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Q: What is a consolidation? 

A: Consolidation results in one new district in place of two or more districts that consolidate.


(MCA 20-6-203) Elem  -- Two or more elementary districts in one county may consolidate to organize an elementary district.


(MCA 20-6-208) Elem – Any two or more elementary districts located in more than one county and whose territory is contiguous may consolidate to organize a joint elementary district.


(MCA 20-6-315) HS --  Two or more hs in the same county may consolidate to form a high school district.


(MCA 20-6-321) HS – Any two or more high school districts located in two or more counties and whose territory is contiguous may consolidate to organize a joint high school district.


Q: What is annexation?

A: Annexation results in the closure of a district and the attachment of that district to another district, which continues.


(MCA 20-6-204) Elem -- An elementary district can annex to another elementary district in the same county when: 1) 3rd class where high school is not located attaches to 3rd class where a high school is located, or a 2nd class, or a 1st class; 2) a 3rd class joins a 1st or 2nd class; 3) a 2nd class joins a 1st class.  Process is defined in MCA 20-6-205.


(MCA 20-6-316) High School -- A high school may annex to another high school district in the same county when:  1) a 3rd class is annexed to a 1st class or 2nd class district; 2) a 2nd class is annexed to a 1str class district.  Process is defined in MCA 20-6-317.



Q: What is the process for consolidation?

A: 1)  Districts jointly decide whether to consolidate with or without assumption of bonded indebtedness.

2)  A consolidation proposition is introduced in each district by either of two methods:

a)  trustees pass a resolution asking the County Superintendent to order an election in their district, or

     b) 20% or more qualified electors of the district may petition the co superintendent requesting an election.

3)  When the County Superintendent receives a petition or resolution from each district, within 10 days after the receipt of the last resolution or petition, the County Superintendent will order the trustees of each district to call an election.

4)  Each district calls an election .  If there will be assumption of indebtedness, the election must also follow MCA 20-6-206(Elem) or MCA 20-6-318(HS).  If there will NOT be assumption of indebtedness, the election must also follow MCA 20-6-207(Elem) or MCA 20-6-319(HS).

5)  When the election is done, the County superintendent will decide if the proposition was approved in each district.  If approved, within 10 days of receiving the last election certificate he will order the consolidation.   For assumption of indebtedness, the order will state that the taxable real and personal property of the consolidated district will assume the debt.  The order will state the number of the district and for an elementary consolidation, the county superintendent appointment of trustees who will serve until the next election.  The co superintendent will send a copy of the order to the county commissioners and the trustees of each district involved in consolidation.  

6) If any district proposition fails, the consolidation effort fails for all districts.     


Q: What is the process for annexation?

A: The process is the same as for consolidation, except that the petition or resolution comes from the district that wants to annex to another district.  When the county superintendent receives the petition or resolution form the district wanting to be annexed to another district, the county superintendent must obtain a resolution from the trustees of the district receiving the annexation, giving the county superintendent the authority to annex the district.  The county superintendent then can order the district that wants to annex to another district to hold an election.  If the electors of the district that wants to annex to another approves the election, it passes.


Q: Can districts in two or more counties consolidate?

A: Yes, MCA 20-6-208 (Elem) and MCA 20-6-321(HS) allow districts to consolidate to form a joint district.  The process must be "without assumption of indebtedness."  Each district submits its resolution or petition to the county superintendent of the county where their school is located, and county superintendent must cooperatively cover duties required by law for consolidations.


Q: What are the effects of consolidation/annexation on employees?

A: (MCA 20-6-410) Teachers, principals, or other certified employees who are tenured will have absolute preference in hiring for the first year after the joining of the districts for any vacant position for which the person is qualified.  A noncertified, nonprobationary employee has preference for any vacant position and will not be probationary when hired. 


Q: How are trustees positions handled for an annexation or consolidation?

A: (MCA 20-3-312)  Trustees of a district to which another district is annexed (or practically any other method of district boundary changes) continue as trustees after the annexation.  In the case of an elementary district consolidation, the trustees are appointed by the county superintendent in the order of consolidation under MCA 20-6-203(5). 


(MCA 20-3-320) The terms of newly created trustees positions may be shortened in cases of consolidation to ensure compliance with the requirement that the terms of a majority of trustees on the board may not expire on the same date.


Q:  How is the cash balance handled when a district closes by annexing or consolidating with another district?

A:  It depends on whether the districts consolidated or annexed.  In a consolidation, MCA 20-6-414 requires the balances of the fund types to be combined for the districts.  That is, the 2 districts' general funds are combined, the 2 districts' transportation funds are combined, etc. If debt is not mutually assumed in the consolidation, the debt service is kept separate.  In an annexation, MCA 20-6-413 allows the district remaining after the annexation (i.e., the continuing district) to deposit the balances of the closed district in any fund or combination of funds at the trustees' discretion.  Liabilities of the closing district, including final bill payments, termination payouts, etc., must be resolved before the remaining balances can be addressed. The way the remaining balances will be deposited and used after closure of the annexing district is a matter that is normally addressed by both boards of trustees while negotiating the annexation.


Q: Is there any financial incentive for annexation or consolidation?

A:  While there is not a "bonus" for annexation or consolidation, the law allows the districts that are combining to keep the portions of 2 basic entitlements for 6 years. The first year after combining, the district budgets and receives state funding for the Average Number Belonging (ANB) and basic entitlements of the combining districts, regardless of whether schools close or remain open.  The second year and third year, the district receives the ANB based on enrollment in the previous year and the basic entitlements they would have received as separate districts, regardless of whether the schools are closed or remain open. The combined district receives 75% of the second basic entitlement for the 4th year, 50% of the second entitlement in the 5th year, and 25% of the second basic entitlement in the 6th year after consolidation (HB488, 2001 Session).  After the 6th year, the district receives a single basic entitlement for the district and additional basic entitlements only if the district maintains an open school that is 20 miles from the other schools of the district.  (MCA 20-9-311(8)(a)(iv))   The entitlements are funded partly by the state and partly by the taxpayers in the BASE budget area, as usual.


A nonoperating district does not benefit from the financial incentive for consolidation.  If a district is in nonoperating status the year before the consolidation or annexation, the combined district's ANB will not include additional ANB because the nonoperating district had no enrollment in the prior year to generate ANB for the first year of the combination.  The basic entitlement of the combined district will likewise not include a separate entitlement, since the nonoperating district did not receive a basic entitlement in the prior year.  (ARM 10.23.108)


  Q:  What happens to the cash when a district annexes or consolidates with another district  (MCA 20-6-413 and 414)?

A:  In an annexation:   Cash must first be used to pay any debts of the closing district, including bonded indebtedness, tuition, transportation costs, payments due on contracts, payroll and benefits owed, etc.  Any debt service fund cash must first be used to pay bonded indebtedness.


If cash remains after settling all debts, the cash must be transferred to the trustees of the district or districts assuming the territory of the closed district. When 2 or more districts are assuming the territory, the cash is prorated based on the taxable value of the attaching properties of the closed districts.


Any tuition still owed by the closing district must remain the obligation of the taxable property of the closing district (i.e., require a special levy for tuition on ONLY the taxable valuation in the closed district territory), unless the district of attachment assumes the debt.


In a consolidation:  Cash from one district's funds is combined with cash from the same fund of the other district (i.e., general fund to general fund, transportation fund to transportation fund, etc.)  If districts consolidate without assumption of indebtedness, each district's debt service balance must be kept separate so that each district's debt service obligation can be paid using taxes raised in the separate taxing jurisdictions.


Q:  What are the closing district's options for disposing of the school property?

A:     Before closing, the regular laws on district purchase, use and disposal of property would be effective.  MCA 20-6-603 and 604 list requirements for all district trustees’ disposal and sale of property, including publishing and hearing requirements.  Most closing districts contribute all remaining property to the district to which they attached.  The trustees of the continuing district then determine how it is subsequently used.   


Once the district is closed, the law is specific.  MCA 20-6-417 requires that “whenever district boundaries are changed,” title to real and personal property of the district involved in the boundary change become the property of the district that acquired the new territory.   

OPI Contact:  Nica Merala at (406) 444-4401 or email      

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Last Updated
3rd of February, 2010

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