I think it's great that you are heading up such a huge project - 28 tanks! I'm currently trying to save a tank at a local elementary school, but their budget is pretty limited so it would become almost a charity case. You must be a biology teacher I'm guessing?
A couple of things you might want to consider:
1) Search the web for a local reef society group, if you're in or near a major city, chances are that you have one. I would be willing to bet that you may be able to solicit tax-deductible donations of Live Rock, equipment, fish, corals, etc if you have an active and friendly group. I have found that in my local reef society there are always people with too many corals, fish conflicts, etc or are just getting out and you can get all kinds of stuff uber cheap.
2) I would strongly consider the ramification of harvesting livestock or anything else from the ocean, even with a permit. What I am referring to is that you never know what you're going to bring into your system from the ocean. There are contaminants that, from what I understand, tend to me concentrated on the shoreline. You also greatly increase the possibility of introducing unwanted pests into your systems. Some of these can be quite dangerous. I'm searching for the link on here to a Reef Central thread where a guy got a bunch of stuff from the beach, and one of the 'campers' was a type of copepod or something that burrows into your skin and causes a severe rash. Other things like certain snails and shrimp can cause problems. Just something to be aware of!
3) Test strips are notoriously inaccurate, and they also must be discarded if they are expired (especially if they are expired!). The best bang for your buck will be the API Master Test Kit, there are 2 versions for SW, a Reef Master and Saltwater Master. Get the SW Master at a minimum because you need to find out if you have any ammonia or nitrite right now - I wouldn't trust the dip strips. You also want to test your Alkalinity so you might want to get that test separately. You can wait on Calcium until you decide to go to a full blown reef, and unless you get a bigger tank with a lot of hard corals, good lights, and lots of flow, calcium probably won't be that big of a concern. But as I'm writing this, I realize you probably know this - I forgot about your large aquarium experience.
4) I would say that if you know - for sure - that you will be going to a much larger tank, then you might be able to get away with adding a small Blue Tang. However, you must exercise caution here, because a Blue Tang is a very calm, docile fish, and is susceptible to Head and Lateral Line Erosion (HLLE) when stressed, and putting one in a tank with aggressive damsels may not be the best choice. I think it would be a better idea to wait until you have the bigger tank, or better yet, wait until you have multiple tanks and make one an aggressive tank and save the Blue Tang for the community/friendly tank.
5) I would not bury the dead fish in the substrate. This was a serious error, IMO. I would locate the remains and remove it immediately. The fish that are in the system are providing a significant enough amount of ammonia to feed whatever bacterial colony is established, and this bacterial colony will size itself according to the bioload requirement. On this note, Biozyme and other like products are rarely effective, so while it may have provided a small amount of bacteria, it is more likely that it did not, and your tank is now in a cycling process, a mini-cycle at minimum. This causes stress on the fish and is likely a contributor to the the deaths experienced (on top of the bullying).
I would be interested to hear more about your experience working on major aquariums. Which aquariums and what was your job?
What size are the 18 tanks you have for the students?
Welcome to AA, you will find very patient and helpful people here. Again I commend you on bringing this into a classroom environment on such a constrained budget! Find local people to help contribute!
