The city and Harlan County school districts have agreed for the past two years to a contract with a "grandfather" clause excluded the flow of state funding for most non-resident students enrolled after April 2001.
Reluctant to agree each time, Harlan is now proposing a new annual contract which would allow state money to follow students regardless of whether they attend school outside of their home district.
"I think it's time we look at something else," said Harlan Indepenent School Superintendent David Johnson. "All that's happening at this point is funding is not coming into Harlan County. The students are still going from one district to another."
"I don't see our board changing their position on that," said County School Superintendent Tim Saylor. " ... This contract that we have is the best for the Harlan County School System."
Suffering from a budgetary crunch resulting from declining enrollment, the county school board adopted the grandfather contract in an effort to stem the continued loss of large numbers of county residents attending the city district.
"I think the county's thinking was that by setting a cutoff date, students who came after that date would have to pay a higher tuition and we'd have fewer students coming to our district," said Johnson. "That's not proven to be true."
Harlan enrollment figures indicate the number of county residents attending Harlan has remained roughly the same over the past two school years. During the 2000-2001 school year, 348 county residents attended the city school district while just 25 city residents opted for the county. As of February, the numbers have increased to 352 and 46, respectively.
Non-resident students not covered by the grandfather clause total 36 for the city district and 1 for the county. Each non-resident student represents approximately $4,000 in annual state Support Educational Excellence in Kentucky (SEEK) program funding.
Limits imposed by the contract effectively remove approximately $200,000 from the city district's budget, at no benefit to the county, said Johnson.
"The flow of county students to the city district has not slowed as they were probably hoping," he said. "Instead, the funding isn't coming to the Harlan County economy."
"They've been real creative in their offers and I understand what they're trying to do," said Saylor. "We're all under a budget crunch. We're all losing students."
Saylor says he is not ready to alter an arrangement which has helped the county improve upon past contracts that allowed SEEK dollars to flow out of his district and into city schools.
"We were on the bottom end of the stick," he said.
During contract negotiations over the past two years, city offers sought to expand the number of non-resident students covered by the grandfather contract by including other groups and extending the April 2001 cutoff deadline.
With the annual contracts predicated upon residency, Harlan has faced an uphill battle when negotiating.
The current grandfather contract includes county residents attending the city system as of April 17, 2001. Children of Harlan Independent employees and the siblings of qualifying students also count toward the district's SEEK revenue.
If the sides fail to agree on a contract for the next school year, neither district will receive any of approximately $1.25 to $1.5 million in SEEK state funding.
"If there's no contract between us, we'll have to sit down and decide on how to handle this," said Johnson, hinting at a possible appeal to the Kentucky Commissioner of Education.
Such an appeal would likely turn against the city district.
"I just think it's too risky to appeal it," said Donell Busroe in 2001, then a city board member.
After reviewing the state's criteria for non-resident students, Busroe said it could be hard to justify a large majority of those attending city schools.
"I thought it was very depressing from our standpoint," she said. "I could just see them thumbing through 340 of those (non-resident student files) and saying no ... because they don't meet criterion at hand."
If previous contract appeals serve as an indicator, the state would likely rule in favor of the county.
A Department of Education spokesperson previously said the state has generally decided in favor of grandfather contracts which include the siblings of non-resident students currently enrolled.