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.