In spite of $12.4 million in budget surplus the last four years, TESD residents have seen yearly tax increase and yet sadly, the District still does not provide health insurance coverage to their aides and paras.
I have regularly attended school board meetings and associated finance meetings the last 4 years and I have been amazed at the yearly District budget surplus. This week at the Finance Committee meeting, we learned that once again, the District has a multi-million budget surplus – yes, a review of the 2013-14 budget indicates a surplus of $2.2 million.
Thought it would be interesting to review the District’s budget surplus for the last four years. The surplus schedule is as follows:
2013-14: $2.2 million
2012-13: $5.0 million
2011-12: $3.9 million
2010-11: $1.3 million
Total: $12.4 million
Where exactly does the budget surplus go each year? We know that it does not go the cost to providing healthcare to all District employees. The aides and paras remain without health insurance, the residents continue to receive yearly tax increases and the surplus feeds the ever-increasing District’s fund balance. According to the District, as of July 1, the fund balance has grown to $32 million! Remember, the fund balance growth represents surplus from the District’s yearly budget. It would be surprising if this isn’t the largest fund balance of any school district in the state.
I truly struggle to understand how the District manages to add multi-million dollar budget surplus to the fund balance over the years but the residents continue to feel the sting of an annual tax increase. I recall the District’s business manager Art McDonnell’s explanation of the whopping $5 million surplus last year – primarily due to reduced health insurance premium costs for employees. Clearly, last year was not a fluke when you review the mega-millions in budget surplus over the years.
It would be easier to accept the yearly budget surplus if we did not also have a tax increase each year. In fact, you would have to go back a decade to 2004-05 to find the last time that there was no increase. A review of the District yearly tax increase since the last no-tax year is as follows:
• 2014-15: 3.4%
• 2013-14: 1.7%
• 2012-13: 3.3%
• 2011-12: 3.77%
• 2010-11: 2.9%
• 2009-10: 2.95%
• 2008-09: 4.37%
• 2007-08: 3.37%
• 2006-07: 3.90%
• 2005-06: 1.40%
• 2004-05: Zero Tax Increase
Where exactly does the budget surplus go each year? (We know that it does not go the cost to providing affordable healthcare to all District employees.) The aides and paras remain without health insurance, the residents continue to receive yearly tax increases and the surplus feeds the District’s ever-increasing fund balance. According to the District, as of July 1, the fund balance has grown to $32+ million! Remember, the fund balance growth represents surplus from the District’s yearly budget. TESD’s fund balance could well represent the largest in the state.
I fully understand the impact of the pension crisis and that unless there is reform; all Pennsylvania school districts are going to fall over the cliff in the near future due to the ballooning costs. I do understand that the District must protect resources for the pension crisis but at what cost to the residents?
Other items of interest from the Finance Committee meeting included responses to Ray Clarke’s questions. By now, most of you have probably heard about the 24 Dell computers fraudulently purchased by someone using the District’s Dell account. This matter is an ongoing police investigation. Ray asked about the District’s ‘purchase process’ and Dr. Waters confirmed that it was actually the internal District controls that uncovered the purchase and there was no financial loss as a result.
Ray referenced Unionville Chadds Ford School District’s receipt of $582K in state grants for construction costs and asked if similar funding was possible for the District’s classroom expansions. Ray’s suggestion sadly was dismissed as requiring too much work for the benefit.
Ray’s comment to me regarding the 2013-14 audit is as follows:
The audited financials showed revenue of $112.9 million, expenses of $110.75 million, for a surplus of $2.15 million, compared to the budgeted deficit (before contingencies) of $1.7 million. Fully one third of the favorable variance to budget ($1.325 million of the $3.9 million) came from “breakage” – the replacement of retiring staff and approved leaves with lower cost staff. This is entirely predictable and we’ve asked for it to be included at budget time for the past several years, but every year the request is ignored and the property tax increase is 30% more than it need be, all other things being equal. There is now $31.7 million of taxpayer money squirreled away in the General Fund Balance and that’s after a $10 million transfer to the Capital Fund a couple of years ago. Perhaps since next year is an election year the Board might turn up their hearing aids.
It continues to be a struggle for residents to receive clear explanations. Materials provided often only offer partial information with many of the suggestions/questions of residents at the Finance Committee meeting dismissed or deferred. No argument that T/E School District is a great school district as all the school rankings indicate — but is the price for the District’s success no public input allowed?
I attended Tredyffrin Township’s Board of Supervisors meeting in the last week, and the preliminary 2015 township budget was reviewed and discussed. In addition, the supervisors held a Budget Workshop this week. The differences between school district and the administration and the supervisors, township manager and staff are striking. The next Community Matters post will provide an update.