Custodian Outsourcing and Implementation of Activity Fees Remain TESD Finance Committee Options for 2012-13 Budget
I attended the T/E Finance Committee meeting last night as did Ray and Carol Clarke. However, other than one other resident, the 8-10 T/E school district teachers in the audience outnumbered us. Presumably, as the District begins the teacher contract negotiation process, there will be a continued presence at school district meetings from the teachers union.
Highlights from the Finance Meeting:
It should not be a surprise to learn that real estate tax delinquencies are up from last year, albeit only slightly at this point. However, the District has a process in place for the collection of unpaid real estate taxes and has hired Portnoff Law Association to collect the delinquent taxes. Currently there are 320 delinquent taxpayers, 75 are commercial properties and the remainder residential . . . total outstanding delinquent taxes: $1.7 million.
The majority of the meeting was spent in discussion on 2012-13 budget strategies. The most significant cost-saving measure that remains from last year’s budget discussion is the outsourcing of custodial services. Although the savings remains listed as $950K, the Board recognizes that is last year’s number and will need to be updated. There is the possibility of outsourcing a portion of the custodial services versus all of the services. There was talk of different options, such as outsourcing 3rd shift or segregating buildings to outsource. This will require a detailed RFP with specifics outsourcing options to bid. It was pointed out that some bidders may not be interested in bidding for a part of the custodial services.
There is an internal TENIG meeting on January 12, and the Board is hopeful that the union can ‘give back’ to help with expenses. The Board realizes that it is difficult to measure intangibles in the in-house custodial services . . . many of the TENIG employees live in the T/E school district and their families are part of the community. In addition to living in the community and protecting local jobs, there is a level of safety that comes from having in-house custodial services that is difficult to measure. The RFP is hold and the Board will wait to hear back from TENIG.
The implementation of an activities fee for participation in extra-curricular activities and transportation charges for some extra-curricular activities and busing for summer school remains on the 2012-13 budget strategy list. I recall the activities fee discussion last year, which the Board was able to avoid for 2011-12. However, because so many of the strategies are now in place, there are far fewer options in place.
The cost to the school district for non-mandated extra and co-curricular activities is $1.1 million. Because of the magnitude of the expense, the Finance Committee is looking at various options to help offset some of the cost, including an activities fee. In one scenario, a fee of $50 per student (high school only) involved in non-mandated sports or activities would net $70K to the District. This fee would be one-time only to the student, regardless of the number of activities. For those families unable to pay the fee, a hardship waiver would be in place. The cost-savings to the District for charging for transportation (middle school and high school) for some extra-curricular activities and summer school busing is budgeted at $140K. Of that amount, $20K is attributable to busing for summer school. Further discussion was suggested, including looking at other school districts.
Ray Clarke makes the following observation of the budget strategies,
There are no strategies for further meaningful deficit reduction beyond the possibility of TENIG concessions/janitorial out-sourcing. Reduction of in-service days ($200,000 per day) has been taken off the table during contract negotiations. To me, this means that we are looking at a deficit of at least $2 million. (One possible upside might be better healthcare cost experience – I read today of an S&P analysis that had private insurance spending growing in 2010/11 by 7.35%. Medicare growth was a low 2.6%. This mirrors TE’s experience, and suggests that cost growth has slowed for whatever reason and therefore the 10%/15% increases in the TE projection model may be too high).
The closing of St. Monica’s will affect approximately 150 students and the actual impact on the T/E school district is not clear. St.Monica’s will merge with St. Patrick’s in Malvern so for those students who change schools, there will be increased transportation costs to the District. For those families who decide on public education, there are increased educational costs. Devon and Beaumont Elementary are the public schools impacted by the closing of St. Monica’s. It’s too early to know the magnitude of the impact but it is possible that redistricting will be required to accommodate the additional students (specifically at Devon Elementary).
I asked for clarification on the teacher contract negotiating team. At the last school board meeting, members of the negotiating team included the hired negotiator, Art McDonnell (TESD Business Manager), Sue Tiede (TESD Director of Personnel) and Superintendent Dan Waters but no mention made of school board members. Although historically the District’s negotiating team for the teacher’s contract has always included school board members, it was confirmed that this time there would be no representation on the team by the school board. This decision struck me odd but it was explained that this was a Board decision and that the team would be given the parameters by the Board and receive ongoing updates. I know we have former school board members commenting on CM, who have been part of prior teacher contract negotiations, so I will be curious to know your opinions.
Perhaps, leaving the contract negotiations to the ‘professionals’ will keep the discussion focused and directed …? At this point, the negotiating team has not developed a strategy for public communication.
The Board is developing a communication strategy for the PSERS situation. There was discussion to include a special PSERS presentation for the public and updating the District website with PSERS information. Ray Clarke continues to believe that, “while it’s important for the public to know what’s driving the 1 – 1.5% tax increase that this [PSERS] represents for the next 4 years, it deflects attention from other issues under their [School Board] control.”
In closing, the Finance Committee presented a list of goals for 2012 that included (1) formulation of 2012-13 budget; (2) maintain 5-year budget projection model; (3) develop financial communication model and (4) develop steps for further EIT studies.
Ray Clarke asked the Finance Committee to explicitly address fund balance strategy as an additional goal. Clarke’s suggestion was rejected on the basis that it was included in goals 1 and 2 of the Finance Committee and was covered by the Policy Committee. As a reminder, T/E has one of the largest fund balances in the state — $30 million. Some in the community that would suggest that the fund balance is excessive and that as taxpayer’s money it should be used.