Backlash Continues over T/E School District’s 3.9% Tax Increase – Some on School Board Defend Annual Increases

Since the publication of the Philadelphia Inquirer article regarding local school tax increases last week, there has been much discussion on social media — with at least two currently serving school board directors defending T/E School District’s tax increases on Facebook.  In T/E School District residents have faced annual tax increases for the last fifteen years.  And for the 2019-20 year, our District has the second highest tax increase (3.9%) in the Philly region.  Not a distinction many of us want.

Unlike some places, we are fortunate to have an abundance of educated and engaged residents in our community — and many with knowledge and expertise in finances. As examples, Ray Clarke, Mike Heaberg and Neal Colligan are residents with financial backgrounds who attend most school board meetings and routinely offer financial advice and comments.

Although school board members encourage attendance at its meetings, it has been my view that many of the comments and/or suggestions by residents are either ignored or not seriously considered. I believe that you should “play to your strengths” and would encourage the school board to take advantage of the financial expertise that some of our qualified residents are offering.  Everyone cannot be an expert in all things, so school board, why not take advantage of the high level financial skill set which exists in the community.

Following the publication of the recent Philadelphia Inquirer article, one of our financial gurus Neal Colligan wrote a letter to the T/E School Board.  The communication addresses the District’s finances and Neal has generously agreed to share it below:

Greetings School Board,

I’m writing to you on financial matters.  While I may appear to be a “broken record”, the financial decisions of the T/ESD affect everyone in our District whether they have children in the schools or not.  The Inquirer recently did a story on School Tax increases.  In this article, you may notice that T/E had the highest dollar increase in school taxes in Chester County for THIS year, for the past 5 YEARS and the last 10 YEARS.  It adds up and is, obviously, a burden to all property owners.

Next year, you will have to decide on a new teacher’s contract.  This is the largest (by far) municipal contract impacting our community.  A multi-year contract could well approach a Quarter of a Billion Dollars…it’s very important.  So, before you get into that issue, it may well be a time to look at recent financial decisions to see if we can learn anything about our process that could/should change in the future.

As you’re well aware, this past Budget season you learned that the District had filed erroneous State Financial Disclosure forms increasing your taxing authority beyond what it should have been. I believe you have begun to deal with the correction of that issue…I applaud those of you that moved to “do the right thing”.

Just this last year you approved a $30 MM bond issue even though you had no use for those funds for two years. You were convinced that “rates were at or near their low and that it was a good time to Borrow”.  We may want to examine that decision.  The Carry on that borrowing is substantial, for the two years that the money is unused it amounts to about $2.4 MM ($30 MM x .04% x 2 years).  Was that a wise move?  Rather than rates going up, as you were led to believe, rates have plummeted well over 100 basis points on the 10-year (the statistic that the bond seller used to compare).  This also has financial impact…in a simple calculation: $30 MM x .01% x 10 years…or $3 MM dollars!  That’s a possible interest savings of well over 5 MILLION DOLLARS.  That kind of money, even over a 10-year period, could fund a lot of educational expenses.

Those decisions have been made and we can’t go back even though we may wish we could.  The important take-away, IMHO, is your decision making process.  Are you getting the information you need to make good decisions, do you trust the “data” you are being given???  I suggest; we can do better.

Are your BEST people; Administration and Board representatives; in charge of formulating your strategies???  Do you need other professional voices; hired or volunteer; to help you make these large fiscal decisions.  If YES; and I think you would agree the answer is YES: now may be the time to get your “Process” in order.  Your coming up on another large Borrowing for the expansion of the High School, you’re coming off an accounting issue that was obfuscated and denied for a long time (by both your key Admin people and your key Board members), and you have in front of you the renewal of the LARGEST municipal contract in our community.  Those are BIG items; we’re counting on you to make good decisions.  Give yourself the best chance to do the right things by changing your Process if it helps.

Members of this community are always here to help.

Neal Colligan

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  1. Very, very interesting! I just checked on EMMA and found that interest rates for TE’s bonds (maturity 2035) have dropped by over 1% (100 basis points) as Neal mentioned above. This was not a representative graph of 10 year bond yields; this was an actual sale last Thursday of a 2019 issue TESD bond.

    As Neal mentions above – TESD taxpayers are losing millions in two ways.
    1)the taxpayers are paying interest on money that is unneeded for another one or two years
    2) the taxpayers took out a $30M loan with an interest rate that could have been 1% less had the school directors waited.

    [Reply]

    Taxpayer Reply:

    Keith,

    Thank-you for this information. It’s very valuable and helps all of us, in every District.

    You’re very proud of your fiscally conservstive Board Members in the UCFSD. I hope your right. I hope they can keep getting g elected. But all it takes is one mother of a school teacher to get elected and one D leader in your District to pay half attention, and you’re on the same slippery slope LM, Radnor and TE are on.

    And let’s be honest Keith, you had a big hand in giving us Radnor Supt. Ken Batchlor. Thanks for that. He made it okay for Solicitor Ken Roos to help teachers write and file complaints against citizens, Board Members no less, who table issues regarding Booster Club fees and how they’re collected, recorded and spent. It certainly doesn’t encourage citizens to speak up when they see their peers getting legal complaints filed against them by their own Solicitor and a teacher when they simply table an issue that clearly needed to be tabled. The Board Member who was served was also asked to resign her seat on the Board on top of being humiliated by being served with a complaint written by our Solicitor and a teacher.

    Goes to show who really runs things in Radnor, LM and TE and it’s not the citizens, and it’s not the Boards……it’s Art McDonnell, Ken Roos, the vendors and the Architect.

    Somebody should write a book.

    [Reply]

    Pattye Reply:

    As a point of clarification, the former head of the TTDEMS recently resigned as she is moving out of state and the position is now jointly chaired by Alan Yockey and Jerry Henige. The T/E School Board is currently a D majority but that is a recent shift – for many years it was a Republican led. The annual tax increases have occurred under both.

    [Reply]

    Keith Knauss Reply:

    Taxpayer,
    I, too, hope knowledgeable citizens continue to get elected as board members.

    I don’t agree that I had a “big hand” in getting Ken Batchlor hired. Ken was excellent in every position he held at UCF and I certainly communicated that. But, let’s be honest, I didn’t interview him, compare him to other candidates or vote to hire him.

    I have no knowledge of the complaint written by the solicitor so I can’t comment.

    [Reply]

    Taxpayer Reply:

    Keith,

    You lobbied hard for extravagant raises for Ken Batchlor. You justified his outlandish salary and increases by saying some other District would come in and lure him away if you didn’t.

    If another District was going to lure him away, they would have done it anyway and they did and you just added to the very huge problem of outlandish Administrator pay In all Districts around here by inflating his already outlandish salary before he left UCF.

    UCF employees cite the high pay in TE and Radnor around contract time to justify increases for themselves. TE employees cry about how LM is “the gold standard” and they won’t stop until they get what LM gets, because
    “they deserve it.” This has to stop. Some District has to stand up to these people and say ENOUGH. Let them quit. (They won’t, where would they go?) LM?, let them go, but how many spots can there bein LM? Their teachers make $125,000 to $130,000. This is insane and tax payers are sick and tired of pandering to these people. There are 400 applicants for every open teacher position. We’re told that we can’t find qualified applicants. Who believes that?

    You contributed to this problem with your constant cheerleading and demand for more pay for Administrators.

  2. Just a couple of points in support of Neal’s cris de coeur ….

    It is easy to criticize the bond issue with the benefit of HINDsight. It was also easy to criticize it with FOREsight. A decision that had to be made quickly because interest rates were going UP at one meeting, but by the next we had to move quickly because interest rates were going DOWN. Clearly the only real rationale was that the investment banker had clients lined up, eager for more TE debt.

    That’s one process that can clearly benefit from professional financial counsel. Here’s another: the annual budget fandango. Administration adds back last year’s cost savings and new programs, produces a $10 million deficit, the Board labors for six months to take the savings out again and claims $6 million of “budget strategies”, and then the eventual actuals turn out to be more-or-less break-even. How about starting from a detailed line item look at revenues and expenses for this year (updated as we go) and justifying every change in the budget for next year?

    It’s maybe worth a moment to review the Board members’ Facebook posts that Pattye mentions. Mr. Boyer asks us not to worry because the tax RATE relative to the value of our housing stock (“equalized mills”) is relatively low, completely ignoring the fact that it is the ACTUAL DOLLARS we have to hand over to the school district every year that is second in Chester county only to Keith’s UCFSD and moreover is increasing at the highest rate in the county. (And of course the equalized mills are low because the mortgage payment is high: the total cost of housing is what hits the wallet). And I’m not sure the relevance of comparing the cost of one year’s residential tax bill to the total 12 year per student cost of a T/E education. (A reminder that commercial enterprises – which make bottom line decisions on where to locate – contribute 25% of local revenues).

    Dr. Hotinski blames increases in enrollment, Special Education and pension costs. The first has kicked up in the last couple of years, but so has the tax base (and state funding, despite contrary claims). Note that in the short term the incremental per student cost is less than the average cost, so a 1% revenue increase funds a 1-2% enrollment increase. The second is quite likely a contributor, but we can’t be sure because after this year’s debacle there is no basis to trust any numbers related to TE’s Special Education program. The last has had little impact in the last couple of years, now that the rate has leveled off. (Although payment for the unfunded liability is a big burden that charter schools do not necessarily bear, but that is another issue).

    Neal argues for a fresh approach. It’s desperately needed.

    [Reply]

  3. Thanks Ray….it is disturbing when Board Members continue to cloud the real issues. Here’s a response from “Hotinski for T/E School Board” Facebook page (she’s running with Kantorczyk-no indication if this is his response too):

    “Some major points:
    – Enrollment is up 37.5% since 1999, with increases of 2-3% per year over the past three years.
    – Our special education expenses are over $20 million per year and increasing while the state contribution has been a flat ~$2 million for years. Last year the number of students supported increased by 7.6 percent over the previous year.
    – Pension costs have increased from $1.6 million in 2006 to $10.46 million in 2019-2020.

    These numbers explain the scale of the financial challenges facing the district, the burden of which falls largely on local taxpayers. Cost increases from these drivers outstrip our Act 1 index and increases in our tax base and need to be addressed by a combination of cost cutting, program delivery and staffing changes, and tax increases – all of which have been utilized in recent budgets.”

    Take the first Stat, she’s using 20 years of enrollment data to explain 10 years of tax increases. She goes back to 1999 (to catch the enrollment increases of the early 2000’s) to explain tax increases since 2009. To compare Apples to Apples: The 20 YEAR enrollment increase of 37.5% corresponds to the 20-YEAR tax increase of 110%! The 10-YEAR tax increase of 37% should be compared to the 13% enrollment increase over the 10-YEAR period!

    Be careful when politicians quote statistics. Maybe they don’t understand the numbers (a little scary but acceptable if finances are not one’s expertise) or maybe they intentionally distort…scarier! Either way; my comments are more pertinent now with big financial decisions to be made this year (expansion and borrowing AND a huge employment contract).

    In terms of Hotinski and Kantorscyk….these were the two board members who saw no reason to correct the District’s erroneous State Financial filings AND pushed for tax increases closer to the 5%+ level. Luckily, the majority of the board thought another way on each of these key issue.

    [Reply]

  4. As a taxpayer in this district for 48 years, and who has participated in attending board meetings and activities for 45, I learned years ago there seems to be a rule which only allows two fiscally conservative board members at a time on the board. This allows their voice to be heard but not enough to affect the final vote on spending. If this district truly wants to control spending by making more conservative decisions, then be sure that future board members have proper financial credentials as a priority, and elect only those with a proven record in this regard. We worked for years to maintain a low tax rate which benefited everyone, but our gains in the past have been eroded during the past 10 years and I hope the above discussions will encourage everyone to change that direction. I personally wrote each board member urging them not to approve the bond issue in January, which was ignored, but would have hopefully saved enough to balance the budget this year and removed the need for many of the resulting cuts.

    [Reply]

    Pattye Reply:

    Julie, thank you for your thoughtful comment. Attendance at meetings is regularly encouraged by the school board but it is unclear why. During each election cycle, we see candidates touting fiscal responsibility, transparency, increased public communications, etc. etc. But then something happens after the votes are counted and the new officials are seated … sadly, the people who voted seem to matter less and less.

    [Reply]

    T/E Anonymous Parent Reply:

    From my perspective, the community seems to care less and less about fiscal responsibility. It’s more along the lines of spending. I believe the board reflects that, and I don’t think it will change back. If anything, the pendulum has not stopped swinging in the ‘spend direction’.

    [Reply]

    Taxpayer Reply:

    I disagree. People don’t know about the mismanagement and when they find out, they don’t know what to do about it. They watch and hope someone else will hold the Board and Administration accountable.

    Also, people are squeamish about confronting Board Members and employees about their actions and behavior. It takes confidence to stand up in front of 9 people and the almost same number of employees of the District——- who show up and sit in the audience just to let you know they are there and to remind you that they will be seeing your kid in a few short hours,—— and talk about things that hold the District accountable for their bad actions. A lot of parents know how it really works because they’re around it and see it but don’t speak up for fear of retribution against their children. The same people at the meetings are the same people their kids have to go to school and face the next day. And don’t think or tell yourselves the teachers/Administrators don’t hold it against the kids, they do. A kid can come home and tell heart wrenching stories about the way they’re treated and then beg you not to call or say anything because, “it will make it worse, they’ll do it more” and they’re right. So unless parents band together, and go to meetings in a group and grovel for a $300,000 reading program for a year, no one says anything because it’s too uncomfortable a thing for them to do and too hard on their School age children to manage.

    [Reply]

  5. In addition to comparison of the annual % increases across the different districts, it would be helpful to know the actual % tax assessment over the same years for the same districts. As I recall from a few years ago TE had a lower % assessment than most other suburban Philadelphia school districts. If that relative ranking still holds, it would seem that increases to the TE district might have some merit; yet, we must also take into the account the overall higher average and range of property value in the district compared to most others. Hence, with equal percentage assessments between districts, TE would tend to receive greater tax revenue due to the greater property assessment. This all must be taken into account when looking at the amount of assessment change from year to year as well as total yearly assessments. Unfortunately the most recent Inquirer article did not include the latter.

    [Reply]

    Keith Knauss Reply:

    mallam,

    The state ranks the relative wealth of each district and uses the data to dole out state aid. I’ve listed the wealthiest and poorest districts below on the basis of market value per student. For instance, TE looks like a low tax district relative to UCF because each mil brings in 30% more revenue. Compared to Oxford, TE brings in three times that of Oxford. From this listing you might understand why there is a lawsuit going through the state courts asking for fair funding from the state.

    [Reply]

  6. I am not advocating a course of action with this comment. If the outstanding quality of the schools in T/ESD helps to drive up our property values, why then, aren’t the property values periodically reassessed? Instead of raising the school tax rate, revenues would increase merely by accurately reflecting the increased property value. Is this approach taken by other school districts or do they all just keep raising the tax rates without regard to home values?

    [Reply]

  7. Taxpayer,

    Let’s address four issues.

    1)Ken Batchlor did get a big bump in salary as an assistant superintendent, but the driving factor was NOT because he was going to be lured away by another district. UCF folded two jobs into one (personnel director and assistant superintendent). You probably only saw the jump in salary and because of that you’re upset. What you missed was the large saving (about $100K per year) to the taxpayers because a position was eliminated (personnel director). I feel no need to apologize for saving the taxpayers $100K.

    2) I’m not sure you understand that the marketplace for teachers and administrators is quite different. Yes, there are numerous qualified applicants for every open teaching position leading one to think some teachers may be over paid. But the market for administrators is different. In my experience it is always difficult to find qualified applicants for a superintendent position or an assistant superintendent position leading one to think administrators are not over paid. You may incorrectly characterize my actions as “cheerleading”; I call it paying the market rate.

    3) Your statement that increasing a person’s pay won’t reduce the chance of them being lured away is nonsense.

    4) When will you come out from behind your pseudonym?

    [Reply]

  8. Keith,

    1. You said the reason for his salary jump was because other Districts were already callling him, and your District needed to be competitive because he was so good at his job you had to bump his salary to keep him. I’ll go back and try to find that in writing. I didn’t miss you saying a position was eliminated so you could justify his outlandish salary increases on top of his outlandish salary. That is the oldest trick in the public school book. When Rich Gusick was pounding his fist on the table demanding that his two new Administrators for his two newly created positions received top market salaries for their efforts, he also used the old, “positions have been eliminated so I’m actually saving you money” line. Their salaries have increased at alarming rates since then and I can’t even count how many new positions have been added.

    2,) Because Administrators say the market for Administrators is tight doesn’t make that a true statement. They want it to be tight so it is. They keep that pool small so to benefit themselves. We had a highly, highly qualified financial person interview for the Supt. Position. He did not get the job. By his own admission, Rich is not a financial person. Look at the mess we’re in. Rich was chosen for that job long before he took over. The interview process was a sham to pretend like others were considered.

    3.) Why would you bring up point 3. If in fact you weren’t trying to keep Batchlor in UCF by increasing his already outlandish salary with another outlandish salary increase.

    4.) I have a constitutional right to post with a screen name.

    [Reply]

  9. The board split on approval of a new contract with Ken Batchelor, the assistant to the superintendent. The contract, which will pay Batchelor $193,199 per year, represents an eight percent raise. Board member Keith Knauss addressed the issue, saying, “Two years ago, the district had one personnel director, and one assistant to the superintendent, Ken Batchelor. Ken then assumed many of the duties of the personnel director. Essentially, we collapsed two positions into one. The savings were large. He has been able to handle the duties, and his performance has been excellent. It’s time he is rewarded for his extra efforts. I don’t want to lose him, and I’m willing to pay to retain his services.”

    This is a quote from Keith ion 2015, justifying Ken Batchlors outlandish salary and increase because he

    “Didn’t want to lose him”

    [Reply]

    Keith Knauss Reply:

    Excellent Taxpayer. You proved my point that two positions were collapsed into one (as I said in my post above) and due to his proven performance (over 2 years) he was rewarded. Of course I didn’t want to lose some who could competently cover two jobs.

    I’m not sure how many administrative job openings you’ve participated in filling but I’m guessing I’ve done about 10 over my decade of school board service. How many have you hired?

    While you can hide behind a pseudonym as long as you want it does allow you to evade responsibility for your posts.

    [Reply]

    Taxpayer Reply:

    Keith,

    I did no such thing. I did not prove your point. You completely ignore what I said about the ridiculous justification

    “I’m going to spend more money to save the District money”

    that Supt.’s use to bully Board Members into agreeing to outlandish salaries and raises for Administrators. It’s the oldest trick in the book, isn’t true and a con run on taxpayers.

    It doesn’t surprise me that you had trouble gettting “qualified” Administrators. When the job requirements are:

    Have to be good at:
    1.) distorting what parents/taxpayers say
    2.) remaining silent in the face of mismanagement
    3.) bullying and intimidating students
    4.)never ever ever ever admit wrong doing and blame the victim
    5.) lie, cheat and work in the best interest of Administrators

    How many qualified candidates are there?

    [Reply]

  10. Neal hits multiple nails on the head with this one. I wish the school board would actually listen to its citizens instead of ignoring us at the finance committee meetings.

    Why they continue to believe Art McDonnell after years of lying to the board is beyond comprehension. He does a poor job. Budget Process? Total fiasco. Tracking Invoices? Total failure. Bond Issues? Pay way more than we need to taking money out of education and into bond holders’ hands.

    [Reply]

    Taxpayer Reply:

    Doug,

    You say,

    “””Why they continue to believe Art McDonnell after years of lying to the board is beyond comprehension. He does a poor job. Budget Process? Total fiasco. Tracking Invoices? Total failure. Bond Issues? Pay way more than we need to taking money out of education and into bond holders’ hands.””””

    They don’t believe Art, they know what you are saying is true. They don’t want to deal with it. It’s a wink wink, I’ll wash your back, you wash mine thing. Scott got a Cush job out of it, Kyle needs that recommendation letter and the kids of the rest are treated very well in the schools. Each and every Board Member gets something out of this and it’s more than feeling great about their public service.

    Not one teacher or Administrator was fired or probably reprimanded for the hazing, the sexual assault and the second sexual assault a short year later. Don’t you think since nothing happened there, a little thing like lying to the Board and mismanaging our money is going to be a big motivator for change?

    [Reply]

  11. I take offense at these remarks. Everybody is not bad and everything is not easy.

    It is true that I am not satisfied with the progress on financial accountability and transparency in TESD. The criticism is just that it is difficult to make rationale decisions with any foresight. I have been one of the leaders on this Board for more openness and listening. Good ideas do come from the community and stakeholders. I believe the SB has improved since I joined it with a healthy assist from several SB members and community members but we still need to make more significant progress.

    That being said, the claim “each and every member gets something out of this” is just not true. It is a truly baseless comment. This service takes significant amounts of time away from family and professional life. But it is a truly important service and its what American was built on . . . people willing to step up and serve for the common good. Our goal should be to have the best district and to have those serve who add to that goal. Affordability is one thing that has and will continue to attract families interested in an outstanding education here and we must be fair to all residents by not raising taxes too high.

    The goal here is to build, not destroy. I believe I have something to offer based on 25 years of volunteer service and trying to effectuate positive change. I am a lawyer and a small business owner. I have been active in leadership roles in my church. My experience teaches that change comes from constructive engagement. My goal has been persuasion, which is necessary when you need five votes out of nine votes on our School Board for effectuating change and your party is Republican and there are 7 Democrats and 2 Republicans. I usually am the moving party at Board meetings on “change” votes, and have several times commanded a majority. I do listen to good ideas from the community and have stood up against a “one size fits all” and/ or “top down” mentality. Persons of Irish decent like myself have a unique historic view of having been “on the outside looking in.” I think it makes me a better Board member as does my occupation where I see injustice happen frequently and represent clients to fix it.

    This Board has been often governed by the unique personalities and values of its members. The “party line” seldom is where votes are decided. I thank the members of the Board for this. It is a skill set knowing those personalities and values and trying to persuade them what is right and good for the district. My four year of service gives me a unique ability to be effective. Tredyffrin people often vote candidate, not party, and this Board has a role for a fiscally conservative Republican who is a Plaintiff’s lawyer who sees that big entities can be sometimes myopic.

    You do get to vote for two in Region 2. I hope to be one of the two. I will continue to take the same approach: willing to stand up for what is right, respectful of others’ ideas, and committed to trying to obtain a principled consensus.

    Posting can be a decent public service. Pattye’s blog does add significantly to the public’s understanding of local issues. However, I ask people to get directly involved in local public affairs. Posting is a poor substitute for the actual difficult responsibilities of day-to-day work that supports our local public institutions. Serve on a volunteer board or commission.
    Help as a committeeperson or volunteer time on a campaign. Indeed, run for office. The goal here is the public good.

    No one challenged the incumbents for office in TESD Region One. When I hear people rail against the personally decent people who serve in this role, I am puzzled. No one ran against the Region one incumbents. No one. This is the backdrop to some uniquely harsh and undeserved comments here.

    Let’s not have Tredyffrin mimic the shrill and often self-destructive nature of politics nationally. Politics needs to get better, not worse. We are all Americans. We have a comparatively excellent product in TESD. I am committed to making it better.

    This is my opinion and not that of the TESD Board or Adminitstration.

    [Reply]

    Ray Clarke Reply:

    Ed:

    Many thanks for your comment. It is so helpful to read the perspective of those actually responsible for making the decisions that impact us all so profoundly. And I especially appreciate your personal initiatives to move for change.

    You have recently championed resolution of the recent revenue recognition problem and to argue for reforming the budget process. Two issues that we now find, from tonight’s Board agenda materials, that are related. The district’s ability to apply for tax exceptions for years both past and future has been compromised by a budget process that failed to account for growth in special education and variability in self-insured medical expenses, and so limits your ability to correct the erroneous state filings.

    So I hope that your work can continue, and indeed accelerate. I think that there are many in the community that stand ready to help – even if other commitments stand in the way of the elected office you would like.

    [Reply]

  12. Hello Ed,

    Thank-you for your comment.

    This is true:

    ——I have been one of the leaders on this Board for more openness and listening. Good ideas do come from the community and stakeholders. I believe the SB has improved since I joined it with a healthy assist from several SB members and community members but we still need to make more significant progress.——.

    I agree and thank-you.

    ——I believe I have something to offer based on 25 years of volunteer service and trying to effectuate positive change. ———.

    I believe you have something to offer based on you demonstrating through your actions that you truly represent taxpayers and students.

    I hope you win.

    [Reply]

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