The Goals Behind A Consolidated Twin Valley PK-12 School District

1. To create a consolidated school system upon which we can build a

great pre K-12 academic program.

2. To create a cost efficient school system that will allow the districts to sufficiently fund the facilities, the academic program and minimize or lower the cost to the taxpayer.

3. To be able to withstand future cost increases or funding cuts.

Our Future in Consolidation The above goals for a consolidated PK - 12 schools system have not changed from last year’s presentation on school consolidation. Since our last vote in July of 2011 the school districts of Wilmington and Whitingham have faced ongoing challenges concerning the financial operation of our schools. Our goals for consolidation are even more relevant this year. We have faced two years of level funded contributions from the state and for the third year we are being told by Governor Shumlin to level fund our programs again. We have faced reductions in federal contributions to the school program and still foresee the possibility of future cost increases and potential funding cuts. Throughout all of this, our school boards are faced with the continual pressure of maintaining school budgets that minimize the cost to residential taxpayers and yet still provide the same educational opportunities that students in other towns receive. At present, our time is increasingly spent struggling with the financial operation of the schools as budget meetings, facility maintenance and contract negotiations become long and difficult when money is tight. The ultimate goal of our work should be about how to deliver the best education to our children--but this in not an easy task when a majority of our time and meetings are spent focused exclusively on the financial operation of the school. Our hope is, through consolidation, a single Twin Valley School board can free ourselves from many of these financial constraints so that we can be about the business of educating our children. We must be able to focus ourselves, as a board, on building a great educational program that takes place in our schools.

The School Consolidation Plan In July of 2012 both towns were presented with three options for school consolidation. 129 Wilmington voters favored the MS/ES in Whitingham and the ES in Wilmington while 107 Wilmington voters favored the reverse option with the MS/HS in Wilmington and the ES in Whitingham. Also, 128 Wilmington voters voted “no” on both options. We can interpret these votes to mean that some Wilmington voters did not favor school consolidation or did not favor either of the two consolidation options that were proposed. It is believed that some of these 128 voters may have favored another consolidation option but it is important to know that the Twin Valley Board put forth only those options that we believed were financially and politically feasible. While we would like to go to a bond vote with more certain support for the proposed consolidation, we did receive results that favored the one option in both towns more than others. Though this option did not have a strong majority, we are compelled to go forth with the option that did have the majority of votes. The results showed that a larger number of Wilmington voters were in favor of some form of consolidation by a total of 236 compared with the 128. While we do believe that a significant number of voters favored a MS/HS exclusively in Wilmington, we were also aware that a significant number of Wilmington voters who favored that option were also willing to support the alternative consolidation option. These original supporters of a MS/HS in Wilmington included several Wilmington Board members. A Consolidated Academic Program The information below is a revised summary of the consolidated academic program. There have been no significant changes to the program or educational benefits beyond financial savings to consolidation. Below is some information developed by our administrators to give a picture of a consolidated school system. The primary goals for a consolidated academic program for Pre K-12 are:

1. To increase educational opportunities for all students.

2. To use the opportunities from consolidation to create a unified and comprehensive Pre K -12 academic program in one school district.

Educational Benefits There is cost efficiency in school consolidation, but more importantly, there are many educational benefits to consolidation, here is what we see: 1. Alignment of elementary school curriculum in practice and content will

give middle school students advantages from less time spent on integration.

2. The opportunity for the two communities of Wilmington and Whitingham to come together as one community focused on serving all our children.

3. Fewer building transitions for Wilmington students. 4. Consolidation allows for increased teacher collaboration and sharing of

expertise so they may find the best instructional methods and implement advanced instructional techniques.

5. Consolidation would increase students’ access to technology, science, art, music and athletic equipment because of shared resources.

6. Flexibility to divide classroom cohorts in positive ways that gives greater control over the classroom environment.

7. Increased levels of diversity allow teachers to meet the full range of student needs.

8. A strong consolidated school system can attract families and staff to the valley and increase the likelihood of keeping current families and staff.

9. Larger school populations make extra curricular activities such as music, sports, art, and drama more available because larger enrollments support a more diverse range of extra curricular activities.

Combined Enrollment Numbers Elementary School 2010-2011 Wilmington 140 + Whitingham 83 = 223 2011-2012 Wilmington 144 + Whitingham 98 = 242 2012-2013 Wilmington 150 + Whitingham 94 = 244 2013-2014 Wilmington 151 + Whitingham 90 = 241 Middle School 2010-2011 Whitingham/Wilmington 107+ Tuition 13 = 120 2011-2012 Whitingham/Wilmington 101+ Tuition 15 = 116 2012-2013 Whitingham/Wilmington 103+ Tuition 13 = 116 2013-2014 Whitingham/Wilmington 105+ Tuition 14 = 119

High School 2010-2011 Whitingham/Wilmington 122+ Tuition 39 = 161 2011-2012 Whitingham/Wilmington 122+ Tuition 45 = 167 2012-2013 Whitingham/Wilmington 123+ Tuition 45 = 168 2013-2014 Whitingham/Wilmington 134+ Tuition 45 = 179 Note: The increase in the MS/HS numbers are not based on estimated increases in enrollment due to the attraction of tuition students to a new facility. There have been no projected increases on this basis. The appearance of enrollment increases is due to a very small high school grade (the current 11th grade) cycling out of the program. Consolidated Elementary School Grade Sizes Grade 2010-11 2011-12 2012-13 2013-14

K 30 32 35 34 1 36 28 30 33 2 37 35 27 29 3 37 39 37 30 4 35 40 42 40 5 37 36 41 43 Pre-K NA 32 32 32 The student class sizes as indicated above would call for two classrooms at each grade level with class sizes for K-2 not exceeding 18 students and for grades 3-5 not to exceed 22 students. Consolidated Middle/High School Grade Sizes 6 -12 Grade 2010-11 2011-12 2012-13 2013-14

6 35 37 34 37 7 39 40 42 40

8 46 39 40 42

9 39 56 41 43

10 32 39 56 41

11 40 32 39 56

12 50 40 32 39

For the middle school, the student class sizes as indicated above would call for the same existing, core class structure. There would be two core teachers for grade 6 and four core teachers for grades 7 and 8. Middle school class sizes would average approximately 20 students. Planning Ahead The development of a detailed plan to transition our schools into a consolidated academic program will take some time. It is our intention to give the principals and faculty significant time to develop a thorough plan for transition and integration to a consolidated program. We will expect our administrators to take the lead on determining the best practices, methods and curriculum based on student outcomes and faculty performance and we will encourage collaboration and teamwork to integrate the school cultures. This will be the primary goal of consolidating the elementary school academic program. While the MS/HS program has already undergone changes to create a Twin Valley program, we expect to take advantage of consolidation changes to improve the existing program to better suit a program for a school our size. Recently the school boards have petitioned for changes in state legislation to provide consolidation aid to schools that are formed through a joint contract. Recently we have found that Twin Valley was ineligible for up to $150,000 in transition aid for consolidation because we were a joint contract school. We have secured changes to this law and we have good assurances that come the end of this legislative session we will have approximately $104,000 in aid from the state to fund the planning and transition of a consolidated academic program. It is expected that these funds will also be applied to help transform our academic program to improve the quality of education for our students. At present this current legislation has been approved by the House of Representatives and is going for a vote in the Senate. The Savings From a Consolidated School System It was our intention to realize immediate savings from consolidation. We had hoped the savings from the program would offset the costs from the bond payments so that our residents would see no increased taxes. In the first few years of the bond payments we may not see immediate savings in the form of a lower tax rate. In part this is because we will be paying the interest on

short terms loans that we will borrow in on the state aid portion of the construction cost. Once the state reimburses the districts for 50% of the construction costs, those short-term interest cost will go away. Based on the current waiting period for construction aid, we believe it is likely we will be reimbursed within five years. Ultimately, the state legislature decides when and how much will be reimbursed. Also, please note, the present savings calculation do not include the full potential for cost savings. This will be explained below. There still exists the potential for lower tax rates in the first years of the bond. Annual Projected Consolidation Savings: $433,250 (both towns) Projections are based on current costs and are for comparison purposes. These total savings have been revised since the July 2011 consolidation vote. Summary of Consolidated Savings In July of 2011, the projected savings from consolidation were estimated at $541,264 annually. This projection has been revised to a lower amount of $433,250. The decrease in these total savings came after a review of the education specifications for the consolidated program. After some discussion with the administrators there was a concern that some of the original staff reductions would result in fewer educational opportunities for our students. The boards are adamant that school consolidation will either increase educational opportunities or maintain the same opportunities that already exist. In order to assure these opportunities remain unchanged, the decision was made to add several part time positions back into the existing program. This included a part time physical education teacher, part time guidance counselor, and part time art teacher for the MS/HS program and one additional part time cooking assistant for the elementary school. Where The Savings Come From The savings from consolidation come from a broad range of reductions in staffing that would be expected from closing down a school building. These cost savings come from the elimination of administrative positions and reductions in teaching staff at the elementary school level. Many of these

reductions come as partial FTE (full time equivalent) reductions that include positions in nursing, guidance, physical education, special education, support staff, technology, custodial and library. In sum, the total number of FTE positions that have been eliminated are: Reduction in Elementary School: 3.23 FTE Reduction in MS/HS: 6.24 FTE Increase in ES FTE 6.0 FTE Note: There is an increase in 6 para-educators at the elementary school level. These positions were included to assure a smooth transition in combining the schools. Both schools have been reducing the number of para educators over the past few years to a minimum. We expect this trend will continue after consolidation and the new program may not require the full number of paras and we will continue to work towards reducing this cost. Note: Salary differences for one FTE vary greatly. Even thought the total reduction in staff is at present 3.5 FTE, the total salary reductions are much greater than this unit of measurement would indicate. The total savings from consolidation, at present, only includes staffing reductions. It does not include:

1. Reductions in operating cost of 3 buildings, including fuel oil, utilities, insurance, lawn maintenance, licenses, etc.

2. Savings that may come from shared equipment, such as copiers, computers, and educational equipment.

3. Combined Savings/Losses from a reduction of food services for three buildings.

The above items could not be quantified, because we just don’t know how much fuel or electricity we will save from three schools being consolidated. In addition, we do not know how much savings will come from new energy efficient lighting or the addition of a wood pellet boiler at the elementary school. In sum, the total building maintenance cost, excluding staffing, for all three schools is $560,000. It is fair to assume that this total figure will be reduced by a significant percentage and ultimately add to the total savings for both towns. However, we cannot accurately predict such a figure and have excluded those savings from our present calculations. Whitingham Wilmington

Annual Savings Consolidated Program: $87,495 $345,754 Consolidation Financial Comparison for Whitingham Current Budget, 2011-12 FY: Budget Revenue Net Cost 3,895,854 1,128,203 2,767,651 Whitingham Consolidated Budget: Budget Revenue Net Cost 3,751,960 1,071,804 2,680,156 Annual Savings Consolidated Program: $87,495 Consolidation Financial Comparison for Wilmington Current Budget, 2011-12 FY: Budget Revenue Net Cost 4,913,896 866,911 4,046,985 Consolidated Budget: Budget Revenue Net Cost 4,590,939 889,709 3,701,231 Annual Savings Consolidated Program: $345,754 Estimated Average Annual Bond Costs for 20 Year Bond Whitingham Wilmington Average Bond Costs: $196,649 $278,349 Loan Interest: $ 55,131 $ 78,036 (on state aid) Annual Savings from Consolidation: $ 87,495 $345,754

Note: The low interest loan cost would likely occur within the first five years of the bond, until the state reimburses the district, and would not extend out for 20 years Note: Loan interest is computed on an annual cost at 2% on state aid amount. (The current market rate for short-term borrowing.) This assumes that Twin Valley would borrow funds at a low rate of interest to finance the construction cost that will be paid by the state. The loan interest cost would be eliminated when the state reimburses the districts for the state aid due for construction. Note: At the present rate, state aid is being reimbursed in about a 5-year period. The short-term interest costs will be eliminated once state aid is fully received. This cost will not be carried out over the entire 20 years. Estimated 2nd Year Costs for a 20 Year Bond Whitingham Wilmington 2nd Year Cost: $230,826 $326,725 2nd Year Tax Impact: $0.095 $0.021 Note: Numbers for the second year bond costs are provided because the second year of the bond is the highest cost that would occur during the 20 year period of the bond. It is given to show the maximum estimated tax increase.

Summary of Changes to the Cost Estimates There have been some significant changes to the cost estimates of the two school facilities since the previous informational meetings. A significant part of these costs were the increase of the contingency percentage on the project. Originally, the contingency fee, which is an allowance to cover unexpected cost overruns, was 5% of the total cost. On the recommendation of the Department of Education we increased this percentage to 7.5%. There were also changes to the costs, detailed below, to include a sprinkler system in both schools for fire suppression. We had not included this in the original cost as we believed the extent of the renovations did not warrant its inclusion. After speaking with the State Department of Fire Safety, we have found that the inclusion of fire suppression was necessary.

While our costs have increased, it is important to note that we have also increased the total amount of the project that is eligible for state reimbursement. Previous estimates for the costs of the projects were based on our expectation that we would only receive 40% state reimbursement for construction costs. So while our costs have increased, so have state contributions to the project. In all, it has been our goal to minimize the extent of construction so as not to place an unreasonable tax burden on the local taxpayers. Most of the cost increases that we have included below are based on necessity. Additions to the Construction Budget Twin Valley Middle/High School (Grades 6-12) in Whitingham 1/9/2012 Projected Estimate 8,507,950 FCS Room 100,000 Sprinkler System 296,850 Field Work 345,000 Asbestos Abatement 162,500 Furniture/Equipment 50,000 Legal Costs for Bonding 8,400 Additional Insurance 3,150 Total Cost of MS/HS Project 9,473,850 9,473,850 Elementary School (Pk-5) in Wilmington 1/9/2012 Projected Estimate 3,654,248 Wood Pellet Boiler 150,000 Sprinkler System 238,840 Offset eliminate fireproofing -100,154 Asbestos Abatement 10,000

Furniture/Equipment 20,000 Legal Costs for Bonding 3,600 Additional Insurance 1,350 Total Cost of ES Project 3,977,884 3,977,884 Total Cost of Both Projects 13,451,734 Twin Valley Elementary School

Cost and Design -- Twin Valley Elementary School in Wilmington Cost of TV ES in Wilmington: $3,977,884 Estimated State Aid: $1,991,442 Bond Amount: $1,986,442 Scope of Work:

• 5,200 Sq Ft of new classrooms. • 5,110 Sq Ft of new cafeteria, art and music room. • 13,757 of renovation to existing class room space. • Renovation of office spaces. • Library, gymnasium and some small offices remain untouched. • Renovates a majority of facility for the next 20-30 years. • Expanded parking and bus drop off • Replacement of single pane windows.

Summary: The costs and scope of work for the elementary schools have changed slightly since the last presentation on consolidation. The previous cost for the ES was $3,966,118. This cost is up slightly at the present cost of $3,977,884. There are several changes to the design that should be noted. Two classrooms were eliminated from the scope of work as we felt that we could eliminate these rooms and still have sufficient capacity to grow if enrollments increased. Apart from minor changes there were no other significant changes to the design. The cost of a sprinkler system was included in the new costs as the state agencies strongly advocated their inclusion. This increased the costs by approximately $240,000 but we were also able to eliminate the fire-proofing of the steel structure which also reduced the cost by about $100,000. After meeting with state agencies during the preliminary review process, we were also reminded that renewable energy systems were eligible for 75% reimbursement from the state. Recently, new technology for wood pellet boilers have become available that have the capacity to serve a building this size. Due to the cost savings from a wood pellet boiler, we included these costs in the design. This system and the additional space to house the boilers add $150,000 to the cost.

There were also minor additional costs for new furniture for 4 classrooms and a small allowance for removal of asbestos insulation on the existing boiler. Twin Valley Middle/High School

Cost and Design Twin Valley MS/HS in Whitingham: Cost of TV MS/HS in Whitingham: $9,473,850 Estimated State Aid: $4,666,925 Bond Amount: $4,806,925

Scope of Work:

• 5,900 Sq Ft of new classrooms/administration. • 14,000 Sq Ft of new gymnasium and locker rooms. • 2,100 Sq ft of new industrial arts space. • 43,090 Sq Ft of renovation for remaining, existing space. • Renovates facility for the next 20-30 years. • Single pane window replacement and upgrading of exterior doors. • All glass block removed, replaced with framed insulated walls and new

windows. • Existing gym transformed into auditorium, music/ band space and

additional classroom. • All existing classrooms getting new flooring, paint, lighting fixtures and

ceilings. • Expanded parking lot and bus drop off.

Please note: The reason for new administration space is because the current plans convert existing administration space into classrooms. Summary: The cost and scope of work for the MS/HS have changed more significantly since the previous informational meetings. The original cost of the project was $7,233,970. The total cost has increased to $9,473,850. There are four major contributions to these cost increases: inclusion of a sprinkler system for the entire building, inclusion of field repairs, and abatement of asbestos. Lastly, as mentioned above, the contingency fee for the entire project was increased from 5% to 7.5% The cost of the sprinkler system was an unavoidable as it was deemed necessary by the state agencies. Originally we had designed new construction in a way that would eliminate triggering state guidelines that require a sprinkler system. The cost of this system is approximately 300,000. There was a larger amount of asbestos present than we had originally expected. The cost of the abatement of these materials is approximately $160,000. We know these estimates to be appraised high and will be working diligently to minimize this cost, but we felt it was wise to assume the higher cost and expect a lower cost.

There was an added allowance to improve the drainage and grading of the four playing fields at the site. We received an estimate from Stevens and Associates Engineers for re-grading and improved drainage for the fields at $345,000. This was the lower estimate of a proposal to include drainage under the field and provide irrigation for improved recovery time of the fields. While we would have liked these features we were mindful of keeping costs to a minimum. The benefits of the more costly system would be that the fields have better recovery time from the extensive use that they will receive. There was also the expansion of approximately 1,800 square feet of new construction to create sufficient space for the family consumer science program. In the previous design the DOE expressed concerns that there was insufficient space for this program and we shared those concerns. The Construction Process and Inclusion of Local Contractors If the construction bond passes in both towns, the next immediate steps would be to begin the detailed design of the construction plans and to set forth a process for managing the construction projects. There are two methods that we can use to go about the construction process. We can use a general contract where a contractor will bid on the entire project and be responsible for the full scope of that project. In this case a general contractor would be responsible for selecting the subcontractors and managing their work. The work of this contractor will be given oversight by a clerk of the works, who is an agent for the schools to assure the quality, timelines and financial management of the project. The alternative method for construction would be to use a construction management process where the school board selects a construction firm to manage the construction process. Such a firm would not do the work, but would manage the subcontractors for the school. A clerk of the works would also be used for this process as well to provide the schools with the same oversight as in a general contract process. It is the desire of the school boards, should a bond pass, to see that taxpayer funds are used efficiently to deliver high quality, well-built buildings, under budget. However, we would also like to see that the construction bids be available for qualified local contractors and suppliers. As much as possible, we want to see these funds benefit the local economy.

If we are to use a general contract process, the general contractor selects the subcontractors. Though it may be stipulated in the contract that the firm will make sure bids are open to local contractors. Ultimately, a general contractor decides on who wins the contract. If we are to use a construction management process, the managing firm selects bids and works with the school board in the selection process. In both cases, the selection of contracting bids is subject to Vermont’s open bidding law that dictates the process of public bidding. In a general contract, only the total contract is subject to a public bid. In a construction management process all subcontracts are subject to open bidding. At present we are favoring the use of a construction management process because this will enable us to break down the subcontracts to a scale that would make more local contractors eligible to participate and quite possibly for a better price and better quality. It is important to note that the school board cannot exclusively choose contractors or subcontractors from our towns. We must choose the lowest bids from qualified contractors. However, we do believe that the construction management process would allow greater local participation of area businesses. There are benefits to using a general contractor and the process is less demanding on the school boards and this should be considered. However, the use of a construction management process also allows the school board and the clerk of the works to work more closely with the architect and local contractors in a way that we can more effectively value-engineer the project by using more cost effective methods of delivering the same product.

The Ballot And Warnings

Please note voting times are 10 AM to 7 PM in both towns. Explanation of Differences in Warned Bond Amounts

You will notice in comparing the two warnings for Wilmington and Whitingham that Wilmington has warned for the total construction amount of the consolidated elementary school and Whitingham has warned for the total construction amount of the consolidated middle/high school. This is because both towns respectively own their school buildings and can only post a bond for the amount spent on the school within its district. However, the joint agreement between the two towns dictates how the costs of both towns will be shared under a Twin Valley School System. Under this agreement, Twin Valley construction costs are shared by both towns using the current cost sharing formula based on the average daily enrollment. This is the same way operational costs are shared. The joint contract agreement stipulates that both towns are financially committed to the bond, for the 20-year life of the bond. These legal obligations and methods of bond financing have been constructed by legal counsel and in consultation of state authorities.

Warnings and ballots for both towns are presented on the following pages.