ESDs prove invaluable to small school districts

At a time when money for education remains tight, taxpayers are spending about a quarter-billion dollars each year on a little-known bureaucracy that operates between local schools and Olympia.

Dozens of public employees in these agencies earn six-figure incomes.

And there’s little public oversight: Boards that oversee spending and policies at these agencies are not elected by the public but chosen by local school board members, some of whom acknowledge they don’t know much about them.

School board members aren’t the only ones in the dark: The average taxpayer likely doesn’t know what educational service districts are, what they do or how much they cost. Nor do the parents of children who stand to benefit from the programs supported by the nine districts.

“If your average teacher was asked: What are ESDs? They would have a hard time coming up with it,” State Superintendent of Public Instruction Randy Dorn said.

ESDs are considered an extension of the state’s K-12 office, a professional assist to help school districts meet the diverse and often expensive needs of students.

Their most ardent supporters are small school districts. ESDs provide speech pathologists, special education teachers, teacher training and other assistance that a small district might have a hard time hiring. The districts also help make educational mandates and operations affordable to fulfill.

“I think the districts that are smaller than 4,000 (students) use their ESDs all the time for expertise, federal rules and regulations, financial expertise, child care … and they think they are essential,” Dorn said.

Large school districts such as Spokane Public Schools consider ESDs an optional resource for training and information.

But critics say the state spends too much for this layer of bureaucracy working outside the classroom.

Between 55 and 65 cents of every dollar spent by the nine ESDs in Washington go toward payroll.

A majority of these employees’ salaries are set by the agencies themselves, not by elected state officials or local school boards.

There are no statewide guidelines for salaries. They “just evolved as they do in negotiations and things like that,” said Mike Dunn, the superintendent of the Northeast Washington District, the ESD offering services to 59 public school districts in Eastern Washington.

Such educational agencies are not unique to Washington; they exist in 45 states under 17 different names and come with a combined $14.7 billion price tag.

Lee Warne, executive director of the national Association of Educational Service Agencies, said it’s the same story throughout the nation: “The districts know us, but no one else does.”

ESD pay not stagnant

The superintendents of ESDs are paid triple-digit salaries that can exceed those of school district superintendents, to oversee budgets and staffs that are far smaller.

Dunn, for example, is paid $184,000 each year, according to public records. His agency has a staff of 146 and spends $17 million a year.

By comparison, the Central Valley School District superintendent is paid $170,000 to oversee a $115 million budget and 1,666 employees.

Across Washington there are 121 ESD employees who earn more than $100,000.

And while Washington teacher pay has remained stagnant for four years, and the state did not include any increases in the 2013-15 biennium budget, ESD employees have done much better.

Minutes from a March 19, 2013, ESD board meeting show 20 employees in Eastern Washington receiving annual raises ranging from $2,000 to $5,000. All the agency’s employees will receive 1 percent cost-of-living increases each year through 2016.

Dunn’s executive secretary’s new annual salary is $59,668 effective Sept. 1, the minutes show.

$40 million spending growth in a decade

As teachers were laid off and school budgets cut during the recession, state funding cuts barely scratched ESDs.

Some discussion occurred about consolidating two agencies in Western Washington and two in Eastern Washington, state officials said.

“That’s been a 25-year discussion,” said Dorn, the state superintendent. “Usually the topic generates interest then goes away. The smaller school districts come out of the woodwork” to defend the status quo.

Since the creation of the agencies in 1969, there have been a dozen comprehensive reviews done on ESDs.

Their findings have been somewhat similar, at least in recent years.

A 2007 review by the Washington State Auditor’s Office and a 2009 legislative report both concluded that smaller school districts benefit from the services but that efficiencies could be implemented at individual offices and more efforts were needed to create statewide systems. The 2009 review suggested a reduction in administration in more than one of the districts.

Additionally, ESD finances are reviewed annually by the state auditor’s office.

But ESDs have not shrunk in the past decade. In fact, they employ 654 more people than they did in 2003 and spend $40 million more annually despite student population growth of just 22,000.

ESD responsibilities have grown

ESDs were created in 1969 primarily as a regulatory body, but the focus shifted to a school district support role in 1975. Through the years, the districts’ responsibilities have expanded to include the management of insurance, unemployment and workers’ compensation pools; offering early learning and special education; financial management, teacher training and staff development; and data management and technical services.

In some areas, the agencies have developed specific programs to meet the needs of surrounding communities, such as migrant education.

“In general, the ESDs came into existence because the laws and rules of school districts became much more complicated,” Dorn said. “The ESDs help the school districts more easily navigate the maze of Washington and federal laws regulating schools.”

The agencies’ services are available to private and public schools as well as the Washington State School for the Blind and the Washington School for the Deaf.

Some ESDs also run the educational programs within juvenile detention programs, such as Spokane County Juvenile Detention Center and Martin Hall Juvenile Detention in Medical Lake. The recession and numerous state initiatives have inflated the agencies’ role even more.

“My philosophy coming into the office, especially in the downturned economy, I knew we’d have to use the ESDs more,” Dorn said.

The state office cut its curriculum staff and gave ESDs the responsibility of teaching to educators Common Core, a new curriculum adopted by a majority of states across the nation. The same thing happened for statewide science and math programs.

ESDs also took a key role in training educators on a new kindergarten assessment program and a newly mandated teacher and principal evaluation system.

“A lot of the times the role that we play is to be a convener,” said Rich McBride, superintendent of ESD 171, which is in Wenatchee. “To bring together those groups who have been trying to achieve a goal and together can do it better.”

He added, “One of the reasons ESDs are not as visible is due to what we provide: We are behind the scenes. We provide a lot of the backbone. We are trying to walk beside the school districts.”

School boards vote on ESD boards

ESDs are overseen by boards of directors that range from seven to nine members.

Local school board members elected by the public then vote on those directors after reading ballots listing their qualifications and reasons for running. School board members are encouraged to call ESD director candidates to review their qualifications, said Rocky Treppiedi, of the Spokane Public Schools board, but Treppiedi said he can’t remember whether he’s made such a call.

Districts send the ballots to OSPI to be tallied.

“The whole issue of governance is interesting, and the insider layers of accountability,” said Liv Finne, director of the Washington Policy Center’s Center for Education. “The incestuous nature of the education system makes holding people accountable very difficult.”

Bob Douthitt, another Spokane school board member, said he doesn’t recall ever voting for any ESD board members.

As far as accountability goes, he said, “When you have 59 (school) districts in the region, the accountability is so diffused that it isn’t on your radar. I mean, it isn’t on my radar. The responsibility is so spread out.”

But Elissa Dyson, board chair of the Onion Creek School District, a 46-student district in Colville, said school board members “do have the power of the ballot box” in overseeing ESDs. “We do elect them.”

Gary Livingston, former Spokane Public Schools superintendent and Community Colleges of Spokane chancellor, is one of the ESD board members.

“The sense is that the ESDs serve the districts, and the districts are policy-setters, so they are the ones who hold us accountable,” he said. “I don’t know how else you would do it unless the governor appointed you, and that would be even further removed.”

After all, ESDs are like a business: If the agencies are not giving good service, then the districts don’t have to use them.

“Nothing requires them to buy service,” Livingston said.

Federal, state, local dollars support ESDs

Each agency’s revenue is a combination of federal, state and local dollars.

About a quarter comes from competitive grants or bids on contracts such as Head Start or Title I funding to help low-income students.

“It’s mostly grants, but also there are some federal monies that other districts received that we are managing. A lot of it is flow-through dollars from OSPI,” said Jerry McDermott, Northeast Washington District assistant superintendent.

ESDs also manage cooperatives, which allow districts to pay into a pool of money to share expenses such as unemployment, risk management, workers’ compensation, special education, early childhood education or science and math materials.

Pooling resources helps small districts provide services they might not be able to afford on their own, making educational opportunities equal across districts, according to superintendents at several small districts. It’s a model that works: According to one report, for every $1 of state allocation, ESDs return an average of $40 worth of services to districts.

Such cooperatives contribute another 25 to 30 percent of the ESDs’ revenue.

Fees for services or support make up another chunk of money. School districts can pay the agencies to manage their money, train teachers or track student data, for example.

The remainder of the revenue comes from local grants, investments and state funding.

The Northeast Washington District, based in Spokane, receives the most state funding because it serves the greatest number of school districts with fewer than 2,000 students, Dunn said. The smallest district served is Benge School District in Adams County. At last count, 11 students were enrolled.

ESDs critical to small districts

Livingston, the former Spokane Public Schools superintendent, said he didn’t use the ESD’s direct services.

Still, “I benefited from the surrounding districts they served, the information (ESDs) could gather, and we often became a partner in an effort,” he said.

Shelley Redinger, Spokane Public Schools’ current superintendent, said she likewise doesn’t use ESD services. “In the larger districts, you just have a lot more infrastructure to do things without them.”

Mead School District is outgrowing the need for ESD services.

Five or six years ago, Mead was a member of a data co-op that tracked student financial aid and academic information, said Wayne Leonard, Mead’s assistant superintendent.

But “We got to the size where it just got to be too expensive,” Leonard said. “It makes more sense for small school districts to be a part of it. We felt like we’d outgrown the co-op model.”

Travel to a rural district, however, and the need changes.

“We couldn’t function without them,” said Bill Motsenbocker, superintendent of the Liberty School District in Spangle.

Whether it be staff development – “We let them know what we need, and they put together the presentations and bring them to us” – training or evaluation systems, “without them, it would have been impossible,” he said.

The ESD functions as a search firm when a new superintendent is needed, and if there’s a crisis the agency will send a team of professionals, said Jim Kowalkowski, Davenport School District superintendent.

Workers’ compensation, regulations, special education: “Not very exciting, but it’s all stuff that has to be done,” Kowalkowski said.

Both superintendents also use Dunn as a sounding board and for general advice.

“If ESDs weren’t there, we’d call OSPI and they’re good, but they don’t know the districts like Mike does,” Kowalkowski said.

“Everywhere I go, the support from ESDs is critical,” said Dyson, who also chairs a task force on small districts for the Washington State School Directors’ Association. “I can’t underscore enough how valuable ESDs are to small districts.”