12/08/2014 – Annexation Report

Annexation – Student Enrollment and Tax Implications
Transcript, Video and Related Documents and Articles
12/08/2014 Business Meeting
Annexation Presentation
School district promises fight against annexation proposal
Get Schooled Discussion
DeKalb School Watch Discussion
* Druid Hills Civic Association – Cityhood & Annexation Options and Their Effects on Taxes and Schools
* Together In Atlanta responds to correct errors in Superintendent Michael Thurmond’s presentation

Michael Thurmond – DeKalb Schools Superintendent
About a month ago, the chair directed me to begin to look at and analyze various annexation and city-hood proposals that were being promoted in DeKalb County.  One of the things we recognize, that the city-hood proposals do not have any direct influence or impact on the Dekalb County School district as it relates to enrollment and/or funding.
Annexation presented some unique issues, so we began the process of looking at annexation.  There will be other reports in subsequent months.  First, as it relates to student enrollment, student choice and instruction, as well as the many various tax implications as it relates particularly to those residents that might live in any proposed annexation areas.
[Annexation Presentation – Page 3]
The proposed Druid Hills annexation plan was developed by a group known as Together In Atlanta.  It is made up of DeKalb and City of Atlanta residents.  According to media reports, Together in Atlanta spokespersons have argued and supporters of this plan have argued very publicly that the partial annexation of DeKalb County School District property that is located in the Druid Hills Cluster would also result in the forced transfer of DeKalb County School District property to Atlanta Public Schools.
The proposed Druid Hills annexation plan, based on our analysis and projections, would result in the disenfranchisement and displacement of 2922 students and it would result in a district wide loss in instructional opportunities, athletic programs, severe reductions in instructional staff and funding potentials.
I’m going to ask 3 members of my staff to provide additional insight and we’ll answer questions and I’ll provide insight.  I’ll call up Dr. Morcese Beasely who will look at the impact of this proposed.  I want to emphasize that this is a proposed annexation.  So we are looking at this in a point in time, the impact of this proposed annexation on school choice, which I think will be considerable.
[00:03:07]
[Annexation Presentation – Page 4]
Dr. Morcease Beasley – Executive Director for Curriculum, Instruction, and Professional Learning
In your packet you have a slide labeled Impact of Annexation on School Choice.  I would like to remind the board that DeKalb County is a very school choice friendly school district.  Of 100,000 students we have over 20,000 students that have exercised their option of going to a school outside of their assigned attendance zone.  It is important to note that 20% of our students currently exercise school choice options.
School Choice is a key component to DeKalb’s educational and instructional philosophy. School Choice offers our parents the opportunity to select unique schools and programs that enhance the academic needs of our students. The proposed Druid Hills annexation plan will disenfranchise and displace students who will no longer have access to DeKalb school choice options.
[Annexation Presentation – Page 5]
This slide identifies approximately 37 schools that have 1,626 students that reside in the proposed Druid Hills annexation area that will be disenfranchised and displaced.  Therefore, they will no longer have access to DeKalb County school choice options.   If the annexation passes these students will reside in the Atlanta Public School System attendance area and will therefore, currently, they schools that they attend, they will no longer have access to those schools.
For example, there are 30 students at DeKalb School of the Arts that would no longer have access to attend DeKalb School of the Arts.  There are 22 students at Coralwood, 10% of their population, would no longer have access to Coralwood Center.  Kittredge Magnet has 15 students that reside in the proposed area that would no longer have access to attend Kittredge Magnet.  Chamblee Charter HS has 12 students.  Oak Grove ES – 6 students, Hawthorne – 4 students, Museum – 4, and the list goes on.  This proposed annexation has district wide ramifications to the students who would no longer reside in the DeKalb Schools attendance zone and would no longer be able to go to their DeKalb School of choice.
[00:06:45]
[Annexation Presentation – Page 7]
The proposed annexation will severe the Druid Hills cluster into two parts.  In the diagram, the part outlined in red identifies the proposed annexed area.  Note that removes from our district the Briar Vista Elementary School, Druid Hills High School and the Fernbank school.
Note the students left behind attending Druid Hills Middle School, Laurel Ridge ES, McLendon ES and Avondale ES would no longer have a high school in their attendance zone.
[00:07:57]
Michael Thurmond
This document is available on our website and will be shared throughout the district.  Now Mr. Drake will look at the impact of proposed annexation on the schools and/or other facilities that will be impacted related to student enrollment.
[00:08:51]
[Annexation Presentation – Page 8]
Dan Drake – Director of Planning and SPLOST Programming
I’ll walk you through the impact of the proposed annexation on student enrollment and instruction.  The biggest impact would be on Druid Hills HS.
There are 1,386 students in the historic 1,200 seat high school facility.  The annexation would result in 311 students to move with the high school to the Atlanta Public Schools and leave behind 1,075 disenfranchised students without a high school.  The majority of these left behind students live in the attendance areas of Laurel Ridge ES, McLendon ES and Avondale ES.
Additionally, the loss of the 311 students to APS would result in the loss of approximately 20 teacher positions at the high school.  Approximately 45 teachers would be reassigned to the schools where these 1,075 students would attend.  The problems is, we currently do not know where these students and teachers would be housed.  This could mean adding portable classrooms to already overcrowded neighboring high schools.  We’re talking about Cross Keys, Clarkston, Lakeside, all these schools immediately around it, Towers.  All of them at capacity or some of them substantially over capacity.
Additionally, the annexation would result in the loss of the International Baccalaureate Program currently only being offered at 3 high schools.  This would be the loss of 1 of those 3 high schools.
Finally, this would be the loss of the historic high school facility with a rich history originally built in 1927.  More than $19 million in SPLOST improvement has been spent on the facility over the past 10 years.
[00:10:50]
[Annexation Presentation – Page 9]
The next facility impacted and lost to APS with a forced transfer of title would be the Fernbank facility.  Currently 605 students attend Fernbank ES … 480 from the neighborhood and 125 from outside the attendance area.  The 480 students would go with the facility.  This is a brand new, 900 seat facility, that is slated to open this Fall 2015.
Demographics […]
The loss of the 480 students would result in a loss of approximately 25 teacher positions and the loss of another IB Program.
The forced transfer of the brand new, $21 million, would be handed over to the APS and a major loss to the district.
[00:11:54]
[Annexation Presentation – Page 10]
The next facility is Briar Vista ES which has 458 students.  362 of them would move to APS with the facility.  The other 96 would be disenfranchised and forced back to their home schools.
Demographics […]
Briar Vista ES is one of only two Montessori schools in the district.  The other is Huntley Hills ES.  This annexation would result in the loss of that Montessori Program as well as approximately 20 teacher positions.
Finally, the district has invested $1.3M in SPLOST funds for Briar Vista ES which would be lost to APS
[00:12:52]
[Annexation Presentation – Page 11]
The next impact is Druid Hills Middle School.  This school would not be transferred to APS, but the current student population of 903 students would be shrunk down by 250 students to only 653 students in a 1,200 seat facility resulting in 54% occupancy.
Demographics […]
The loss of 250 students would result in the loss in the loss of approximately 15 teachers.  In addition to the teachers, support positions like counselors and assistant principals would need to be eliminated.
[00:14:11]
[Annexation Presentation – Page 12]
The Fernbank Science Center is a unique facility in the state.  It has a functioning planetarium and science labs.  100,000 students will be denied access to the Planetarium and the specialized expertise of science staff.
The proposed annexation and forced transfer of property would result in the loss of the highly regarded STT [Science Tools and Technology] program and other specialized programs.  The loss of these programs would cause the loss of specialized staff, many of whom have PhDs.  This highly educated staff is a great resource to the district and the backbone of the STEM training center that more than 48 schools are currently pursuing.  DCSD has 4 out of the 11 STEM state recognized STEM schools in Georgia.
The cost to replace this facility is in the tens of millions.
[00:15:16]
[Annexation Presentation – Page 13]
Laurel Heights is a youth residential treatment center located on Briarcliff road which has an agreement with the district for educating students who are being treated for complex psychiatric and behavioral problems and developmental disabilities.  15 students will not have the benefit of familiar DeKalb staff and a loss of quality service providers.
The impact of future funding to the district from the loss of this facility is not known at this time.
[00:15:46]
[Annexation Presentation – Page 14]
International Center is located on North Druid Hills road and within the proposed annexation area.  With the forced transfer of the title of property, we would need to relocate the 600 students to another facility.  The facility currently serves 300 Lab students who are new to this country, mainly refugees who have never been in school before and have a highly specialized program.  300 of those Lab students and 300 Intensive English students.
[00:16:26]
[Annexation Presentation – Page 15]
Adams Stadium is located in North Druid Hills is in the proposed annexation area and is adjacent to the International Center.  DCSD currently has 5 stadiums that serve 18 high schools and 18 middle schools.  Losing 1 of the 5 stadiums and making due with only 4 facilities would trigger a loss in athletic activities.
There are currently 135 varsity and junior varsity activities and middle school football games scheduled at Adams Stadium.  Squeezing the 5 stadium schedules into 4 facilities would reduce the activities and would impact the lower level sports to a much greater degree including junior varsity soccer and lacrosse.  It would be a loss of venue for 30 community sponsored events including the Relay for Life.
Finally, $2M is slated for the stadium for major repairs and installing artificial turf.
[00:17:33]
[Annexation Presentation – Page 16]
Old Briarcliff HS – Together In Atlanta (TIA) claims that annexation would give APS the power to take title to the old Briarcliff HS.  DCSD has received offers for this property in excess of $50 million for those 3 combined properties.
This concludes our review of the proposed annexation’s impact to student enrollment, school choice and instruction.
[00:18:27]
Michael Thurmond
Dr. Michael Bell has done a detailed analysis of the proposed annexation on the ad valorem and sales tax impact on citizens included in the annexation.  He has determined what, if any, tax advantages or disadvantages that might be associated with this proposed plan by TIA.
[00:18:51]
[Annexation Presentation – Page 17]
Dr. Michael Bell – Chief Financial Officer
I’m going to make some general comments about the impact of this annexation on property taxes, sales taxes, utility costs.  And we’re going to take a look at 3 real tax bills of $300K, $400K and $500K house in the annexation area.  And the specific impact of the HOST tax credit program which was put in place by the county of DeKalb in 1997.
One of the big impacts is the difference in the senior tax payer exemption in DeKalb County compared to APS.  The senior taxpayer exemption in DeKalb is much more generous than that which would be available in Atlanta.
The HOST tax credit on the homestead tax bill to day is a column that says HOST credit.  HOST stands for Homestead Options Sales Tax.  Those credit dollars are only applied to DeKalb County operating expenses.  So, the services that would shift to Atlanta, those credits go to 0.  Atlanta does not have this program.
Utility rates for water and sewer.  The annual charge for sanitation pickup, 3-4 a week in DeKalb County, is $265.  In the city of Atlanta, it’s $500 for once a week, plus yard waste.
Another structural, legal requirement would be that the bonded indebtedness millage.  In DeKalb County bonded indebtedness, there’s two categories.  There’s GO bonds and there’s a special tax district for parks bonds.  They would remain on the tax bills in the annexed area by law.  Atlanta could elect to add its bonded indebtedness.
[00:21:27]
[Annexation Presentation – Page 18]
General Property Tax Issues.
Ad Valorem property taxes for DeKalb Bonds right now is 1.68 mills.  The HOST credit doesn’t apply to bonded indebtedness.  That millage would remain at 1.68 mills on the annexed areas property tax bills until all bonds are paid off.
The City of Atlanta could add additional millage.
The Homestead Option Sales Tax (HOST) credit is voted on every year when the county sets its millage rates. Right now it 57.7 cents per every operating dollar of taxation. For every operating dollar of taxation charged by DeKalb County, the HOST credit alone is 57.7 cents.  That means, when you write the check, you’re only paying 42.3 cents for every dollar because of HOST.  The HOST credit would not apply to Atlanta charged services.  The city of Atlanta does not have such a program.
[00:22:32]
[Annexation Presentation – Page 19]
The HOST credit is calculated by the Fair Market Value of the house.  Using the 57.7 cents on the dollar.  The 2014 tax bill has a Police District charge.  The district millage charge in DeKalb is 6.18 mills.  However, with the 57.7% credited off in the HOST column, the effective millage rate charge for DeKalb County police on homestead exempt property is 2.62 mills.
The same for fire.  The present millage charge for fire is 2.87 mills.  The effective millage rate for the fire district is 1.21 mills.  That would not apply after the annexation.
Public Works and Parks are collectively considered on the DeKalb tax bill.  Right now that charge is 1.46 mills.  The effective is .61 mills after HOST credit.
[00:24:16]
[Annexation Presentation – Page 20]
Sales Tax – Sales taxes are county level taxes in Georgia and are complex as they have evolved over the years.  Right now in unincorporated DeKalb County, the total sales tax comes to 7%.  1% of that funds the HOST credit.
The sales tax in Atlanta/Dekalb is 8%.  Atlanta got permission to levy a MOST – Municipal Option Sales Tax.  That 1% is used to subsidize Atlanta’s water/sewer system … called water shed now.
[00:26:20]
[Annexation Presentation – Page 21]
Other Service Issues – Aside from the very high cost of Atlanta’s water/sewer, the sanitation rates in Atlanta are $500+ for once a week pick up plus yard waste.  There’s a structural difference between Atlanta and DeKalb.  They’re the two largest sanitation systems in the state.  DeKalb has the Seminole Land Fill which has 30+ years of life.  Atlanta’s land fills are full and must pay tipping fees.
[00:27:04]
[Annexation Presentation – Page 22]
Senior Citizens
In DeKalb County, a senior citizens is 70 years or older that has a house hold income under $82,708.  They do not pay any part of the 23.98 mills the school district charges.  That’s under the DeKalb H9 Exemption.
The tax commissioners office ran a pro forma calculation on a $500K house in Druid Hills and put it in Atlanta.  The tax bill with the DeKalb County exemption totaled $1,905 in County and school taxes.  The same house in Atlanta and apply the same exemption, APS A6F, the tax bill would go up to $4,010.
[Annexation Presentation – Page 23]
This is the tax bill for a $300K homestead in 2014.  The County Operations millage rate and the Hospital millage rate would remain.  HOST credits for fire, police and std-unincorporated go away.  HOST credit lost due to Annexation results in a 60% tax increase of $667.07.
[00:30:31]
[Annexation Presentation – Page 24]
The next tax bill is for a $400K homestead.  HOST credit lost due to Annexation results in a 60.32% tax increase of $909.64.
[00:31:23]
[Annexation Presentation – Page 25]
A $500K house would be similar.  HOST credit lost due to Annexation results in a 60.46% tax increase of $1,152.21.
[00:33:00]
Michael Thurmond
This concludes the Superintendent Report.
Thad Mayfield – Board Member
My first concern is whether or not there is direct board involvement in trying to get our arms around this challenge.  Have we met with TIA representatives to discuss this issue or any other alternatives to school transfer?
Michael Thurmond
No.
Thad Mayfield
I propose a committee have this conversation with TIA to better understand what the options are as they see it.  I would also request to understand how the district would adjust to these challenges.
Dr. Melvin Johnson – Board Chair
I would like to thank the Superintendent for such a comprehensive report.  Regarding Mr. Mayfield’s comments, it brings to us some attention that this is a comment to the Superintendent for future budget considerations.  Of course, you would have to bring this back to the board, it would be incumbent upon the school system to consider reserving the appropriate funds to litigate if necessary.  It’s incumbent upon the board to do whatever is necessary to protect the interests of our students and property.
Michael Thurmond
In discussions with Dr. Bell, at the next board meeting I would like to bring forward a proposal that we reserve out of the fund balance at least $2.5 million to hire and access governmental affairs and legal expertise to protect the interest of our 100,000 students and Dekalb County tax payers and to continue to prepare for whatever comes and that we exhaust all options to protect the integrity and value and work and efforts that have gone into building  what I think is one of the finest school districts, or becoming one, in this country.
At this point, I would hope that the board, would not retreat in any way from our position of protecting what is naturally ours.
[5 people clapping in the background]