By MIKE ANTHONY

Executive Editor

A Mehlville Board of Education member has asked the board to consider a proposal for the district to withdraw from the Voluntary Transfer Student program.

Secretary David Gralike last week requested that a proposal to withdraw from the voluntary transfer program be placed on the agenda when the board meets at 7 p.m. Monday, March 24, at the Administration Building, 3120 Lemay Ferry Road.

Gralike’s request came March 10 after Randy Charles, assistant superintendent for finance and the district’s chief financial officer, had presented several scenarios to the board regarding the financial impact of withdrawing from the voluntary transfer program.

The district currently receives about $7.5 million annually for its participation in the program, according to Charles.

During his presentation to the board, Charles noted that court-ordered desegregation ended and was replaced with a settlement agreement beginning with the 1999-2000 school year.

The settlement agreement continues through the 2008-2009 school year and can be renewed at that time.

The Voluntary Transfer Student program now is operated by the Voluntary Interdistrict Choice Corp., or VICC, which has projected a budget shortfall totaling about 8 percent – $5 million – beginning with the 2005-2006 school year. That shortfall would grow to about 15 percent – $9 million – in 2006-2007 and remain at or near that level each year, Charles told the board.

VICC has formed a study group to study the projected shortfall and three subgroups – expenditure reductions, allocations options and alternative funding – have also been formed.

The terms of the settlement agreement include a “midpoint formula” that addresses the possibility of a budget shortfall for the program. Under the formula, high-cost districts would be reimbursed at an amount less then their respective per-student expenditures.

“As far as how the program looks here in Mehlville, one thing that we experienced unexpectedly this year was a decrease in enrollment. We’ve been running in the neighborhood of 1,400 transfer students each year. That’s what we budgeted for. This year we experienced a shortage,” he said, noting the district currently has an enrollment of 1,277 transfer students.

Charles presented several scenarios to the board outlining how a reduction of transfer students would impact the district’s budget. His calculations included a reduction in VTS revenue, a reduction in costs and the annual impact on the district’s budget.

For example, if the district decided to accept no new enrollees, but allowed students to finish at the schools they currently attend, the reduction in VTS revenue for the 2003-2004 school year would be $2,213,964, the reduction in costs to the district would be $638,357 and the impact on the district’s budget would be a loss of $1,575,607. Under that scenario, the district would be disengaged from the program by the 2008-2009 school year.

Noting that board members have been discussing this issue over the past few years, Gralike said, “… One of the concerns that we’ve expressed over the last year and a half or two years is the fact that this is a program that has the possibility of coming to an abrupt ending and that we need to plan the ending on our terms. And as I look through these different scenarios on projections, the one that assumes no new enrollees that allows students to finish the current school that they’re in, that phases us out of the program in 2009, which is aggressive, but at the same time I think that’s what we need to plan for because that’s when the program is going to be renewed, is that correct?”

Charles said, “That is when the current settlement agreement terminates. It could be renewed.”

Gralike said, “Right. So the possibility (exists) that it might not be renewed in 2009, so I think that we ought to have a plan that gets us out in 2009. In addition to that, even if we would go with one of the other scenarios as you stated, we’re going to end up in that situation anyway. Once we start to phase out of the program, I think that VICC parents are going to be pulling students out when they get to a certain graduation point. So I know that we’ve looked at this several times and I think as a district I think that now is the time to take action and to plan.

“And if it ends up that the 2008-2009 school year’s too aggressive, we can then go to a fallback position, but I’d rather see us come forward with an aggressive plan …”

Charles noted, “… You mentioned that the settlement agreement ends in 2008-2009. If that agreement were to end and not be be renewed … I think that if that settlement agreement isn’t renewed in ’08-’09, students who are in the program still could continue through grade 12.”

Superintendent John Cary said, “… The issue’s going to be more the funding than the actual logistics of it.”

After further discussion, Gralike said, “… I think the time is now that we make a decision on that and I’d like to see that come back underneath new business for the March 24 meeting that we give consideration to disengaging the district from the VICC program and would also prefer that that proposal would be assuming no new enrollees and finishing through the current school.”

On Monday, Gralike told the Call, “I was proud to be part of the agreement that settled the desegregation case in 1999 that allows districts to cease desegregation participation. Subsequent to the settlement, I have been relentless in the pursuit to disengage our district from the program – I have always believed that public education is based on the foundation of local buildings, local funding, and local children.

“Unfortunately, the district has become co-dependent on the funds generated from the VICC program,” he continued. “The VICC funds, however, are not timeless. Eventually this program will collapse under its own weight and considering the state’s financial status – this may be sooner than later.

“We have already witnessed several districts, including ours, which have suffered from lower-than-anticipated city student enrollment, which equates to lower than anticipated district revenue. If the restructured VICC program would abruptly conclude, our district would sustain a revenue shortfall of about $7.5 million and potentially bankrupt our district. It has been my position that we must take back our schools, wean the district from the VICC funding, and remove our district from the program under our terms – not fate’s,” Gralike said.