property tax increase

T/E Finance Committee Meeting w/no decision on tax increase – School Board Meeting Tonight at 7:30 PM, Conestoga High School … A School Board Divided

Unfortunately for T/E taxpayers, the District’s Finance Committee meetings are not videotaped. With the open budget issues, looming June 10th deadline, in addition to unresolved $1.2 million accounting errors related to Special Ed expenses, the public really needs to know what’s going on in the process – especially in advance of the important School Board meeting tonight!

I was unable to attend the Finance Committee meeting and will miss the School Board meeting tonight as it conflicts with the special Tredyffrin Township Zoning Hearing Board.  At 7 PM at the township building, Catalyst Outdoor Advertising will present its appeal on the township’s denial of their application for the digital billboard in Paoli.  My BAN the Digital Billboard campaign has been 9 months in the making so need to attend the ZHB meeting.  However, also important is the School Board meeting tonight (7:30 PM, Conestoga High School) – the proposed tax increase, the accounting errors and how the business manager (Art McDonnell) factors into the situation.

After speaking with several residents in attendance at the Finance Committee meeting, an update would be useful. (Remember, the meetings are not videotaped and I was unable to attend). Resident Doug Anestad did attend the Finance Committee meeting and offers his personal commentary below.

Reading Doug’s remarks, it sure sounds like the Finance Committee and its Chair Todd Kantorcyzk are a ‘school board divided’. And just when you thought ALL the numbers are in for the proposed budget, the administration announces that “ … special education expenses were going to be an additional $700k this year with $500k of that as a recurring expense” as reported by Doug.  My question is WHY is this information coming in at the eleventh hour of the budget process!

Last night’s Finance Committee meeting was a late one ending after 10:30 pm.

At the beginning of the meeting, an undated letter from the auditor was distributed to the audience. The Business Manager, Art McDonnell, stated that he asked the auditor after the last finance meeting to make the letter after the community questioned the $1.2M in special education spending that was incorrectly applied to the wrong school year and in order to respond to the complaint directed to the Pennsylvania Department of Education.

Neal Colligan pointed out that the letter clearly stated “Management made all decisions regarding how and when these transactions were recorded.” I pointed out that the email chain for the document clearly stated that it was sent on May 10 – three days before the last finance meeting, not after it as stated by Art. The letter also mentions the question of the $1.2M being raised in April 2019. Was that when the auditors were first made aware of the misstated $1.2M? We still don’t know the answer to this or other questions because the auditor did not show up to yet another meeting even though school board members have requested that they show up repeatedly for quite some time. It seems that Art does not feel the board members are entitled to talk to their auditor.

The administration then did their presentation on the current status of the budget process. This is when the Director of Individualized Student Services, Chris Groppe, stated that special education expenses were going to be an additional $700k this year with $500k of that as a recurring expense. As this is a recurring expense, the administration then suggested that the $500k be added to next years budget.

This was followed by a long conversation on where the board members stood in regards to the budget. The school board members then went around and stated where they were in terms of tax increases. Even though the Finance Chair, Todd Kantorczyk, wanted to have the school board members express what they were comfortable with in regards to a projected deficit, most of the board members seemed to want to express where they were in regards to a percentage tax increase.

Here is a summary of where the board members were:

2.8% – Kate Murphy, Edward Sweeney

3.91% – Heather Ward, Michele Burger, Tina Whitlow, Scott Dorsey

4.33% – Roberta Hotinski, Kyle Boyer, Todd Kantorczyk

Kyle Boyer stated he was willing to go down to 3.91% and offered to do so in order to have five votes for the 3.91% to move the process along. Todd Kantorczyk did not take him up on his offer so all three options will be presented at the board meeting tonight.

Many of the school board members showed their displeasure with administration during their comments. Words like frustrated, distressed, pissed off, and trust were used by board members. They really did not like $700k in expenses being added to this year with $500k of that as recurring expenses for next year being dropped on top of them at the last minute.

It would appear that many of the school board members are starting to see the manipulation the administration uses with the school board and don’t like what they are seeing.

The committee then approved the following strategies for deficit reduction. Reducing the budgeted amount for the school safety coordinator position between $50k to $70k. Remove the elementary mental health specialist for $96,000. Delay new reading program $300,000.

The meeting ended with one last appeal for the school board by former Tredyffrin Township Supervisor Mike Heaberg. Mike made the case that by not fixing the incorrect financial numbers, the district might lose some of the trust of the community and that the school board should do so at the meeting tonight.

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2 Weeks to Final Budget Vote & T/E Tax Increase Remains at 6% — Community needs to ‘Trust’ School Board Oversight!

With just two weeks until the final budget is approved for the school district, where is the school board in the process? We know that the 6% tax increase proposed in mid-December has not changed. Rumors continue that the school board will approve a lower tax increase yet the public remains in the dark.

For months, community members have requested school board action regarding the Special Ed $1.3 million accounting errors that impact the proposed (and future)budgets without resolution. Requests for the auditor to attend a public meeting are met with “not available” responses by the District’s business manager Art McDonnell. Then this past week we learned that the District posted a job opening for a new controller with a start date “ASAP” – apparently the District’s current controller is leaving for another job. Any secrets can remain safe if the controller is absent from public meetings and the controller leaves the District.

In my opinion, there is an imbalance in power and control in the school district administration. All roads lead back to (or through) Art McDonnell, the business manager. Many on the school board seemingly depend on (and support) the words of McDonnell, even when presented with evidence and opposing facts from financial experts in the community. Why is that?

We need to trust the school board as our oversight – to demonstrate leadership, courage and the will to govern on our behalf. At the core, the associated budget issues, including accounting errors, revolve around trust. As taxpayers, how are we supposed to trust the accuracy of this proposed budget (read “tax increase)?

We need a brave school board member to honor their responsibility to the community by making a motion requiring the administration to correct the $1.3 million Special Ed accounting error.

As a lead-up to the final budget vote on June 10th, there are two important meetings for school board members (and the public!) to speak out this week. There is a Finance Committee meeting Tuesday, May 28, 7 PM (click here for agenda) and regular school board meeting on Wednesday, May 29, 7:30 PM (click here for agenda).

Below Ray Clarke provides his personal commentary on the budget and related Special Ed accounting problem and his thoughts on the District’s business manager Art McDonnell.

Another month has gone by in the annual cycle of operas that is the TESD budget process.  On Tuesday the Finance Committee holds it last meeting before the June 10th vote on the Final budget.  It is increasing clear that the Board is ill-served by its Business Manager and that it is time for a fresh approach.

A few more facts are on the table.  In the last two weeks, the budget deficit for the current year has jumped by $700,000 of “Other” expenditures.  The Administration now presents a range of tax increases from the Index 2.3% to the erroneous Exceptions of 5.964%, and appears to be promoting 4.64%.  This is based solely on creating a budget deficit equal to the average of the last five years’ budgets without any further program changes. 

Also, the auditor’s Management Letter that accompanies the wrong financials for both years is quite clear that “our audit of the financial statements does not relieve you [the Board] or management of its respective responsibilities”.  The Letters for both years make no reference to the CCIU invoice mis-classification, even though dated in December of both following years, a month to a year after the issue came to light.

Some questions that arise:

  • Is the Administration proposing a $1.3 million budget deficit because they know that expenses are over- and revenues are under-budgeted?
  • What caused the last minute increase in projected expenses for the current year, and further, what impact does that have on next year’s budget?
  • How can the Board make informed budget decisions when the basic information about departmental level trends underlying that budget were presented so long ago (and in very broad strokes) and have been impacted by the disconnected list of programs under consideration? Most important, those financials are in one case just plain wrong.
  • Is the Board comfortable with basing a tax decision – impacting both this year and next – on authority granted by PDE based on erroneous information?
  • Has the Board received confirmation from its Auditor that, per its Management Letter, in December 2018 it either did not identify the CCIU error that was identified over 12 months earlier, or that it considered the matter “trivial”?
  • What is the Board going to do about Mr. Sweeney’s suggestion two weeks ago that the Budget process should be improved?

The mis-representations, cover up and associated taxing and budget debacle is the culmination of years of the TESD Board being treated by the Business Manager like a set of the proverbial mushrooms.  Other districts provide models for informed decision-making.  It’s time for the Board to exercise its contractual rights and make a change.

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TESD: Proposed Tax Increase of 4.3% Drops to $3.875% — School Board to leave $20 in taxpayer pockets

Tax-increaseFor the 13th year in a row, it looks like the TE School Board will vote to increase taxes to its residents.

At the District’s budget workshop last night, the public learned that the proposed 2016/17 tax increase has decreased – the tax increase has reduced from the 4.3% contained in the preliminary budget approved in January.  The proposed tax increase is now 3.875%.  This ‘decrease in the increase’ means homeowners will keep roughly $20 of the proposed tax increase in their pockets.

T/E School District has one of the largest fund balances in the state – in 1996/97, the District had a fund balance of $4,333,661 and in the last decade we saw the fund balance increase to more than $28 million.  The total fund balance as of June 2015 was $32,381,047 – that’s $32.4 million in taxpayer dollars. Continuing to grow the fund balance, the District shows a budget surplus for the fifth year in a row yet residents continue to feel the sting of an annual tax increase.

Ray Clarke and Neal Colligan were in attendance at the budget workshop and their comments from the meeting are appreciated.  Thank you both.

If residents care about the proposed ‘thirteen years in a row’ tax increase, they should plan to attend the TE School Board meeting of April 25 and voice their opinion.

Budget Workshop Notes from Ray Clarke:

Three hours of discussion at last night’s TESD Budget Workshop culminated in some good news for taxpayers – although you’d need a microscope to see it.  The Board will vote at its April 25th meeting for a “Preliminary Final Budget” that includes a tax increase of 3.875% – down from the maximum allowable by a token 0.4% (worth about $20 for the average taxpayer, who is still faced with an increase of more than $200).

Notwithstanding well-articulated positions from members Dorsey, Sweeney, Burger and Hotinski (and from the audience) for a lower rate, more considerate of the increased fees to families and the fixed, inflation-linked incomes of retirees, the outcome seemed pre-ordained, driven by the same majority that voted for the senseless VFMS fences.  That majority seems pre-occupied by risk and unable to appreciate that every number they are given by the Administration is conservative.  For example:

–  Half of the adjustments to the Preliminary Budget could arguably be higher – most notable being the use of approved rather realistic estimates to budget the impact of staff retirements.

–  There was much lamentation of the possible impact of the next union contracts (due in 2017/18), without recognition that the projections already include 7-10% increases in the benefits costs (worth 1-2% in total compensation).

–  Revenue projections are especially murky.  This year’s transfer tax is already $1 million over Budget, as are even base real estate revenues – the most predictable of all line items!  It’s not at all clear if next year’s Budget, developed months ago, considers these developments.

Years of operating outcomes favorable to Budget show that the Administration is skilled at managing its resources.  Superintendent Gusick read a scripted plea for the Board to set the District’s tax parameters and pledged to implement a process next Fall to conduct the oft-advertised “deep dive” into expense strategies that would address any apparent operating deficit that resulted.

The April 25th Board vote is not final, but is nevertheless significant.  Anyone that believes that our School District should be managed more like the County Intermediate Unit, which also last night presented its Budget and a commitment to live within the Act 1 2.4% Inflation Index, should come out in support of our Board members who are trying to hold the line here in TE

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Budget Workshop Notes from Neal Colligan:

-Current Year operating projections now show an estimated $984,000 Surplus for the District for the 2015-16 fiscal year (this year).  Current year’s budget was passed with an anticipated deficit of $1.654 MM.  It’s a miracle…a $2.5 MM swing!

-This “miracle” of Deficit Budget morphing into an Actual Surplus has now happened in EACH of the last five years.

-As a result of these Surpluses; the District has added almost $12 MM to its Fund Balance over the last 5 years…that’s a pretty profitable operation!!!

-With over $32 MM in Fund Balance (about to be over $33 MM with this year’s Surplus); at what point is that adequate?

-The growth of the Surplus is remarkable as we always seem to be “up against the wall” when it comes time to set a new tax rate.  Possibly this pattern is a result of the budget forecasting methods employed when looking at the next year’s budget.  On average (10 years); the District collects a bit over 100% of budgeted revenue and spends about 95.5% of budgeted expenses.  Perhaps this speaks more to the budget estimates used at tax setting time than actual operational changes employed during a given fiscal year.

-At 3.875%; the tax increase this year will be higher than the 3.84% increase imposed on the community for this year.  Not sure the new Board Members ran to increase taxes.

-Perhaps it is time to look at using a small amount of our Surplus (88% funded by local sources) to dampen current tax increases?  One could certainly argue that the Fund Balance is now super-adequate and it is taxpayer money that they were told would go to education….!!!???

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