When one door closes, another one is supposed to open. Or at least that is how the saying goes. But what happens when one door closes and remains closed?

That is the issue many school districts in New Jersey are currently facing. Declining enrollments throughout the state have forced boards of education to close schools in order to save money. And it does not appear that this trend will be reversing anytime soon. The United States Department of Education has projected that public high school enrollment in New Jersey will increase only 0.9 percent by 2020 (silver lining: the U. S. Department of Education has projected high school graduates in New Jersey to increase 1.4 percent during this period after a negative projection for the previous seven years). The national average for public high school enrollment is expected to increase by 3.6 percent. While pre-K-8 enrollment is also projected to increase statewide, the numbers again are not promising. This population is projected to increase by 1.7 percent by 2020 while the national average is expected to increase by 5.2 percent.

Where declining enrollment has hit hardest, school boards do not only have to deal with the logistical and financial planning of a potential school closing; they are increasingly dealing with overt political pressure and threats. 2016 has already seen the mayor and town council of Evesham sue their school board for voting to close an elementary school. The mayor of Surf City has publicly denounced the Long Beach Island Consolidated School District’s plan to dispose of one of its schools due to declining enrollment.  The politics of declining enrollment has made already-tough decisions by boards of education even tougher.

So what can boards of education do get out ahead of these issues and keep their constituents informed? The first course of action for a board of education to take is to commission a demographic study to determine whether the trend is long-term or short-tem. There are a handful of reputable demographers that will project enrollments, analyze home turnover in a district, evaluate a district’s socioeconomic trends, and look at the impact new charter schools are having on enrollment in the area. The New Jersey Department of Education (NJDOE) also maintains student enrollment data while the New Jersey Department of Health has an online module to determine birth data from 1990-2014 by town.

Second, it is recommended the boards of education continually revisit their Long Range Facilities Plan (“LRFP”). While the LRFP is only required by law to be updated every five years, there is nothing preventing boards of education from doing an annual internal review to see if any of the “major” amendments should be made. The “major” amendments are comprised of the following areas: (1) enrollment projections, (2) building capacities (room inventories), and (3) health and safety conditions (capital maintenance needs). Districts should also be mindful of “minor” amendments to the LRFP.  “Minor” amendments are those which add a capital maintenance project for approval or include the project for budgeting purposes. Regardless of the type of amendment, having a well-maintained LRFP can greatly reduce headaches and stress later  in the process when deciding whether to undertake some cost-saving measures or needing to close a district school.

Cost-Saving Measures A school district facing declining enrollment has a number of cost-saving measures at its disposal before resorting to closing a school. One of the first options a board of education should explore is shared services. Shared services can generate great cost savings for the participating districts that can save jobs, after-school programs, and activities.

When a shared services agreement is being contemplated, creativity is king. This is one area of school law where thinking outside the box is encouraged! N.J.S.A. 18A:18A-11 not only empowers two boards of education to agree to share services, but also allows a single board of education to enter into a joint agreement with the governing body of any municipality or county. The statute also allows two boards of education who enter into a joint purchasing agreement to include nonpublic schools located within the municipalities comprising the school districts as additional parties. Nonpublic schools is broadly defined as “an elementary or secondary school within the state, other than a public school, offering education for grades kindergarten through 12, or any combination of them, wherein any child may legally fulfill compulsory school attendance requirements and which complies with the requirements of Title VI of the Civil Rights Act of 1964.” The potential to bring in a wide array of nonpublic school as a way to split costs further should not be overlooked or ignored.

Traditionally when boards of education contemplate shared service agreements, the first thoughts are of sharing superintendents and school business administrators. While a shared superintendent or school business administrator can greatly help smaller districts, having top administrators split time between two districts is not always feasible. The time commitment to one district may leave the other district feeling disadvantaged, the public may not support the measure, and the state education commissioner may not sign off on the agreement.

So what other types of shared services can boards of education explore? Local educational services commissions and jointure commissions in each county allow school districts to share pupil transportation, facilities, child study teams, guidance services, special education services, nursing services, custodial services, purchase of natural gas and oil, textbooks, and the purchase of office supplies. The educational service commissions and jointure commissions are invaluable resources when trying to generate cost savings in a district.

The second way a school district can look to raise revenue in the face of declining enrollment is to accept tuition students. Adopting a policy allowing non-district residents to attend school in-district upon payment of tuition is an easy way to garner revenue to save jobs and programs. Before adopting such a policy, a board of education should be mindful that it may already have adopted a policy limiting the number of students that can be in a class. If accepting tuition students would increase class sizes above the maximum set by policy, the district may end up paying more money to hire another teacher to support the additional students, thus negating the cost-savings brought upon by the acceptance of tuition students. Boards of education must also be aware that if their district is a member of the Interdistrict Public School Choice Program (commonly referred to as “Choice”), their district may not accept tuition students.

A third cost-saving measure for a board of education to explore is an adjustment of the current staffing levels. As enrollment declines, the cost of keeping staffing levels at pre-decline levels may become prohibitive. Reductions in force (“RIF”) of teaching staff members can be effectuated for “reasons of economy, reduction in pupils, change in administrative or supervisory organization, or other good cause.”

When a RIF of tenured teaching staff is carried out, the district must maintain a preferred eligibility list or “seniority list.” It is important to maintain an updated and accurate seniority list. In the event that enrollment begins to trend upwards and more staff is needed to meet the needs of the district, a board of education must be prepared to act quickly. Furthermore, the board does not want to make mistakes with the seniority list and open itself up to grievances from the local education association.

Staff that is not granted tenure under the education statutes, may still be eligible to achieve tenure through a collective bargaining agreement. A board of education should be aware of which staffing groups have tenure in the district and should be sure to consult with their board counsel before undertaking a RIF.

Closing Time If enrollment has declined to such a point where the cost-saving measures mentioned here are either ineffective or insufficient to meet the needs of the district, a board of education may decide that it should explore the option of closing a school and selling the property. As any business administrator will be happy to tell you, operating a school is an expensive endeavor. If a board of education is unprepared, attempting to close a school building can quickly become a prolonged exercise in futility.

To begin, is a board of education even permitted to sell real estate? Yes, pursuant to N.J.S.A. 18A:20-2, a board of education may sell and lease real estate and personal property. This power is paramount to allowing a board of education to exist as its own political entity, not subject to the will or pressures of mayors and town councils – political bodies who often fail to understand a board of education’s main responsibility is to the children of the district in which the members serve. 

Once a board of education decides to sell real estate, the law requires the land or interests sold to be sold at a public sale to the highest bidder after advertisement of the sale.  However, if the lands are sold to the state or a political subdivision of the state, a board of education is empowered to sell the lands at a private sale without an advertisement.

A board of education is not stuck if it attempts to sell a building at a public sale and the bids come in below the fair market value of the property. The law allows a board to set, by resolution, a minimum price for the sale of the building. If that fixed price is not met (or the board receives no bids), the board of education is entitled to enter into negotiations with any party for the sale of the property without continuing down the road of public bidding and contracts law. If a price can be negotiated between the board of education and private bidder, the acceptance of the deal must be recorded by roll call majority vote of the full membership of the board at a regularly scheduled meeting.

On paper, this process reads as a simple series of procedural steps that must be undertaken. However, as evidenced in the state just this year, boards of education are rarely afforded the ability to act within their power. Mayors, town councils, real estate developers, investment bankers, realtors, local attorneys, and the average member of the public all want to tell a board of education why selling a building is wrong or right. Threats may be made and members of the public may spread misinformation in order to push the populace in mobilizing for a desired effect. It is therefore recommended that a board of education wishing to pursue the sale of a school building in the face of declining enrollment be prepared with information and handouts, and be willing to schedule special meetings to explain why the sale of a school is a necessary measure that must be taken. The more a board of education attempts to communicate with its constituents, the easier a sale of a building will be.

Anthony P. Sciarrillo and Nicholas F. Savio are attorneys with Sciarrillo, Cornell, Merlino, McKeever & Osborne, LLC in Westfield. They can be reached at [email protected].