SPECIAL ACT SCHOOL DISTRICTS
What's the backstory?

Special Act School Districts (SASDs) were formed by a “Special Act” of the legislature to create public schools on the grounds of residential treatment facilities that serve needy students, many from New York City. Schools operate independently of the agency running the facility, and typically educate day students in addition to residential students. SASDs have independent Boards of Education with "public" members appointed by the SED commissioner, in addition to members appointed by the residential agency. Initially, 20 SASDs were formed, of which nine are still operational, and six are in Westchester County.  

SASD schools are often a placement of last resort for students who have failed in other traditional settings. Students often arrive with multiple challenges which can include emotional disorders as a result of traumatic home environments, severe or violent behavior problems, psychiatric disorders, delinquent histories, academic deficits, autism and medical fragility. Students may be sent to SASDs by the NYS Office of Mental Health, the Office of Children and Family Services, the court system (especially after the legal age for incarceration was increased from 16 to 18 under the recent Raise the Age legislation), and local school districts throughout NYS who are unable to provide an appropriate educational environment for children with the most challenging needs.  

Although SASDs are public school districts subject to all the NYS mandates (licensing, testing, curriculum), their funding is radically different from the state aid and property tax base on which most public schools rely. Despite their status as public-school districts, SASDs are regulated by the NYS Education Department's (SED) nonpublic school unit. Tuition rates are set by SED, in a restrictive formula that typically operates on data that is at least two years old. Until the current NYS budget, SASDs were not permitted to maintain reserve funds. Instead, districts were required to spend all funds by June 30th to avoid returning excess money to the state at the end of the school year. With a constantly shifting student population, and outdated tuition rates, SASDs are constantly on the edge of insolvency. The closure of many SASDs over the years has generally been triggered by financial collapse. 
What's the latest?  

Special Act public school districts in Westchester County continue to provide a nurturing educational environment for more than 1,000 students that come from all over New York. 

In Westchester County, SASDs include: 
 
The advocacy agenda on behalf of SASDs for the past few years has focused on: 
  • Permitting SASDs to establish an unappropriated reserve fund, like all other public-school districts in New York State. The recent budget agreement in Albany included a provision to permit SASDs to set aside a reserve fund of up to 1% per year, rising to a total of 4% in four years.  
  • Ensuring that SASDs are awarded an “interim plus” tuition rate at the beginning of every fiscal year, to permit districts to budget using approved growth rates, instead of relying on tuition rates that can be years out of date. 
  • Providing SASDs with additional funding for increased safety and security as part of the implementation of Raise the Age, to address the placement of youth offenders in SASDs by the Courts. 

The lack of fiscal stability of SASDs also affects their ability to borrow – either for capital bonds, or for short-term Revenue Anticipation Notes (RANs). Approximately 65% of NYS public school districts are rated by Moody’s as AA3 or better. SASDs are typically rated as non-investment grade (high yield) which results in much higher interest rates, increasing the cost of borrowing and making it difficult to find willing buyers of risky SASD debt. 

In addition, like all other districts, SASDs have been coping with COVID-19 expenses and regulations. Due to the tuition rate-setting process, there are additional financial wrinkles that SASDs have had to manage during the pandemic. The NYS budget did ensure that SASD tuition rates going forward will include a hold harmless provision for enrollment declines during the pandemic. WPSBA and LHEC have also pushed for a recognition of SASD COVID-19 expenses to be considered direct care costs (instead of overhead), as the rate-setting process will disallow non-direct care costs over a 30% threshold. 
What's next?

With the precarious financial position of these unique public-school districts, advocacy is critical to ensure the financial stability of districts that provide education and support to children who often have nowhere else to go. Our Westchester legislative delegation has been very supportive of SASDs. Also, in the coming year, the NYS Education Department (NYSED) is planning to undertake a review of the tuition rate-setting process. Nonetheless, the overall awareness of SASD issues remains low in New York, even though these schools educate students from all over the state. 

We encourage all our members to learn about the issues that affect all public-school districts, including those that relate only to certain districts (like SASDs). Our voice is stronger with all 54 WPSBA districts (and all 77 districts in the LHEC region) speaking about issues that affect any of our public-school districts. To that end, WPSBA has webpages devoted to several core issues impacting public schools in our region, including a page with information on Special Act public school districts.