Case Study

Step One - Situation Audit 

School district K-12 enrollment: ~4,500

Setting: Rural area with moderate to strong but sporadic energy industry (oil & gas) influence

Characteristics: Recent moderate growth with substantial downside potential; limited to modest support from the energy industry; community division evident between “old timers” and new energy-related population

A relatively small school district in the Rocky Mountain region had been historically subject to substantial employment fluctuations attributable to mining interests. In the early 1980s a couple of large international oil companies were actively pursuing extracting oil from shale deposits using a relatively expensive technology. Oil prices had been increasing considerably which made the venture appear more economically viable. As such, the companies built rather extensive processing plants and mining operations and brought in a large number of employees. However, when oil prices dropped, more than 50 percent the oil companies shuttered the plants and all surrounding activities, resulting in an exodus of their employees and children who populated the local schools. The adverse conditions exerted on the school district’s facilities and budget was substantial but not unexpected. Although some temporary capacity measures were employed, the district constructed permanent facilities as well. These facilities were somewhat underutilized for a few years after the employment bubble burst but the financing provided by the mining industry offset much of this concern. Roll the clock forward about 25 years and this area was again positively affected by mining, this time due to natural gas exploration and production. One of the major differences from the previous experience was the fact that many of the drilling crews were not only temporary but brought in from foreign countries due to the lack of a local workforce. Consequently, much of the impact on local schools was fairly minimal. Even so, when the national economy entered the Great Recession, most of the local workforce remained in place because of the lack of opportunities elsewhere in the country. Thus, the economic conditions were much less predictable with uncertain implications for the local population’s mobility. As you might expect, this situation made it much more difficult to be confident regarding enrollment expectations.

Bottom Line: These examples illustrate the importance of understanding both what is affecting the local economy as well as how it may affect the community and its infrastructure requirements, including school enrollment and facilities. By having a clear grasp of economic indicators, districts can better determine how shifts in the job market can directly affect enrollment and facility needs, both positively and negatively.

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