No Custodial Outsourcing for 2012/13 but looks like Sports and/or Activity Fees Could be a Reality in T/E

Based on attending the TESD Finance Committee meeting, it looks like the custodial outsourcing in the school district is ‘off the table of consideration’ for another year.  If you recall, the most significant cost-saving measure to the District remaining from last year’s budget was ‘outsourcing of custodial services’ with a savings listed as $950K.  After internal TENIG (non-instructional union of TESD) discussion, the custodial workers made an offer to the school district, which was presented to the Finance Committee by school board president Karen Cruickshank.

For the 2012-13 year, the custodial workers of TENIG have offered a 10% reduction in their salaries and they will not take the 4.5% increase contained in their existing contract. In real dollars, the cost savings to the District is $197K in salary reduction, plus the additional percentage contractual savings for a total savings of approximately $285K!

Beyond the generosity of the custodian workers offer, the Board realizes that it is difficult to measure intangibles in the in-house custodial services … many of the employees live in the T/E and their families are part o the community.  With that comes a level of safety that is difficult to measure.  Although the custodial workers offer has to be reviewed internally by the District attorneys, the it received overwhelmingly positive support from the Board.

A $285K savings to the school district plus the bonus of saving local jobs … congratulations to TENIG, custodial workers, District staff and Karen Cruickshank (on behalf of the school board) for such a positive outcome early in the 2012/13 budget discussions.

Ray Clarke also attended last night’s Finance Committee meeting and I thank him for his willingness to share his thoughts and opinions below:

Notes from Ray Clarke, TESD Finance Committee Meeting

A relatively well-attended TESD Finance committee meeting on Monday, and some important topics discussed – in varying depth and with varying data quality – the two not always correlated.

1.  A significant announcement from Mrs Cruickshank at the end of the meeting: the janitorial staff in the TENIG union have offered to take a 10% reduction in wages for the 2012/13 school year. Their contract entitles them to, and the preliminary budget assumed, a 4.5% contractual increase. By my math, starting from the $1.97 million compensation line item provided by Dr Waters, this means a total benefit versus the budget of $286,000. In return the union asked for the district to remove the outsourcing option for 2012/13. (Also, with no further actions next year, the salaries would revert in 2013/14 to the contracted level – a 20% increase that would not of course be a tenable option).

After getting the numbers sorted through, the Committee was very appreciative and broadly in favor of this offer, weighed against a potential outsourcing saving three times the offer, but with risk and the uncertainty of basing the alternative on now-expired bids.

This looks to be a good result for all concerned. Employment security is maintained and compensation continues to move towards market levels. Importantly, it can continue to do so assuming similar flexibility next year and a more equitable benefits program in the next contract.

2. Much information was shared regarding possible fees for “sports and activities”. Most neighboring school districts have either implemented some kind of fee or are considering doing so. There are as many approaches as there are school districts. Significant money can be raised: at $100 per sport/activity (with a cost to the district), the revenue would be about $150,000 for both high school students and middle school students. For context, about 1700 of the 2050 high school students participate in at least one sport/activity of any type; the middle school numbers are similar.

There seems to be a consensus that the district should charge only for those activities for which it incurs costs for either extra teacher time (EDRs) or for transportation. (An interesting issue thus raised: the process by which a club gets the status of having compensated teacher oversight). Also clear is that there should be a process to ensure that no student should be prevented from participating for financial considerations.

Decisions still to be made:

  • The same fee for any sport or activity, or some kind of tier system loosely based on cost?
  • A fee per student regardless of number of sports/activities or a fee per sport or activity up to a maximum?
  • The amount of any fees

The administration was charged with coming back with further permutations. It seems to me that it would be helpful to also tabulate other districts’ experience regarding participation levels and administrative costs. There seems to be a good argument for action here. For me, fairness would suggest some kind of tiered fee structure with a maximum, if it can be administered reasonably. The Committee is keen to give this air time at the Budget Workshop.

3.  On revenues: no immediate bad news in the Corbett budget proposal. The move to bundle four separately calculated state funding items (basic ed, social security subsidy and public and non-public transportation) looks to me like a plan to cap future funding in a way that is unrelated to the actual underlying costs of those items. The one loss is a $50,000 grant that TE uses to fund the homework club.

Less good news on the property re-assessment front: $573,000 of lost revenue more or less planned for in the budget, but in addition $550,000 at risk from nine commercial assessments being appealed to the state courts and $820,000 at risk from a Vanguard appeal.

This illustrates the district’s vulnerability from relying solely on one tax that falls disproportionately on a class or classes of taxpayer that see no direct benefit from the tax, when many of those who get the benefit see their tax dollars going to other jurisdictions. But unfortunately any discussion of diversifying the tax base was hijacked in the last election.

4.  A big mystery around the district medical benefits cost. Independence Blue Cross is apparently proposing a change in the way it gets compensated for administering our self-funded plan. Currently they get a 2.5% administrative fee (if only the overhead for the entire US healthcare system were that low!). Much perplexity about the proposal since it is being couched in terms of changing provider discounts. However, the net effect would be a $400,000 to $620,000 cost increase. I’m not sure there will be too much to be done about what is effectively a price increase, but more clarity needs to be provided.

5.  No net surprises in the current district financials so far. We are on track for a deficit of about $0.75 million, as budgeted after adding back the $1.3 million budget reversal.

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19 Comments

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  1. Great gesture by the custodial union. Now it is time to fix the teacher’s contract and get their benefit costs in line with what the rest of us pay in the real world. Teachers and other staff paying $1000/year for the best family medical plan possible is just not fair to tax payers. That coupled with high raises on this mysterious matrix scale that Ray Clarke has referred to in the past to is eating up too much of the school district’s budget.

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    Squeeze Reply:

    What is so mysterious about the matrix scale?

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    TE Observer Reply:

    Sure it’s great to say we should have the teacher’s benefits reflect what the rest of us in the “real world” pay, but that’s a slippery slope. I’m not sure how many teachers live outside the district but we’re lucky in TE that we are taxed very little – no gross receipts tax and even more so no EIT. Most people in other districts are taxed in those ways. If we start trying to benchmark things to the “real world” then we’re going to need to look at the revenue side and new taxes. The presentation by the school district on their website does play up the fact that we’re taxed little relative to the rest of the state.

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  2. The TE board/administration should contact the UCF board/administration for the extensive documentation relating to activity fees. UCF instituted a tiered fee structure recovering about 15% of the incurred costs. There has been no discernible falloff in student participation.

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    Pattye Benson Reply:

    Keith, TESD looked into some of the nearby school districts, including UCF. In the handouts, they offered the following information for Unionville-Chaddsford. Does this seem accurate?

    High School, Tier system, $10, $25, $50, $75 (Is tier structure based on participation of a student – # of activities/sports or the costs of the various activities/sports?)
    Individual cap of $200 per student
    Community Service Club – $10
    Middle School – $20 for each sport
    ——————————————————
    Radnor – No fees for 2011/12, under review for 2012/13.
    ——————————————————
    Lower Merion – No fees for 2011/12.
    ——————————————————
    Great Valley – High School & Middle School students pay $50 per activity. No family will pay more than $400 during school year. No single student will be required to pay more than $150 for activities.
    ——————————————————
    Phoenixville – High School & Middle School students pay Minor activity fee of $25/activity; Major activity fee of $50/activity. No data as to exactly what ‘minor’ v ‘major’ means. There is an individual cap of $75 per year and family cap of $125 per year.

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  3. Yes, that information is accurate. The rate is based on the cost per student to support the activity.

    For instance, soccer costs the district $25K. There are 60 participants. The cost per participant is about $400. The participation fee is set to $75 or about 18% of the total cost.

    See this page for detailed information.

    http://www.ucfsd.org/userfees.html

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  4. Kudos to the custodians for being able to represent themselves in bargaining. Had TENIG and PSEA been so diligent, we might never have subcontracted busing….but the unio prevented the bus drivers from offering any changes to their contract or language.
    Again — health care cannot be defined by the benefit — we have to define what we can justify paying and then let the union side go about negotiating with Blue Cross as to what they would buy. WAY bigger pool that way. I support fees because it allows famlies to contribute rather than lose the activity due to cost. When you look at the cost of what parents pay for activities outside of school, these fees are peanuts. Again — there has to be a free and reduced population adjustment.
    And Ray — I understand your hijack rant….mild this time around …. but I truly believe it would never succeed and politics only capitalized on that — trying to own the right side of the issue — The state already has an income tax — and needs to be more honest about what they collect and what comes back to schools. That’s not a new tax.

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    Ray Clarke Reply:

    You have flagged a very good point here: the custodians themselves took the lead here, recognized the realities, made the not-at-all-easy adjustments, and fully deserve our appreciation for their approach and the outcome.

    On the state income tax; I suspect that most in TE would prefer to see their money being used for their children, rather than absorbed and reapportioned in the state budget, or indeed sent to another jurisdiction where they happen to work. We should also note that the state does currently pay for half the PSERS cost that is so easily blamed for all our ills.

    The Finance Committee draft goals do include the following:

    “Review the TSG’s final report and recommend to the full Board suggestions for next steps in further analysis of an Earned Income Tax”.

    Let’s see if the TTRC allows that to stay in the final version!

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  5. The contract negotiations with the Teacher’s union will be an all out war. The old days are finished. I work for a firm where I pay $2860 per year for family medical coverage AND have a high deductible. $950 per family member – $1900 total family. Some of that is offset with a $700 contrib by the firm. That is the future for the teacher’s like it or not. The community is tapped out on tax increases. An earned income tax will be rough going to say the least. Also, the pensions must be reformed. Simple math dictates that necessity.

    I am all for NOT decreasing the salaries and am for providing COLA and merit pay increases. The district has great teachers. However, they need to enter the realities of this century.

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  6. Sincere kudos to the TENIG staff. Taking a cut in pay is not an easy thing to do. They deserve to be commended.
    The teachers must consider their contract as well and not leave the cost savings all to TENIG as they did in the previous year. They should have been ashamed of themselves with that action. Certainly lost my respect.

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  7. With all due respect to the custodial staff, the teacher’s are much more inportant. Yes, things need to change certainly but I don’t see actual cuts in pay for teachers as part of the solution.

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    Township Reader Reply:

    MD — ironic perspective. In fact,as employees go, the custodians are probably as important — because they are committed to TESD, not tenured, and not easily replaced. They keep their jobs because they are good at them. Teachers — to be candid — are a dime a dozen. There are thousands out there looking for jobs. Unlike custodians, they cannot be fired, do not put their pay at risk with a strike (TENIG doesn’t get paid when they don’t work — teachers do), and would never fight their union for the right to be heard. PSEA speaks for teachers. In this case, the ONLY way the custodians were heard is because they stepped up. As I said earlier — when the bus drivers were in a similar situation — the TENIG and PSEA reps would not allow them at the table, would not let them make an offer to stay more affordable, and allowed the deadline for contracting out to force the board’s hand.
    In this case, let’s see if the rank and file of the teachers are willing to be as brave and honest at the custodians — because the young teachers are in jeopardy (seniority) and the people at the top of the schedule will have to settle for the 2.5% increase in pension every year they work — not a pay raise.

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  8. You are certainly entitled to your opinion but based on my experience in the school district, these teachers are by and large exceptional. Sorry, but custodians are NOT more important to a school district. They didn’t cave in out of the goodness of their hearts either. They know full well they are completely expendable.

    As for the teacher’s, the healthcare benefits and pension scheme needs to change. That is a simple fact of math. However, they have earned the salaries. Check the test scores. They will get a pay raise although it won’t be as much as what they received in the last contract. I am not pro-union at all. I think the union is a disgrace but again, the teacher’s themselves have done the job. Results count. Results matter.

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    Not so fast Reply:

    MD – Let’s not lump all of the teachers together so easily – that would be completely unfair and totally inaccurate. Sure there are exceptional teachers in the district, but there are also teachers in the district that are exceptionally BAD. In fact there are teachers in this district that are verbally abusive bad people as well as those that just suck at their job. This is fact. The system perpetuates it. It exists now just as it did when i was a student in the district myself decades ago.

    A system that bases salary increases on nothing more than years of service and credits/degrees is proven a total failure. It is long past time to reward the best and get rid of the worst….

    If only the good teachers would band together and drive change from within their union (stop protecting the bad/poor/underperforming teachers) maybe the would garner more support from the community.

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    Township Reader Reply:

    MD — Your “simple fact of math” is what has kept contracts from being ratified all over this state of PA — the state with the highest percentage of strikes in teachers in the country. If I custodian isn’t any good, good-bye. If a teacher isn’t any good — so what? I completely agree that we have fabulous teachers — but the power of the process will never yield the teachers stepping up — because while any individual teacher is expendable, they are protected from termination. Will the teachers stand together to protect the jobs of some of them? I wonder. If I were running the negotiations, that’s the only way I would be able to approach it. Give something up or we’ll do massive layoffs. Class size is an artificial job protection. There is no way to break the teacher’s union — and while the custodians offer is a bit desperate, it does reflect an understanding of economic realities that are class based….teachers are protected — and as you said it — custodians are expendable.
    This is hard because there are many, many good teachers in our system. But their salaries are not market driven….the custodians are. And most of the taxpayers are paid based on this economy — i.e. market driven.

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  9. I agree with township reader. There are thousands of teachers looking for jobs. Can you honestly tell me that one 26-40 aged teacher is better then another, which seems to be the average age of the teachers in TESD. Are we saying that the teachers in Downingtown, Kennett Square, Media, and other lesser paying school districts, are not as good as our teachers? Maybe we should be looking at teaching credentials. The test scores from our schools are a product of our environment. We live in a wealthy area with educated parents, and that reflects on the students and there preformance. Look at the statistics that are provided in the newspaper every year, low preforming schools are in poorer districts. All we have been hearing is how our taxes are lower then everyone else. Great!! Why does it seem like we have to catch up , by paying more in taxes, with the Radnor and LM school districts. LM has two brand new high schools, Radnor has a new middle school, the high school was totally redone, and a new elementary school built in the past 10 years

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  10. No, you are missing my point. LM and Radnor have something to show for there higher taxes. TESD has no plans to build more schools, and if they did, I would understand my taxes being increased!

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    Township Reader Reply:

    Be careful AO — “building envy” is always about the next new idea. The only reason Radnor and Lower Merion have newer facilities is partly because it took them 10 years to get a decision on what/where to build….they lived with major drek in that time period — and Radnor delayed their middle school for a long time because the had exceeded their debt ceiling and were not allowed to borrow more until their revenues rose from taxes. TE has built as needed…and our kids have never had buckets in rooms to catch the drops. Now — a/c in the elementary schools and middle schools has always been about getting 5 votes on the board. Ask the candidates how they feel about it the next time you vote.

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