two (2) year period commencing with the 2005-2006 school year...."[1]
*760 On April 25, 2007, the District sent Martinek a notification, stating that it intended to terminate her employment at the end of the 2006-2007 school year, on June 30, 2007. As grounds for the termination, the District listed: (1) declining enrollment, (2) budgetary restrictions and problems, (3) reduction of position(s), and (4) realignment of school organization.
Pursuant to the realignment, Larry Frakes, the former 7-12 principal, became the superintendent and part-time elementary school principal, and David Sextro, the former superintendent, served as assistant superintendent, part-time elementary school principal, and construction supervisor for the new elementary school. Five days after terminating Martinek, the District hired administrator Roy Frakes to serve as 7-12 principal and activities director. Roy Frakes is thebrother of Larry Frakes. The District claimed that the hiring of Roy Frakes was part of a plan to gradually reduce administrators, and that a portion of Sextro's salary was paid out of the construction fund and had no effect on the school's yearly budget. At the hearing in front of the administrative law judge (ALJ), Sextro testified that at the end of the 2007-2008 school year he would retire, leaving the district with only two administrators.
Martinek sent a letter to the Belmond-Klemme School District Board of Directors (Board) contesting the reasons for her termination and requested a hearing before an ALJ pursuant to Iowa Code section 279.24(5)(c). A hearing was conducted, after which the ALJ issued a proposed decision finding the District had shown by a preponderance