S.I.F.T.

REPORT
School Innovative Finance Taskforce Findings and Recommendations

FY 2022
TABLE OF CONTENTS
Introduction ............................................................. 3

Panther Team 1: Local Composite Index (LCI) .... 4

Panther Team 2: State Budget Review ............... 11

Panther Team 3: Philanthropic Opportunities...…16

Conclusion ..................................................... 23

Electronic Appendix List ...................................... 25

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INTRODUCTION

Funding public education in Rappahannock County, Virginia requires very careful planning and
collaboration between school and county administration. With many competing priorities, unique
demographics, an aging population, declining school enrollment, and limited capacity to generate tax
revenue, sustaining a high quality, first-rate public education in Rappahannock takes a creative
approach. With the ever-increasing, largely unfunded demands placed on the public school system by
the state, along with the costs of ameliorating the impacts of COVID-19, problem-solving and finding
alternative sources of funding have never been more important.
The School Innovative Finance Taskforce (SIFT), founded by the County Administrator and School
Superintendent of Rappahannock County, was formed to focus on understanding the current financial
realities facing the public schools and the county, as well as researching opportunities to influence that
portfolio. SIFT included the following members as the steering committee:
 Debbie Donehey, Chair, Board of Supervisors

 John Wesley Mills, Chair, School Board

 Garrey Curry, County Administrator

 Dr. Shannon Grimsley, Superintendent of Schools

 Dr. Gary Aichele, Chair, Headwaters Foundation

The task force spawned “Panther Teams” to research specific areas of interest and report back to the task
force with the intention of disseminating the results publicly.
Specific areas of interest and focus for the three Panther Teams were:
 Local Composite Index (LCI)

 The State Budget

 Philanthropic Opportunities

This report shares background of the SIFT team members, outlines the processes used to review the
three areas of interest, and provides findings and recommendations for further exploration and
discussion in order to address the identified challenges.

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PANTHER TEAM 1: LOCAL COMPOSITE INDEX (LCI) STUDY TEAM

Panther Team 1 convened to study the effects of each variable computed in the LCI to explore possible
local impact scenarios that would arise should these variables be intentionally modified. Sensitivity
analyses and projected scenario schematics were developed to answer essential questions developed by
the team.
 Team Members & Credentials:

o Matthew Black - an economist who worked at Mathematica and later as a senior

VP at SRA International where he ran the economics program and business
reengineering practice for a range of federal clients. He and his wife have owned a
home in Rappahannock since 1995 and have been permanent residents for the past
8 years. Matthew is president of RAAC, the local arts organization, member of the
Sperryville Rescue Squad, and serves on the board of a local education nonprofit.

o Garrey Curry – Rappahannock County Administrator, ICMA credentialed

manager who maintains a Virginia Professional Engineer (PE) license with
specialized training in civil and environmental engineering.

o Casimir (Casey) Eitner - retired recently from the biomedical and biotechnology
industry, where he ran companies and businesses and served as the head of
strategic and financial planning functions at companies, schools and other
organizations. Since moving to Castleton, he has dug deeply into issues that may
affect the county’s finances and overall development, including land use, open
space provisions available through the Virginia tax code which the county has
chosen not to adopt, as well as property assessments and the LCI scoring process.

o Page Glennie - a background in mathematics and program analysis. He has closely

monitored and analyzed both the County’s and School’s budget for numerous
years. He has a thorough understanding of the Local Composite Index (LCI)
equation and has monitored state-wide LCI data for a few years. He is familiar
with county taxes, land use, and state code.

o John McCarthy – former long-serving Rappahannock County Administrator and

currently Senior Adviser & Director of Strategic Partnerships for The Piedmont
Environmental Council (PEC).

o John Wesley Mills – Rappahannock County School Board Chair, career electrical
engineer and program manager in federal government and industry national
security domain.

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 Project/Work Scope: Team 1 met virtually 1) kickoff and establishing next steps and
assignments June 22, 2021 3p-4:30p with all participants attending (agenda/notes attached), 2)
reviewing data and considering follow-up August 4, 2021 3p-4:30p with all participants
attending (agenda/notes attached), 3) our final report was circulated via email to the team and
iterated by all over a 30 day period to produce this document and make suggestions about its
finalization (submitted Nov 19, 2021). This team’s scope was limited to LCI and local potential
to increase state contribution to education by lowering our LCI.

 Essential Questions or Challenges: This team was focused on analysis of the parameters of the
LCI equation (ability to pay based on a uniform function that is dependent on: real estate value,
income, sales tax, population, and school attendance) and potential impact to state contribution if
we can modify our local profile’s parameters.

 Data Analysis: Assignments for research were distributed. Foundationally, the LCI analysis
was the starting point for breaking down the task and creating assignments. Some looked into
land value alternatives, some into income anomalies, and others compared data with other
districts in the Commonwealth. Attached documents are the collection of findings and analysis.
Summary findings follow.

Page Glennie, created a very useful tool (attached) using the LCI formula to enable what-if
analyses to determine the extent to which various realistic changes in variables could favorably
influence our LCI. Gross income and property values together represent 90% of the LCI
financial variables. In our Commonwealth, Rappahannock County ranks 12th among all 146 LCI
jurisdictions in Gross Income/population and 5th in True Value/population. Because of this
indicated wealth, and the small student population, we concluded that it would require a dramatic
and probably unrealistic inflow of low- and middle-income families with many children to make
any significant improvement in our LCI score.

 General Observations:

1. The LCI was developed 40 years ago to measure a county’s or school district’s ability to
locally fund public education, and it continues to be used by the State to allocate funding to
counties and districts.

2. State allocation of funds to counties and districts begins with the Virginia Department of
Education’s estimate of necessary financial resources needed to meet state-mandated
Standards of Quality (SOQ) in each locality. In general, the state allocates revenue to support
a greater percentage of local education expenses to counties and districts determined to have
a low ability to pay for their public education—those with low LCIs.

3. Computed FY2020-22 LCI measures range from 0.1690 to 0.8000 across all counties and
districts in Virginia (index is calculated for two-year periods and is capped at 0.8). An LCI of
0.8000 means that a locality is expected to cover 80% of necessary funds to meet SOQ
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 requirements for its school children. Rappahannock County’s 2020-2022 LCI is 0.7990 one
of a handful of counties with a very high index, and of an even smaller group of counties
with low population/school enrollment with a very high index.

4. LCI is considered by many to be flawed and an inaccurate measure of local ability to pay for
public education. Yet, periodic efforts by the General Assembly (GA) every two or three
years have been thwarted because some localities would gain while others would lose state
funding under proposed revisions to the LCI. The resulting stalemate has persisted for
decades.

5. Given the difficulty noted above in #4, Panther Team 1 did not set out to change or advocate
to change the formulation of the LCI in Virginia. Rather, the Team focused on better
understanding how Rappahannock County was affected by the current formula and, if
possible, document the extent of any “hurt” that could be used in subsequent efforts to justify
supplemental aid apart from changing the LCI itself.

6. The LCI computed for each county/district is complex and consists of three primary financial
factors that are separately standardized by student enrollment and by population: local true
value of property (50%), local adjusted gross income (AGI) (40%), and local taxable retail
sales (10%).

7. LCI critics have noted that a locality’s AGI should not be included in LCI because counties
and districts are prohibited by the state from taxing personal income. Therefore, it is not a
relatable measure of a locality’s “ability to pay” for education.

8. More technically, standardizing AGI by student and by population yields averages which are
well known to be sensitive to extreme values. For example, a relatively few very high-
income households can skew the mean income for a county. A median income measure
would be a better indicator of typical community income. The current LCI uses computed
mean incomes.

9. The “True Value of Property” component in the LCI can also create undesirable anomalies.
There are three sub-components of property value in the county: property in land use
(agriculture, horticulture, forestry), conservation easement, and all other real estate. The LCI
formula values property in conservation easement at its lower assessed value, which makes
sense because that’s what is taxable by a county. However, property in land use is valued by
the LCI formula at its theoretical full market value (FMV) even though it is assessed and
taxed by localities at a much lower value. This inconsistent treatment overestimates a
locality’s relative ability to fund education by creating artificially high LCI values in
localities with larger proportions of property in land use.

The team discussed the potential merits of adding an “open space” designation under land
use (a fourth type permitted by state code that is used by some adjacent counties). The
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 concept was that, if open space land was assessed at a rate higher than other land use types
but lower than fair market value, additional revenues could be generated as some believed
some land use recipients would voluntarily switch to open space as the attendant
requirements might be less onerous. It was determined that an analysis of this possibility
would require data and the participation of the Commissioner of the Revenues to determine
its relative worth and ability to be implemented. While a deeper review should occur,
adoption of the open space type is not expected to change the locality’s LCI.
10. The local application of land use valuation is optional for localities and the program has been
supported by the Board of Supervisors to support land use goals as it serves to align tax
liability with service need for large agricultural parcels thereby acting as a hedge against the
financial drivers that could lead large land owners to subdivide their property.

11. Standardizing the LCI components by local school enrollment and population has a desirable
effect of standardizing for the wide variation in county and school district sizes across
Virginia (the population and school enrollment form the denominator of the LCI equation).
However, as the population and school enrollment get smaller (either by population and
demographic changes or by preference for home or private education), changes in property
value, AGI, or retail sales can have magnified effects on the computed LCI. The same holds,
for example, when a small enrollment declines over time (the effects are magnified compared
with similar changes in large districts). Smaller counties are more at risk to this arithmetic.

 Key Findings:

1. Due to the zero-sum-game aspect of the statewide LCI program, there is no expectation that
the LCI formula will change in the foreseeable future.
2. Rappahannock County’s community profile is not anticipated to change in ways that would
have a positive impact on the state’s financial contribution (~20% school expense based on
Standards of Quality (SOQ)). It is expected that the county’s LCI will hit the maximum of
0.8000 the next time the state calculates it.

o Parameter 1 (income) will most likely increase (see footnote 1) regardless of lower-
or middle-income families entering the profile.

o Parameter 2 (real estate value) will increase with the passing of time and the
construction of more high-end residences. Conservation easements, which do
positively impact the LCI, are not expected increase in their coverage. Because of
land-use taxation reductions are not reflected in the real estate value; the real estate
value is not an accurate measure of the locality’s ability to pay.

o Parameter 3 sales tax is not expected to decline.

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 o Parameter 4 (population) is relatively static with the 2010 and 2020 populations both
reported to be 7,373.

o Parameter 5 (ADM) is declining but because of the construct of the formula, it is the
parameter that has the largest impact on the LCI. Rappahannock County’s
profile/demographic/economy makes it difficult for new families with children to
become established. Additionally, the number of children being homeschooled or
going to private schools is increasing, which further reduces the potential ADM.

3. Beyond the next calculation cycle, without a change to the LCI formula, our Team does not
anticipate a secular decline in Rappahannock County’s calculated LCI. Aggregate AGI, total
property values, and retail sales are expected to continue rising over time all while the
county’s comprehensive plan does not forecast population to increase appreciably. While
student enrollment has declined over the past several years, even if the enrollment trend
reverses slightly, we don’t expect that it will lead to significant reductions in the county’s
LCI. Without significant changes to the county’s land use vision (and none are foreseen), we
expect the county’s LCI to remain close to or at the ceiling of 0.8000, which means the LCI
funding program is not expected to increase the allocation of state education funding.

4. Rappahannock County data collection and analysis could assist a consortium of small rural
districts to support proposed changes to legislation to supplement their allocations of state
education aid outside of the LCI funding constraints. One such consortium exists, Coalition
of Small and Rural Schools of Virginia, and our school Superintendent is engaged with these
efforts.

The best approach to supplement Rappahannock County’s school budget from the receipt of
additional state funds would appear to be less visible, one-off budget adjustments to partially
offset the LCI “penalty” endured by our county rather than to propose a major overhaul to the
LCI. The analysis performed by this team can be used as an explanation of our unique
circumstances and justification for one-off changes that are being explored and proposed by
Panther Team 2.

5. Property value investigation: One of our members, Matthew Black, developed a

comprehensive analysis that highlighted the way the LCI process accounts for property
values in the land use program, counting them at their full assessment value, penalizes
Rappahannock County far more than any other Virginia school district. The reduction in state
funding due to the local implementation of land use (which use is applied at a much higher
rate here than any other county) is calculated to be approximately $550,000 per year.

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 State educational aid is steadily reduced as more property is placed into land use. This
happens because of how the LCI is calculated. The LCI is intended to measure a locality’s
ability to raise taxes for public education. But it falls short for several reasons, particularly in
how it values property in land use. LCI treats property in land use as though it had never
been protected. That is, the LCI formula measures property in land use at its theoretical Full
Market Value. Interestingly, the LCI does measure property in conservation easement
correctly, at its lower assessed value.

6. Income investigation: The LCI calculation of mean income rather than median income
misrepresents the income component, as mean income is more likely to overstate actual per
family income available for land purchase or the purchase of goods and services because
incomes are skewed upward by a relatively small number of very high-income earners (the
“Warren Buffet” effect)1. The use of mean rather than median causes county’s income to be
overstated by about 18%. This problem is not unique to Rappahannock County but generally
penalizes counties with pockets of very high-income earners.

7. Home value investigation: A sampling of actual market price and assessed value for nearly
100 homes sold during a recent two-year period was conducted. The analysis showed that
for homes which sold for over $1 million, property assessments were undervalued by an
average of 27%, while lower-priced properties were only under-assessed by 7%. The team
discussed whether the reassessment process currently under way would rectify this issue or
whether a more specific investigation was needed. True alignment of market price and
assessed value is not expected to lower the LCI, but it could more fairly share the tax burden
among property owners.

 Recommendations for Further Discussion:

o Findings give a firmer basis on which to claim that Rappahannock County is

disadvantaged more than other Virginia counties because the LCI is based on
Total FMV rather than taxable property value and the county has a long-term low

1 Warren Buffet effect is intended to demonstrate a pertinent mean (or average) salary scenario. An average bar
room with 50 clients has mean annual salary of $50k. Warren comes into the bar and mean salary becomes $1B.
Regardless of who else comes into the bar the average will not change appreciably. Alternatively, median salary
would throw out top and bottom salaries resulting in remarkably lower salary reflecting the general client base.
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 growth vision (that serves to constrain overall long-term educational
expenditures). The impact of the unfair treatment of land value and AGI is more
pronounced in Rappahannock County because of our low population and ADM.
Rappahannock County is one of just a few rural counties with low populations and
ADMs, high LCIs, and high percentages of FMV in land use. The results of the
analyses performed by Panther Team 1 and the underlying data should be used to
justify the need for supplemental State relief to the very small group of unique
counties that are similarly disadvantaged by the LCI formula. As such, alternatives
for supplemental state aid in lieu of LCI-based funding should be explored with
this analysis provided as evidence of the disadvantages experienced by a small
group of peer localities.

o Exploring alternatives for supplemental state aid in lieu of LCI-based funding

(outside this team’s scope).

o Exploring alternatives to increasing ADM to account for the homeschooled and

private school children who could be included in public school ADM as partial
credit if they take advantage of portions of the public school educational
experience. These partially credited students accumulate to increase the ADM and
therefore the state funding contribution.

 References/Appendices for Panther Team 1 are hyperlinked at the end of this report.

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PANTHER TEAM 2: STATE BUDGET REVIEW TEAM

Panther Team 2 convened to examine the state budget tool and associated Virginia codes to find
opportunities for creative partnership agreements between districts where supplemental basic aid may be
linked.
 Team Members & Credentials:

o Dr. Shannon Grimsley—superintendent of schools since 2017, having served

RCPS in various capacities since 2006 at both the elementary and high school, as
well as in the central office, including special and gifted education, English, career
and technical education, review and curriculum development, academic services,
federal programming, and civil rights compliance. Grimsley also has experience
as a successful grant writer, bringing over three million dollars in additional funds
to Rappahannock County Public Schools in the last several years. Dr. Grimsley
earned her bachelor’s degree in English from the University of Massachusetts, a
master’s degree in educational administration from Shenandoah University, and
completed her doctorate in advanced educational leadership from Regent
University. In addition to the superintendency, Dr. Grimsley is an adjunct
professor for Averett University instructing courses including School Finance and
Human Resources to master’s students pursuing educational administration.

o Stacey Whitt—Rappahannock County Chief Financial Officer since 2017, having

served as the assistant finance director for two years prior to being appointed the
current CFO. Stacey holds an MBA from Louisiana State University and a
bachelor’s in business marketing management from Virginia Tech. Stacey is a
certified member of the Virginia Association of School Business Officials
(VASBO).

o Eve Brooks—retired from a 40-year career in child advocacy, providing

leadership to State level child policy and budget advocacy in New York State and
State multi-issue child advocacy groups nationally. She also developed school
based mental health services in over 50 charter schools in DC. She now serves on
Boards of the Child Care and Learning Center and the Rappahannock Rapidan
Community Services. Eve has been a resident of Rappahannock since 2014.

o Steph Ridder – A former Legal Services attorney representing low-income people

in civil matters including family law issues in Rappahannock, Fauquier, Culpeper,
Madison and Orange counties, Steph has been a resident of Rappahannock County
for more than twenty years. She has taught courses in Juvenile Justice, Family
Law and The Child, the Family and the State among other courses at the George

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 Washington University Law School. She has also served on the board of the Child
Care and Learning Center, and currently serves as a member of the Headwaters
Foundation Board of Directors.

 Project/Work Scope: Panther Team 2 met both in-person and virtually between May
2021-October 2021 to explore the state budget and identify areas of opportunity for
partnerships or advocacy for state adjustments. Initially, team members and student
interns created a spreadsheet compiling all public school divisions across the
Commonwealth (attached), organized by budget category and biennium over a ten year
period. In this way, the team could analyze division budgets in one place by category in
order to identify obvious disparities in funding streams as well as potential opportunities
to add funds. Also, supplemental basic aid categories were analyzed to explore other
creative partnerships established in order to access this funding stream. After the initial
analysis, the team worked to delve deeper into the county and community constructs of
districts identified as being similar to Rappahannock. Those similar in size and
demographics with a commonly higher LCI identified for this exploration were: Bath
County, Highland County, Goochland County, Surry County, Northumberland County,
and Lancaster County. Additionally, investigation of the history of the Madison
Agreement and its overall impact on RCPS state funding was conducted to better
understand if this contract yielded the most advantageous use of the supplemental basic
aid allowable funding.

Essential Questions or Challenges: The County’s very high LCI places undo pressure on local revenue
for support of the schools. The Team was tasked to examine whether the County could make up for
the relatively low amount of state funding received, owing to our high LCI, through other state
funding streams. The team examined other State funding streams that could be maximized and or
developed so as to reduce the pressure on the County property tax revenues.

The group focused on the following questions:

o Are there other school districts in the state of Virginia receiving supplemental
basic aid?

 If so, what insights can we glean from these agreements in other counties
to optimize our current Madison agreement?

o What opportunities may there be for advocacy at the state level for additional
funding for Rappahannock County?

 Are there opportunities to collaborate with other high-LCI counties with

similar revenue challenges?

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  Data Analysis: A spreadsheet was created to collect information from the VDOE district
budget calculation tool in order to sort categories of interest by district and better identify
districts with similar fiscal situations. High school interns were hired to work under the
supervision of Dr. Grimsley to collect this information and enter it into the working
spreadsheet. Once completed, Panther Team 2 reviewed the LCI, ADM information, and
state funding streams for every county in the Commonwealth.

Additionally, specific phone interviews were conducted by team members to the respective county
Commissioner of the Revenue offices of those identified small counties with high LCIs to determine
the extent to which land use issues and the LCI calculation of such was affecting and/or responsible
for LCI ratios.

Communication was made to other school districts to investigate the origin and process for receiving
Cost of Competing Adjustment (COCA) funds from the VDOE.

 Key Findings:

o No other county had a high LCI solely as a result of significant land-use.

However, other counties with high LCIs did report revenue issues related to
exclusion of taxable land due to the formula.

o When examining state funding categories, the At-Risk Add-On formula has
received significant attention and advocacy from the Coalition of Small and Rural
Schools (COSARS) as a way to provide additional equity to schools with high
poverty, all the while adding revenue for all school districts. Establishing a
minimum amount for districts of at least $200,000, as was done with the
Infrastructure and Operation category last year, would generate a much more
proportionate formula for addressing at-risk student needs than the current
formula.

o Cost of Competitiveness funding may be a solution to receiving additional funding

for instructional compensation adjustments. Currently, this funding stream is used
to bolster instructional salaries of staff in school districts adjacent to Maryland and
other Northern Virginia counties with high teacher salaries made possible by
strong local revenues. The Commonwealth Institute has suggested that this
funding stream be altered to also target small school districts. Currently, the
COCA for Planning District 8 eligible school districts costs the state
approximately $15 million in order to adjust a COCA for support positions.

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 R

o Only one other school district has taken advantage of the Supplemental Basic Aid
mechanism in the state funding formula. Therefore, adjustments made in this area
would not cost the state significantly.

 Recommendations for Further Discussion:

o Panther Team 2 discovered that a full state review of the LCI is likely in 2024
after the Joint Legislative Audit and Review Committee (JLARC) completes its
study. The most direct approach to increasing state educational revenue is to lower
the County’s LCI, however, as Panther Team 1 explained, this is a heavy lift. The
current estimated loss in state revenue to RCPS based on the state calculation due
to land use is approximately $550,000. Exploring the feasibility of securing a line
in the state budget to address the loss of state aid by excluding Rappahannock
from the use of Market Rate for land in land use for the purposes of the LCI
formula would be valuable. A supplementary adjustment could also be sought to
address the loss of state aid for any county with high land use and small ADM
inputs. A collaboration with the identified districts from this report would be
necessary to make the case.

o Work in coalition with other small districts in Planning District 8 to extend the
COCA funding to Rappahannock and other areas disadvantaged by size,
population/enrollment loss, and competition.

o Examine further the feasibility of adding a floor of $200,000 to other budget

categories, such as the At-Risk Add-On. A collaboration with other districts in
this scenario would strengthen this argument.
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 o Work to remove the cap restricting the actual amount of supplemental basic aid
Rappahannock can receive from agreements with contiguous counties (Madison
Agreement). The current state entitlement is capped due to language in Chapter
589 of the 2008 General Assembly which states, “… in no event shall any
payments be made prior to July 1, 2010, or will the sum of the basic aid payment
and the supplemental basic aid payment exceed the basic aid payment the locality
received pursuant to Chapter 847 of the Acts of the Assembly of 2007.” An
amendment should be sought that will eliminate the capping language in order to
be able to receive more than the Rappahannock County share of its FY 2007 Basic
Aid payment of $1,129,280.

o Explore the possibility of working with other contiguous counties with lower LCIs
than Madison to receive additional supplemental basic aid should the cap be
removed.

 References/Appendices References/Appendices for Panther Team 2 are hyperlinked at the end

of this report.

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PANTHER TEAM 3: PHILANTHROPIC OPPORTUNITIES TEAM

Team Mission

The Team's mission was to explore as yet unrealized philanthropic opportunities for financial support of
Rappahannock County Public Schools. One of the concerns from the outset is that any additional
philanthropic support should not provide an opportunity or incentive for a reduction in County support for
the school budget. It is also important that private philanthropic support of RCPS not subsidize parts of
the school budget more appropriately supported by tax revenue.

 Team Members & Credentials

o Dr. Gary Aichele, Chair – A former attorney, educator, and ordained minister,
Gary currently serves as the Chair of the Board of Directors of the Headwaters
Foundation. Appointed by Rappahannock County as a member of the
Rappahannock Rapidan Community Service Board, Gary is also a former member
of the Planning Commission and Town Council of the Town of Washington,
Virginia. Since arriving in Rappahannock County in 2013, he has been active in a
wide range of community and civic activities, and especially involved with issues
affecting the education and welfare of Rappahannock’s children and youth.

o Betsy Dietel -- Betsy is a Senior Partner with Dietel and Partners, a woman
owned, philanthropic advising firm that serves a select client base. The business
has offices in Maine, Virginia, and Washington and provides comprehensive
grants management, thought partnership, and special project oversight to families
who want to more effectively leverage their philanthropy. Betsy served as Board
Chair of the Childcare and Learning and is the current Board Chair of the Path
Foundation, a health conversion foundation serving Rappahannock, Fauquier and
Culpeper County. In her spare time, she is “shepherdess in training” with Bean
Hollow Grassfed located at Over Jordan Farm in Flint Hill.

o Lynn Dolnick – A scientist turned science educator, Lynn worked for twenty
years at the Smithsonian's National Zoo as head of the exhibits department, and
previously carried out research in molecular biology. She also has board
experience serving on for-profit and non-profit boards, including the board of the
New York Times, the National Audubon Society, and currently, the African
Wildlife Foundation. Locally, Lynn serves on the boards of RAAC and Rapp at
Home.

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 Team Advisors & Credentials

o Dee Akre -- A relative newcomer to Rappahannock County, Dee and her family
have made significant commitments to preserving the unique beauty of
Rappahannock County and promoting the well-being of its residents. Dee is
particularly interested in issues of public and private education, food insecurity,
mental health, housing and broadband access. She has served as a member of the
Rappahannock County Conservation Alliance and the Board of Directors of the
Headwaters Foundation.

o Barbara Black – Barbara serves on the Board of RAAC and heads up RAAC's
Claudia Mitchell Arts Fund. Since retiring from professional life as a fundraiser
for arts educational and non-profits, she's been an active volunteer in all RAAC's
programs, as well as the Food Pantry, Benevolent Fund and Headwater's READ
program. With Sallie Morgan, she spearheads RAAC's collaborations with
Headwaters and RCPS to support arts education in the schools.

o Shannon Grimsley – Dr. Grimsley has served as Superintendent of

Rappahannock County Public Schools since July 2017. Prior to her becoming
Superintendent, Grimsley served Rappahannock County Schools for over a decade
in various capacities at both the elementary and high school, as well as in the
central office, including special and gifted education, English, career and technical
education, review and curriculum development, academic services, federal
programming, and civil rights compliance. Grimsley also has experience as a
successful grant writer, bringing over three million dollars in additional funds to
Rappahannock County Public Schools. Dr. Grimsley earned her bachelor’s degree
in English from the University of Massachusetts, a master’s degree in educational
administration from Shenandoah University, and completed her doctorate in
advanced educational leadership from Regent University. In addition to the
superintendency, Dr. Grimsley is an adjunct professor for Averett University
instructing courses including School Finance and Human Resources to master’s
students pursuing educational administration.

o Tom Massie – Tom is a veterinarian, farmer, RCPS alumnus, and father of three
children that have attended Rappahannock County Public Schools. His
professional efforts largely focus on supporting the livestock industry and
protecting public health. Tom serves on the Northern Virginia Community
College Veterinary Technician Curriculum and Advisory Board, The Dean’s
Advisory Council at the VA-MD College of Veterinary Medicine, and the Board
of Veterinary Medicine for the Commonwealth of Virginia. He has served on the
board of directors for the Rappahannock Non-profit Coalition, American
Farmland Trust Grazing Project, Virginia Veterinary Medical Association, and is
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 currently serving as chair of Family Futures. He has a passion for integrating real-
world experience into the education of children and young professionals.

o Steph Ridder – A former Legal Services attorney representing low-income

people in civil matters including family law issues in Rappahannock, Fauquier,
Culpeper, Madison and Orange counties, Steph has been a resident of
Rappahannock County for more than twenty years. She has taught courses in
Juvenile Justice, Family Law and The Child, the Family and the State among other
courses at the George Washington University Law School. She has also served on
the board of the Child Care and Learning Center, and currently serves as a
member of the Headwaters Foundation Board of Directors.

 Project/Work Scope: Panther Team 3 began preliminary meetings in May, 2021 with
follow-up meetings of various members of the Team occurring monthly. The purpose of
these meetings was to explore realistic means of achieving the goals set for the Team by
the SIFT Steering Committee. Specific tasks were delegated to particular members of the
Team for further development and implementation, with an understanding that some
outcomes would take longer than others to achieve. The Team set the end of October as
its target date for reporting back to the SIFT Steering Committee on its progress and
recommendations.

 Essential Questions or Challenges: The first priority of the Team was to identify the
greatest needs of RCPS—particularly those that currently are not—and cannot—be
funded by public tax support. In approaching this question, the Team examined what it
considered to be the strengths and weaknesses of the RCPS, as well as what opportunities
and threats should be considered in planning for a public campaign to garner additional
private dollars to support public education in Rappahannock County. (See Appendix A).

Another priority for the Team was assessing and identifying potential sources of additional
private support for RCPS—both within Rappahannock County and beyond. As part of this
process, the Team considered various options for structuring a campaign, and various ways
of presenting a compelling narrative likely to result in a successful campaign.

The Team considered the pros and cons of establishing a new 501(c)3 private charitable
endowment fund to augment current foundation support for RCPS. While the Team agreed
that certain aspects of the proposal had merit, it concluded that such an approach was
unlikely to provide the immediate financial support necessary to ensure the continued
success of "at risk" RCPS programs. (See Appendix B).

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 The Team then discussed more immediate ways to solicit funds for priority programs
currently dependent on inadequate or vulnerable sources of public funding. The Team
identified the following as the most significant:

(1) providing additional funds to make RCPS more competitive in attracting, recruiting, and
retaining excellent teachers and staff; and,
(2) identifying and funding the newly established Agriculture and Health Academies. (See
Appendix C.)

Finally, the Team spent some time discussing strategies for increasing private financial
support of public education, and addressing the need to ensure that providing additional
private financial support for public education in Rappahannock County not result in any
reduction in public tax support for RCPS. (See Appendix D.)

 Data Analysis: Data analysis consisted primarily in an examination of current RCPS

budgets and related issues, and researching ways similarly situated communities have
used private funds to augment public support of public education. (See Appendices E, F,
and G.)

 Key Findings

1. RCPS's size relative to larger districts results in opportunities for excellence not
enjoyed by larger districts, as well as threats to its future success as an independent
public-school division. With fewer than 1,000 total students, RCPS students benefit
from small class sizes and a school culture "where everyone knows your name." The
small scale of the division also results in RCPS being more "nimble" than larger
districts, resulting in the capacity to implement changes quickly to meet the
challenges of changing circumstances and the possibilities presented by new
opportunities. RCPS also benefits from an administrative culture where creativity and
innovation are valued and rewarded, often resulting in pilot programs that have
become part of RCPS's pattern of distinctive achievement. Examples include
programs like Farm–to-Table and Commit-to-be-Fit, curricular enrichment and
development that include Profile of a Graduate and financial literacy components,
academic programs like the new Agriculture and Health Science Academies, and
institutional additions like the Health & Wellness Center.

The success of these and other programs, however, depends on RCPS receiving
adequate financial support to maintain them and similar future advancements. The
County's declining school population and other factors affecting the LCI for

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 Rappahannock County potentially threaten RCPS's ability to compete in the market
for highly competent and qualified teachers and staff, as well as constraining further
development of programs and activities that distinguish RCPS as among the best in
the State. (See Appendices H-1, H-2, and I.)

2. At present, 58.3% of County tax revenue is budgeted to support RCPS. This percentage
likely represents the upper limit of how much County taxpayers are prepared to commit
to public education. Increases in County real estate tax rates are also unlikely in the
near future, which means that after adjusting for the most recent round of property
reassessments, County funding of RCPS will likely remain flat in coming years. While
possible increases in state and federal funding for RCPS are more likely, additional
sources of private funding for RCPS seem essential if RCPS is to remain in the forefront
of innovative and highly effective rural school districts in Virginia.

3. While income and wealth inequality result in significant negative consequences in the
computation of the LCI and State financial support for RCPS, Rappahannock County
benefits from the generosity of residents and friends both willing and able to provide
private financial support for quality public education. The success of the Headwaters
Foundation, Family Futures Foundation, and Child Care and Learning Center attest to
a level of local support not common in other small, rural communities.

4. The challenge going forward will be identifying RCPS's most pressing needs and
creating immediate ways to make those needs known to those most likely willing and
able to meet them. Private donors will be unlikely to make significant contributions if
those contributions result in any reduction of County tax support for RCPS, making it
essential that such gifts can only be accessed to increase financial support for at-risk
programs and priorities if County funding for RCPS remains at prior/existing levels.

 Results & Recommendations for Further Discussion

o As a result of the Team's work, a new source of dedicated funds to support

teacher/staff recruitment and retention has been identified, and progress is being
made on establishing secure grant funding for this program for the next three
years.

o After deciding that the creation of a new endowment fund was not the best way to
respond to the immediate needs of RCPS, the Team began to explore the
possibility of promoting annual "mini-campaigns" for specific at-risk programs
like the new Agriculture Health Science Academies, and for future enrichment
programs that might expand existing programs in music, drama, and the arts.

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o The Team concluded that these campaigns might appeal especially to taxpayers in
the County who benefit from paying reduced taxes as the result of current
conservation and land use tax abatement provisions. A voluntary annual charitable
contribution in support of specific educational programs of particular interest to
the donor in lieu of taxes is one way to address the fact that less than 15% of
taxable land in Rappahannock County is taxed at fair-market value.

o A remaining question is how to administer these campaigns and resulting

contributions. Restricted funds could be administered by an existing 501(c)3
charitable organization such as the Headwaters Foundation or the Northern
Piedmont Community Foundation. If administered by Headwaters, contributions
to specific programs might be bundled into a single "Rappahannock Futures Fund"
with an annual appeal that encouraged donors to "invest" in Rappahannock's
future. This campaign would highlight the way contributions to the fund benefit
students involved in these at-risk programs, as well as the benefits to the boarder
Rappahannock community.

o Regardless of how such a fund might be administered, an annual campaign to

solicit contributions to the fund—which might take place in September to coincide
with the start of a new school year—should be conducted by a separate group of
leaders in the community familiar with potential donors, who themselves are
committed to the goal of increasing private charitable support for Rappahannock
Public Schools. Over time, this annual fund drive could evolve into a program that
in addition to raising money for specific RCPS programs and activities, increases
public awareness of the needs and successes of RCPS in a way similar to the
impact of the Northern Piedmont Community Foundation's "Give Local
Piedmont" campaign.

o Finally, however additional funds are raised to support RCPS, it will be of critical
importance that the terms and conditions for receiving and distributing funds to
support RCPS prevents private funds from being substituted for reduced public
support—or to pay for budget lines more appropriately paid for with tax dollars. It
is imperative that from the outset, any additional private charitable support for
RCPS be viewed as "over and above" public financial support provided by
Rappahannock County taxpayers.

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 References/Appendices References/Appendices for Panther Team 3 are hyperlinked at the end
of this report.

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CONCLUSION

In sum, SIFT found that the formula currently utilized by the state to allocate funding is inequitable for
small, rural counties in general, but even more so if those counties also have a high community use of
land use taxation. Since a complete overhaul of the LCI formula is unlikely to occur in the upcoming
biennial budget development process, steps should be taken to optimize elements that drive state
revenue. At this time, the variable the school system and county has most control over is average daily
membership, or ADM.
Recommended ADM influence factors worth considering:
 Continue to provide innovative educational programming with community emphasis.
Current Agriculture and Health Science Academies are examples of programs that make
RCPS stand out and attract families with children.

 Cultivate partnerships with county independent and private school systems in order to
share and leverage resources.

 Promote outreach to homeschool population emphasizing services that are available to

homeschool students without fulltime enrollment (i.e. dual enrollment classes, lab
sciences, assemblies, etc.).

 Review policies that allow nonresident students to attend RCPS as part of

recruitment/retention county initiative (i.e. work in the county, at RCPS, or pay taxes).
Perhaps consider expanding enrollment options for children with grandparents who are
employees of the county/school.

In addition, advocacy is needed to pursue more beneficial state code language geared toward increasing
supplemental revenue to RCPS (and similar schools). Areas to advocate for revisions:
 Language in the VA Code capping supplemental appropriation revenue.

 Pursue additional shared resource agreements with other contiguous counties (Page,
Culpeper, Warren).

 Application of funding floors (such as $200,000) to other state funding formulas.

Finally, the role of philanthropy in bolstering and enhancing public school programming and services
cannot be overstated. RCPS success relies on support from generous community donations as well as
grants from foundations such as Headwaters, PATH, Northern Piedmont Community Foundation,
FAGUS Foundation, and MHA Foundation to name a few. It is recommended that RCPS continues to
seek philanthropic funds and grants, especially for pillar programs that are not supported in SOQ state

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funding, and work toward sustainability models to maintain these services. The availability of
philanthropic funding can be invested in RCPS as value-added differentiators for students and staff as
compared to what is possible though typical publicly funded education resources.

SIFT will continue to work through these recommendations with county officials, the School Board, and
Board of Supervisors through budget development as well as propose recommendations for use in the
RCPS Comprehensive Plan which is currently being revised and proposed for FY 23-FY28.

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ELECTRONIC APPENDIX LISTING

All referenced appendices and supporting materials can be found on the SIFT webpage.
Appendices included digitally are as follows:
Preliminary Meeting Notes
SIFT One-Pager
Panther Team 1:
LCI Analysis
Virginia Land Use Recent Amendments
Research Project: Socio-Economic Impacts of Conserved Land on Virginia’s Eastern Shore
Virginia Mercury Article: State Education Funding Lags in Virginia
Op Ed: Equity in Virginia School Funding
BEA Rappahannock Per Capita Personal Income Chart
Presentation: How it Works: Virginia’s Use-value Assessment Program
Technical Report: Clarke County, Virginia Cost of Community Services Study
Eitner Op Ed: Divergence between Assessed and Market Value of Properties in Rapp 2021
Fair Market Value Notes
Black Land Use and LCI Analysis
LCI Sensitivity Analysis Worksheet
Black LCI Analysis 2
Mean vs. Median LCI Worksheet
Misc. Dialogue
Article: School District Funding in Virginia
Team Meeting Notes 1
Team Meeting Notes 2
Supplemental Basic Aid Code Language
Virginia School District 2020-2022 LCIs
VDOE Calculator Notes

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Panther Team 2:
Budget Review Data Entry Instructions
State Budget Tool District Comparison Sheet
Supplemental Basic Aid Request Letter
Most Recent Madison Agreement
Approved RCPS FY 22 Budget

Panther Team 3:
Appendix A: Rappahannock County Public Schools SWOT Analysis
Appendix B: Rappahannock County Public School Endowment Fund (Draft)
Appendix C: Notes from “Teacher Incentives in Rural Schools”
Appendix D: Possible Elements of a Multi-Pronged Development Strategy
Appendix E: RCPS School Budget Issues
Appendix F: Issues for Discussion & Consideration
Appendix G: A Regional Model: Rural Schools Partnership
Appendix H-1: “Q & A: How to Attract Young People to a Rural Region”
Appendix H-2: Excerpt from “How to Attract Young People to a Rural Region”
Appendix I-1: LCI Comparisons with RCPS Comparison Group
Appendix I-2: LCI Comparisons with Selected Virginia School Divisions

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