School Facility Efficiency Review

While there is a natural reduction in utilities, buildings will continue to be maintained at a basic level in order to ensure the integrity of the facility. Space may be utilized for other district needs or rented/leased for community needs. In some cases the property could be surplused.

If a facility is repurposed and leased to another entity, the rental income will be deposited in the general fund. If the property is sold, the revenue is deposited in the capital projects fund and can not be used for operating expenses.

Programs should continue, but at a different location.

Throughout this process, district leadership has consistently gathered and reviewed demographic data (race, income level, special programs, etc.) to determine not just who may be impacted, but also how best to mitigate potential negative results, especially for historically underserved populations. The district also has a Race & Equity Impact Decision-Making Tool to help inform the work.

The Olympia School Board and district staff have taken and continue to take an active role in advocating for school funding from the state Legislature. Advocacy regarding school funding has been key to OSD’s Legislative Priorities for years. Thurston County School Superintendents meet collectively and individually with local legislators, and the Olympia School Board invites community members to participate in advocacy efforts, especially during Legislative sessions.

As outlined on this page, the board voted on December 14, 2023 to open a 90-day window to accept community input regarding a board proposal to consider Madison and McKenny elementary schools for school consolidation/closure. The board will hold community meetings during the 90 days, followed by possible board action in April 2024.

The revenues from the sale of properties are deposited in the capital projects fund. They cannot be used for operating expenses. The projected shortfall is an ongoing operating budget concern and will need an ongoing solution. Revenues from the sale of property are one-time.

We are not considering any land acquisitions at this time.

The district has regularly communicated with families and the community through a variety of means, including direct email communication, district newsletters, board meetings and work sessions, and the OSD website about enrollment declines and the potential for boundary studies and/or school consolidations/closures. In 2016, for example, the school board and superintendent engaged specific school communities in boundary revision conversations. Conversations about enrollment declines have continued since then at board meetings and in district communications with families. In March 2023, the school board received 2023-24 School Year Budget Reduction OptionsOpening in a new window (list of possible savings), including the option to close a small elementary school. While that specific budget reduction was later removed from the list of approved cuts, the board noted that enrollment was projected to continue to decline and it may return as an option in future budget discussions. A committee was commissioned in the fall of 2023 to look at facility efficiency as a district and a report was produced that can be accessed on the website.

Our Human Resources Department works with our labor leaders to determine how to proceed in situations like this. That process always begins by referencing and following any applicable contract language. There are a number of factors to consider like how many schools may close/consolidate and if there will be any additional cuts prior to next year.

Boundary optimization is a practice in which small schools and large schools are redistricted to maximize staffing efficiency between them, eliminating blended classroom sections where multiple grades are unintentionally served by one teacher and schools where there are not enough students for classroom sections to be filled to an efficient maximum. Districts in which this has been found to be the most workable have a combination of high and low utilization schools. Boundary optimization generally increases the potential for full FTE classroom teachers at the elementary level and makes course offerings more equitable at the secondary level. It generally improves access to elective programs at: Elementary - Art, Music, PE, science, technology, etc. Middle school - Art, Music, PE, world language, science, technology, etc. High school - Reinforcement of small section sizes in low demand classes OSD, unfortunately, has uniformly low utilization schools and there is little benefit to be gained from Boundary Optimization... If Boundary Optimization were attempted in OSD, 20% of existing students would need to be impacted in order to realize a nominal benefit.

The above information is shared on page 13 of the Facility Efficiency Report CAC Findings, which is posted on the OSD website. 

In general, it is the goal of most school efficiency efforts to eliminate combination sections which tend to be small and small classroom sections that typify small schools that do not have the staffing depth to run classes efficiently when small grades move through the system. An example would be a 38-student second grade where a combination section may not be available and the only alternative would be to run two 19-student sections. These types of staffing inefficiencies are repaired by school efficiency actions, but average class sizes throughout districts implementing efficiency actions tend to remain unchanged.

The above information is shared on page 44 of the Facility Efficiency Report CAC Findings, which is posted on the OSD website.

If students were to change schools, we would leverage the support offered at schools currently (counselors, behavior tech, family liaisons and/or School Social Workers). Those services are available now for students and families as well if needed. In elementary we would use class meetings and work with staff and parent organizations on transition plans.

We understand that families need to do what they believe is best for their given situation. Of course, our hope is that families are familiar with the excellence of OSD programs and services that are prevalent in all of our schools and would choose to remain in the district.

Ride times are expected to increase slightly by not more than 10 minutes per ride. Students currently walking to school can expect a ride time of between 5 and 20 minutes per ride.

Students and families will see a slight increase in commute times. Schools considered for consolidation are less than 2 miles from the receiving school.

Besides school consolidation, the board will consider operating expense cuts including more cuts to central administration. Last spring, the board adopted approximately $7 million in ongoing reductions (approximately 40% of the cuts were at the district office). As expenses continue to increase at a greater rate than revenues, more cuts will likely be needed in 2024-25. District leadership will bring a proposal to the board this spring. Students and families, staff, and community members may suggest ideas through the annual budget survey or by emailing the Board.

Current budget estimates show an ongoing shortfall of approximately $3.5 million. This calculation assumes the renewal of the M&O levy because it is a replacement levy.

Consolidation/closure is being considered not only because of the current funding shortage, but also because of the projected ongoing declining enrollment. As a district it is important that we use our resources effectively. Consolidation will allow for more services to be available at the remaining schools.

The school board held a public hearing at Madison Elementary on February 26, 2024, and at McKenny Elementary on February 29, 2024, per Board Policy 6883. The board also held a Community Solutions Work Session on March 7, 2024 about school efficiency and possible consolidation, and a Community Cafe on March 16, 2024 regarding visioning to inform budget, school consolidation and program reduction. Recordings from the meetings held on Zoom are located on the School Facility Efficiency Review webpage (recordings are linked under the "Recent Reports/Resources" heading near the bottom of the page).

The Olympia School Board continues to welcome public comment at regular school board meetings. The community is also welcome to contact the five board members via their OSD email, or by phone. View a list of individual board member contact information, as well as the email for all five board members.

Possible Board Action on School Consolidation April 25, 2024

The Olympia School Board is scheduled to possibly take action on school consolidation during its regular board meeting on Thursday, April 25, 2024.

The Superintendent’s Office accepts sign-ups for a public comment list from 8 a.m. - 4 p.m. the day before the regular board meeting. Regular board meetings are usually scheduled the second and fourth Thursdays of each month unless noted otherwise (holiday). Sign-ups to comment in-person or via Zoom will only be accepted through this sign-up process. Sign up here.

Depending on the number of people who sign up, each speaker on the public comment list will have up to three (3) minutes to speak. If a large number of people sign up, the board may shorten the amount of time to comment. The board president will review comment topics and determine a speaking order. Students and those persons speaking to items pertaining to the agenda will have priority to speak during Public Comments prior to the meeting’s reports. Public comments on topics not included in the meeting’s agenda may be heard during Other Public Comments.

The community is welcome to contact the five board members via their OSD email, or by phone. View a list of individual board member contact information, as well as the email for all five board members.

The district contracted with Western Demographics to lead a process that included a districtwide committee to consider OSD schools and facilities in light of downward enrollment trends and revenue challenges. Specifically, the parameters used to determine were:

• School Size
• School Utilization
• Facility Condition
• Prior Investment
• Future Development Potential
• Combinability of Boundary Areas
• Socio-economic Factors
• Future Development Potential
• Walkability
• Cost Savings

Descriptions of each parameter can be found in the Facility Efficiency Report of 11-21-23 beginning on page 15.

The lowest scoring schools or those considered top candidates for closure/consolidation are found on pg. 8 of the 11-30-23 School Efficiency Final Report. They are:

• McKenny ES - 48
• Reeves MS - 53
• Madison ES - 54 
• Pioneer ES - 56 
• Boston Harbor ES - 57 
• L.P. Brown ES - 58
• Jefferson MS - 65

There are a variety of factors contributing to enrollment decline in Olympia. These same factors are impacting districts across the state, region, and nation.

1. Lower Birth Rates: Current generations of younger adults are having fewer children. (pg. 4 of Facility Efficiency Final Report)
2. Housing Issues: High mortgage rates, home prices, and rental costs are a barrier for young families in the Olympia Area. Lack of single-family home inventory and changes in construction patterns also contribute to challenges. (pg. 7 of Facility Efficiency Final Report)
3. Choosing Other Options: From the fall of 2020 to the Spring of 2023, about 8.6% (143) of all withdrawals from the district (1644) were reported as a choice to homeschool or attend private school.

Enrollment is a key driver of revenue. The high-water mark for enrollment in the Olympia School District was during the 2019-20 school year, just prior to the pandemic. Since that year, our district is down 723 full-time equivalent students or approximately 7.8%. The bulk of that decline is at elementary school that accounts for 572 of those fewer students. In fact, elementary enrollment has declined by almost 13.2% since 2019-20. What many thought was a temporary anomaly due to the pandemic appears to be, in retrospect, a trend that was making itself known prior to COVID in the form of declining birth rates. While other factors have contributed to lower enrollment since the pandemic like greater numbers homeschooling; over the last decade we’ve seen an average decline of about 50 births per year from the first five years to the last five years in OSD. That directly correlates to lower kindergarten classes that gradually make their way up through our system producing smaller enrollment each year. OSD enrollment is projected to continue to decline at a rate of about 50 to 100 students per year annually through 2033. That equates to approximately $650,000 to $1.3 million less revenue each year.

The district reports enrollment on the P223 each month. The count day is the first school day of each month (except for September which is the 4th school day). The report lists student enrollment in two ways; Headcount (HC) and Full- time Equivalent (FTE). Headcount (HC) means the count of the individual students regardless of their amount of time in school (i.e part time, half-time, etc.). Full-Time Equivalent (FTE) means the measurement of a student’s enrollment and accounts for how much they actually attend school (see OSPI Handbook Link below for more detail). FTE is the measurement that determines our basic education funding.

We are funded based on the annual average student FTE enrollment. Each month OSD sends the P223 report to OSPI and they compile them into the 1251 reports. We have these available in the annual financial reporting section of our website.

Here are a few key P-223 reports related to this topic. These reports include the October 2023 P-223. October is normally the highest enrollment month for a school district. Also included is the most recent March 2024 P-223. By comparing the two, it shows the difference in enrollment between now and October. Since October we are down 24 students (HC) and 45.02 students (FTE). Also you will find the October 2019 P-223 which was the high water mark for enrollment in our district. By comparing the October 2019 report to the October 2023 report it shows we are down 560 students (HC) and 722.57 (FTE) since that time.

• March 2024 P-223
• October 2023 P-223
• October 2019 P-223

Resources for Understanding Enrollment and Funding

• Apportionment, Enrollment and Fiscal Reports
• Enrollment Reporting Guidance and Handbook

The OSPI Report Card webpage is a publicly available resource for information about school and district enrollment. It is important to note that the OSPI Report Card does not provide an accurate count of student enrollment for which districts receive funding. Instead, the Report Card, captures data for all students who are enrolled whether they can be counted for funding or not. The Report Card will never match the enrollment numbers reported by the district on the official monthly count known as the P223.

There are many reasons that a student might be included on the OSPI Report Card yet not count towards enrollment at the district. Two of the most common reasons include:

• Homeschool students who are only enrolled for sports
• Students who have been absent for twenty or more consecutive days and cannot be counted

In addition, preschool students and students who are enrolled only for special education services are not included on the P223. Funding for these students is reported through the P223H. They are not included in the district enrollment count but are included on the OSPI Report Card.

• OSPI Report Card

Impact Aid is a Federal grant program for local educational agencies (including school districts) who have lost local property tax revenue due to the presence of non-taxable Federal land. The Impact Aid law (now Title VII of the Elementary and Secondary Education Act of 1965 (ESEA)) provides assistance to local school districts with concentrations of children residing on Indian lands, military bases, low-rent housing properties, or other Federal properties and, to a lesser extent, concentrations of children who have parents in the uniformed services or employed on eligible Federal properties who do not live on Federal property. Districts around OSD with greater concentrations of qualifying students do receive some aid (see attached). For example, North Thurston received $305,000 and Yelm received $185,000. It is highly unlikely that OSD would qualify for more than those districts.

Note: Roughly 15% of school districts in Washington state receive some Federal Impact Aid.

• 2022-23 Federal Impact Aid by District

Since the adoption of House Bill 2242 in 2017, the so-called “McCleary fix” legislation did not help the Olympia School District. While it provided a much-needed and long overdue infusion of additional funds into education, it resulted in a disproportionate allocation of revenue to districts across the state, thus creating winners and losers. Unfortunately, our district is in the latter category as OSD failed to receive a Regional Cost of Living allocation, commonly referred to as state regionalization dollars. This is particularly perplexing as every other district on the I-5 corridor that touches Puget Sound received this money in 2018. Additional districts – again not Olympia – were chosen to receive the funds in 2023 (State law calls for regionalization funds to be re-based every six years). The regionalization factor can increase district apportionments by anywhere from 6% to 18%. For Olympia that would mean approximately $4.5 million at the 6% level. The Legislature will not revisit regionalization until 2029.

Regionalization is supposed to help provide increased compensation to staff in areas with higher costs of living. Regardless, having that infusion of revenue would be helpful in our current budget challenge.

Potential Expansion of OSD Early Childhood Services Google Slide Presentation

Central office administration makes up 6.0% of our overall budget and has been around that percentage for the last few years. Like all districts, OSD submits this data to the state and it is found here.

In 2017-18 central administration made up 6.7% and in 2016-17 it made up 6.4% of total expenditures (see chart below). OSD is currently above the state average (5.5%) and above some of our neighbors.

Hiring has been reduced at the district office and will continue to be with an expectation for the district to be below the state average next year. At the same time, district office staff are necessary to support the work in our schools so we need to be mindful of that while reducing. In the past district leadership has made every effort to compensate staff competitively compared to the market rate. Competitive wages is what our employee groups expect and it is how we attract, hire, and retain staff at all levels.

No: Staffing allocations will follow student enrollment. If a school's student enrollment grows, that school will receive commensurate staffing needed to run specialist classes. Facility use, meaning classrooms, gyms, and multipurpose areas, may need to be adjusted to accommodate use in response to larger enrollment (see chart below).

Costs per pupil decrease as school sizes increase. Conversely, costs per pupil increase as school sizes decrease. Given the state’s funding models, when elementary schools are about 300 students they are difficult to operate financially, and when middle schools are less than about 600 students, they too, are more expensive to run. Schools need “inelastic staff” like administration, food service staff, office support, custodians, etc., regardless of school size. For example, it takes 464 students to pay for one elementary principal in the Olympia School District. It is twice as expensive for a school with 232 students to pay for that same principal (see table below for other examples showing the number of full-time equivalent students to generate specific OSD staff positions). We often lose efficiency in instructional staffing as well with smaller schools due to less flexibility. If we only operated a couple of small schools in Olympia, the cost to run them could be offset by running larger schools. We don’t have one or two smaller schools in Olympia, we have several. Districtwide we serve nearly 9,000 full-time equivalent students; however, we have capacity in our schools to serve approximately 13,300 students.

State prototypical formula compared to OSD salary schedule

BASED ON ENROLLMENT (Calculated in 2023)