The circumstances preceding and following the 1984 merger of two small school districts in North Central New York State contained cooperation, controversy, and disharmony. The school districts had enough similarities--in their rural, agricultural base, in the pride and loyalty with which many residents viewed their schools, in the central role played by each school within the community, and in the economic hardships faced by both schools due to lowered enrollments and increasing educational demands mandated by New York State's Regents Action Plan--to make reorganization plausible yet extremely challenging. Differences between communities added to the reorganization challenge. Ellison's wealthy subpopulation of retirees and summer residents were more in favor of the merger and the promise of lowered taxes that went with it than Gramville residents. Gramville's disproportionate size advantage and tradition created an aura of superiority which disturbed Ellison parents, students, and teachers. The goal of reorganization (to improve educational programs while lessening taxpayer burden) was met, although some benefits arose because of financial incentives offered by the state rather than from reorganization itself. This case study pays particular attention to controversial decisions and incidents surrounding them. Viewpoints of taxpayers, teachers, students, and school administrators are used to convey local perceptions of these events. (NEC)