School District Mergers Bring Projected Cost Savings

August 15, 2011

Investigative Reports

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The NerveConsolidating school districts isn’t as easy as changing logos on letterheads, but supporters say that in the long run, students and taxpayers are the winners when it occurs.

The Nerve recently attempted to find out some specifics on the cost savings of consolidations this school year in three counties:  Dillon, Marion and Sumter.

Dan Strickland, the first superintendent of the consolidated Marion County School District, which involves the merger of three districts (Marion 1, 2 and 7), told The Nerve last week that he likely won’t have firm cost-savings numbers until next year after a salary study is completed and new contracts are offered for the 2012-13 school year.

But, he said he expects that “overall, we will see savings” after the county’s Marion, Mullins and Rains district offices are merged by the end of this school year into one office, to be based in Marion.

According to a consolidation study authorized last year by the Marion County School Board, the cost of having three superintendents in the county in 2009-10 was more than $447,000. Strickland’s annual salary is $140,000. That translates into an initial savings of at least $300,000 when compared with the salaries of the three previous superintendents.

The three districts have a total of about 5,000 students, which ranks among the smaller enrollments in the state, according to the most recently available figures from the S.C. Department of Education.

Marion County last year operated with two superintendents after former District 2 Superintendent Nathaniel Miller was charged with embezzling more than $500,000 from the Mullins-based district and Richland School District 1, where he formerly worked.

The Marion County consolidation study found that reducing the number of superintendents by one resulted in a savings of about $200,000.

Strickland, who previously served as superintendent of Columbus County Schools in Whiteville, N.C., was hired by the Marion County School Board in January as the superintendent of the consolidated district, beating out Marion County’s two sitting superintendents.

Strickland became superintendent-elect on May 1 and officially took over the position on July 1, the start of the school year.

Based on figures cited in the consolidation study, a copy of which Strickland provided to The Nerve, the total cost last year of having 74 employees in the three district offices was $3.12 million, or an average cost of $42,289 per employee.

Under Strickland’s reorganization plan, which was approved by the county school board, the number of employees in the single district office would drop to about 45. Based on last year’s average per-employee cost, merging the administrative services would save more than $1 million, The Nerve’s review found.

Strickland said some existing positions at the district level that became vacant with retirements or other attritions have been combined with other positions, while other district office employees have found jobs in the district’s schools. He said the remaining district office employees whose jobs will be eliminated in the reorganization will have first crack at any open positions in the schools.

“Right now, everyone will keep their jobs,” Strickland said. “We’re going to try to save as many jobs as possible.

In Dillon County, where two of the three districts (Dillon 1 and 2) are merging, Ray Rogers, the former longtime Dillon 2 superintendent based in Dillon and now superintendent of the consolidated district, known as Dillon District 4, told The Nerve recently that the merged district will save money with having one less superintendent.

Former Dillon 1 Superintendent Stephen Laird, who retired, earned $96,355 last year, while Rogers’ annual salary was $114,616, according to Department of Education records. Rogers told The Nerve that his new salary likely will be about $149,000 – an approximate $35,000 increase – with his expanded role, though he added that it hasn’t been formally approved by the new District 4 school board.

The combined district will have about 4,200 students, and an approximate $20.8 million budget for this fiscal year, which started July 1, Rogers said. Latta-based District 3, which had about 1,600 students last school year, is not part of the merger.

Rogers said that with the consolidation of districts 1 and 2, older teachers participating in the state’s Teacher and Employee Retention Incentive (TERI) program, which allows them to earn their salaries while accumulating retirement benefits that are paid out after the five-year program, will be paid at a starting teacher’s salary (about $30,000 to $35,000, depending on education levels) if they wish to continue working after their TERI status ends. That will save the district an estimated $400,000 to $500,000, he said.

But other potential cost savings are unknown, Rogers said, explaining that the consolidated district’s financial picture is clouded by debt problems in District 1.

“I’ve heard many different figures,” Rogers said when asked how much the Lake View-based district is in the red. “The only thing I know is that they felt they couldn’t make it through another year.”

Contacted last week, Scott Price, attorney for the South Carolina School Boards Association, told The Nerve that it isn’t always a given that districts will save money by consolidating. As an example, he pointed to a 2006 study by his organization of a proposal to merge Dorchester County school districts 2 and 4.

Although the study, a copy of which Price provided to The Nerve, didn’t recommend whether the districts should be consolidated (it didn’t happen, as it turned out), it concluded that earlier consolidations in Orangeburg and Marion counties resulted in “significant shifts … toward increases in instructional expenses.”

“When you combine two districts, you’re going to have to make salary adjustments – probably upward – unless the salary schedules in both districts are the same,” Price said. “If you have a debt-heavy district combined with a district with relatively stable finances, it could lead to a tax increase in the new district.”

Price said his organization is not planning any study of the current consolidations in Dillon, Marion or Sumter counties. A school spokeswoman in Sumter County, where Sumter 2 and Sumter 17 officially merged on July 1, did not return a phone message left last week by The Nerve. 

Reach Brundrett at (803) 254-4411 or rick@thenerve.org.