include a financial determination about the impact of the proposed

transfer on the 'receiving' and 'losing' school districts" by prorating the debts and subsidies.

Washington Twp., 153 A.3d. at 1180 (citing 24 P.S. § 2-242.1). If, however, there is no

64

educational merit, an independent school district may not be created. Id at 1184 (citing

Riegelsville II, 17 A. 3d at 981-82) ("[I]f the Secretary does not approve the petition, then the

common pleas court must deny it and the statutory process ends. If the Secretary approves the

petition, then the common pleas court must issue a decree establishing an independent school

district for transfer purposes and transmit the same to the Board for the final step in the

process.")

After an independent school district is created, the court of common pleas transmits the

matter to the State Board which makes the final decision as to whether the territory is transferred.

24 P.S. § 2-293.1. Previously, when making its decision, the State Board was not bound by the

Secretary's determination and seemed to conduct an unfettered review as it considered the

educational merit and other matters that it deemed relevant. See, e.g., In Re: Application of the

East Brady Independent School District to Transfer from Armstrong School District to Karns

City Area School District, ISD-92-1 (Pa. State Board of Education 1993).75 Recently, however,

the Commonwealth Court has sought to explicate the respective roles of the Secretary and the

Board in its Washington Twp. decision. Each step of the process is an "independent step'~

whereby the Commonwealth Court expounded that:

[T]he common pleas court reviews the petition for completeness. The Secretary reviews the petition for educational merit. The Board reviews the common pleas court's decree as an application in order to determine whether assignment of the newly-created independent school district to the receiving district would violate standards for the organization of school districts adopted by the Board and established by statute.

75 In East Brady the State Board considered the educational merit including the following additional matters: geography, transportation, teacher assignment, facilities, and financial impact.

65

Washington Twp., 153 A.3d at 1188.

Section 242.1 was added to the School Code by the Act of June 23, 1965, P.L. 139, and

most recently amended by the Act of December 19, 1967, P.L. 865. Further, "[t]he present,

pertinent statutory law which provides for the creation of independent school districts, solely for

the purpose of transferring territory of one school district to that of another, not only includes the

provisions of Section 242.1, but, because of the impact of reorganization, is also the subject of

Sections 292.1, 293.1 and 311.1 of the Code," which were also amended in 1967. In re

Establishment of Indep. Sch. Dist., 349 A.2d 480, 482 (Pa. Cmwlth. 197 5). I can only surmise

that the General Assembly envisioned for this process to be more collaborative and not

adversarial, but it does not escape me that this process germinates from provisions contained in a

fifty-year old statute.

I have also not ignored that aside from passing upon the procedural sufficiency of a

petition, Section 242.1 imposes further duties upon the court of common pleas "including the

proration of debts, obligations and State subsidies between and among the affected districts." Id

at 483. The court of common pleas under this statutory law, however, "has no power or

authority to inquire into or determine the merits of the petition requesting such transfer, or the

reasons assigned by petitioners, which role is exclusively within the province of the designated

educational authorities." Id Similarly, pursuant to Section 292.1, "[w]hen an independent

district is created by the court of common pleas for purposes of transfer from one school district

to another, the court shall submit to the State Board of Education its decree creating such district.

Such decree shall be considered an application for the assignment of said district to the

designated administrative unit of the approved county plan " The State Board of Education is not

tasked with reviewing a "petition filed and approved by the Secretary and the common pleas

66

court, but an application for assignment of the newly-created independent school district to the

designated receiving school district, as set forth in the common pleas court's decree."

Washington Twp. 153 A.3d at 1187. The Board ofEducation, therefore, reviews and approves

an application in accordance with Section 293.1, and, like the courts of common pleas, has no

express or implied statutory authority to consider the proration of debts, obligations and State

subsidies.

My analysis of the totality of this process is that the proceeding before the Secretary is

the most appropriate, and the only place, to review the petition to consider a districts' fmancial

capacities directly impacting a districts' ability to educate its students. Grounded upon the

independent steps of the process outlined in the Commonwealth Court's Washington Twp.

decision, if financial matters directly impacting the education of students affected by the

·proposed transfer are to be given accord, it is within the purview of the Secretary to consider.

The appropriate court of common pleas and the State Board of Education are not statutorily

authorized to effectuate that type of analysis of the petition itself, which appropriately rests with

the Secretary.

To conclude that financial considerations enmeshed in the provision of education is not

within the purview of the educational merit review of the petition before the Secretary is a result

that is dissonant with the function of the statutory scheme in its entirety. The General Assembly

could not have intended that fmancial factors relevant to the provision of education would not be

considered in determining the educational merit of the petition. The Secretary's educational

merit review is "restricted to the substantive provisions of the School Code." Washington Twp.,

153 A.3d at 1185 (citing Riegelsville II, 17 A.3d at 991). Within these substantive provisions of

the School Code, the General Assembly, however, has empowered the Secretary with making

67

various determinations relative to the financial operations of schools, including determinations of

financial recovery. See, e.g., 24 P.S. §§ 6-601-A- 6-694-A; see also 22 Pa. Code Ch. 18.76

Thus, financial considerations impacting a school's operations and derivative ability to educate

students, is embodied in the School Code as a basis for considering educational merit.

Further, reviewing financial considerations at this part of the process provides the

Petitioner and the affected school districts with a full record upon which to observe how

fmancial consideration might impact the educational merit of a petition, if at all. The courts have

no authority, nor experience as an educational authority, to evaluate how the current and

resultant fmancial capacities of the districts involved may impact an ability to educate students;

such a function is distinguishable from the role of the appropriate common pleas court to

determine only the "amount, of any of the indebtedness and obligation of the school district,

from whose territory such independent district is taken ... and a statement prorating the State

subsidies payable between or among the losing district or districts and receiving district." 24

P.S. § 2-242.1. Consequently, the common pleas courds tasked with quantifying debts and

subsidies associated with the proposed transfer, but that does not equate to, or otherwise include,

an analysis of a district's financial and structural health to assess the provision of high-quality

educational programming.

Application of Educational Merit Factors

The phrase, "merits from an educational standpoint," which appears in Section 242.1, is

not defmed by statute or regulation. The Commonwealth Court has held that the scope of the

Secretary's statutory authority to pass upon the educational merit of a petition is "restricted to the

substantive provisions in the Public School Code of 1949." Riegelsville II, 17 A.3d at 991.

76 SHSD is designated a "financial watch" school district pursuant to the early warning system mandated under Section 611-A of the School Code, 24 P.S. § 6-611-A.

68

"[W]hen the Secretary exercises his discretion to determine whether a proposed transfer has 'merit '

from an educational standpoint,' he must be guided by the policy choices made by the legislature

in the [School Code] and not by his own personal sense of what constitutes good education

policy." Id. Several considerations comprise an educational merit determination, including: (1)

whether affected students will be placed in a school district that produces better academic results;

(2) whether the proposed transfer will end discontiguous boundaries; (3) whether the proposed

transfer will place all students from the same municipality within one school district; and (4)

whether the proposed transfer eliminates a lengthy commute. Id.

The Secretary's educational merit review has not been limited to include only

consideration of academic achievement in the districts. For example, in In re Establishment of

Indep. Sch. Dist. Consisting ofW Portions of Hamlin & Sergeant Twp., 349 A.2d 480 (Pa.

Cmwlth. 1975), the Secretary found merit from an educational standpoint where the petitioners

sought to reduce the distance of travel for the affected students. Likewise, in Appeal of E. Brady

Indep. Sch. Dist., 630 A.2d 540 (Pa. Cmwlth. 1993), the Secretary found educational merit where

the petitioners sought a better curriculum, closer schools, a new facility and better school district

management. The Commonwealth Court has held that identifying "other, relevant provisions in

the Public School Code ... to give ... substance" to the phrase "merits from an educational

standpoint," continues to be the appropriate approach to discerning the meaning and application

of the statutory standard." Riegelsville II at 988-989 (citing In re Weaverland Independent

School District, 106 A.2d 812, 815 (Pa. 1954)Y.

The determination of whether affected students will be placed in a school district that

produces better academic results is among several considerations that comprise an educational

merit determination. Riegelsville II, 17 A.3d at 991. As agreed by Petitioner, "providing our

69

children with a quality public education is one of the most important obligations society has

imposed on itself. The importance of education cannot be overstated, making the Petition all the

more important."

Educational Merit Review of the Highspire Petition

Being mindful of the direction provided by the Commonwealth Court as explained above,

the Department, through my direction, acted to review the educational merit of the Petition and

implemented a review that reflects increased inquiry to further examine factors impacting and

influencing educational outcomes given the complexities of student assessments, school

accountability measures and funding all of which are relevant to the review. I directed that site

visits occur at the respective school districts to conduct a classroom and fiscal audit, review

positions taken by the parties, 77 and gather additional information that would provide the context

and support necessary to render a thorough decision on tlie educational merit of the proposed

transfer.

Petitioner's Objections to Site Visits and the PFM Report

Petitioner opposed any site visits to the respective school districts, reasoning that visits

would not provide any additional information beneficial to determining the educational merit of

the Petition. On February 16, 2017, the Department confirmed with the parties that it would

proceed with conducting the site visits, at which time Petitioner reiterated its opposition to the

site visits and renewed its request to participate and in so doing, characterized the Department's

decision as "an epiphany that site visits are a necessary part of its analysis" because the

Department has historically made its determinations of educational merit without such

77 The impacted districts set forth a litany of concerns about the impact of the proposed transfer (i.e. Findings of Fact 78, 79, 85-87, 142 and 143).

70

inspections and visits. (Sec Rec 41 ). In response, it was explained that the more robust review

was merely the byproduct of experience, insight, and commitment to a thorough deliberation of a

determination that will impact generations of present and future school-aged children. (Sec Rec

42).

Petitioner renewed its objections to the site visits in its comments on the Report and

objected to any reliance by the Department on the Report or any data, information, or

conclusions arising from PFM Group's involvement or the site visits themselves. Petitioner.

submitted that the Department is attempting to improperly expand the meaning of "educational

merit" to wholly engulf fmancial and other considerations extending beyond the meaning of

educational merit; that only academic programs and extracurricular programs were raised in the

Petition such that all other areas of information are irrelevant to the consideration of educational

merit. Petitioner criticizes emphasis on studies and reports that do not arrive at firm conclusions

or any fmdings that changes in class sizes, for example, will have adverse educational impact.

Finally, Petitioner reinforces its position that the educational achievements of SHSD students is

inarguably inadequate as evidenced in Table 19: School Performance Profile Achievement Data

and Table 20: School Performance Growth Data. (Sec Rec 45). I address Petitioner's objections

below.

Petitioner advances an argument that only academic programs and extracurricular

programs were raised in the Petition and, as such, all other areas of information requested by

PFM Group and included in the Report are irrelevant to the consideration of educational merit of

the Petition. As explained below, I cannot accept the position advanced by Petitioner.

Nothing in Section 242.1 or the relevant case law indicates that the Secretary's

consideration is limited only to the reasons raised in the Petition. I cannot insert words into

71

Section 242.1 to limit its application when the General Assembly did not provide those words.

See Amendola v. Civil Serv. Comm'n ofCrafton Borough, 589 A.2d 775,777 (Pa. Cmwlth.

1991) (Courts have "no power to insert words into statutory provisions where the legislature has

failed to supply them."). Indeed, if the Secretary's review was limited as argued by Petitioner, it

would be rendered superfluous because a petitioner would only list those reasons that clearly and

convincingly demonstrate the petition has educational merit laiowing the Secretary's educational

merit review could not extend further. This is an absurd and unreasonable result and fails to

recognize the General Assembly's clear intent to rely on the knowledge and expertise of the

Secretary of Education in this three-part review. See Section 1921 of the Statutory Construction

Act of 1972 (Statutory Construction Act), 1 Pa. C.S. §1921.

However, even if the Secretary's review is constrained to only the reasons cited in the

Petition, Petitioner asserted in the Petition that SHSD experiences severe budget constraints and

also included in the Petition the Auditor General's report that made an observation about

SHSD's fmances. Moreover, during this review, the districts vocalized opposition to the Petition

and, as highlighted previously, raised a myriad of concerns that are relevant to evaluating the

educational merit of this Petition.

I am also unable to accept Petitioner's argument that the Secretary is prohibited from

including financial considerations in the educational merit review of the Petition. Within the

substantive provisions of the School Code are various provisions relating to school district

finances. For example, school districts are required to submit to the Secretary on a yearly basis

and in the time prescribed by statutes: Annual Financial Reports, local audit certification

statements, and budgets for the next school year. 24 P.S. §§ 2-218, 6-687. Most relevant here,

however, are the substantive provisions of the School Code relating to School District Financial

72

Recovery. See 24 P.S. §§ 6-601-A- 6-694-A. These provisions, as also supplemented by the

regulations promulgated by the Department at 22 Pa. Code Chap. 18, provide detailed

information for identifying school districts with negative financial conditions that might impact

their ability to provide and maintain educational programs for students and methods to rectify

those conditions. Indeed, SHSD is a school district in Financial Watch Status pursuant to

Section 611-A of the School Code, 24 P.S. § 6-611-A. Consequently, I cannot accept

Petitioner's argument that financial considerations are entirely excluded from the consideration

of the educational merit of the transfer of the Highspire territory from SHSD to MASD because,

as previously explained, such a review is within the authority of the Secretary to adjudicate.

Petitioner also takes umbrage to any reliance on studies cited in the Report that call into

question a correlation between academic achievement and class size arguing that there is no clear

conclusion that increased class sizes have adverse educational impact. Previously, Petitioner

acknowledged that it does not dispute that increasing the average class size can negatively

impact a student's education. (Pub Rec 15). Below, I discuss the causal connection between

classroom size and educational outcomes. As also discussed more fully below, I do not dispute

Petitioner's position that the educational achievements of SHSD students are comparatively

inadequate to that of the achievements ofMASD students, even in terms of growth measures.

Comments by MASD to the PFM Report78

MASD provided comments on the Report and acknowledged that the Report addresses a

wide variety of actual and projected data concerning MASD and SHSD reflective of the "policy

choices made by the legislature in the [School Code]." Washington Twp., 153 A.2d at 1184.

MASD submitted that the Secretary is free to consider the Report when determining the

78 SHSD did not submit a response to the PFM Report.

73

educational merit of the proposed transfer of Highspire students from SHSD to MASD. MASD,

however, did question or disagree with conclusions and assumptions regarding MASD relating to

projected enrollment totals and associated costs for MASD to absorb Highspire students and the

projected increase in MASD revenues and debts.

MASD expressed disagreement about the assumptions made in accounting for the

projected number of Highspire students subject to transfer and suggested that the numbers might

be underestimated. Per Table 8: Enrollment by Category- Steelton Highspire School District,

Highspire has 363 school-aged residents; however, per Table 24: Highspire Borough Students

Transferred, only 325 school-age children are identified as being school district, charter school,

or nonpublic school students subject to transfer to MASD. MASD directed attention to Table 24

of the Report, which identified 20 fewer Highspire nonpublic school students (for a total of21)

and 7 fewer charter school students (for a total of28) than reflected in Table 8 of the Report for

whom MASD would be responsible in the event of transfer. (Sec Rec 45 and 51). Concern was

expressed that resulting financial projections ofMASD's future expenditures would not

accurately reflect the cost associated with a larger number of charter school students as found in

Table 8, or the additional transportation services needed for nonpublic school students.

I recognize that there are a number of uncertainties about the total number of students

that may enroll in MASD schools with a transfer of Highspire to that district. Regarding the

figures contained in Table 24: Highspire Borough Students Transferred of the Report, reasonable

assumptions were made in order to facilitate the generation of financial projections. It was

assumed that the distribution of Highspire students enrolled in nonpublic schools and charter

schools would reflect the distribution of students in MASD over time, although there may be

some variation. The table below reflects MASD enrollment shown in Table 3: Total Enrollment

74

- Middletown Area School District from the Report, but re-oriented to summarize the enrollment

by category. This distribution was utilized to allocate the 363 students from Highspire shown in

Tables 7 and 8 of the Report.

~\;;~~~ ~ · · ~: -" -·--s1iEnrolimeri.i:~"- _ :~w--::- -- · --:· -', "

' - "' '

' --, '-- "):--" "'_;_,::.~'t--·-- ~ ~-~

' ' '' - ,~ --- '

R~ ~~

%of Enrollment Total

..

School District 2,330 88.7%

AVTS 75 2.9%

Out-of-District Placements 29 1.1%

Charter Schools 50 1.9%

Non-Public Schools 143 5.4%

Total 2,627 100.0%

Using this data, the final distribution ofthe Highspire students considered in the analysis

is summarized in the table below. The 325 Highspire students noted in the "School District"

category matches the total enrollment shown in Table 24: Highspire Borough Students

Transferred of the Report. No adjustments were made to the enrollment of students in vocational

schools, or students receiving services through out-of-district-placements.

75

Enrollment

School District 325 89.5%

AVTS 6 1.7%

Out-of-District

Placements 5 1.4%

Charter Schools 7 1.9%

Non-Public Schools 20 5.5%

Total 363 100.0%

As indicated by the response from MASD, the complete transfer of all students currently

enrolled in charter schools and non-public schools would require the investment of additional

resources that would exceed the amounts considered in the Report. The Report also included

estimates of the major categories of costs that would be associated with students that are not

enrolled in facilities that are operated by MASD, including tuition payments for students enrolled

in charter schools, vocational schools, and students receiving services through out-of-district

placements. In addition, the costs of transportation were estimated on a per-student basis using

the average cost of contracted transportation for MASD, which may not reflect the actual cost of

providing transportation to these student populations if MASD is unable to achieve economies of

scale in the transportation of students from Highspire. For example, ifMASD is required to

increase the number of routes to accommodate the additional students from Highspire, these

costs may exceed the projected average cost per student, particularly if there are relatively few

76

students transported by each vehicle. Other factors may also impact the costs of transportation

and the reimbursement for transportation services from the Commonwealth, including the need

to provide transportation for homeless students and the ability to schedule multiple runs per

vehicle.

MASD also expressed concern about the projected financial scenario whereby BEF and

SEF are not adjusted to reflect an increased number of students from a transfer. That particular

projected financial scenario contemplates perpetual real estate tax increases, decreased

expenditures supporting student educational programs, or both. MASD commented that a

reduction of per-student expenditures as a result of the transfer would have a clear adverse

impact on the education provided to students currently being served by MASD, and increased

real estate taxes would undermine the efforts ofMASD's School Board to adopt annual budgets

sensitive to the needs of the entire community. As discussed more fully below, weight is given

to a scenario whereby the BEF and SEF are adjusted to reflect an increased number of students

resulting from a transfer of Highspire students.

Merits of the Highspire Petition

Petitioner cites, as its foremost reason in support of the Petition, that the transfer would

be in the best educational interest of present and future school-age children living in Highspire.

Petitioner has made clear that its primary basis is that students residing within Highspire do not

have "a quality educational experience available from ... [their] current school district .... "79

(Sec Rec 15). Further, Petitioner projects that the "fmal determination to be made by the

79 A potential secondary effect would be that Highspire would become "a more desirable place to live and will likely result in an increase in property values" and more families will remain in Highspire, resulting in increased income tax revenue, instead of relocating to better performing districts. (Sec Rec 17). As I see no substantive provision of the School Code upon which to rely to find that a speculative increase in property values supports the transfer of one portion of a school district to another pursuant to Section 242.1, I did not consider this factor here.

77

Department of Education is the same that motivated ... [Petitioner] to file its petition, namely,

what is in the best interest of the children in Highspire." (Sec Rec 15).

Contrary to a singular focus on the impacted student group within the territory proposed

for transfer, however, the Secretary has historically examined the educational merit of a

proposed transfer by considering the anticipated educational impact upon three groups of

students: (1) the students within the territory proposed for transfer; (2) the students remaining in

the district which would lose the territory (the losing district); and (3) the students in the district

which would gain the territory (the receiving district) (collectively referred to as "the student

groups"). See Washington Twp., 153 A.3d at 1181 ("In evaluating the merits of the petition

from an educational standpoint, the Secretary considered the potential impact of the transfer on

the Washington Township students, the students who would remain in Dover, and the students in

Northern York."). Considering the historical practice of examining the educational impact upon

all three student groups, a proposed transfer was found to lack educational merit if a negative

impact was anticipated on any one of the student groups. As reflected in In Re Porter Township

Initiative (Secretary's Order and Opinion, dated March 16, 2011), a review of the impact of the

creation of the independent district on the "losing" district, or district in which the territory is

proposed to transfer from, has long been part of Secretary's analysis. (Pub Rec 22). Further,

consideration of the student groups was not curtailed in Riegelsville II wherein the

Commonwealth Court did not limit application of the meaning "merits from an educational

standpoint" to the student group subject to the proposed transfer. The Commonwealth Court has

itself cited the impact on the "losing" district in analyzing the educational merit of a proposed

transfer. See Riegelsville II, 17 A.3d. at 988-989 (Noting that the petition will not impact the

facilities of"either district" and will "end" [the "losing" district's] "discontiguous borders.")

78

In undertaking an educational merit review, the scope of affected students impacted by

the proposed transfer has not, and should not, be whittled down to an insular review of the

educational impact only upon the current and future school-age students residing within a

territory. Doing so would be subversive to the Secretary's fundamental interest in serving all

students and the "aim and object of our school system . . . to provide the best education for the

children of the Commonwealth." Walker v. Sch. Dist. of the City of Scranton, 12 A.2d 46, 48

(Pa. 1940). Consequently, my review includes all impacted student groups.

Further underscoring the need to consider the educational impact upon all affected

student groups are the unequivocal views from SHSD and MASD in opposition to the proposed

transfer. Petitioner asserts that the majority of taxable inhabitants of Highspire, including the

vast majority of parents of public school students, are in favor of relocating Highspire students to

MASD. This is a process to engage citizens in the "very important matter of how school district

lines are drawn." Riegelsville II, 17 A.3d at 990. The educational merit of the Petition requires

careful and thorough examination, as the determination will potentially affect the elementary and

secondary educational opportunities for generations of children, not only those in Highspire but

also those in MASD and those remaining in SHSD. Thus, I am not guided solely by the

viewpoint of parents of current public school students residing in Highspire.

There are suggestions and assertions by the school districts that the two remaining

student groups - the students that would continue to reside within SHSD and the students

currently residing within MASD -will be negatively impacted by the transfer. Both school

districts expressed opposition to the transfer. It is noted that it "may be appropriate to seek input

from the districts, but their opposition is not dispositive, particularly when based upon economic

considerations, not academic concerns." Riegelsville II, 17 A.3d at 986.

79

SHSD strongly opposes the proposed transfer because the financial ramifications would

negatively impact the educational quality of the non-transferring/remaining SHSD students and

the ability of MASD to operate an effective education program for students residing in Highspire

because of debt obligations that would transfer with the students; and the escalating costs to

educate Highspire students.80 MASD anticipates that the proposed transfer would adversely

impact existing MASD students because a "large influx of new students" would generally tax

existing facilities, staff, and programs.

When asked to list the major educational impact to either support or reject the proposed

transfer, both school districts identified major negative impacts. SHSD provided a series of

reasons to support its contention that its ability to operate an effective education program for

students remaining within the district would be negatively impacted. Specifically, that a

reduction in financial resources and loss of revenue would make it more difficult for SHSD to

have the resources necessary to properly educate students. Likewise, MASD offered a variety of

reasons to support its contention that incorporating students residing in Highspire into its existing

public school system would have a detrimental educational impact on MASD students. Given

the school districts' indications that the proposed transfer would have an anticipated negative

educational impact upon two of the student groups subject to the transfer- the students

remaining in SHSD and the students currently residing in MASD, there is a question whether the

proposed transfer would impair either or both ofthe school districts' ability to provide a

comprehensive, quality education to its students if Highspire is transferred to MASD.

The Size of the Affected Student Populations

80 Both Petitioner and MASD oppose any SHSD debt following Highspire students to MASD upon approval of the Petition by the Secretary. (Sec Rec 17). Petitioner opines that whether any debt follows an independent school district is a decision for the courts and not the Department. (Sec Rec 15 and 17).

80

The nature and extent of the educational impact on the affected student populations

proportionally correlates with the relative percentage of students involved in the transfer. In

other words, a higher percentage of students residing within the territory proposed for transfer

equates to a higher and more widespread educational impact on all student groups. Here, the

relatively large magnitude of this particular proposed transfer, in terms of the student population

residing within Highspire subject to the transfer, cannot be overlooked. The proposed transfer of

territory is one of the largest in scope that the Department has been asked to consider in recent

time.81

SHSD reported that a total of235 students of its 2014-2015 school year total enrollment

resided within Highspire, whereas MASD reported that 229 students residing in Highspire would

be subject to the transfer. Despite the minor difference in enrollment reporting, the enrollment

data for students residing within Highspire compels recognition that the scope, in terms of the

percentage of school-age children impacted by the proposed transfer, is sufficiently large in

·the present Petition such that the educational impact of the proposed transfer would be felt

more broadly and warrants a corresponding degree of attention.

In terms of scale, comparison may be made to the petition filed by the Washington

Township Education Coalition which sought to transfer the territory of Washington Township,

and approximately 320 students residing within Washington Township, from the Dover Area

School District to the Northern York County School District. However, both districts reported

student enrollment totals over 3,000, such that 320 students equated to approximately 9% of the

Dover Area SD student population.

81 On February 28, 2017, the Press & Journal published a news article entitled "Still Waiting," indicating that ''the number of students involved- 229 -makes this transfer petition one of the largest in scope that the department has been asked to consider in recent memory." (Pub Rec 14).

81

Here, both districts reported much lower district enrollment figures. MASD reported

student enrollment figures in district-operated schools, ranging between 2,305 for 2014-2015

school year and 2,330 for the 2016-2017 school. Likewise, SHSD reported even lower student

enrollment figures in district-operated schools, ranging between 1,359 students for the 2014-

2015 school year and 1,479 for the 2016-2017 school. Enrollment data from 2014-2105

evidenced that a total of 235 students in SHSD-operated schools, or approximately 17% of

SHSD's total enrollment, resided within Highspire. (Sec Rec 14). However, when considering

all enrollment data from 2014-2015 (i.e., including non-public schools and charter schools), the

number of school-age children residing in Highspire that could be potentially affected by a

transfer increases to a total of335 students, approximately 20%. (Sec Rec 14). Similarly, the

enrollment data from 2016-2017 evidenced that a total of276 students in SHSD-operated

schools, or approximately 18.7% ofSHSD's total enrollment, resided within Highspire. (Sec

Rec 45- Table 8: Enrollment By Category- Steelton-Highspire School District). Again,

when considering all enrollment data from 2016-2017, the number of school-age children

residing in Highspire that could be potentially affected by a transfer increases to a total of363

students, approximately 20%. It is entirely reasonable to surmise that Highspire-resident

students not presently enrolled in SHSD-operated schools would consider enrolling in MASD if

the transfer occurs. (Pub Rec 14).

Academic Performance Data

SAT Results

Petitioner seeks the creation of an independent school district for several reasons, but it

predominately relates back to a comparison of educational programs based upon the academic

performance of SHSD students compared to those of MASD. One metric to be considered is the

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performance of students enrolled in the two school districts on standardized tests including the

SAT. The SAT serves as an indicator of student performance because it "assesses student

reasoning based on knowledge and skills developed by the students in their course work." (Pub

Rec 15). Petitioner asserts that SHSD continually underperforms on the SAT exams when

compared to the Commonwealth of Pennsylvania as a whole; whereas MASD continually

outperforms on the SAT exams when compared to the Commonwealth as a whole. 82

As an initial matter, MASD students consistently achieved higher SAT scores than SHSD

students. The average SAT scores achieved by students in MASD for each subject area over the

years exceeded the average SAT scores achieved by students in the SHSD, resulting in MASD

having an average composite SAT score 261 points higher than those ofSHSD. Also, during the

years compared, the average percentage of students participating in the SAT for MASD

exceeded the percentage of students participating in the SAT for SHSD by 3.2 percentage points.

In 2014, the two districts experienced an increase in SAT participation by approximately 10

percentage points which resulted in both reporting the same percentage of SAT participation

(31.4%). The participation rates at both districts were relatively analogous until a sizeable a

difference in SAT participation in 2015, in which MASD exceeded SHSD's percentage of

participation by 10.1. Both school districts experienced a decrease in SAT participation in

2015; however, SHSD's percentage decreased by 12.5 percentage points while MASD only

experienced a 2.4 percentage point decrease. Although the data on SAT participation rates is not

as clearly compelling, the aforementioned considerations favor a conclusion that there is

82 Petitioner seeks comparisons made between the two districts against the Commonwealth as a whole; however, in order to analyze the student performance parity between the districts, this metric was evaluated based upon districtonly data to allow a direct comparison, consistent with other analyses contained within this pre-adjudication determination.

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educational merit in transferring the territory from the SHSD to MASD based upon the SAT

scores.

Although there is an appreciable differential between the districts, as a point of caution,

the SAT may not be an appropriate metric for such a comparison. See Pa. State Bd. of Ed.,

Report of the Special Committee on the Washington Township Independent School District

(September 16, 2015) (Pub Rec 26). The College Board State Profile Report advises that "[n]ot

all students in a high school, school district or state take the SAT. Since the population of test

takers is self-selected, using aggregate SAT scores to compare or evaluate teachers, schools,

districts, states, or other educational units is not valid, and the College Board strongly

discourages such uses." (Pub Rec 15). Therefore, a comparison of educational programs

between the districts through analysis of student performance based on the SAT scores achieved

by district students, while considered as part of this review, will not be given substantial weight.

Pennsylvania System of School Assessment (PSSA) Results

Petitioner also advances that SHSD continually underperforms on the Pennsylvania

System of School Assessment (PSSA) tests when compared to the Commonwealth as a whole,

whereas MASD consistently performs above the State's proficiency level. In 2013, 2014, and

2015, in all grade levels and content areas, the percentage ofMASD students scoring proficient

or above was consistently higher than the percentage of SHSD students in all 51 comparisons.

The margin of difference between MASD's percentages and SHSD's percentages is

considerable. For example, in 2015 in the content area of mathematics, 29.6% ofMASD grade 8

students achieved proficiency or above (which was very close to the state average in that year);

however, only 1.1% ofSHSD grade 8 students did the same. Likewise, in 2015 in the content

area of English Language Arts, 52.8% ofMASD grade 8 students achieved proficiency or above;

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however, only 6.3% of SHSD grade 8 students did the same. In 2015 in science, 58.2% of

MASD grade 8 students achieved proficiency or above; however, only 7.4% of SHSD grade 8

students achieved the same.

Student assessment data for the economically disadvantaged subgroup was also analyzed

to provide a review of educational outcomes. When comparing the percentage of economically

disadvantaged students achieving proficient or above, the data indicates that in 2013, 2014, and

2015, the percentage ofMASD students consistently exceeded the percentage ofSHSD students

in all 51 comparisons. The foregoing comparisons favor a conclusion that the proposed transfer

of territory to MASD would have a positive educational impact on the students residing within

Highspire subject to the transfer.

Academic Growth

In a continuing effort to better serve public education in the state, Pennsylvania has

moved away from a system of accountability that assessed school performance based solely on

the percentage of students scoring proficient or advanced on state assessments for districts,

schools, and defined subgroups of students. The Pennsylvania Value Added Assessment System

(PV AAS) is a statistical analysis of state assessment data used to measure academic growth.

Achievement data only captures student academic performance at a single point in time, is highly

correlated with a student's demographic, and compares student performance to P A Core

Standards, whereas PV AAS (growth data or the change in student achievement data from year

to-year) has typically little to no relationship with students' demographics, and compares

performance of a student group to their own prior performance. (Pub Rec 21 ). PV AAS provides

two types of information: (1) value-added (or growth) data on groups of students; and (2) student

level projection data. The value-added, or growth, information analyzes available data from

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previous years (looking back) to help districts and schools evaluate how much groups of students

have gained academically in a school year. The projection information uses the data already

analyzed to help schools project (looking forward) to the future and can be used for intervention

planning, enrichment planning, and resource allocation. (Pub Rec 21).

This measure of school effectiveness warrants consideration of indicators of academic

growth. Test score growth provides an important piece of information by conveying whether

students are making progress even if they are performing below proficiency.

The data for SHSD reveals significant evidence that the district did not meet the standard

for PA Academic Growth in 50 of 69 (72.4%) of the calculations; whereas, the data for MASD

reveals significant evidence that the district did not meet the standard in only 20 of 120 (16.7%)

of the calculations performed. Based on the three-year (2013-2015) average of middle school

and high school grade levels in Algebra I, Biology, and Literature, the SHSD Junior/Senior High

School PV AAS scores reveals significant evidence that SHSD did not meet the standard for P A

Academic Growth for any of the content areas tested. MASD's PV AAS scores evidence MASD

High School did not meet the standard for PA Academic Growth for Algebra I; however, MASD

showed evidence that the district met the standard for P A Academic Growth for Biology, but

then showed moderate evidence that the district did not meet the standard for P A Academic

Growth for Literature. MASD PV AAS scores indicate significant evidence that MASD Middle

School exceeded the standard for P A Academic Growth in Algebra I.

Based on the same three-year (2013-2015) average for content areas tested at the

elementary school level, the data revealed that SHSD Elementary School scores indicate

significant evidence that the district did not meet the standard for P A Academic Growth for any

of the content areas tested. Comparatively, Fink Elementary School results indicate significant

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evidence that MASD exceeded the standard for all content areas tested. Kunkel Elementary

School results, however, indicate only moderate evidence that MASD did not meet the standard

for Math, but there was evidence that the MASD met the standard in Reading/ELA and Science.

Reid Elementary School results indicate evidence that MASD met the standard in Math, but

there is significant evidence that MASD did not meet the standard in Reading/ELA and Science.

Based on the same three-year (2013-2015) average for Math and Reading/English

Language Arts (ELA) at the middle school and high school level, SHSD High School results

indicate significant evidence that SHSD did not meet the standard for P A Academic Growth for

Math, Reading/ELA, and Science for students in grades 7-8. MASD Middle School results

indicate significant evidence that the district exceeded the standard for Math for students in

grades 6-8 and Science Grade 8. Additionaily, for Reading/ELA, there is evidence that MASD

met the standard.

The yearly PV AAS math data for SHSD and MASD elementary schools shows

significant evidence that MASD exceeded the standard for P A Academic Growth in grade 5 at

Fink and Kunkel Elementary Schools and moderate evidence that the district exceeded the

standard at Reid Elementary School. In grade 4, there is moderate evidence that MASD did not

meet the standard in Math at Robert Reid Elementary School, moderate evidence that MASD

exceeded the standard at Fink Elementary School, and significant evidence that MASD did not

meet the standard at Kunkel Elementary. Lastly, there is significant evidence that SHSD did not

meet the standard for P A Academic Growth in Math for SHSD Elementary students in grades 4

and5.

The PV AAS data for math for SHSD Junior-Senior High School and MASD Middle

School indicates significant evidence that MASD exceeded the standard for P A Academic

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Growth in math for students in grades 6 and 8 at MASD Middle School as did SHSD students in

grade 6; and there is significant evidence that SHSD did not meet the standard for P A Academic

Growth in math for students in grades 7 and 8 at SHSD Junior-Senior High School as did MASD

students in grade 7.

The PV AAS Reading/ELA data at the elementary school level indicates significant

evidence that MASD exceeded the standard for P A Academic Growth for students in grade 4 at

Fink and grade 5 at Kunkel elementary schools. There is evidence that MASD met the standard

for PA Academic Growth in Reading/ELA for students in grade 5 at Fink and Robert Reid

Elementary schools. There is moderate evidence SHSD did not meet the standard for P A

Academic Growth in Reading/ELA for students in grade 4 at SHSD Elementary School. Lastly,

there is significant evidence that SHSD did not meet the standard for P A Academic Growth in

Reading!ELA for students in grade 5 at SHSD Elementary School as is the same for MASD

students in grade 4 at both Kunkel and Reid Elementary Schools.

Similarly, the PV AAS Reading/ELA data at the middle and high school levels indicate

significant evidence that SHSD exceeded the standard for P A Academic Growth in

Reading!ELA for students in grade 6. Moreover, there is significant evidence that SHSD did not

meet the standard for P A Academic Growth in Reading/ELA for students in grades 7 and 8.

There is evidence that MASD met the standard in Reading!ELA for students in grades 6-8.

In reviewing the PV AAS data for Science in Grade 4, the data indicated significant

evidence that MASD exceeded the standard for P A Academic Growth for students at Fink

Elementary School. There is evidence that MASD met the standard for students in grade 4 at

Kunkel Elementary School. However, there is significant evidence that both SHSD and MASD

did not meet the standard for P A Academic Growth in Science for students in grade 4 at SHSD

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Elementary School and Robert Reid Elementary School. Similarly, the PV AAS data for science

in Grade 8 indicated significant evidence that MASD exceeded the standard for P A Academic

Growth in science for students in grade 8, whereas there was significant evidence that SHSD did

not meet the standard for students in grade 8.

The PV AAS data for Algebra I indicated significant evidence that MASD exceeded the

standard for PA Academic Growth in Algebra I for students in MASD Middle School; however,

there was significant evidence that SHSD and MASD did not meet the standard in Algebra I for

students at both the SHSD Junior-Senior High School and MASD High School. The PV AAS

data for Biology indicated evidence that MASD met the standard for P A Academic Growth for

MASD High School students; but, there was significant evidence that SHSD did not meet the

standard in Biology for SHSD High School students. Lastly, the PV AAS data for Literature

indicates moderate evidence that MASD did not meet the standard for P A Academic Growth in

Literature for MASD High School students, and there is significant evidence that the SHSD did

not meet the standard in Literature for SHSD High School students.

While student achievement is a measurable and important metric, so is progress.

Achievement coupled with academic gains data contextualize student and school results. After

reviewing PV AAS scores, the indicators for academic growth show that MASD students have

made more progress academically on a yearly basis than those at SHSD.

Parental Involvement

SHSD's performance on standardized tests and statewide assessments is supportive of a

determination that the proposed transfer possesses educational merit. However, my inquiry

cannot rest solely on academic achievement; rather, it only informs the determination. To give

context to the student academic performance outcomes from both districts, consideration was

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given to levels of, and opportunities for, parental involvement that support learning. Evidence of

parental engagement strategies and activities and robust parent communication structures allow

for a more complete analysis of student achievement with the districts. (Pub Rec 18).

"Many studies found that students with involved parents, no matter what their income or

background, were more likely to: earn higher grades and test scores, and enroll in higher-level

programs; be promoted, pass their classes, and earn credits; attend school regularly; have better

social skills, show improved behavior, and adapt well to school; and graduate and go on to

postsecondary education." (Pub Rec 16). "Children are more likely to apply themselves and

perform better in school when their parents show an interest in their school work, are willing to

assist them with homework, and are willing to hold their children accountable for completion of

school assignments. Youth who are not working hard at school may begin to perceive school as

valuable when parents actively demonstrate that they value school through involvement." (Pub

Rec 17). Although the degree of impact may be subject to dispute, it is evident that levels of

parent and guardian involvement in a student's education impact educational outcomes which is

why evidence of levels of parental involvement is considered herein.

SHSD reported some challenges with parental involvement and cited transportation as an

issue that limits involvement, but SHSD reports working to expand volunteer efforts and has

developed an interactive online presence to improve the home to school connection. Both SHSD

and MASD held multiple meetings throughout the years to try to involve parents. Successful

parent involvement programs at districts evolve over time with the help of parents, district staff,

students, and the community. Both districts appeared to add and try different events throughout

the years. SHSD took more of a district approach to parent involvement and added Daybreak

with Dad, Morning with Mom, and pasta and barbeque dinners. MASD relied on the schools to

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find creative ways to involve parents as demonstrated by Reader Theatre Performances, Kunkel

County Carnival, Bowling Night, and a Color Fun Run. SHSD scheduled a higher number of

parent-involvement meetings and had a notably high attendance of 190 at a S.T.E.A.M (Science,

Engineering, Technology, Arts, and Mathematics) Night. MASD elementary schools, generally,

held fewer parent-involvement meetings and reported variable attendance numbers. Both

districts attempt to encourage parents to be a part of the education process. Events that report a

higher number of attendees demonstrate that school has a greater understanding of the interests

of the parents and what would be gained from their attendance at the meetings. This metric of

educational merit does not weigh heavily on the Petition as it is evident that both districts value

parental involvement and have developed a communication infrastructure to connect with

parents; but increasing attendance at events and meetings remains a common goal.

Graduation and Drop-out Rates and Post-Graduation Plans

Graduation rate data from 2010-2011 to 2013-2014 reflects that SHSD graduation rates

exceeded those ofMASD. In 2010-2011, SHSD exceeded MASD's graduation rate by over 5

percentage points; the difference between graduation rates narrowed in the other three years. In

2014-2015, MASD' s graduation rates exceeded that of SHSD by over 8 percentage points. Both

MASD and SHSD demonstrated an effort and commitment to increasing graduation rates.

When comparing the drop-out rates of the two districts from 2010-2011 to 2014-2015,

the data reflects that MASD reported a higher drop-out rate than SHSD in three out of the five

school years reviewed. Upon averaging the drop-out rates over the five-year period, SHSD had

an average dropout rate of 1.354% which is less than MASD's average dropout rate of 1.642%.

SHSD's drop-out rate, however, has demonstrated a slight increase annually since 2010, and

both drop-out rates are relatively comparable.

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Recognizing that post-secondary opportunities are directly impacted by economic

opportunity, a tangential consideration is the post-graduation plans of students in SHSD and

MASD. Over a five-year period from 2009-2010 to 2013-2014, the percentage ofMASD

graduates that were post-secondary-bound consistently exceeded the percentage of post

secondary-bound graduates from SHSD by, on average, 12.5 percentage points. The difference

in the percentage of post-secondary-bound graduates was perhaps most notable in 2012-2013 and

2013-2014, when MASD exceeded SHSD by 18.9 percentage points in.both years. MASD's

lowest percentage of post-secondary-bound graduates was reported in 2009-2010 at 79.1 %,

whereas SHSD's lowest percentage was reported in 2012-2013 at 60.7%. For the years

compared, SHSD's highest percentage of post-secondary-bound graduates was reported in 2009-

201 0 at 7 5.3 %, which was still approximately 4 percentage points lower than MASD' s lowest

percentage at 79.1 %. Notwithstanding the limitations of such a review, it is noted that MASD's

percentage of post-secondary-bound graduates is higher.

Attendance, Truancy, and School Safety

Unsurprisingly, gaps in achievement and low or declining graduation rates are linked to

attendance and truancy rates. When comparing attendance rates by school at the elementary and

high school levels from 2012-2013 to 2014-2015, the data reflects that MASD consistently

reported higher attendance rates than SHSD. While SHSD attendance rates dropped slightly in

2014-2015 at the elementary level, MASD attendance rates have remained steady. Upon

averaging the attendance rates for all three elementary schools over the time period compared,

MASD's elementary schools averaged a 95.05% attendance rate, which amounts to an

elementary school attendance rate 3.30 percentage points higher than SHSD's Elementary

School's average attendance rate of91.75%. A similar difference in attendance rates is

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evidenced at the high school level. Upon averaging the attendance rates for the high schools

over the time period compared, MASD High School averaged a 93.4 3% attendance rate, 83 which

amounts to a high school attendance rate 3.10 percentage points higher than SHSD Junior-Senior

High School's average attendance rate of90.3%.

When comparing the habitual truancy rates reported by SHSD and MASD from

2010-2011 through 2014-2015, the data reveals that MASD has consistently experienced lower

truancy rates than SHSD. Upon averaging the truancy rates over that time period, MASD had a

2.72% truancy rate which was unequivocally lower than SHSD's average truancy rate of

36.14%. The highest margin of difference was in 2014-2015 when SHSD had a 72.82% truancy

rate as compared to MASD's truancy rate of3.88%. MASD's truancy rate climbed to over 3.5%

and remained there for three out of the five years compared; however, the differential in truancy

rates between the districts favors MASD for having clearly and significantly lower truancy rates.

In view of a school culture and climate that facilitates learning; school safety is another

educational merit factor that is relevant to such a review. Pursuant to Section 1303-A(b) of the

School Code, 24 P.S. § 13-1303-A(b),84 school districts are required to submit an annual School

Safety Report to the Department.

Although school safety data may be relevant in light of the Court's holding in Riegelsville

II, data regarding school violence contained in the School Safety Report should be considered

83 MASD Middle School's attendance rate percentages were excluded from this calculation, but over the years compared they consistently reported attendance rates over 94%; so it does not alter a conclusion that MASD reports higher rates of attendance.

84 "Each chief school administrator shall report to the office by July 31 of each year all new incidents involving acts of violence, possession of a weapon or possession, use or sale of controlled substances as defined in the act of April14, 1972 (P.L. 233, No. 64), known as 'The Controlled Substance, Drug, Device and Cosmetic Act,' or possession, use or sale of alcohol or tobacco by any person on school property. The incidents to be reported to the office shall include all incidents involving conduct that constitutes a criminal offense listed under paragraphs ( 4.1) and (4.2)." 24 P.S. § 13-1303-A(b ).

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with caution as it is self-reported by school districts and collected for purposes of providing

technical assistance, professional development programs, and security-related activities to

support school safety. Moreover, identifying whether certain conduct is an "act of violence"

requiring a report is subject to discretion, and thus the self-reporting of certain incidents may

vary between districts. Even the number of arrests which are verified by law enforcement must

be viewed with caution. Although a comparison of arrest rates may provide a seemingly reliable

data set in ascertaining whether one school district may provide a safer school environment than

another, a school district retains discretion in determining whether to notify law enforcement of

an incident. 22 Pa. Code § 1 0.22.

Given this cautionary background and acknowledgment that weight to be accorded to this

factor is limited, when comparing the overall rate of arrests per 100 students85 for SHSD and

MASD for the period of 2010-2011 to 2014-2015, SHSD' s rate of arrests is higher than MASD' s

in three out of the five years compared. However, both districts' rates of arrest were

comparatively close during the 2010-2011 and 2014-2015 school years and MASD's rate of

arrests was higher for the 2013-2014 school year. MASD reported its highest rate of arrests

during the 2014-2015 school year, whereas SHSD reported its highest rate during the 2012-2013

school year followed immediately by its lowest rate the very next school year. When

comparing incidents of misconduct between SHSD and MASD from 2010-2011 to 2014-2015,

the data revealed that MASD consistently reported a lower percentage of incidents in each year,

and in four of the years the incident rate was several percentage points lower. SHSD, however,

did report a lower percentage of total arrests as compared to MASD during two out of the five

85 The Safe Schools Report includes school safety data provided by school districts that is calculated to produce an overall rate of arrests per 100 students, which offers a quantifiable criterion for comparison among districts.

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school years. When comparing particularly egregious misconduct categories (identified as those

involving aggravated assaults on students, aggravated assaults on staff, and fighting), MASD had

a lower number of infractions during the 2012-2013 and 2013-2014 school years; SHSD

indicated an overall decrease during the 2013-2014 and 2014-2015 school years in the

misconduct categories compared; and both Districts were comparably equal for the 2014-2015

year. Given the limitations inherent in the data as well as the comparably equal data in the 2014-

15 school year, this metric of educational merit does not weigh heavily on the Petition.

District Staffing

MASD anticipated that the influx of Highspire students, given the increased case load and

nature of work needed, could sigllificantly impact staff positions. MASD specifically

highlighted the need to hire additional staff as the one home and school visitor employed by

MASD responsible for enforcing all residency requirements and ensuring truancy and attendance

concerns are addressed would have a diminished capacity to adequately address concerns in a

timely and efficient manner if the incoming students demonstrated a pattern of inconsistent

school attendance. The truancy rate data reviewed for SHSD demonstrates a pattern of

inconsistent school attendance. Although the attendance and truancy rates are not entirely

attributable to students residing within Highspire, it is reasonable to give credence to MASD's

conclusion that it anticipates needing to hire additional staff if the transfer is approved because of

a corresponding increase in absenteeism related matters that require additional attention.

Educational Program Offerings and Extracurricular Activities

In terms of student engagement, among other educational merit assertions advanced by

Petitioner is that MASD provides a more diverse range of extracurricular programs.

Extracurricular activities support diverse student interests and increase overall student

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engagement. Both school districts provide a variety of extracurricular programs at both the

middle school and secondary levels. Secondary extracurricular activity offerings at MASD are

more extensive than at SHSD. SHSD concedes that MASD may provide more extracurricular

programs, but SHSD has a process in place to add extracurricular programs (i.e., additional

sports teams, competitions, and clubs) based on student or faculty interest. The proposed

transfer would not present any significant changes to SHSD's extracurricular activities. MASD,

however, asserts that the proposed transfer would impact their extracurricular activities in two

ways: (1) increasing the number of advisors needed to be hired; and (2) and needing to expand

the number of extracurricular activities offered to account for increased student enrollment,

which may also increase costs to MASD. Petitioner provides an analysis of any potential impact

on MASD's Pennsylvania Interscholastic Athletic Association (PIAA) classification by opining

that SHSD reports low participation rates from students residing within Highspire, so that it is

unlikely that SHSD's PIAA classification would change. Likewise, additional Highspire

students would unlikely impact MASD' s PIAA classification for any team. Given as much, my

review turned to educational programs and course offerings to evaluate the curricular offerings

available to students at both schools to support student outcomes.

Included among the educational merit assertions advanced by Petitioner is the position

that due to severe budget constraints in recent years SHSD has reduced teacher staffing and

education programs. With emphasis on early childhood education, MASD offers full-day

kindergarten whereas SHSD's kindergarten remains a more traditional half-day session. Both

SHSD and MASD offer a wide and similar array of special education classes and services.

While both districts offer English as a Second Language programming, SHSD reports an

extensive interventions/remediation program. SHSD offers courses referred to as "Selectives,"

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which are assigned by the Guidance Department and include the following: Keystone

Remediation/Enrichment, Math, Reading and/or Science Acceleration. SHSD also provides

intervention during blocked instruction time at the Elementary School K-6 and grades 7 and 8.

Likewise, remedial courses are offered at the high school level in math and reading, and also for

Keystone remediation in Literature, Algebra, and Biology. MASD provides elementary reading

support and remediation for high school students in the Keystone courses. MASD has a number

of academic and program opportunities for transferring Highspire students who are testing at

less-than-proficient levels, including a strong career pathways program, counseling, and remedial

opportunities.

· MASD has a more systemic organization than SHSD to support the many facets of a

school district including, curriculum, student support services, professional development, and

facilities. However, MASD will face a multi-year-transition to integrate Highspire students.

This will range from ramping up early learning supports to assimilate Highspire students into its

schools to providing necessary materials and supports for instruction. This challenge is

evidenced by the existing achievement gap between the two districts: Highspire students would

come to MASD with deficits starting at the primary level (e.g., for 2015 an average of23.5% of

SHSD elementary students were proficient in reading at Grade 3 compared to a much higher

average of 66.1% at MASD). This gap extends to all grade levels and content areas as the

percentage of MASD students scoring proficient or above was consistently higher than the

percentage of SHSD students in all 51 comparisons.

With regard to graduation requirements, MASD requires .5 more credits to graduate than

SHSD. SHSD students participating in graduation, however, must also accomplish the

following: 60% average in all core classes, apply to a post-secondary school or submit two

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completed employment applications, take an independent assessment based on appropriateness

for their career choice, and successfully complete Keystone Assessments or Keystone project

based assessments. MASD requires all students to submit a career portfolio and participate in an

interview to meet the graduation project requirements.

Both MASD's and SHSD's core course offerings provide high school coursework

ranging from a standard level through Honors and Advanced Placement. School districts are

required to offer at least two foreign languages, but the law does not require students to complete

foreign language coursework to graduate. 22 Pa. Code§§ 4.23(d)(3), 4.24, 4.25(a). In

satisfaction ofthis requirement, both SHSD and MASD offer foreign language programs;

however, SHSD offers five foreign language programs compared to MASD's offering of two

foreign language programs. MASD offers Spanish and French I through IV, as does SHSD; but,

SHSD also offers Chinese I & II, German I & II, and Latin I & II, with some of the foreign

languages classes being offered through the Roller Cyber Academy and as blended learning

opportunities. Likewise, both districts offer a comparatively similar amount of Advanced

Placement Courses, as SI;ISD offers nine Advanced Placement Courses and MASD offers

eleven. SHSD offers nine Honors Courses as does MASD. Both school districts provide

students with access to career and technical education and minor variations in access to Dauphin

County Technical School are not significant.

Although Petitioner asserted that MASD High School offers a greater breadth of courses

by virtue of being a larger high school than SHSD, comparatively, both districts offer similar

educational programing for secondary students. The graduation requirements vary slightly, but

the range of course offerings and the opportunities for advanced coursework are comparable with

only minor variants in programs such as Advanced Placement Coursework. Both SHSD and

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MASD offer multiple pathways for students to earn college credit while in high school through

dual enrollment partnerships with local colleges and universities. Both districts offer electives

that enable students to pursue such areas as Nurse Aide Training, Journalism and Creative

Writing, various art-related electives including Art Appreciation, Graphic Design, and

Photography for SHSD and Art I through IV for MASD.

Existing School Facilities

In viewing yet another dimension of educational merit, in In re Establishment of Indep.

Sch. Dist. Consisting ofW Portions of Hamlin & Sergeant Twp., the Secretary concluded that a

proposed transfer had merit from an educational standpoint where the petitioners sought to

reduce the distance of travel for the affected students. Students residing in Highspire currently

travel a range between 3.22 to 4.68 miles (from three hypothetical bus stops within Highspire) to

the SHSD School Complex. Elementary students residing within Highspire could travel a range

of 1.8 to 4.25 miles (from the same three hypothetical bus stops) to any ofMASD's three

elementary schools; a range of3.44 to 4.05 miles to MASD Middle School; and a range of3.27

to 4.58 to the MASD High School. Students from both SHSD and MASD may attend the

Dauphin County Technical School so the distance traveled for those students would remain

comparatively the same.

There is no assertion that the proposed transfer will eliminate a lengthy commute. The

proposed transfer to MASD schools, however, would overall decrease slightly the distance

traveled by some of the affected students from Highspire except for a slight increase in distance

for some students from the 2nd and Mumma Streets bus stop. MASD anticipates sending

Highspire elementary students to Reid, Fink or Kunkel Elementary School. If Highspire students

were transported to Kunkel Elementary School, on average, they would experience a reduction in

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distance traveled. No students residing within Highspire walk to the SHSD School Complex and

SHSD utilizes four buses to transport school-age children residing in Highspire. Likewise, all

incoming school-age students residing within Highspire would need to be bused to MASD

schools, regardless of the elementary schools utilized, which may require between three and five

additional school buses depending upon configuration of bus routes and the buildings that

Highspire students are assigned to attend. The proposed transfer may reduce the distance

traveled for some affected students traveling to elementary school in MASD, depending upon

their location of residence, their designated bus stops and the elementary school to which they

are assigned; but overall there is no lengthy commute that would be eliminated by the proposed

transfer nor such close proximity of school buildings that students could walk to school.

Given the number of students affected, the proposed transfer of Highspire from SHSD to

MASD will, however, have an impact on building utilization in MASD. MASD reports that if

the Petition is granted, the addition of Highspire students would adversely impact MASD's

facilities because the proposed transfer of elementary students would result in one of two

scenarios: an addition of one classroom per grade level at Grades K-5 or class sizes approaching

30 students in some grades. For MASD, absorbing Highspire students in existing buildings will

not be without consequences. Absorbing Highspire students would put all MASD buildings

closer to full capacity, but it appears that in the short and medium-term MASD can physically

absorb the middle school and high school students that would transfer from SHSD.

Consideration of capacity limits at educational facilities is most appropriately

concentrated on the elementary school facilities which are most likely to be immediately

impacted by the proposed transfer. If the transfer is approved, MASD anticipates that its

elementary student population would increase by approximately 13.6%. Petitioner does not

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dispute that adding elementary-age students from Highspire would likely prove challenging for

MASD as nearly half ofMASD's student population is in grades K through 5. Increasing class

size to accommodate transferring students would have a detrimental impact on the academic

achievement of all students; therefore, it is reasonable to project that MASD would seek to add

additional teaching staff, but it could be challenging to find instructional space for additional

teaching staff. MASD anticipates no additional classroom space available in the three

elementary schools for additional teachers or classes. (Sec Rec 13). MASD would perhaps need

to consider changing the elementary buildings into centers with a change in grade configuration.

MASD would perhaps need to rearrange attendance areas and re-distribute current MASD

students among the elementary buildings or it could continue its current practice of assigning

new students to schools based on availability. Conversely, SHSD reports that all its buildings

will continue to operate. The proposed transfer will cause a few empty classrooms in each of the

two buildings, but those classrooms could be offered to the IU or to the Head Start program.

Petitioner directs attention to the newly constructed MASD High School and disputes any

perceived position by MASD that the new facility is not equipped to integrate Highspire

students. Plans to design the new high school building were underway prior to the filing of the

Petition. Aside from anticipating typical population growth rates within MASD, the design did

not and could not have contemplated the potential influx of students residing in Highspire. Nor

should MASD have been expected to modify design plans and utilize taxpayer funding to

increase the size of the high school to accommodate a population of students and tax base that

was not a part ofMASD. More reasonably, MASD considered adding space within the high

school to accommodate future growth within the district. Reasonably enough, MASD's High

School planned for 10% growth over existing enrollment. And, although Petitioner asserts that

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there was considerable public discussion on transferring Highspire to MASD as well as news

reports, this cannot reasonably be construed as being equivalent to the actual filing of a Petition;

moreover, even had a Petition been filed, it still could not be concluded that MASD should have

constructed a high school facility to accommodate students residing within Highspire unless and

until the State Board of Education's final approval of the transfer was secured.

Despite MASD's planning to accommodate reasonable future growth, a classroom audit

indicated that MASD is expected to face building capacity issues by 2020 even if the transfer of

Highspire students does not occur. If more than anticipated Highspire students choose to attend

MASD or if the facilities lack the capacity as projected, MASD could face additional major

capital costs for classroom space.

The classroom audit confirmed that MASD will have to add more staff to open more

classrooms, increase class sizes or some combination of both. MASD could physically absorb at

least some of the Highspire students with fewer additional resources because MASD's current

elementary class sizes indicate that Highspire students in grades K through 8 could be absorbed

within existing classrooms without MASD elementary class sizes increasing by more than two or

three students. MASD strongly believes that the proposed transfer would adversely impact its

student class size, which is a potential outcome, and expressed concern about any impact on

class sizes since lower class size is directly related to higher educational outcomes. Petitioner

disputes that increasing the average class size can negatively impact a student's education,

however, marginally higher class sizes may have a negative impact.

At the elementary level, the classroom audit found that if Highspire students were placed

in existing K through 5 classrooms, the class sizes would likely increase. Additionally, the

student performance analysis indicates that Highspire student achievement outcomes are lower

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so that the addition of incoming students may warrant additional supports, because without them

there would be less time and instruction devoted to current MASD students.

According to the classroom audit, although the average class size may rise slightly after

the transfer of students of Highspire, the physical capacity of the school district will be strained

at the elementary level. Accommodating Highspire students would be challenging as the current

elementary configuration provides limited opportunities for new space. At the high school level,

there is more flexible class scheduling and sizes to absorb the small per-grade numbers of

Highspire high school students. At the elementary level, the addition of Highspire students will

increase building capacity utilization tp over 90%. (Sec Rec 45- Table 30: Estimated Changes

in Emolment Based on PDE Projections).

Finally, the classroom audit found that MASD may need to make changes to

accommodate the transfer of Highspire students: upward adjustment to class size at the

elementary level, moving existing students outside of current attendance areas to keep

appropriate class size balance and/or abandoning the existing practice of assigning a student to

the same school throughout the student's elementary experience.

Auditor General Findings

That last reason cited by Petitioner in support of the creation of an independent school

district is predicated upon the significant noncompliance by SHSD with relevant requirements as

found by the Pennsylvania Department of Auditor General in its February 2014 Performance

Audit Report, including: possible teacher certification deficiencies; school bus driver

qualification deficiencies; and, serious financial challenges, including a $2,680,400 general fund

deficit that prompted the Auditor General to state: "If the District's fmancial situation continues

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to deteriorate, it is possible that the Pennsylvania Department of Education may declare it to be

in fmancial recovery status."86 (Pub Rec 18).

Generally, the audit covered the period from May 2009 through July 2013. In regard to

teacher certification deficiencies, eleven individuals may have been assigned to positions prior to

obtaining proper certification, five individuals may have continued in positions after their

temporary certification had expired and prior to obtaining permanent certification, and four

individuals were assigned to locally titled positions possibly without proper certification. (Pub

Rec 18). Notably, it is the fourth consecutive audit of SHSD that has included a fmding related

to teacher certification deficiencies; however, the corrections are being made under the tenure of

the current administration. The audit attributes this pattern to the administration's failure to

develop an efficient process that strengthens its review and monitoring of certification

information. The consequence of this repeated issue is the potential for SHSD to face subsidy

forfeiture. SHSD, however, reported that there has been an effort to correct all certification

issues and a commitment to reviewing its hiring process to resolve issues involving the lack of

correct certifications. The issue is largely localized to SHSD's past practice of employing

individuals on an emergency basis with or without emergency certifications and the report

concluded that it would follow-up on its recommendations at the next cyclical audit.

The audit found that SHSD failed to independently confirm that 20 bus drivers possessed

the Act 114 Federal Criminal History Record. Protecting the safety and welfare of students is of

paramount concern. SHSD was instructed to immediately obtain the necessary documents to

ensure that the drivers were properly qualified to have direct contact with children. SHSD

86 Possible teacher certification deficiencies and school bus driver qualification deficiencies are among the audit findings; however, as a point of clarity, it was an observation that SHSD is facing serious financial challenges including a significant general fund deficit. (Pub Rec 18). The remaining audit findings related to pupil membership errors resulting in underpayments.

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contracted with another school district for bus services, was unaware of its responsibility to

review clearances for all drivers87 and, as such, failed to conduct their own independent review

of Federal Criminal History Record checks for drivers transporting SHSD students. SHSD

requested clearances from its contractors for all bus drivers transporting SHSD students. A

recommendation was made to develop policies and procedures to review clearances prior to

allowing any driver to transport SHSD students, which will be reviewed during the next cyclical

audit.

School Districts' Financial Ability to Maintain Educational Programs for Students

SHSD is experiencing significant financial challenges due to several factors. As

highlighted by Petitioner, the report by the Auditor General made an observation that SHSD is

facing serious financial challenges, including a $2,680,400 general fund deficit for the fiscal year

ended June 30,2012. (Sec Rec 15). The report by the Auditor General primarily attributed the

deteriorating general fund balance to SHSD's "failure to properly forecast actual revenues,

which were consistentlylower than budgeted revenues and exceeded by actual expenditures."

(Pub Rec 18). SHSD repeatedly overestimated its actual revenues by incorrectly budgeting for

local taxes, state, and federal revenues, which, in part, led to a decline in its general fund deficit.

In 2013, the Department placed SHSD on Financial Watch Status pursuant to Section 611-A of

the School Code, 88 which gave SHSD access to technical assistance from the Department to

87 Section 111(b) of the School Code, 24 P.S. § l-1ll(b), requires that public and private schools review federal criminal history record information for all prospective employees and independent contractors who will have contact with children and make a determination regarding the fitness of the individuals having contact with children. The review of the criminal history reports of these individuals, including school bus drivers and other employees hired by independent contractors who have contact with childien, is required prior to employment.

88 Under Section 611-A(a)(l) of the School Code:

The department shall develop and implement an early warning system under which the department shall:

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improve its fiscal condition so that it would not experience severe fiscal problems that would

could cause SHSD to fall into fmancial recovery status. There were several financial indicators

leading to the financial watch status including SHSD's need for advances on BEF, high

delinquent real estate tax rates, and unpaid bills. The audit also recognized that SHSD was

facing growing financial pressure from an increase in tuition being paid to charter and cyber

charter schools. Summarily, the report by the Auditor General concluded that SHSD was facing

severe financial challenges and may be forced to eliminate certain educational services and

reduce its professional staff to account for its poor fmancial situation. (Pub Rec 18).

The General Assembly is clearly concerned with school district finances; this presents

another significant educational policy factor embodied in the School Code that inust be weighed

in considering the merit of the proposed transfer. Given the substantial number of students that

. would transfer from SHSD to MASD, the financial impact on both school districts is an

important consideration in whether the transfer has educational merit. If, financially, MASD is

unable to provide a quality education to the Highspire students that transfer from SHSD and

maintain services for its own students, or the transfer of Highspire students leaves SHSD in a

financial state that negatively impacts the education SHSD is able to provide to its remaining

(i) Compile financial data and maintain accurate and current information and data on the financial conditions of school districts. Each school district shall provide its financial data and information to the department within 15 days of a request by the department.

(ii) Regularly analyze and assess school district budget reports, data and other information directly related to the financial conditions of school districts.

(iii) Utilize appropriate fiscal and socioeconomic variables to identify financial difficulties in school districts in financial watch status.

(iv) Notify any school district identified for financial watch status. (v) Offer technical assistance to school districts in financial watch status to correct minor

financial problems and to avoid a declaration of financial recovery status under Section 621-A.

24 P.S. § 6- 611-A(a)(l).

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students, or both, then such significant factors weigh against a finding that the proposed transfer

has the requisite educational merit.

The "appropriate approach to discerning the meaning and application of the statutory

standard" - merits from an educational standpoint - is to turn to the School Code to give the

standard substance. Riegelsville, 17 A.3d at 988-989. Given as much, as emphasized in the

Auditor Generals' report, Section 611-A(a)(1) ofthe School Code, provides that the Department

must develop and implement an early warning system whereby the Department can assess the

fmancial conditions of a school district and, if necessary, render technical assistance. Such

provisions are contained in the School Code because a district's financial and structural health

are inextricably linked with the provision of high-quality educational programming. The ability

to provide a quality academic experience is in large part dependent on stable finances that allow

for sufficient recurring expenditures on teachers, support staff, curriculum, facilities and related

items on a recurring basis.

As Petitioner contends, the "ability of a district to provide a quality academic experience

goes beyond finances." (Sec Rec 15). Petitioner points out that SHSD routinely spends more

J

per student and a higher percentage of budget expenditure on instruction than a local higher-

achieving school district, warranting a conclusion that there are "persistent educational issues at

SHSD [that] require more than additional funding to solve." (Sec Rec 15). Although I do not

disagree with Petitioner, finances remain a component impacting changing and challenging

educational landscapes. Moreover, finances become a more significant consideration with a

larger percentage of students involved in a proposed transfer as is the case here. For these

reasons, this educational merit analysis includes consideration of the financial impact of the

proposed transfer on the two districts.

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Several financial projection models showed the full panoply of the potential financial

impact of the transfer of Highspire from SHSD to MASD. Unlike other proposed transfers

considered by the Secretary, the magnitude of students residing within Highspire is such that if

Highspire is transferred from SHSD to MASD there will unquestionably be a financial impact on

the two districts.

As with all projection models, certain reasonable assumptions must be made for the

model to be operational. Here, it is reasonable to assume that if Highspire students are

transferred to MASD then a proportional amount ofBEF and SEF state subsidy will be

transferred from SHSD to MASD to correspond with the movement of the SHSD students. To

assume otherwise would yield an unreasonable result. For example, if the BEF or SEF state

subsidy did not transfer to MASD alongside the transfer of the Highspire students, then the

potential result is that MASD would be responsible for providing educational services to an

increased student population, approximately 335 to 363 school-age students residing within

Highspire, without corresponding state funding per pupil. Petitioner is in concurrence that

MASD would likely receive an increase in state funding as a result of the increase in student

population due to the transfer of Highspire students. (Sec 15).

Weight is not given to an assumption that Pennsylvania's historical "hold harmless"

approach to state funding, which does not take into account growth or loss of student population,

would apply and, therefore, guarantee steady funding to SHSD even if a transfer of students

occurs. "Hold harmless" was an approach to state education funding used for decades by the

General Assembly, and it called for school districts to receive no less funding than the year

before. However, the General Assembly eliminated its "hold harmless" approach to state

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education funding upon enactment of the student-weighted basic education funding formula. See

24 P.S. § 25-2502.53.

Furthermore, "hold harmless" is not a concept that would apply given that Section 242.1

expressly provides for "prorating the State subsidies payable between or among the losing

district or districts and the receiving district." When the subsidies are prorated as expressed in

Section 24 2.1, MASD would receive a proportionate amount of BEF to educate students

transferred from Highspire to MASD, and SHSD would receive a proportionate reduction in

funding based on the loss of student population. Given Section 242.1 's requirement to prorate

state subsidies, it is reasonable to assume that SHSD will lose funding in the transfer. While the

General Assembly may choose to appropriate additional funding to make up for this loss to

SHSD, there is no guarantee or requirement for the General Assembly to do so.

It cannot reasonably be concluded that the General Assembly intended for the "hold

harmless" provision to apply in such instances because the unintended result would be that BEF

and SEF attributable to Highspire students, a population that would be statutorily reduced

through the filing and approval of the Petition, would be retained by SHSD and an equal

additional amount would need to be appropriated to MASD. fu other words, one faction of

students, those residing in Highspire, would be generating two BEF state subsidy payments with

one going to the losing district, SHSD, under the "hold harmless" provision, and one going to the

receiving district, MASD, by the mechanism for prorating the subsidies as delineated in Section

242.1 ofthe School Code. On this basis, there could be a proliferation of independent school

district petitions whereby the transfer of pockets of territories between districts serves to improve

financial conditions by enriching both the losing and receiving districts based upon a double

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accounting of the same population of students, and the state's BEF and SEF appropriations

would necessarily increase without control by the General Assembly.

However, I can only postulate that enriching both the losing and receiving districts based

upon a double accounting of the same population of students is not what the General Assembly

intended. Taxpayers could not, and should not, bear such an absurd or unreasonable result, and

the rules of statutory construction require that I presume that the General Assembly did not

intend a result that is absurd or unreasonable. See 1 Pa.C.S. § 1922(1 ).

The General Assembly is also required to provide for the maintenance and support of a

thorough and efficient system of public education to serve the needs of the Commonwealth.

Danson v. Casey, 382 A.2d 1238, 1240 n. 2 (Pa. Cmwlth. 1978) (citing Pa. Const. Art. III,§ 14).

School districts must provide free public education, and thus, districts also must find a means to

fmance that education. PaulL. Smith, Inc. v. Southern York County Sch. Dist., 403 A.2d 1034,

(Pa. Cmwlth. 1979). The organization of the public school system is controlled by the School

Code and "[t]o fmance this system, Section 507 of the School Code, 24 P.S. § 5-507, vests in

each school district 'all the necessary authority and power armually to levy and collect, in the

marmer herein provided, the necessary taxes required, in addition to the armual State

appropriation .... "' Danson, 382 A.2d at 1241. The Secretary and the Court, however, do not

have authority to require that the General Assembly appropriate additional BEF state subsidy

payments.

If Highspire students are transferred to MASD, then a proportionate amount ofBEF and

SEF state subsidy would be transferred from SHSD to MASD, and MASD would also receive its

share oflocal tax revenue from Highspire, which SHSD would lose. It is noted, however, that

SHSD has an unstable local tax base, as evidenced by its high rate of delinquent tax payments.

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(Pub Rec 10 and 18). Still, the transfer ofvarious local tax revenue streams from Highspire

would be a significant source of additional funds for MASD, with real estate taxes and earned

income taxes from Highspire representing the largest source of increased local revenue to

MASD. Conversely, the transfer of students from Highspire to MASD would generate a number

of costs for MASD.89 Marginal costs of Highspire students include expenditures for

technology, textbooks, supplies, and student activities. For example, at MASD all students in

grades 6-12 have an iPad; thus MASD has ratios of 1: 1 in their secondary buildings and would

need to make technological purchases for incoming students to maintain that ratio. MASD

estimated that it would incur an increase in staffing costs, which would be predicated upon the

staffing level needed to support the transfer of Highspire students with final staffing figures

being variable. As evidenced in the analysis of student achievement, Highspire students may

require additional staffing for some years, but actual student needs would not be known until the

transfer occurred. Further, if the revenues provided with the transfer of Highspire are iower than

expected or if the costs of educating Highspire students requires the investment of additional

academic resources, MASD has the legal ability to raise additional revenue through real estate

taxes. As MASD indicated, increased real estate taxes would undermine the efforts ofMASD's

School Board to adopt annual budgets sensitive to the needs of the entire community, including

both students and taxpayers. Under this scenario, approximately $2 million is eliminated from

MASD's annual deficit, but annual deficits would·still range from 1.0 to 2.6% of expenditures.

It is clear that the transfer of Highspire students increases MASD's annual deficit compared to its

89 The financial impact on MASD of absorbing students transferred from Highspire is dependent upon several variables; but it was assumed that, minimally, all school-age students currently attending SHSD-operated schools would emoll in MASD-operated schools. It was, likewise, assumed that the shift in emollment would occur in one school year, 2018-2019.

111

current budgetary projections, but the addition ofBEF and SEF revenues would reduce a large

portion of the annual deficit.

In the same way, it is imperative to understand SHSD's current finances and the impact

on SHSD if Highspire is transferred to MASD. SHSD is irrefutably experiencing continued

serious fmancial challenges. SHSD's precarious financial status was evidenced by several

financial indicators which are related to the management of cash on a monthly basis. One

fmancial pressure experienced by SHSD is the amount of unpaid bills. SHSD has an ongoing

cash flow issue and has a policy of deferring a portion of its required PSERS payments into the

following school year. Insufficient revenues have forced SHSD to choose what bills to pay at

the end of the fiscal year when cash is limited. (Sec Rec 45). Consequently, SHSD has regularly

deferred part of its PSERS payments, approximately $1.0 million forecasted for the end of2016-

2017. (Sec Rec 45). In addition to the annual deferral ofPSERS payables, in five of the last

several years SHSD has requested and received multiple BEF advances of over $1.0 million to

provide short-term cash to meet obligations. (Sec Rec 45). There are also multi-year contractual

obligations which may be priced on the basis of SHSD's current emollment for which it may be

required to continue to pay without recognition of reduced emollment numbers if the transfer

occurs. Such contracts could relate to transportation, food services, copying and maintenance

services. However, it is assumed that most contracts are relatively low-cost and would not have

long-term substantive impact on overall SHSD finances. (Sec Rec 45).

SHSD is projected to have a persistent structural deficit with or without the transfer of the

Highspire students. SHSD may be able to reduce costs if the transfer occurs, but there are

several variables influencing its ability to do so. If Highspire is transferred, then the reduction in

the total enrollment may allow SHSD to reduce staffmg to achieve cost savings, but the size of

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the remaining student population will not permit consolidation into one building. After

reviewing grade-level staffing and enrollment, it is assumed that SHSD may be able to reduce

headcount by approximately one professional staff member for each grade based on the number

of students transferred :from Highspire. A reduction in staff would allow SHSD to maintain the

current student-teacher ratio per grade level. Staff reductions are likely to be achieved primarily

from grades 1-6 and core courses in grades 9-12. Using Grade 9 English as an example, the

SHSD's average class size is currently 18.4 students per class. Presently, SHSD could reduce

the number of Grade 9 sections by one section, and class size would average 23 students per

class. With the transfer of Highspire students to MASD, SHSD could reduce one additional

section, and class size averages would increase by 1.3 studen~s to 24.3 student per section.

Therefore, SHSD has the ability to reduce the number of sections without a major impact on

class size. Smaller class sizes, however, improve student performance, particularly when the

student population, as here, has a high percentage of students who are minorities and come from

. families that qualify for free and reduced-price lunches.

SHSD is projected to be able to maintain current class sizes at a slightly lower cost if

Highspire is transferred to MASD, but SHSD will not be able to provide the level of academic

support needed in a district of this type. The diseconomies of scale in a smaller district are likely

to provide a lower quality of academics overall for the remaining students, which would remain

close to 1,000.

With BEF and SEF subsidies transferring in proportion to the Highspire students moving

from SHSD to MASD, the annual deficit for SHSD increases by approximately $2 million per

year, which represents approximately 9.4% of total revenues as compared to the current

projections for 2018-2019. If, as reasonably projected, SHSD's state subsidy levels are reduced

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proportionally to its enrolhnent projections, SHSD's revenues would decline to a level that

would make it very difficult to maintain a balanced budget. Revenues would decline by a

compound annual rate of nearly 2.7% over the five-year projection period through 2021-2022.

The loss of $2 million in BEF and SEF results in slower revenue growth and lower per student

revenues than currently projected in SHSD. Furthermore, SHSD is limited by Act 1 of Special

Session 2006 in its ability to raise local revenue. 53 Pa.C.S. § 6926.301, et seq. Therefore, with

a loss of state revenue, and an inability to raise significant revenue locally due its poor tax base,

as well as legal restrictions, SHSD would face significant fmancial challenges if this transfer

were approved.

It is recognized that growth in expenditures is constrained by the potential reduction in

staffing, contracted transportation services, charter school and cyber charter school tuition

payments and debt services; but expenses per student are expected to rise as total expenditures

are divided among a smaller base of students. The transfer of students from Highspire will

impact the cost structure by providing less academic programs for students in the remaining

portion of SHSD. SHSD would likely achieve some cost savings from some reduction in

variable costs of students (such as the number of tuition payments for student attending charter

schools and reduced staffmg) and some reduction in fixed costs (such as contracted

transportation services and debt service payments). However, there are limited opportunities to

further reduce costs without a negative impact on the delivery of already-stressed academic

programs which are currently under-resourced. There simply are not enough cost reductions to

offset the significant impact on the reduction in state revenue (and also potentially local revenue)

to SHSD.

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With BEF and SEF subsidies transferring to MASD with the Highspire students, the per

student deficit considerably increases in 2018-2019. (Sec Rec 45- Table 35: Summary of

Financial Projection per Student- Steelton-Highspire School District). SHSD currently has

$23.68 million outstanding debt principal issued over the last 14 years to renovate existing

buildings, refund prior debt issues, and fill operating budget shortfalls and has net debt payments

of approximately $2.3 million per year over the next few years. (Sec Rec 45- Table 38:

Steelton-Highspire School District Debt Service, 2016-2017 to 2021-2022). MASD, as the

district potentially gaining students, will take on a share of the existing debt service of SHSD, as

the district potentially losing students. It is assumed that about one-third of current remaining

annual SHSD net debt service payments, in the amount of$780,000, would be taken on in some

fashion by MASD. It is assumed that since existing debt was issued for SHSD facilities, SHSD

would continue to receive 100 percent of state aid payments. Petitioner and MASD oppose any

SHSD debt following Highspire students to MASD (upon approval of the Petition) and Petitioner

opines that whether any debt follows an independent school district is a decision for the courts

and not the Department. Given that the transfer of an independent school district is procedurally

unusual and each step of the process is an "independent step," I recognize that it is the court that

will "determine the amount, if any, of the indebtedness and obligations of the school district,

from whose territory such independent district is taken, that said district 'shall assume and pay,

and, a statement prorating the State subsidies payable between or among the losing district or

districts and the receiving district." 24 P.S. § 2-242.1. To the extent the court undertakes its role

by setting forth the actual amounts to be prorated, it remains part of my task in executing the

educational merit review to consider the potential effect of shifting debts and subsidies between

and among the· districts to the extent an educational impact is felt on the student groups.

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If the transfer occurs, MASD would need to invest in additional resources to

accommodate the students within its existing programs, partially offset by increased tax

revenues. With the BEF and SEF included in the transfer for Highspire students, the annual

deficits for SHSD would increase by approximately $2 million and SHSD would have limited

options to increase revenues to reduce expenditures. SHSD would lose substantial resources in

the transfer of Highspire to MASD, which would manifest in the elimination of over $1.6 million

in tax revenue- 30 percent of current real estate tax revenue and 40 percent of current earned

income tax revenue. (Sec Rec 45).

The largest challenge for SHSD if the transfer occurs is the ability for an institution

already facing a difficult fmancial prognosis and lacking in capacity to properly manage a major

downsizing. For some expenditures, SHSD is already small enough that the reduction of overall

enrolment will not allow it to capture full savings. It is estimated that to keep student-teacher

ratios at current levels, which are not sufficient to achieve needed academic gains, SHSD will

reduce its professional staff by 12 on the basis of the loss of Highspire students to MASD. Full

classrooms can likely be eliminated at the elementary school level, but decisions at the secondary

level are less clear. The possibility remains that electives may be reduced, class sizes may

increase, and dependent upon enrollment in AP courses, there may be a reduction in those as

well. What is clear is that SHSD's already constrained resources compounded.with the potential

loss of tax base make it unlikely that SHSD would have the resources it needs to enhance its

programing and services to the remaining students who will be even more disadvantaged on

average than the current enrolled SHSD population. A potential, likely outcome is that SHSD

will experience further decline in the academic performance of remaining SHSD students and

several years of heightened challenges.

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Based on the foregoing, it is evident that the proposed transfer of Highspire students to

MASD presents :fiscal-related challenges for MASD, and it largely leaves SHSD in a fmancial

state that too severely and negatively impacts the education SHSD is able to provide to its

remaining students.

CONCLUSION

The Court has indicated that of the several considerations comprising an educational

merit determination one such consideration is whether affected students will be placed in a

school district that produces better academic results. Riegelsville II at 991. In reviewing the

academic achievement and performance of students in the two districts, MASD students

consistently achieved higher standardized test scores on the SAT, although weight given to this

factor is limited, and in terms of the statewide assessments, a higher percentage of MASD

students achieved proficiency or above. The student growth scores as measured by the

Pennsylvania Value Added Assessment System underscore the greater annual progress being

demonstrated by MASD students. MASD met the PV AAS growth standard in 83.3% of their

calculation points over the three-year span (2013-2015), whereas SHSD only met 27.6% of their

growth standards in this same time period. MASD reported higher graduation rates in 20 i 4-15

and has consistently experienced lower truancy rates. The percentage of MASD graduates that

were post-secondary-bound consistently exceeded the percentage of SHSD graduates that were

post-secondary-bound. Students residing within Highspire would benefit educationally from

transferring from SHSD as the review evidenced that MASD students demonstrate better

academic results. Going further, as reasonably anticipated, the selected educational metrics cited

by Petitioner in the Petition support fmding that the proposed transfer of students residing in

Highspire to MASD has educational merit.

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Other educational merit considerations were not so clearly supportive of a finding of

educational merit. In reviewing the curriculum, it is evident that both districts offer a

comparable range of academic courses and educational programs that accommodate students of

various abilities and interests. Both districts value parental involvement and have developed a

communication infrastructure to connect with parents. To the extent arrest rates are indicative of

a safer school environment and support a fmding of educational merit, MASD reported a reduced

rate of arrests, but that data is viewed with caution. In reviewing student commute information,

there is no reduction in distance traveled by some of the affected students.

From a singular student group perspective (the student group ofHighspire) constrained to

only the metrics delineated in the Petition, a decision upon education merit seems forthright. For

those few hundred students residing within Highspire, a conclusion that the proposed transfer of

territory has educational merit skews strongly in their favor. The weight to be accorded to such

considerations is significant; but in so doing, it does not render other factors irrelevant or

immaterial to the review. For the few thousand other students split between those currently

attending MASD and those that would remain in SHSD, the proposed transfer has a negative

educational impact.

Although Petitioner suggests that the site visits were an extemporaneous extension ofthe

educational merit review, I deemed them necessary. Unique to the Petition is the relatively small

size of the two districts involved, and the substantial percentage of students residing within the

proposed territory for transfer, which implicate many issues such as class size, building capacity

and funding. Also unique to the Petition is the underwhelming student achievement outcomes

for both districts necessitating further analysis of growth indicators and a global view of parental

involvement, and the current poor financial prognosis for the district from which the territory is

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seeking transfer. Moreover, the divergent viewpoints of the districts compared to the Petitioner

challenged whether the transfer would advance or hinder education for the affected student

groups. There is sufficient evidence to belie a finding of educational merit, as the transfer would

have a negative impact on the students who would remain in SHSD and, to a lesser degree, on

the students in MASD.

MASD has staffing and capacity issues which would need to be addressed in terms of

increasing class sizes, hiring more professional and/or remedial staff, and reconfiguring its

current elementary school configuration. Capacity issues at the elementary level would present

challenges and increased class sizes may have a negative impact on existing MASD students.

SHSD's elective~ and advanced courses become exposed to possible reductions due to

low enrollment numbers and reductions made to the teaching staff. An already small-sized

SHSD would be further reduced to a total student enrollment closer to 1,000 students, making it

difficult to recoup any cost savings from the transfer of students to MASD.

However, considering all the factors above, the most significant factor that guides my

conclusion is the impact of the transfer on the fmances of SHSD and how they negatively affect

its education programs. This proposed transfer not only negatively impacts those students

remaining in SHSD, but it poses a risk to SHSD's fiscal viability. SHSD's long-term finances

will be weakened coupled with continued academic needs. If, as reasonably expected, the BEF

and SEF transfer with the Highspire students to MASD, SHSD could not continue to operate. I

find it impossible to conclude that the General Assembly could have intended to permit that the

Secretary ignore the financial impact that a transfer of territory would have on a school district in

"watch" status under Section 611-A of the School Code; the Department is to assist a district in

financial watch status in an effort to improve its fmances, and taking action that could push the

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district into the more precarious "recovery" status is clearly counter to those efforts. Based on

the foregoing, I am of the conclusion that any educational benefits received by Highspire

students would be vastly outweighed by the negative educational impact of the proposed transfer

borne by the remaining Steelton students and that also may be borne by the students in the

expanded MASD. Therefore, I conclude that the Petition to transfer the Borough of Highspire

from SHSD to the MASD does not have merit from an educational standpoint and a

comprehensive analysis supports that conclusion.

ACCORDINGLY, the following Order is entered:

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ORDER

AND NOW, this 2nd day of February 2018, based upon the foregoing findings of fact

and discussion, I hereby fmd the Petition for Formation of Independent School District

Consisting of the Borough Of Highspire, Dauphin County, Pennsylvania, filed by the Petitioner

Highspire Education Coalition for purposes of transferring the territory of the Borough of

Highspire from the Steelton-Highspire School District to the Middletown Area School District is

not meritorious from an educational standpoint.

DATEMAILED: February2,2018

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M:attheWSteill Deputy Secretary, Office of Elementary and Secondary Education

Record before the Deputy Secretary of Education

DEPUTY SECRETARY'S RECORD (Sec Rec)

1. Petition for the Establishment of an Independent School District For the Purpose of Transferring From One School District to Another 8/15/2014

2. Dauphin County Court Letter Transmitting Petition 8/25/2014

3. Department Letter to Dauphin County Court requesting Opinion and Order 9/4/2014

4. SHSD Response to Petition 9/8/2014

5. MASD Response to Petition 9/19/2014

6. Stipulation of the Parties to Findings of Fact 10/15/2014

7. Dauphin County Court's Letter to Department enclosing Stipulation and Order 10/17/2014

8. Department letter to Counsel transmitting Educational Impact Projection Questionnaires 10/29/2014

9. MASD to Department Letter Requesting Extension of Time 11/17/2014

10. MASD Letter Confirming Geographic Location-Transportation Starting Points designating 11/24/2014

11. Petitioner Letter to Department- No Opposition to Extension Request 11/24/2014

12. Department Letter to Counsel - Extension Granted 11125/2014

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13. MASD's Questionnaire Submission 2/12/2015

14. SHSD's Questionnaire Submission 2/17/2015

15. Petitioner's Reply in Response to SHSD and MASD Questionnaire Submissions 3/16/2015

16. MASD Letter to Department in Response to SHSD's Questionnaire Submission 3/20/2015

17. Petitioner's Letter to Department-Objections to MASD 3/20/15 Letter 3/20/2015

18. Petitioner Email to Department- Status of Petition 9/14/2015

19. Petitioner Email to Department - Status of Petition 4/25/2016

20. Petitioner Email to Department- Status of Petition 7/20/2016

21. Petitioner Email to Department Requesting Status Conference --Draft Application for Administrative Status Conference 7/25/2016

22. Department Letter to the Parties Requesting Additional Information and Clarification 8/02/2016

23. Court Order - Status Conference Scheduled 8/3 0/16 8/05/2016

24. MASD Letter to Department Acknowledging Receipt of 8/2/16 Letter and Req. Withdrawal of Request for Status Con£ 8/05/2016

25. MASD Letter to Department Responding to 8/2/16 Letter with Requested Information 8/12/2016

26. Department Letter to MASD - Time Period oflnfo. Req. 8/16/2016

27. SHSD Letter to Department Responding to 8/2/16 Letter with Requested Information 8/23/2016

A. SHSD SY 2013-2014 B. SHSD SY 2014-2015 C. SHSD SY 2015-2016 D. SHSD School Calendars 2011-2016

28. Email Communication- Telephone Conference

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Scheduled 8/30/2016 8/29/2016

29. Petitioner Communication to Dauphin County Court Requesting Continuance of Status Conference 8/29/2016

30. Communication with Court- Alternative Dates for Status Conf. 9/07/2016

31. Senator Folmer Letter 9/09/2016

32. Department Email to Parties - Rescheduled Meeting 9/13/2016

33. Department Communication to Parties - Status Update after Meeting 9/19/2016

34. Petitioner Letter Opposing Site Visits 9/30/2016

35. Response Letter to Senator Folmer 10/4/2016

36. Petitioner RTKL Request No. 2016-157 10/19/2016 and Department Response Letter 11101/2016

37. Department Response Letter to Petitioner- Site Visits 11102/2016

38. Petitioner Letter to Department- Scheduling of Site Visits 11122/2016

39. Department Response Letter to Petition- Site Visits 11129/2016

40. Department Letter to Parties - Scheduling of Site Visits and Resulting Report 02/16/2017

41. Petitioner Letter to Department Objecting to Site Visits 02/23/2017

42. Department Response Letter Petitioner - Explaining Reason for Site Visits 03/02/2017

43. Petitioner RTKL Request No. 2017-106 06/27/2017 and Department Response Letter 08/04/2017

44. Petitioner RTKL Request No. 2017-107 06/27/2017 and Department Response Letter 08/04/2017

45. Department Letter to Parties - Enclosing PFM Report and Requesting Response 07/24/2017

46. Petitioner Letter to Department Requesting Information Used in PFM Report and Time to Respond After Receipt of Requested Info. 08/07/2017

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47. Department Communication Responding to Petitioner 08/11/2017

48. Department Follow-up Letter to Petitioner Listing Information Used in PFM Report and Requesting Identification ofNeeded Information and Allowing Extension of Time to Respond 08/25/2017

49. Department Letter to Petitioner Seeking Response to 8/25/16 Letter- Identification of Requested Info. Due 9/25/16 otherwise response to PFM Report Due 10/16/16 09/21/2017

50. Petitioner Response to PFM Report 10/06/2017

51. MASD Response to PFM Report 10/11/2017

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Record before the Deputy Secretary of Education

PUBLIC RECORD (Pub Rec)9°

1. Steelton Highspire School District

http://www.shsd.k12.pa.us/site/default.aspx?PageiD=1592

2. Middletown Area School District

3. Graduate Data and Statistics

http://www.education.pa.gov/Data-and-Statistics/Pages/Graduates.aspx#.VydiqFTD-Uk

4. Cohort Graduation Rate

http:/ /www.education. pa. gov/ data-and-statistics/pages/cohort-graduation-rate.aspx#VkBEF!045s

5. Dropout Data and Statistics

http://www.education.pa.gov/Data-and-Statistics/Pages/Dropouts.aspx#.VydiCVTD-Ul

6. Safe Schools -LEA Reports

https:/ /www.safeschools.state. pa. us/(S( vyeootjujmOpfDisd 1 b2m44 f) )/Main.aspx? App=6a 935f44-7cbf-45e1-850b-e29b2flffl7f&Menu=dbd39alf-3319-4a75-8f69-d1166dba5d70&res=

7. School Performance Profile

http://paschoolperformance.org/

8. School Performance Profile Frequently Asked Questions

http://paschoolperformance.org/F AQ

9. MASD Website

http:/ /www.raiderweb.org/about -masd/

10. Financial Watch Status Letter: Steelton-Highspire School District

http://www.education.pa.gov/Teachers%20-%20Administrators/School %20Finances/Pages/Financial-Recovery-for-SchoolDistricts.aspx#tab-1

90 The Deputy Secretary is taking administrative notice of the Public Records. See 1 Pa.Code § 35.173 ("Official notice may be taken by the agency head or the presiding officer of such matters as might be judicially noticed by the courts of this Commonwealth, or any matters as to which the agency by reason ofits functions is an expert."); Pa.R.E. 201.

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11. MASD: New Middletown Area High School Building Project

http://www.raiderweb.org/about-masdlproposed-new-middletown-area-high-school/

12. SHSD's 2015-2016 Curriculum Planning Guide

http://www. shsd.k 12. pa. us/cms/lib/P A09000078/Centricity /Domain/224/20 15-16%20Curriculum%20Planning%20Guide.pdf

13. Fedmonitor System

Available from the Department.

14. Press & Journal News Article

http://www. pressandjournal.com/stories/still-waiting, 7922

15. 2015 SAT State Profile Report: Pennsylvania

https://secure-media.collegeboard.org/digitalServices/pdf/sat/P A _15 _ 03 _ 03 _ 01.pdf

16. Henderson, Anne T. (2002). A New Wave ofEvidence: The Impact of School, Family, and Community Connections on Student Achievement. Austin, TX. National Center for Family and Community Connections with School.

www.sedl.org/connections/resources/evidence.

17. Chowa, G., Masa, R., & Tucker, J. (2013). Parental Involvement's Effects on Academic Performance. St. Louis, MO. Center for Social Development.

https :/ /csd. wustl.edu/publications/ documents/wp 13-15. pdf

18. SHSD Performance Audit Report (February 2014)

http://www.paauditor.gov/audit-reportlitem/3071

19. Pennsylvania Value Added Assessment System - Reports

https :/ /pvaas.sas.corn!welcome.html?as=b&aj=b

20. What Should You Know About PV AAS?

http:/ /www.education.pa.gov/Documents/K-12/ Assessment%20and%20Accountability/PV AAS/Communication!What%20Should%2 OY ou%20KnoWO/o20About%20PV AAS.pdf

21. Pennsylvania Value Added Assessment System- Website

http://www.education.pa.gov/K-12/ Assessment%20and%20Accountability/Pennsylvania%20Value%20Added%20Assess ment%20Systern!Pages/default.aspx

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22. In RePorter Township Initiative (Secretary's Order and Opinion, dated March 16, 2011).

http://www.stateboard.education.pa.gov/Documents/Current%20Initiatives/Applications%20and%20P etitions/Porter%20Township%20Tomalis%20Decision. pdf

23. Capital Area Intermediate Unit: Member Districts

https :/ /www.caiu.org/Schools _and _Districts/schools-and -locations/member-districts

24. ACT Plan Technical Manual

https:/ /www.act.org/ content/ dam/act/unsecured/ documents/Plan TechnicalManual. pdf

25. Future Ready P A Index

http:/ /www.education. pa. gov /Pages/Future-Ready-P A.aspx

26. State Bd. ofEd., Report ofthe Special Committee on the Washington Township Independent School District (September 16, 2015)

http://www.stateboard.education.pa.gov/Documents/Current%20Initiatives/Applications %20and%20Petitions/WTISD%20Committee%20Report%20-%20FINAL.pdf

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