Should the recent court ruling ordering Lower Merion School District to rollback tax increase make a difference in the way TESD School Board manages taxpayer money?

Tonight, Tuesday, September 20th is the TESD Finance Committee meeting, 7 PM at the TE Administration Offices, 940 W Valley Rd # 1700, Wayne, PA .  Residents encouraged to attend — your voices do matter!

With an agenda of 110 pages, the community is fortunate to have residents willing to review the information in advance of meetings.  Ray Clarke provides the following commentary regarding the agenda (click here for agenda).

There are a couple of items that the community might want to pay particular attention to in the light of the recent injunction ordering Lower Merion School District to roll back this year’s tax increase.

To recap, the Montgomery County judge found that LMSD (quoting from the injunction) deliberately over-estimated deficits, failed to predict surpluses, represented to PDE that costs for Special Education and retirement could not be covered without a tax increase, and transferred Fund Balance to assigned accounts to avoid the statutory cap of 8% of the annual budget while still raising taxes.  The judge found that LMSD’s Fund Balance commitments were funded out of the budget each and every year.

These findings will seem very familiar to those following the affairs of TESD.  Moving to the agenda:

Item 6, Bond Discussion: TESD is considering repayment of $18 million of higher interest bonds – arguably a sensible move – but by issuing yet more bonds at mostly 4%, when there is $32 million of taxpayer money sitting in the General Fund, supposedly “committed”, earning about 0.75%.

Item 7, Capital Funding/Fund Balance:  Seemingly to support this plan (only one option is presented), the district is re-publishing its Fund Balance Policy and Regulation (not always consistent with each other), along with the commitments from 2015/16, presumably to establish commitments for 2016/17.  There is no analysis of the capital spending plan.

A couple of questions:

–  Does TESD plan to continue the Fund Balance fiction that brought judicial sanction on LMSD?

–  Are we going to borrow another $18 million we don’t need at the second “generationally low rates” in two years?  (About a percentage point lower than those last generationally low rates).  And pay underwriters and lawyers $150,000?

15 Comments

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  1. Thanks Pattye and Ray,

    First:

    Pattye, you say above———Your voices do matter!

    Could you please explain and/or expand on that statement. I don’t know how you can draw that conclusion based on the facts.

    Facts determine claims. There is no reason to believe or argue that statement when the facts provide for only one point of view.

    Our voices do not matter.

    The very first meeting of the year, before school was in session, citizens were met with a condescending attitude from the Board President and Fog Horn Blasts from the Solicitor in order to intimidate and obstruct citizens from asking legitimate questions.

    Game over right there.

    How do our voices matter?

    Thanks.

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  2. 4% for a AAA muni bond (which is what T/E is rated ) is expensive, and i hope the school board fires any investment firm that says they need to pay that much.

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  3. Hmm, 4% seems like a high rate to pay for new debt, i hope the board is reviewing that if they really go through with borrowing more money.The State of PA just issues GO bonds at around 3% and they are rated lower than TE! 1% on $18,000,000 is a pretty big number each year.

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  4. I would like to take this opportunity to talk about the importance of citizen contribution. It is important to come out to Board Meetings. However, it is crucial for people to come out to school board committee meetings on individual topics (facilities, finance, education, policy, etc.) Our system of government does not work if there is not a “battle of ideas” and citizens do not provide pertinent observations. The committee meetings on individual topics are where issues are most discussed in depth given the full agenda at full Board Meetings.

    In particular, Ray Clarke, Neal Colligan, and Pattye Benson have spoken up in many school board committee meetings and raised similar issues on this blog on financial issues. Doug Anestad comes to many different committee meetings with a variety of ideas which are thought provoking and good ones. Cynthia Verguldi comes prepared to speak about local issues on Old Lancaster Road near TEMS, and gives credit where credit is due, but does not fear to give an honest opinion. Cinda Marturano makes significant contributions to the VFMS traffic issue and routinely informs herself on issues by going to Tredyffrin Township Police safety committee meetings. Jerry Henige has thoughtful commentary. There are several “special needs” advocates who routinely provide important contribution. I have advocated participation of volunteers on standing SB committees.

    I would ask people respect the “golden rule” – “do unto others . . ..” and contribute in a professional and educated way that you would in turn want others to contribute if you ran the meeting. Be aware that the committee meetings are focused on one area of SB issues. Be also aware the committee members need time to ask questions themselves.

    Kudos!

    Ed Sweeney
    Region 2

    This post reflects my view and not necessarily views of other Board members.

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    Pattye Reply:

    Although some of us become disheartened when our suggestions and comments at meetings are disregarded, discounted or dismissed, your words indicate that at least ‘you’ are listening. Thank you Ed for your comment.

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    Ray Clarke Reply:

    There is a very important point here. The School Board is accountable for steering the School District in a direction that reflects the overall wishes of the community, not Administration convenience or individual pet projects. To do its job well, the Board has to educate itself on the professional and technical matters at hand, to inform the community of those issues and to sense the community’s position on them.

    The engaged community that Mr. Sweeney is asking for can help every facet of this process and can keep us from debacles such as at LM, where the School District operated in its own world until its abrupt collision with reality. The committee meetings are where many of the issues are aired, and they are sorely in need of more fresh and critical thinking.

    There are many roles to play, depending on interests, skills, schedules and – and dare I say it – temperament, but as Pattye rightly points out it all starts with a Board committed to the process and respectful of all participants. I, too, am grateful to have Mr. Sweeney in that camp.

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    Older tax payer Reply:

    It is true that the SB is accountable for steering the School District in a direction that reflects the overall wishes of the community, not Administration convenience or individual Pet Projects.

    Only a very small percentage of residents have children in the School District, yet they pay the majority of the load. Many are on fixed incomes that continue to decrease because of tax increases for the school district.

    This portion is completely left out and not considered when it should be considered most.

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  5. I am a Tredyffrin resident, busy mom and business owner who works most evenings, so attending meetings is impossible. It there another way for our voices to be heard and really are we heard? My experience is that parents have very little input on decisions made by school administration i.e. when language program was eliminated, school aides outsourced, extracurricular activity fee required, busing taken away and rising school taxes! I don’t have any confidence that this administration places students and families as a priority and is more concerned covering up their wrongs and padding their wallets.

    What makes this district so highly ranked are that the parents mostly highly educated themselves raise their children to be high achievers, are involved in their education, help them with their homework, have high expectations for their children, pay for SAT/ AP prep, essay prep, travel sports and personal coaching, music lessons, tutors, etc. The affluence of this area is a big factor. Place TESD school system in Philly and it won’t rank as well. I get very offended me when the administration boasts about how well TESD ranked taking all the credit. Don’t get me wrong, we do have a wonderful group of teachers, staff and a very large and active group of parent volunteers -that is where credit is due.

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    Barb Jackson Reply:

    Hi Anne,

    Thanks for your comment. We need more citizens like you to voice their opinion.

    I like Ray’s point that:

    And next year there will be four School Board seats up for grabs, so you can vote for those who best represent your interests.

    I agree with what you say and the best way to effect change is through communication with elected public servants. They are supposed to set the tone, and they are supposed to determine how things work.

    Go to one committee meeting. Watch and listen. Pay attention to the Directors. It won’t take long to determine how it works. I’ll go with you.

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  6. I completely understand the perspectives from recent commentators. TE is very fortunate that there is a kind of virtuous circle at work: decades of good results attract involved parents that have motivated students that attract good teachers that lead to good administrators that all lead to more good results.

    There is, though, the risk of another not-so-virtuous circle: the number of incoming students increases faster than the number of graduates because the attractiveness of the school district outweighs the other benefits and the costs of living here. As enrollment goes up, costs increase yet more, so TE becomes more and more attractive to just families, more retirees move out, enrollment increases again, costs go up, and so on, and so on.

    So it’s really in the interest of the School Board to keep a lid on costs under their control, and thank goodness there is PA Act 1 that does provide a cap that our Board should be encouraged to keep under. It’s also very helpful if the Townships encourage development that does not add students: senior living projects developed and planned in Tredyffrin are one example.

    All constituencies in the townships need to find a way to make their voices heard, and it is not easy. Parents of younger students do have good forums through the school PTOs, and interested retirees with time can show up and contribute to Committee meetings. One thing that TESD does well, IMO, is to publish reasonably full meeting packets the Friday before the following week’s Board and Committee meetings, so at least there is an opportunity to see what is being discussed. And if the meetings are not convenient, which they often are not, at least you can write to the Board or find out your region’s board members and connect with them. And next year there will be four School Board seats up for grabs, so you can vote for those who might best represent your interests.

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  7. Ray,

    You left out the most important component in the virtuous circle. Corporate tax base.

    Families move here because of job relocation. TE is fortunate that we have a diverse, rich Corporate tax base (Pharm. Finance, healthcare etc.) that shields us from economic downturns in 1 or more industries.

    Parents relocating for jobs here bring along their smart, motivated, high achieving children who in turn perform well because they are supported by their smart high achieving parents.

    Ann is right. The credit should go to the students, parents, and Corporate tax base supplied by the smart parents and children who move here.

    It’s nice to have good teachers, the Administrators are interchangeable. The students in this District would perform well no matter who was in charge.

    There is no reason for tax increases that don’t benefit the students who are used as the reason to increase them.

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  8. Interesting take on a projected lower tax increase and kudos to Board members who use their voices for a reasonable tax increase.
    As a former member In Line with the famous and brilliant Culligan finance guru, why is there a surplus for the past years and an increase of the fund balance?
    Obviously to pay for employee contracts. Every year their are negotiations for contract.
    This year the same contracts come along.
    The issues of pension reform and health care costs are also dramatic yet known about for many many years.
    So, get smart:
    1. Seek healthcare bids from other insurance companies who are willing to deal. Share data with the public.
    2.Replace retirees with lower paid teachers,
    3. Ask for health care % share from employees.
    4. Add a Health Savings Account to all employees from the top down.
    Guess what! A HSA is pretax dollars and rolls over the dollars each year. Better yet even if you keep IBC because it saves tax payer dollars, TE can get an HSA from another company like Aetna for employees if they choose to participate.
    5. Use flexible health care language in contracts
    To control potential peaks in health care costs.
    6. Finally hiring dual certified teachers with special ed
    component will lead to better results for every kid.
    7.Finally, stay tune to the Lower Merion court case.

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  9. 8. Allow for a reasonable deductible which can be placed on the HSA card. A deductible for health is. Necessary and most likely easier to stomach with the HSA.

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