TENIG

TESD Finance Committee Notes, Including EIT Tax Study Group Members

As I was attending the Board of Supervisors meeting last night, I imposed on friend Ray Clarke to attend the Finance Committee meeting.  Ray graciously attended and submitted his notes from the meeting for our review.  I was pleased to see that the District released the information on the custodial outsourcing bid process.  It is important for the integrity and transparency of the process, that the public receive the information – and I thank the school board members for providing it.
 
As Ray details, the 9 members of the EIT Tax Study Group have been chosen and were announced at the Finance Committee meeting.  The members of the group include Michael Abele, Michael Benning, Rita Borzillo, Marie Falcone, William Mullin, Terri Smith, Andrew Snyder, Edward Stevens and Lauren Walsh.  I am sure that you join me in thanking these community members for agreeing to serve on the tax study group.  
As always, thank you for your notes from the meeting Ray — we are all most appreciative!
TESD Finance Committee Notes – Ray Clarke
 
Some important topics discussed at the Finance committee meeting:
 
1. This year’s projection. Revenues and expense roughly equal, without the budgeted $1.3 million from the Fund Balance. Helped of course by the PSERS rate reduction and internal programs more than offsetting revenue reduction. Somehow the district again manages to extract more money from taxpayers than is needed, and that will be especially true next year, with the just approved budget set for all worst contingencies. (Included is a just-received $225,000 bill from Blue Cross for 2009 expenses – a hazard of self-insurance [previously T/E was with the County consortium] that speaks to the need for long run funding, see later).
 
2. Fund Balance commitments. Regulations require the commitment of the fund balance for specific purposes. Previous designations seem to have been much looser and Finance Chair Mahoney is requiring a thorough analysis of the policy in the new context. The previous policy was to designate 5 years of PSERS increases vs the current year for “PSERS stabilization”. Which arithmetically means that the fund balance can only be accessed for stabilization when the cost starts to diminish (out in 2025 or so). Alternatively, should the balance be used when the increase is in fact ramping up, to mitigate the increase? Alternatively, should we not in fact assume that the state will have to come up with alternative funding anyway, and so return T/E’s money to the local property taxpayer? There is not enough money for the full five-year increase, as it is now anyway. Plus there is a need for a mechanism to smooth out health care costs in self-funded situation. An important issue.
 
3. Custodial out-sourcing. There were four bidders, all of which invested considerable time in their bids. The lowest bidder was Aramark, with a “base bid” of $1.3 million which was at least $500,000 below the others. The Administration concluded that the total cost would have been about $1.7 million, which they compared to the projected in-house cost of $2.6 million. If I have it right, the TENIG overtime changes and salary increase waiver (all TENIG members, not just custodians) closes $450,000 of the $900,000 gap. Of course, in future years as TENIG rates increase and PSERS rates escalate, the cost comparison for the out-sourcing solution will become more compelling. Hopefully all sides will continue to work on a satisfactory long run solution.
 
4. EIT study group. Members announced: Michael Abele, Michael Benning, Rita Borzillo, Marie Falcone, William Mullin, Terri Smith, Andrew Snyder, Edward Stevens, Lauren Walsh. As Pattye has reported, the selection process was based entirely on the demographics. Each applicant assigned a random number (1 to 186 total applicants), then the administration started from number 1 and filled up the various categories (6 T/3 E, 4 EIT/ 5 No EIT, 1 retired, 2-3 with school-aged children, 1 business owner, I renter, plus loose “as many age brackets as possible”, and “both genders”. Apparently they had to get down to #150 to fill all the categories. The essays only used to exclude those who had written “grossly inappropriate remarks” (none of those!). The group will meet six consecutive Thursdays starting the Thursday after Labor Day, and hold two “information sessions” for the public. A consultant from the PSBA will provide “information and data”. All meetings will be open to the public and hopefully will be used to solicit ideas for analysis and issues relevant to the Board’s decision on a referendum.
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The Clock is Ticking Down for T/E School Budget . . . Will Property Tax Increase be the Highest of our Neighbors

The clock is ticking down . . . the T/E School Board votes on the final budget for 2011-12 on Monday, June 13, 7:30 PM at Conestoga High School.  The preliminary school budget contained a property tax increase of 3.8%.  Will that tax increase remain in the final budget or is possible that the school board members may consider a lower increase?

The school board and the administration have battled their way through the 2011-12 budget since last fall, with regular school board meetings as well as finance and special budget meetings.  The board and administration thoroughly reviewed many budget strategies and made difficult educational and programming decisions. The school district reached agreements for the 2011-12 school year with the teachers union (TEEA) and with the non-instructional union (TENIG).  In the spirit of shared sacrifice, union members from TEEA and TENIG showed their support for the school district and agreed to a variation of a salary freeze to help the bottom line of the District’s 2011-12 budget.

According to the TEEA agreement with the T/E school district, the teachers will have their salaries frozen for the first 6 months of the 2011-12 school year based on their final paycheck of the 2010-11 school year.  As part of the agreement, TESD agreed there would be no involuntary furloughing or involuntary demotion of teachers for 2011-12.  The cost savings for the TEEA agreement is approximately $1 Million to the school district.

The agreement reached between TENIG and TESD is a zero percent wage increase for the 2011-12 school year.  The savings to the school district with TENIG’s salary freeze is $300K.  Adding the additional reduced overtime wages and the total TENIG savings to the District is approximately $450K.

The school board members applauded the efforts of TEEA and TENIG . . . the combined total help from the two unions represents nearly $1.5 million in savings to the school district. 

Here’s my question . . . given the substantial level of savings, due to TEEA and TENIG’s spirit of shared sacrifice, will the school board also recognize the ongoing sacrifices of the taxpayers in this school district?  Will the school board consider a reduction in the proposed 3.8% property tax increase?  The preliminary 2011-12 budget could not predict the $1.5 million savings from the unions, so should the taxpayers expect the final budget to reflect those savings?  I believe that the 3.8% includes taking the full Act 1 exemptions but maybe in light of the union savings, the percentage increase could be reduced.

In anticipation of TESD’s final budget vote on Monday, I thought it would be interesting to see where the currently projected 3.8% property tax increase measures up against other local school districts. I think that it is fair to use Radnor, Lower Merion and Great Valley school districts for comparison.  Generally speaking, these school districts are comparable in level of education quality and I would think that the economic climate of the taxpayers is similar.  Each of these school districts has approved their final budgets —

  • Radnor Township School District1.4% tax increase Lowest RDSD tax increase in years. RTSD credited the Radnor teachers’ sacrifice in reaching a contract agreement for the low tax increase.
  • Great Valley School District 2.9% tax increase  GVSD Superintendent Alan Lonoconus, said of the tax increase, “We tried very hard this year to make sure the impact to programs was as gentle as possible. But we also kept in mind the economic conditions not only of our district, but of the nation.”
  • Lower Merion School District3.3% tax increase  Lowest tax increase since 1984-84 fiscal year

Although not an adjacent school district and perhaps not as highly ranked academically as Radnor, Great Valley, Lower Merion and T/E school districts, I was fascinated by West Chester School District’s final budget decision —

  • West Chester School DistrictNO tax increase.  The 0 percent tax increase balanced WCSD budget by taking $3 million from their fund balance.

It is not surprising that the taxpayers of WCSD overwhelming supported the decision of their school board leaders not to increase taxes.  In reviewing the demands of their school budget over the last months, there was much discussion between school board members and residents in regard to the severe economic conditions facing the residents, rising gas prices, high unemployment, etc. Many taxpayers in the WCSD complained that they are already financially pushed to the limit — the 0 percent tax increase decision came as welcomed news.

As it now stands, unless the T/E school board members reconsider, a property tax increase of 3.8% is on the table for a vote at Monday night’s school board meeting; this increase will represent the highest increase among our neighbors. TESD is a great school district, and one for which we all can be proud, but likewise could be said for Lower Merion, Great Valley and Radnor school districts.  My guess is that the argument that some will make is that TESD currently has a lower tax rate than these other mentioned school districts and therefore taxpayers are in a better position to afford the tax increase.  Correct? 

I have not done a research analysis but I believe that TESD may have the highest fund balance of any of these neighboring school districts. (In fact, I think I read somewhere that TESD fund balance is one of the highest in the state).  Some could argue that the fund balance represents over-taxing of residents in prior years, so . . . now that the taxpayers of this community need financial relief can we ask that the TESD use more of the reserve and lessen our property tax increase?

To help the community, the teachers, secretaries, custodians, cooks and maintenance personnel in this school district have shown us the meaning of shared sacrifice.  Is it possible that TESD will acknowledge the sacrifices of the District taxpayers, and lower the expected property tax increase?  Or, is this just wishful thinking on my part . . . ?

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Milestone Agreement Between T/E Teachers and School District: Is it a ‘Salary Freeze’ or a ‘Pay Waiver’. . . Does it Really Matter What We Call It?

There was a milestone agreement between the T/E teachers and the school district last night.  I am not sure whether we call the TEEA-TESD agreement a salary ‘freeze’ or a ‘pay waiver’ but, . . . if both sides are happy, does it really matter what we call it?

The school board members presented the details of the new teacher union offer.  The offer from Tredyffrin Easttown Education Association (TEEA) was read and the discussion opened for public questions. The board voted on the proposal and the agreement won unanimous support from the school board.  

To read a copy of the TEEA-TESD agreement, click here.  If I understand the agreement, here are the important points:

  • The teachers will have their salaries frozen for the first 6 months of the 2011-12 school year based on their final paycheck of the 2010-11 school year.
  • For the second 6 months of the 2011-12 school year, the teachers salaries will ‘unfreeze’ and they will advance.
  • With this agreement, the T/E school district agrees there will be no involuntary furloughing or involuntary demotion of teachers for 2011-12.
  • This agreement is a one-time cost savings for the 2011-12 school year only and is not precedent setting.  The agreement does not extend the current contract and negotiations for the next contract will be on schedule.

I asked Pete DePiano, union president of TEEA for his thoughts on the TEEA-TESD agreement.  He writes,

“I am so proud of the membership of TEEA for stepping up with this offer during these difficult times. Likewise, I am happy that the Board was able to accept. A special note of gratitude must be extended to Mrs. Cruickshank, for we were in constant communication behind the scenes for a VERY long time working on this – even prior to the Corbett announcement. It was that continued line of open dialogue that made this all possible. We are looking forward to a wonderful conclusion of the school year as we continue to serve the greatest students in the greatest district in the Commonwealth of PA.”

Pete DePiano
President, TEEA

______________________________________________________

Ray Clarke attended last night’s school board meeting and at my request kindly shares his thoughts below.

Re the Earned Income Tax Study Group, I want to personally thank Kevin Mahoney for suggesting that the group members be apolitical.  The school board members made it clear that no one from the school board would be on the study group and I applaud their efforts in making the selection process open and transparent!

Important developments at tonight’s School Board meeting
  1. The Board voted to accept an offer from the TEEA to defer next year’s contracted pay increase for six months with no change to the contract termination date. After six months, salaries will increase to the contracted 2011/12 levels, with step and level movement. There will be no furloughs or demotions during 2011/12, and 2012 retirees will be protected. This is expected to save the District $917,000 in 2011/12. The five year model, which assumes no salary increase in the next contract, claimed that these savings versus the previous projection continue into the out years – although I remain puzzled about that, since the matrix and distribution in place at 6/30/2012 is unchanged under the offer. It may be important to understand expectations on this going into the next contract negotiations.
  2. The impact on next year’s budget is fairly clear, though. The board approved a budget that has a 3.8% property tax increase and a $2.2 million draw down of the fund balance, with an additional $1.9 million possible in the event of specific contingencies. There was no appetite for an Activity Fee for next year, and very different philosophies from all Board members that spoke. Only Kevin Buraks voted against an amendment to remove it from the preliminary budget. Worth looking at the tape to review the issues.
  3. The Board defined the process for obtaining citizen input on the pros and cons of an EIT, through a Tax Study Group. They will select 9 residents for the Group based on information to be requested in a May 16th mailing to residents. Work to be completed by October, for a November decision by the Board whether to move the process forward towards an April 2012 referendum. Important difference from the 2006 effort: the group’s role is not to present a recommendation, but to help educate the Board and the public. The Board is looking for representation from across T/E, and wants the group to be apolitical. All meetings to be open to the public; not sure if that’s very conducive to a deep dive into the economics, but maybe that’s not the purpose.
  4. Per Dr Brake’s legislative report, there seems to be some likelihood that the Legislature will reverse or limit the Governor’s proposed capricious Social Security reimbursement cut, so that may help TESD’s budget (at best, by $1 million). It also seems probable that the local ability to increase taxes beyond the Act 1 limit will not be completely eliminated, retaining at least the possibility of PSERS and special education Exceptions.
A final pet peeve: once again this year the gaming rebate was used in the context of an offset to the property tax increase. If the rebate was increasing by $171 that would be true, but in fact it’s just the same ~$180 it has been for every year since 2008/9. At least it wasn’t Dr Waters this time, but rather Dr Brake, who I thought might know better.
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T/E Teachers Union President Helps Clarify Original Salary Freeze Offer

Struggling to understand the offer that was made by the teachers union, TEEA to the T/E School Board, I sent an email to Pete DePiano, asking for clarification. Below is my email and DePiano’s official response. I accept that because the offer was rejected by the school board, the original offer is now somewhat a moot point.

We understand that other school districts across Pennsylvania are struggling with similar budget shortfalls as the T/E School District and we read of other school boards accepting ‘salary freeze’ offers from their teachers.  The confusion over the definition of salary freeze and pay increase waiver has led many in the public to question why the T/E school board did not accept TEEA’s offer. If nothing else, the continued dialogue on Community Matters is helping us to better understand the nuances that exist in the discussion.

It certainly is not (nor has it ever been) my attempt to create any additional friction between the teachers and the school board.  I, like many in the community, am struggling to understand the school district budget, the strategies to fund the budget shortfall and what role the teacher’s contract may play in those discussions.  I want there to exist a good working relationship between TEEA and TESD . . .  feeling that if the communication between these two groups remains open and honest, the outcome will be all the better for the kids (and the taxpayers).

My email to Pete DePiano, TEEA president:

There continues to be misunderstanding of TEEA’s salary freeze offer. Although I asked you to clarify the salary freeze offer and I thought that I understood, maybe I’m the one who is confused. Here’s a very simple scenario and please tell me if my understanding is correct:

You have a 3-year contract with 3 steps:
Year 1: Step 1
Year 2: Step 2
Year 3: Step 3
Teachers accept a pay freeze for Year 3

As a result:
Year 1: Step 1
Year 2: Step 2
Year 3: Step 2
Year 4: Step 3

Under the ‘pay freeze’, teachers receive the pay raise that they were to receive in Year 3 in Year 4. The 3-year contract is extended to 4 years. The teachers receive 3 steps (raises) in 4 years. Is this correct interpretation – please comment. I want the public (and myself) to fully understand what TEEA offered to TESD.

Response from Pete DePiano, TEEA president:

“Thank you for the opportunity to clarify:

The offer [though a moot point now] was a step freeze for one year, then a continuation of the final year in 2012-13. There was NEVER any suggestion of a “double” step move.

Your example of step 1, step 2, step 2, step 3 is the correct interpretation.”

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Another School District With Salary Freeze & One-Year Extension . . . Is T/E the Only School District Expecting a Pay Increase Waiver?

The Pennsylvania School Boards Association is reporting that roughly 95 school districts out of Pennsylvania’s 500 school districts have some type of salary freeze in place.

School districts around the state are working on their 2011-12 budgets; further challenged by the additional public education funding cuts in Gov. Corbett’s proposed budget.  Looking around other school districts, the trend is for more and more teachers unions to accept a pay freeze.

This week, we learned that several local teachers unions (Norristown and Pottsgrove School Districts) are accepting salary freezes for 2011-12. In the Pottsgrove district, the teachers voted for a one-year contract extension that does not raise salaries. From the Pottsgrove School District website, www.pgsd.org , is the following statement:

The Pottsgrove Education Association voted on May 2 to accept a pay freeze by extending its contract for one year in a move that will save the school district $515,000.  The current three-year contract was set to expire August 31, 2011.  The Pottsgrove School Board of Education will approve the freeze and extension at its next meeting.  In exchange for the freeze, the administration and board have agreed not to furlough or demote any additional teachers for the duration of the one-year contract extension. During the term of the one-year contract extension and freeze, other terms of the contract will remain in place.

Isn’t this salary freeze offer from the Pottsgrove teachers union exactly the same offer that the T/E teachers union (TEEA) gave to the T/E School District? The Pottsgrove teachers are working under an existing contract (the same as T/E teachers) and the contract will be ‘frozen’ and extended an additional year.  Pottsgrove teachers will not somehow make up for the salary freeze in the extended year; their salaries remain ‘frozen’ at the same current level.  Seems simple enough, right?

As I read about teachers offering (and school districts accepting) salary freezes in other school districts, I keep asking myself why should the T/E School District be different.  News story after news story and I never see any mention made of the term ‘pay increase waiver’ as used by the T/E School Board. Obviously, there is something that I’m missing . . . why would TESD turn down the estimated $2.5 million salary freeze offer from TEEA? 

We see other school districts graciously accepting the teacher union offers of a salary freeze, why not T/E. In some districts, the teachers and the school administrators are accepting salary freezes voluntarily.  There seems to be a spirit of working together toward the common goal of helping to solve the public school funding crisis. I want the same for our school district; we are all in this together – the teachers, the school board and the taxpayers.

It is my understanding from the school board members at this week’s Finance Committee meeting that the TEEA offer will cost the district money.  How?  Is it possible that the T/E School Board knows more about our district teachers [and their motivation for a salary freeze] than these other Pennsylvania school boards do?  If a salary freeze and an extension of a teacher’s contract without a salary increase is such a ‘bad deal’, why are so many other school districts accepting these offers?

It doesn’t seem like the ‘salary freeze’ should be such a complicated issue – why can’t the TESD do exactly what the Pottsgrove School District is doing?  A one-year salary freeze, reap the financial benefit and then move on to negotiate the next contract? 

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Looking to T/E Teachers for ‘Shared Sacrifice’ – Pay Increase Waiver not Salary Freeze

School districts across the state are scrambling to plug projected budget gaps stemming from deep cuts in state funding and TESD is no different. The use of “shared sacrifice” has become a common and oft-repeated phrase in today’s political discourse. As school district budget deadlines loom, we are see that teachers (fairly or unfairly) are finding themselves of in the limelight on this topic.  In my view, we do need to boldly address our deficit crisis, but we need to do it in a way that is fair.

Last night’s TESD Finance Committee meeting had a very different tone than the last school board meeting. As the school board and administration discussed the few remaining available budget strategies, I had a sense that the school board was digging in its heels, expecting a ‘pay increase waiver’ versus a ‘salary freeze’, which the teachers union previously offered.  Although the T/E teachers union (TEEA) states the value of their salary freeze offer is $2.5 million, the school board counters that the freeze does nothing more than extend the teacher contract by a year and ultimately costs the district more money.  Encouraging the teachers union in the path of shared sacrifice, the school board prefers the teachers consider a pay increase waiver which, if I understand correctly, requires opening their current contract.

Credit needs to be extended to TEEA for their offer of a salary freeze to the school district. For some teachers, they believe that by offering a salary freeze, they are sharing the sacrifice. Let’s remember that Gov. Corbett suggested that teacher unions offer a salary freeze to their school districts to help with budget deficits. (I don’t recall his using the words, ‘pay increase waiver’.)  Yes, there is a budget crisis in school districts across the state; but I admit that I have difficulty with the breaking of a contract, which was negotiated in good faith by the teachers.  If contracts mean nothing then should we all go home and break our car purchase contract, our mortgage contract, and every other contract we signed in good faith where we expect both parties to be honorable.   What about ‘negotiating’ after the contract is fulfilled . . . ?

Looking at discussion from the other side, the school board is struggling with the remaining budget shortfall.  So . . . what do they do?  In their minds, they believe that the teachers should help with a ‘pay increase waiver’ (shared sacrifice) which according to their calculations could net $3 million.  At the meeting I had a sense that the school board is listening to the public and are interested in keeping the process transparent.  They offered that they have heard from TENIG, the non-instructional union, and are reviewing the offer.  Keeping the community ‘in the loop’ will prove a win-win for the school board, the teachers, and ultimately the taxpayers.

Setting aside the timeline debate of the April 14th TEEA teacher union offer letter of a salary freeze, and the rejection of the offer by the school board, last night the Finance Committee presented their side of the argument in favor of a pay increase waiver.  According to their analysis, the school district budget projection for 2011-12 is as follows:

  • Budget Projection as of May 2, 2011:      $3,170,509
  • Budget Projection (TEEA and TENIG Pay Increase Waiver:   $170,510
  • Budget Projection (TEEA Proposal Letter):         $946,122
  • Budget Projection (Custodial Outsourcing):        $2,370,438

Following the Finance Meeting, I asked Pete DePiano, president of the teachers union for his thoughts.  Here is his response,

“The 450+ members of the Tredyffrin/Easttown Education Association will stay true to their integrity in attempting to come up with a final cost savings offer for the district’s consideration.” 
 
Pete DePiano
President, TEEA

DePiano’s response tells us that the teachers are continuing to work on possible solutions to help with the budget crisis. Open and honest communication between the teachers union and the school board will aid greatly in the ongoing budget discussions. I want to believe that both sides can work together for the sake of the kids and the community.

Ray Clarke kindly offers his comments on the Finance Committee meeting below:

  • The TEEA proposal is judged to be worse on a 5-year time horizon than the status quo, because the projected $2.05 million of savings in 2011/12 is offset by salaries in the following years that are $0.5 million higher than they would otherwise be, due to two years of step movement rather than one. The higher salaries also trigger proportionate benefit cost increases, but there appear to be no fundamental differences between benefit programs, premium contributions, etc. in either scenario.
  • The salary “waiver” has the greatest impact on the district because the saving occurs every year. Although the model was presented without tax increases, it looks to me that, under this scenario, very modest increases in taxes (property or EIT) and gradual use of the “PSERS stabilization” fund balance could allow the district to fund the retirement fund beyond the five-year time horizon.
  • The Board did appeal again to the community to make their voice heard with legislators regarding the PSERS problem, and our frequent academic economist commenter also reminded us once again of the fundamentally bankrupt public pension plans. A couple of data points: the recent “fix” assumes an 8% investment return, and provides retiring career teachers with my estimate of an equivalent $1.25 million annuity. Just to keep this simple, here are the options:

 1. Reduce the liability by undoing the multiplier increase for all, not just new hires (the decrease needs a change in the state constitution, unlike the increase…)

2. Increase taxes:
a) statewide  (Marcellus gas, personal income, corporate income, etc.), or
b) locally (property, income)

3. Redirect spending from somewhere else. Like where? Pick your poison! What would Dinniman and Kampf propose?

  • There was a very unsatisfying discussion of a possible Activity Fee, punting it along to next week’s board meeting. Needless complications about different bases for charging. The bottom line: salaries and transportation for (non-mandated) extra-curricular activities cost the district $1.14 million a year. 80-85% of students participate in at least one. Nobody is making any argument that these activities are not totally worthwhile. A universal charge could be simply administered. So the issue is straightforward: do these continue to be funded by all taxpayers, or do families with high school and maybe middle school students bear a little more of the cost? Hopefully the full Board can have a discussion along these lines next week.
  • The timeline for an EIT study seems very compressed. The Board is considering appointing a study group; they need to get on that right away. If an EIT makes enough sense to put to a referendum, there’s a November 16th deadline for notifying the townships of that intent.
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T/E Teachers Union Offers Salary Freeze . . . TESD Rejects Offer, Wants Pay Increase Waiver

Tredyffrin Easttown School District is struggling with the budget crisis much as other school districts across the state and the country.  Serious budget issues escalated last month with Gov. Tom Corbett’s proposed budget, which contained massive cuts to public education funding. 

School districts nationwide are looking for ways to balance their budgets in the face of looming deficits. Often budget discussions focus on teacher unions, which quickly turn into a debate about whether they have given too much or not enough at a time when school dollars are scarce.  There are those that vilify teacher unions as the cause of escalating school district budgets, claiming that their pensions, health care coverage and guaranteed salary raises have increased the property taxes of those who pay the teacher salaries.  Counter to this attitude are public school teachers and their supporters who claim that politicians are looking to balance budgets on their backs.

School districts and the teachers unions are vying to make their individual cases to the public.  As budget discussions become more heated, often times the divide increases between the two sides. School district officials are looking to balance their budgets and teacher union leaders struggle to protect the rights of their workers. There are always two sides to a story but there is a very important third party, whose rights are often overlooked in the debate . . . the taxpayer.

“ . . . It is well understood that this school district [TESD] like so many in this country is facing a financial crisis.  It would appear that this is the time for all of us to work together instead of against each other.  As a good first step, I would propose that the information disseminated be supported.  Unfortunately, when situations reach a crisis level within an organization (whether it is the school district, local government, corporations, etc) rumor mills explode and before you know it, things are out of control.”  Community Matters, January 18, 2010

I wrote these words 15 months ago in the post, ‘Is the Teacher Union aiding in the Fact vs. Fiction Component of the TESD Budget Crisis” and they are just as important today.

I believe in the value of transparency and availability of information from government to the public.  To understand a situation and to make an informed decision requires knowing the truth.  As I said in January 2010, “. . . when situations reach a crisis level . . . rumor mills explode and before you know it, things are out of control.”  Nothing could be closer to the truth. 

Residents in the T/E School District were told by the T/E School Board that letters (dated April 6, 2011) had gone to the two district unions, Tredyffrin Easttown Education Association, TEEA the teachers union and Tredyffrin Easttown Non-Instructional Group, TENIG.  According to the school board, the letters could not be made public for legal reasons. It is my understanding that the school board letters contained a request to both unions for a pay increase waiver for next year.  If you recall, Gov. Corbett had suggested that teachers unions in Pennsylvania encourage their members to take a salary ‘freeze’ for next year to help their budget shortfalls. Several residents have contacted me and some have spoken up at the school board meetings to ask about the TESD letters, and if there has been a response from either union.  With hands apparently tied legally, our school board was not able to provide much detail.  I was told last week that members of TENIG were considering some kind of ‘give-back’ offer to the district and were to vote yesterday on their offer.

Until earlier this week, I assumed that the teachers union was not considering any type of ‘give-back’ offer or concession. My impression from attending district budget, finance and school board meetings was certainly that no response (or offer) had been received by the district.  During the course of this week however, I have had phone calls and emails from numerous sources suggesting that a salary freeze offer was made to the T/E School Board but that the offer was rejected.  To clarify, these sources of information were not TEEA union leadership. 

Clearly confused but believing in the publics ‘right to know’, yesterday I contacted via email the members of the TESD school board and Pete DePiano, TEEA union president. The following email was sent to the School Board and DePiano asking for clarification:

Dear __________

I am in receipt of information that indicates, among other things, that there was an offer made from Tredyffrin Easttown Education Association teachers union for salary freezes for next year, in advance of the negotiations for the next contract.  According to several sources, the TESD school board rejected the teacher union’s salary freeze offer, citing that such an offer would only be acceptable if the current teacher’s contract were opened and renegotiated. 

I am working on an article on this topic and I am affording you the opportunity to comment on this matter.  If you wish to comment, I will need the information within 24 hours, by 10 AM Friday, April 29, 2011. 

Kind regards,
Pattye Benson

From the President of TEEA, I received the following email response:

On April 15, 2011, TEEA formally offered a salary schedule pay freeze to the T/E Board of School Directors.  The Board formally has responded to TEEA that they cannot accept the offer.  As the T/E School District prepares to finalize its budget for 2011-12, TEEA will continue to work diligently with its members behind the scenes to attempt to reach another cost savings offer.

Pete DePiano
TEEA President

In response to my request, I received the following response from T/E School Board President Karen Cruickshank:

Dear Pattye:

Many thanks for contacting the T/E School Board about a teacher offer in T/E.  As you know we are in a significant budget crisis, and have asked both of our unions in a sense of shared sacrifice to participate in a pay waiver.  At our Monday night Finance meeting we will provide a detailed presentation about why we can not accept a pay freeze but would welcome a pay waiver.  I would encourage you to attend the meeting so that you can see the entire presentation and ask any questions that you have of the board.

Many thanks for your commitment to providing information to our community. 

Most sincerely,
Karen Cruickshank
T/E School Board President

Karen Cruickshank sent a follow-up email:

Dear Pattye:

In regards to your request for information about union offers in the T/E School District, the TESD School Board does not negotiate in public.  We continue to remain in close communications with both of our unions.  

As I did say in my earlier e-mail there is confusion over the difference between a pay waiver and a pay freeze, and we will clearly point out the financial differences between them at our Monday night Finance Committee meeting.  The Board as always will be most happy to take questions from the community at the meeting.

Most sincerely,
Karen Cruickshank
T/E School Board President

Although we learn from these responses that there was an ‘offer’ from the teachers union and a ‘rejection’ from the school district, what did the offer letter and the rejection letter actually say . . . ? It is obvious there is confusion between a salary ‘freeze’ and a salary ‘waiver’ and it is noted from both of Cruikshank’s responses, that the school board intends to clarify those distinctions at TESD’s upcoming Finance Committee meeting on Monday night.

I did not receive copies of either the TEEA letter to T/E School Board or the letter from the T/E School Board to TEEA.  However, with a bit of research online I was able to track down both letters.  The letters are available online (and therefore public) and can be found at www.teeacher.org .

In addition to the TEEA and TESD letters, there is a note to the teachers from DePiano:

To all TEEA members:

Below are two letters. The first, dated April 15, 2011, is TEEA’s response to the TE School Board’s request that we waive the fourth year of our contract. It consists of a refusal to waive the contract and an offer to freeze the contract for one year and extend it.

The second, dated April 27, 2011, is the District’s response, a refusal to consider any agreement that involves extending our contract.

To clarify: A waiver would cancel the fourth year of our collectively bargained contract and put us into immediate negotiations for a new agreement. A freeze is essentially a one-year pause. We would work in 2011-2012 under the same provisions we have this year. We would then realize the negotiated final year of our contract in 2012-2013.

Yours in solidarity,

Pete DePiano, President TEEA

You will note that the TEEA offer letter dated April 15, 2011 to TESD states in part,

“ . . . In an attempt to prevent more painful cuts from having to occur (including program cuts, increases in class size, or an outsourcing of the custodial staff) yet also honor the contract that was negotiated in good faith, the Representative Council of TEEA has authorized a salary freeze proposal for the Board’s consideration.  This includes a salary step freeze for 2011-12 based on the current 2010-11 salary schedule, with the final year of the originally bargained contract realized in 2012-13, including step movement and salaries.  It provides PSERs clemency to staff that will be retiring next year, and maintains status quo on all other provisions of the collective bargaining agreement. . . . I estimate this proposal will generate over $2.5 million in savings for FY 2011-12. . . “

The T/E School District response of April 27, 2011 rejected the TEEA offer stating that their letter of April 6, 2011 called upon the unions to accept a

“. . . one-year pay increase waiver as their contribution to the shared sacrifice to support T/E students.  After June 30, 2011, a waiver indicates that there will be no movement vertically or horizontally on the matrix for the 2011-12 school year.  The settlement of the new bargaining agreement effective July 1, 2012 will direct the placement of staff on the salary matrix for future years.  A one-year pay increase waiver would waive contract raises for the two unions’ employees for the 2011-12 school year and would result in a cost savings of approximately $3,000,000. . . “

Again, as I said more than a year ago, “rumor mills explode” and there is only one way to correct misinformation and that is with the facts. 

The budget crisis facing the school district and our community should not be about ‘picking sides’ . . . it should be about providing transparency, factual information and letting the public draw their own conclusions.

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Budget Ax Falls in Philadelphia; Pink Slips Could Go to 3,820 School District Employees

Late Wednesday, the Philadelphia School District announced that 16% of the district’s 24,000 employees . . . or 3,820 positions might be eliminated.  The district has a shortfall of $629 million and estimates they will need to severely reduce the work force to meet the deficit. A budget for the district must be approved by the end of May and the clock is ticking.

If Gov. Corbett’s proposed budget is passed, Philadelphia School District stands to lose $292 million in state funding – representing close to a 10% reduction in the District’s overall funding.  As a result, pink slips could go to hundreds of aides, custodians and central office staff, plus about 12 percent of the teachers. The school district will be forced to cut the workforce by 3,820, which includes 400 members of Central Office staff, 1,260 teachers, 650 aides, 430 custodians, 180 counselors and 51 nurses. The district also plans to increase class sizes and curb spending on transportation, special education, summer school, arts, music and sports.

Some are forecasting that teacher cuts will be on the newer and probably younger teachers. On hearing the District announcement of massive teacher cuts, a friend forwarded me an email from a young Philly teacher.  Sad words from a dedicated teacher:

This whole thing is so terribly sad. I am a new teacher in fear of being laid off. In view of the circumstances, it may be likely that I will not ever be called back for my job.

Like many other teachers, I put my heart and soul into my job. No expense was ever too great for my students. I feel like I did not even get a chance to prove myself in becoming an even better teacher. My heart goes out to all teachers in fear of losing their jobs. I wish they would let us know so that we can try to make sense out of this and try to cope with this.

I feel like my heart has been ripped out, and I have been robbed of true happiness in doing what I love. I wish everyone the best—including the new teachers who probably will be the first to go.

In addition to the major reduction in the workforce, the District is looking for $75 million in budget help to come from teacher union concessions. As to be expected, union membership feels that they have given enough . . . collectively, the teacher’s are saying, “they do feel the pain!”

We learned this week from Harrisburg that the state school voucher program is inching forward again and discussions are continuing on proposed legislation that permits furloughing of teachers for ‘economic reasons’.. The teacher pension crisis continues to underscore the severity of the current economic situation.  In the morning news, it is reported that New Jersey’s unfunded pension liability stands at $53.8 billion, the fourth highest in the country.

Does this news from Philadelphia School District have any significance for local school districts?

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A Sign of the Times . . . Corbett’s De-Funding Public Education Plays Out in Teacher Contracts, School Vouchers, Education Rallies . . . What is the Future of Public Education in Pennsylvania?

Gov. Corbett’s plan to de-fund public education in Pennsylvania in his proposed $1.2 billion funding cuts is becoming the backdrop for school district budget discussion statewide. Corbett’s education-funding proposal has left many communities wondering how they are going to make up their budget deficits and are looking to the teachers and non-instructional workers for help.

This week in Unionville-Chadds Ford School District, the teacher contracts appear to have stalled with both sides remaining at odds. If you recall, the teachers have been working under the conditions of the old contract, which expired last summer. Unionville-Chadds Ford School District is struggling with their budget and how to handle the $1.1 million reduction in state spending contained in Corbett’s proposed budget. The non-instructional district support staff agreed to a salary freeze but at this time, the teachers have not.

In Tredyffrin-Easttown School District, the school board sent letters to Tredyffrin Easttown Education Association (TEEA) and Tredyffrin Easttown Non Instructional Group (TENIG) unions asking the members to consider a salary freeze for next year.  Although I do not believe there has been an official response from either union, it is my understanding that TENIG will meet tomorrow (Thursday) for discussion and a vote on a salary freeze.  TEEA members will hold further discussions next week but I do not know if salary freeze is part of the discussion. 

In recent days, there have been many rallies around the state in support of public education. “Cut Corbett Not Schools” signs are seen all over Harrisburg – demanding that the legislature restore the $1.1 billion in education funding. There is a continued push by many to create a state-funded school voucher program (SB 1). Currently the proposed voucher legislation is stalled in the Senate; I think primarily due to the perceived cost of implementation.  The heated discussion of a state-mandated school voucher program continues to widen the divide between the teacher unions and the school choice advocates, who believe that vouchers are the answer to failing public schools.

The bitter debate raging in the state over Corbett’s proposed public education budget cuts has taken a toll on his approval ratings.  Less than four months in the governor’s mansion and today the Quinnipiac University polling is showing a big jump in disapproval for Corbett.  The polling indicated that 52% of Pennsylvania voters disapprove of the way Corbett is handling the state budget and 64% oppose his budget cutting of state and state-related universities.  (To read the April 27 Quinnipiac University poll, click here).

Aside from public approval ratings, what will Corbett’s proposed budget cuts mean for the future of public education? What lies ahead for school districts and our children across Pennsylvania . . . the elimination of art and music, language classes, increase in class sizes, scaling back full-time kindergarten to half-day, cuts to athletic programs? These are budget cuts that will require many school districts to impose higher property taxes, lay-off staff or impose pay-for-play requirements. Pennsylvania has become a battleground for public education funding . . . what does this say for the future of our children’s education?

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A reminder that tonight at 7 PM, State Senator Andy Dinniman will hold an education rally on the steps of the Chester County Courthouse (corner of High and Market Streets) in West Chester.

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Outsourcing of Custodial Services . . . Scapegoat for TESD Budget Woes or a Way to Save Educational Programming

I have mixed feelings on the issue of outsourcing of TESD’s custodial services. If you simply look at the bottom line, there is a cost savings of almost $1 million to the school district if the custodial services is outsourced. The school district is facing a major budget deficit and the contracting of support services not related to curriculum delivery is one option under consideration by school board members.

Several custodial members of TENIG (Tredyffrin Easttown Non-Instructional Group) union spoke at the last TEDS Finance Committee, and there are other issues to consider in making an outsourcing decision. Custodial employees number under 30% of the total membership in the TENIG union — 49 custodians. As we heard at the Finance Meeting, many of these custodian union members are long-standing district employees. Many of the custodial employees are local residents and there is growing concern whether or not they could find another job, should their work be outsourced. How will they support their families? As neighbors in the community, should this be a concern? Should school board members show compassion for the custodial employees when deciding whether to outsource the service?

I get the sense among some of the TENIG custodians that they feel they have become the target in the school district’s budget woes. We understand that privatization is seen as a way to preserve the classroom and its programming, but it does come with a human toll.

Outsourcing services that historically have been in-house functions with long-time employees is a major shift in institutional culture — despite the cost savings that could be realized. Probably the biggest and most difficult obstacle to outsourcing the custodial support service is the ability of staff and community to accept the change, or even the consideration, in spite of the current budget pressures and economic realities.

Can outsourcing provide the same level of productivity and quality of job performance as the current union employees? One could argue that the current custodians have developed a connection with the schools and the students. As a result, these employees may argue that they will do a better job than an outsourced company who does not share that same level of ‘ownership’ in the school system.

 The RFP for outsourcing of services was issued by the school board with a deadline for bids in early April. Once the outsourced service provider bids are returned, it will be interesting to see if TENIG’s custodial employees are prepared to match the outsourcing proposals.

Bottom line . . . the school district is faced with financial challenges in the budget. If outsourcing of the custodial services can save the district $950K, should privatization take priority over education and programming cuts? On the other hand, if TENIG is prepared to make a concession and meet the district somewhere in the middle, can we agree that is acceptable? This is only the beginning . . . TENIG is the precursor to the teacher union negotiations; setting the stage for what is to come.

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Reminder: Tonight is the TESD School Board meeting. The location has been changed to Conestoga High School, 7:30 PM. Click here for the School Board agenda.

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