Wednesday, March 31, 2010

Win-Win: Decision Time

The Columbus Dispatch recently ran a story reminding us that the so-called Win Win Agreement between Columbus City Schools and most of the suburban school districts is coming up for its sexennial renewal this Spring.

I have discussed the Win Win Agreement at length in prior blog articles, so will distill it to simply this:

In exchange for the sharing of property tax revenues, Columbus City Schools agrees not to petition the State Board of Education to align the boundaries of Columbus City Schools to those of the City of Columbus.

In other words, without the Win Win Agreement, Columbus City Schools might petition the State Board of Education, the entity which sets school boundaries, to transfer some or all of the homes and commercial properties in the Hilliard School District that lie within the borders of the City of Columbus to Columbus City Schools. Apparently the belief among suburban school leaders is that the inclination of the State Board of Education to grant such a petition is sufficiently high to take the threat seriously.

Remember that these parcels have always been in the Hilliard School District. These parcels used to be part of various townships, mostly Norwich, but were annexed into the City of Columbus in the late 1970s and early 1980s by developers in order to gain access to water and sewer services. It caught both the developers and new homeowners by surprise when in the early 1980s, Columbus City Schools began threatening to petition the State Board of Education to realign its district boundaries with the Columbus municipal boundaries, as had been the custom in prior years. The developers thought their booming new homebuilding market was going to dry up, and folks who had already built homes in suburban school districts were horrified that their kids might be shifted to Columbus City Schools. I know. As one of the original homeowners in Golfview Woods, my wife and I were right in the middle of the battlefield.

Lawsuits, politics and general ugliness ensued – to the point that the Ohio General Assembly passed a law enacting a moratorium between the parties until a deal could be worked out. That deal is the Win Win Agreement, first signed in 1986, and up for renewal every six years. In the prior renewal years, all parties have continued their participation, except for Reynoldsburg. According to the Dispatch story, Groveport-Madison is giving consideration to not renewing its participation this year.

So where does that put the Hilliard Schools community today, twenty-four years later? Should we renew or not?

First, let's be clear what parcels we're talking about. The Win Win Agreement contains exhibits that spell out with precision the boundaries of the area that Columbus City Schools agrees will be left in the suburban districts. In the case of Hilliard City Schools, this represents roughly the large swath of land between I-270 and the Scioto River, and another couple of large hunks on the southern border of the district.

These areas include neighborhoods such as Golfview Woods, Highpoint, Westbrooke Park, Crosscreek Village, Thornapple Grove, Saddlebrook, Hilliard Green, Western Lakes, Scioto Trace, The Glen, River Place, and Bayside Commons Apartments.

It also includes substantial commercial properties, such as the Boehringer-Ingelheim-Roxanne Labs facility, the shopping centers on Hilliard-Rome Rd at Trabue/Renner, and the Buckeye railroad yard.

One way to make this decision is to look at the pure economics of the Win-Win Agreement today. According to data from our district's Finance and Operations departments, we currently have a few more than 7,000 kids in our school district who reside in the City of Columbus – about 46% of our student population. If it costs $11,000/yr to educate each of these kids, then the total cost to our district is $77 million.

The total amount of property tax we collect from residential, agricultural, commercial and industrial properties in the City of Columbus is $53 million/yr, or $24 million/yr less than it costs us to educate those kids. The $1 million/year in revenue sharing (I prefer to call it a ransom) we must pay to Columbus City Schools under the Agreement just adds to the spread – making the total economic impact about $25 million/yr.

Therefore, one way to look at this is that this $25 million/yr is the added cost all of us in the school district bear to keep these Columbus neighborhoods part of our school community. Realizing that $25 million is 16% of our total operating budget, this is a significant number.

So does that mean that if we bail out of the Win Win Agreement, we can save $25 million/yr and shed 7,000 kids from our school district?

Not exactly.

First of all, even if that were true, we're not talking about 7,000 kids in abstraction here. These are our neighbors and friends - people who are every much as part of the Hilliard Schools community as the rest of us. They have paid the same property taxes, voted on the same levies (and for the same school board candidates!), been part of the PTOs and worked the concession stands during competitions. They aren't they, they are us!

Secondly, our state funding is based almost entirely on the number of kids we have enrolled in our school district. While it is true that the Transitional Aid Guarantee has kept our funding relatively constant as the number of kids has grown (another long conversation), and presumably works the same way if there is a decrease in the number of students, the wholesale transfer of 7,000 kids from one school district to another is bound to cause the State to reallocate funding from Hilliard Schools to Columbus Schools, even if it requires special legislation. The net is that we would not gain the full $25 million/yr. I could see our State funding of $60 million/yr cut in half, making this choice generate a net loss for our district!

But here's the factor that, I think, makes our continued participation in the Win-Win Agreement a no-brainer: as Treasurer Brian Wilson pointed out to me, it's not an all-or-nothing deal for Columbus City Schools. They could theoretically petition to have only the commercial, industrial, and high-value residential property reassigned to Columbus City Schools. The outcome could be that Hilliard Schools keeps nearly all of the 7,000 kids and loses most of the revenue.

That would be an unmitigated disaster.

This is a complex, multi-dimensional question. In addition to the recommendations of the Administration, I'm hoping the smart folks on the Audit & Accountability Committee will take on the challenge of examining the situation, and giving their advice to the School Board as well.

And certainly, the thoughts, analysis and opinions of fellow community members are much appreciated!


  1. I was not aware that Columbus could "cherry pick" in that manner, but regardless, the Win-Win has been in place for so long that I agree, it would tear at the fabric of our community, and despite any of it's perceived blemishes, should stay in place. Many of us chose to live in the school district, not necessarily the city; I started out in Cross Creek when it was brand new and my eldest was just 1 year old, and that was all about the schools. I am now in Hilliard proper, but always felt I lived in "Hilliard" to begin with.

  2. Historically, the State Board has been somewhat hesitant to alter district boundaries. It's far from automatic. They are especially sensitive to attempts to "cherry pick" high tax value parcels.

    I have a hard time imagining that Columbus Public would be able to make good on their not-so-thinly-veiled blackmail.

  3. Colleen: Thanks for commenting.

    I'm not at all familiar with the history of other Ohio metro areas, but central Ohio has always had a tension between the economic power held by the City of Columbus through its exclusive control of the water/sewer system, the political power of Columbus City Schools, who has always wanted to reverse the impact of the 'white flight' 30 years ago, and the real estate developers who exert much influence over the politicians.

    The situation is well-chronicled in Getting Around Brown by Gregory Jacobs. While out of print, the full text is available online through the Ohio State Press.

    According to Jacobs, the more normal situation in Ohio has been for school district boundaries to move with municipal boundaries, and the anomoly happened in the 1970s when developers convinced the State BOE to decouple school district boundaries from municipal boundaries. Indeed, the Win Win Agreement specifies that municipal and school district boundaries will again move together, and it has happened many times already in the Hilliard community. All the Win Win does is grandfather a few areas that were already developed when this conflict brewed up in the 1980s.

    We have two subdivisions that border the land on which two of our elementary schools sit, yet because that land was outside the zones protected by the Win Win, the land was annexed into Columbus, and those kids are transported to Columbus City Schools.

    I've recently had a long conversation with a mother who was distraught to find that her kid cannot attend the Hilliard elementary school which shares her back property line, which was the whole reason she bought that house. Neither the previous owner nor the real estate agent bothered to tell her that her street is in Columbus City Schools.

    And as I said, there's an emotional component to this question - does anyone in the Hilliard community really want to slice off folks who have been part of the community for more than 30 years in some cases?

    If not, are we willing to call the bluff and see what kind of power Columbus Schools wields with the State BOE?

    Colleen Grady is a former member of the State Board of Education and the Ohio House of Representatives, and co-author of the blog State of Ohio Education

  4. While it obviously is important to keep an eye on the residential development that occurs anywhere inside the Hilliard CSD limits, I'll be curious to see how the City of Columbus in particular allows residential development to move forward. From what I understand, there is some concern that has been vocalized by some Norwich Township residents (Timberbrook subdivision) about the Enclave at Hilliard Run that is supposed to be in the works for the area near Meijer.

  5. STJ: The Hilliard School board has also formally expressed its concern about this new development. This is a parcel which has been annexed into Columbus, but remains in Hilliard Schools due to the Win-Win Agreement.

    The WWA was always designed to protect the interests of developers. While there was a lot of public outcry back when Columbus Schools was threatening to petition the State Board of Ed to align school boundaries with municipal boundaries, the political power came from the developers who had bought up lots of land that they knew would have little value if absorbed into Columbus Schools.

    Some areas of the parcels delineated in the WWA as being 'off-limits' for Columbus Schools remain undeveloped. We need to keep our eyes on these - more of this high density housing may be in the works...

  6. Paul,

    Agreed. Glad to see the BOE express concern over this. While the development is a relatively small one (54 units from what I understand), it continues to put additional pressure on our already very tight financial situation.

  7. Any other new residential developments in Hilliard CSD that are set to ramp up in the near term (next 1-2 years)?

  8. None that I know of for sure, but of course the City of Hilliard has recently accepted annexation requests from developers who own 1,000 acres along the west side of Alton-Darby Rd.

    Have you had a chance to read this saga? This chess game has been in progress for a long time, with the school district getting outmaneuvered at each step.

  9. Yes, I'm quite aware of (and quite concerned about) that situation. Thanks!

  10. I'm scared that my life savings and the hard earned money I used for a downpayment for a home in Cross Creek will have been in vain. I am regretting not buying a smaller property in Hilliard proper or another suburb like Upper Arlington. I love being in Hilliard, even though I guess it's not 'really' Hilliard. I can't help but wonder what will happen to the value of my home if this goes through and becomes Columbus City Schools? And I will have to worry about this every 6 years? Oy Vey.

  11. Kelly Anne:

    Thanks for commenting. I understand your concern.

    While I think the probability is nearly zero that the current Hilliard School Board would vote to withdraw from the Win-Win Agreement, as we see from the story on the front page of the Dispatch today, there is now questions being raised by the Columbus School Board as to whether they should renew the agreement.

    I suspect that this is posturing by Columbus Schools - why not use the opportunity to renegotiate the Win-Win Agreement with higher 'ransom' payments from the suburban districts. If not signing the Win-Win is unthinkable for suburban districts, then you might as well hold them hostage.

    We'll definitely need to keep our eyes on this.

  12. what would happen if the win-win is not renewed by CCS? Would it take effect in the fall? or will it take years to iron out the details?

    Like another poster, I should have paid more attention when I moved here and not picked a win-win area, or known that the win-win could be changed without having a say.

  13. Davia's Mom:

    The Dispatch had a pretty article on the Win-Win today. As it says, if the Win-Win is not renewed, nobody knows what will happen. But I also agree that the chances of it not being renewed are pretty slim.

    The problems facing Columbus City Schools has little to do with capturing suburban kids or even having more tax revenue to spend. They already spend one of the highest amounts on a per-student basis in Franklin County. The problems are deep issues, centered on a culture of poverty which has developed over generations.

    More tax money won't help - this is an economic development issue: we need more industrial jobs so that folks with a high school education can find meaningful employment and get off public assistance.

  14. Paul,

    Maybe you can help me understand something. We live in cross creek. Our street address is Hilliard with a 43026 zip code. How is it even possible that this area would not stay Hilliard if the agreement was not renewed?

  15. Your mailing address is a function of the post office branch which serves your neighborhood, and nothing more. Municipal and school district boundaries are independent of that.

    My address is Hilliard as well, but my land is not now, nor is likely to ever be in the City of Hilliard. At the present, it is in Brown Twp, outside the range of the water/sewer services agreement between the City of Columbus and the City of Hilliard.

    Therefore, if my land were to be annexed into any city, it would be Columbus - something I would surely fight, because under the terms of the Win-Win Agreement, my land too would be reassigned to Columbus City Schools.

    However, we also live in the Big Darby Accord area, in which the City of Columbus has said it will provide water/sewer services without annexation.

    We have to understand that for the most part, development policy in central Ohio is written in favor of developers, not existing homeowners. The same is true in regard to state law applying to annexation.

    One of the primary reasons for this water-with-no-annexation change of heart for Columbus is, I believe, that it keeps the gravy train going for the developers.

    Otherwise, the Win-Win Agreement actually gets in their way, as was the case with the large Dominion development north of Hayden Run Rd between Cosgray and Avery, which when annexed into Columbus to gain access to water/sewer service, transferred to Columbus City Schools because of the terms of the Win-Win. My understanding is that the developer very much wanted to keep this development in Hilliard Schools.

    By the way, even if the Hilliard School Board decided not to renew the Win-Win - which has about zero probability - it doesn't mean your property would automatically shift to Columbus Schools.

    Such a transfer would start with Columbus School petitioning the State Board of Ed to make the transfer. It's not clear to me what would motivate their Board to open that can of worms, although it has been reported that a couple of their School Board members have asked for an updated analysis of the benefits of the Win-Win to Columbus City Schools.

    But let's say the Columbus School Board said they wanted some or all of the part of the Hilliard School district in the City of Columbus; then the State Board of Ed would still have to choose to accept the request. This is a political decision, and I certainly can't say whether the State Board of Ed is inclined to grant such a request. The State Board's decision would likely be influenced by whether Columbus Schools petitioned to take all of these parcels, or to cherry-picked the high value commercial property and leave the kids behind.

    Even if the State Board of Ed did grant a transfer request from Columbus Schools, there would undoubtedly be one or more lawsuits filed to block it.

    Remember that the legal battles which led up to the Win-Win Agreement lasted for years. But it is true that the players are different this time.

    In the 1980s, it was the developers who wanted Columbus Schools out of the picture, but they wanted annexation into Columbus if that's what it took to get water/sewer service to their new developments.

    This time around, the developers are largely out of the Win-Win fight, as they have very few, if any, undeveloped parcels left in the Win-Win areas. This is strictly between school districts now.

    Different game.