Ray Clarke

TESD Calendar update — Students will have 179 school days & other updates

An article written by Yuge Xiao & Lavi Ben-Dorin in StogaNews online this morning, reports on the school board meeting and the updated school calendar, stating that“…  students now have 179 school days. Staff will still have 191 days, with the last being on June 30.  Originally, the Tredyffrin/Easttown School District (TESD) had scheduled 182 instructional days (the state requirement is 180). However, the district has chosen to not reschedule the two additional days.”

Thanks to Ray Clarke for attending TESD the meeting last night — Finance and Special School Board meeting — his notes are offered below:

Ray Clarke – Notes from February 10 Finance & Special School Board Meeting

1.  Off-off-the-presses Affordable Care Act changes.  The Board committed that the district will analyze the impact and report the results at the February 24th Board meeting.  This is a hard commitment.

ACA Change: Companies with 100 workers or more are getting a different kind of one-year grace period. Instead of being required in 2015 to offer coverage to 95 percent of full-time workers, these bigger employers can avoid a fine by offering insurance to 70 percent of them next year

2.  As suggested by some CM commenters, there are ways to save Spring Break and have the last day no later than June 20th: reducing instructional days from 182 to the state minimum of 180 and also counting three non-instructional days towards the 180.  At the moment (before the the next storm on Thursday!) there are two days that remain to be used in this way and thus preserve Spring Break. The explanation wasn’t the clearest and I didn’t have a good angle on the screen, so the public should check the TESD web site for the approved calendar.  Interesting here that the recently hired cafeteria manager was credited with bringing these ideas to the District from his previous public accounting (I think) experience.

3.  The preliminary Budget was approved, with the authorization to file for Exceptions, which – if approved by the State – the Board has the discretion to use to whatever extent they deem necessary for the final Budget, which has to be passed by June 30th.  Governor Corbett’s PA budget proposes reducing the increase in PSERS, which Art McDonnell stated would have the effect of reducing expenses by $600,000, if enacted exactly as-is.  (I think that benefit is net of the state’s contribution, and presumably therefore the allowed exception would also be reduced by this amount – giving an allowed exception tax increase of ~0.6% rather than the current 1.1%).  Many moving pieces here, and obviously important to make sure that the latest and best information is brought to bear on the final decision.  Much reference to the March and April budget workshops, which hopefully can include fine-tuning across the board, incorporating things like salary “breakage”, for example.

4.  Not discussed at the Board or Finance Committee, but there is an important Education Committee meeting tomorrow at 1:30pm.  Topics include a review of the Special Education program (which we have told will be over-spending this year’s budget by $850,000 [over 5%], for over 1,000 students receiving special education services in the District].  Also on the Agenda, enrollment projections.  At 12:30pm the Legislative Committee will be reviewing the Governor’s education budget and perhaps providing some insight on its prospects.

5.  The district’s transportation staff drove the bus routes on Sunday to check that the roads were cleared sufficiently to allow the schools to open today – quite an effort and accomplishment, I think.

Affordable Care Act compliance ideas for T/E School Board

AffordableCareAct-MainPhoto1I am passionate about our community’s history and the preservation of our historic buildings and the demolition of the house on Pugh Road has had my attention the last few days. The discussion on the township’s historic resources will continue but I want to get back to other issues, including the TESD budget and the District’s compliance of Affordable Care Act.

The school district held a special meeting on January 6 to present the preliminary budget proposal and for a ACA presentation by Rhonda Grubbs, Wisler Pearlstine attorney and Art McDonnell, District’s business manager. (See Community Matters related post).  Following the ACA presentation, many questions remained.  School board president Kevin Buraks told the audience that the ACA discussion would next be discussed at the Finance Committee meeting on Monday, January 13.

I attended the January 13th Finance Committee expecting further discussion of the ACA.  However, the decision was to postpone any additional ACA discussion to the next full school board meeting — upcoming on Monday, January 27. Although it was the decision of the school board members attending the Finance Committee meeting to postpone the ACA discussion, Pete Motel actively reached out to the community and asked that we provide our own ideas for compliance to the school board.  Remember, all TESD employees are not currently offered health care benefits – facing the ACA compliance deadline, the  Board needs to decide what to do about the aides, paras and substitute teachers, the employees not currently receiving health benefits.

The Finance Committee meeting is not videotaped so probably few in the community are aware that Motel encouraged ideas and suggestions about ACA compliance from the public. If you want to help keep the jobs of the aides and paras from outsourcing, they need to have health coverage.  This is important and the Board needs to hear from the public.  Send your suggestions, (be specific) to schoolboard@tesd.net and share those ideas for discussion on Community Matters.

Compliance with the ACA is not an easy task for the Board. There are many factors to consider and I think the Board left the ACA presentation with as many questions as members of the public.  The ACA presentation gave a negative, ‘cannot be done’ slant to the compliance situation.  However, there are people in the community that believe that there are other options for the Board to consider.

In an email, resident Ray Clarke suggests that it is important for the Board, “to base the analysis on reasonable estimates of any underlying variables (family vs single status, % opting out in favor of cash, etc. while of course, recognizing that the actual outcomes could be different (back up with budget contingencies, fund balance commitments).  The values for these assumptions should be published along with the impacts.”

Taking school board member Pete Motel’s suggestion to heart, Ray sent a list of ACA ideas to the Board and they are included below:

–  Provide the “current” healthcare plan to full time aides, paras, subs, and so make the non-discrimination test moot.  Make reasonable estimates for and publish all the assumptions: premium share, family status, coverage provided, wage adjustment, coverage waiver bonus, etc.

–  Provide a minimum “basic-care” employee-coverage-only plan to full time aides, paras, subs and Admin.  Deal with the Admin group as Keith has suggested on CM.  Make assumptions as above.

–  Facilitate the formation of a union/bargaining group for either the Admin group or the aides, paras, subs so that their benefits can be bargained separately and avoid the non-discrimination test.

–  Cap hours/days of all aides/paras/subs at 27.5 hours/3.5 days.  Flesh out the impact on students and management overhead and provide realistic estimate of any partially compensating salary increase.

–  Outsource as needed.  Provide guesstimate of impact based on rates paid for current out-sourced employees and from last year’s discussions with vendors.

I think that the Board should also have a table comparing compensation rates and all benefits (including PSERS) for aides, paras, subs in neighboring school districts.

Perhaps the Board can also be encouraged to get direct feedback from the affected employees.  There are web-based tools that could be used, for example, for a simple anonymous ranking of employee priorities (while of course recognizing that the priorities are not in practice independent and none can be guaranteed).

TESD Facilities Committee proposes fees for VFES tennis court usage

The monthly TESD Facilities Committee meetings are held at a time that makes it difficult for many to attend – Friday at 2 PM, and the Friday, June 15 attendance proved the point.   Ray Clarke attended the comittee meeting with 3 other residents and provided the his notes for Community Matters.  In addition, I spoke with him for clarification, specifically in regards to the infamous tennis courts at Valley Forge Elementary School.  If you recall, Zoning Hearing Board granted the variance last month so that the District could build the additional parking spots and leave the tennis courts intact.

I had assumed that once the tennis courts at Valley Forge Elementary School received their ‘stay of execution’, residents would continue to enjoy them free of charge.  However, based on Ray’s explanation, it looks like the District views the courts as a revenue source.  According to Ray’s notes, initially the Facilities Committee proposed two options for the tennis courts – an hourly rate for usage ($15-$25) or a flat annual fee of $28K to be paid by an association!  It is unclear what ‘association’ the District had in mind — the neighbors next to VFES?  Looks like tennis court neighbor Michelle Berger temporarily thwarted a PR nightmare for the Board with an agreement that the resident usage fee will not start until the fall.

June 14, Facilities Meeting Committee Notes … from Ray Clarke

Well, an audience of four at the Facilities Committee was treated to a detailed exposition of the process underlying the Infrastructure Plan.  On one hand, we were told the plan took 332 hours of Daley and Jalboot time at the bargain rate of $12,200 (plus $8,000 for mechanical engineering), using annually updated CAD drawings of every building, inspections of every building, meetings with the Maintenance staff, using cost projections updated for 4% annual inflation, etc.  Bbut on the other hand, we were told that we should pay no attention to the fact the resulting cost estimate is over $50 million, and in fact, that to even mention that number is inflammatory and “foolish”!

I wondered about the status of the Infrastructure report.  I was told it was approved in “the May Board meeting”.  I see that the minutes of the 5/13 School Board meeting includes the Facilities Committee report: “Also on the May 13, 2013 consent agenda is the infrastructure report, which is a ten year renewal of the plan”. However, there is no record in the published agenda or in the minutes of the actual item.  The only related item in agenda or minutes is “Daley + Jalboot 2013 Projects/Fee Proposal/Infrastructure Implementation”.  So, is it possible that the Plan was not only put on the Consent Agenda, but also added verbally at the meeting (and not recorded clearly in the minutes), so only those still awake at midnight would be aware of it?

I proposed that the Board and the community might benefit from a detailed discussion of a plan that sets the tone for the next decade’s capital spending – a discussion that might be needed once every 10 or maybe five years.  Perhaps the items could be prioritized — essential to nice-to-have.  Perhaps payback identified for those projects that would reduce costs.  These ideas were met with derision —  the Facilities Committee has managed things just fine for the last ten years, we spend an amount only equal to the auditors’ arithmetical calculation of depreciation, our debt service is constant at $6 million a year, most of the school kitchens are original (although equipment has been renewed), told I didn’t know the difference between capital and operating funds,  etc., etc.   It seems to me that the whole reason that there is such interest in the affairs of the District now is that in fact there really is a “new normal” where funds are not so readily available and trade-offs must be made.  Prudent governance should recognize that.

The discussion of the VFES tennis courts provided further indication that this Board leadership just doesn’t get it.  Two usage fee options were presented: a) fee of $15/hr. weekday, $25/hr. weekend, or b) an annual fee to an “association” of $28,000.  This was to be implemented July 1st.  The courts to be locked and monitored.  Thank goodness, for a sensible and articulate local resident, Michelle Berger, who was persistent and managed to get through to the Committee, suggesting that this approach would be a total PR disaster and that it was better to involve the community to figure out a practical approach than an abrupt implementation of a bureaucratic plan.  Tennis camps and any other organized groups will be charged right away – I think at the $30 per court hour that the township charges.  Fees for residents will start in the fall.

So common sense thankfully prevailed here.  But it’s really unfortunate that the Board has developed such a bunker mentality.  I wish I could offer a solution.  Perhaps the Board candidates will offer realistic commitments for change that we can hold them to.

The Chester Valley Trail … Open Land Conservancy to Offer Update at their Annual Meeting

Cheser Valley TrailToday, when I visited Wegmans in Frazer, the Chester Valley Trail, located next to the parking lot, was filled with walkers, runners and bicyclists  The glorious Spring weather had people of all ages out enjoying the trail — so how appropriate that Open Land Conservancy will use the trail as the topic for the annual meeting tomorrow night.

What is the status on the trail through Tredyffrin?

In describing the Chester County Trail, Open Land Conservancy offered —  “It seems like it would be easy – lay down some tar on an old railroad right-of-way for a few miles, and you have a nice multi-use trail. The reality: it takes years – hundreds of hours spent by local and state government officials, a huge financial commitment, countless hours of volunteer work, and pledges for decades of on-going maintenance.”   According to the Chester County website, the Chester Valley Trail project dates back to 1991, when representatives of Chester County, Montgomery County and PennDOT envisioned a soon-to-be abandoned rail line as a major trail.

For their 74th annual meeting, Open Land Conservancy has invited Owen Prusack, Chester County Regional Park Superintendent and responsible for the Chester Valley Trail.  Prusack will explain the  many challenges and rewards associated with the creation and preservation of the Trail.  Also hear about future plans for the trail, connections to the local trail network, and the importance of trails such as those on our preserves in helping maintain a high quality of living.

The Open Land Conservancy annual meeting is open to the public and interested residents are encouraged to attend.   The meeting is Wednesday, April 10, 8 PM at the Great Valley Presbyterian Church, on Swedesford Road, north of Paoli.  Following the meeting, refreshments will be served.

T/E School Board leaves option open for tax Increase — How much more can we afford?

At the same time as the Board of Supervisors organizational meeting last night, the T/E School Board held a special meeting to vote on using allowable exceptions to Act 1 for the 2013-14 budget.  By using Act 1 exceptions, provides the School Board the ability to raise taxes above the State index of 1.7%.   The School Board voted to apply for the Act 1 exceptions and the preliminary 2013-14 budget should be on the TESD website sometime today. The Board considers the preliminary budget at their regular meeting on January 28.

Due to a conflict with the township’s Board of Supervisors meeting, I was unable to attend TESD meeting. However, Ray Clarke attended the meeting and shared the following comments with me. His remarks suggest a rather strong position and I will be interested to know if others share his sentiments.

The School Board voted its usual 7-2 to publish a 2013/14 budget that includes tax increases of 1.7% from the Index plus another 1.74% from Exceptions.  This is preparatory to a vote at the next meeting (Jan 28th) to formally apply for the Exceptions.

There was slightly more than the usual Board commentary that tonight’s vote was “only to keep the options open”, and certainly the numbers would support a moderation in the rate of increase.  With a 1.7% increase the projected deficit is $1.3 million – just about equal to the one-time payment due to the teachers, which should absolutely not be built into the tax base.

Not only that, the projection model was positioned without the context of the 2011/12 actuals and 2012/13 forecast, which I have argued here would show an artificially inflated base.  Remember the unexpected ~$3 million surplus last year.  Also, there is no explicit consideration of the cost saving impact of retirements which have in recent past years saved $800,000 per year.

In addition, the administration did list a number of items that could have a significant budget impact that have yet to be quantified.  The majority of the Board wanted more details on these.  (I fear that the expense additions will turn out to total more than the subtractions).  The more courageous move, advocated eloquently by Dr Brake, would be to have signaled a leadership commitment to manage these opportunities and risks within a modest tax increase that does not continue to load up the property tax base, and to begin a serious dialog with the community about the form we want TE public education to take.

Anyone with an interest in limiting the extent to which their pockets can continue to be picked by this Board should attend the Finance Committee next Monday (7pm).

TESD 2013/14 budget discussions underway; including outsourcing of services

Ray Clarke attended last night’s TESD Finance Committee meeting and provided his notes from the meeting.

Reading over Ray’s notes, it appears that members of TENIG (Tredyffrin Easttown Non-Instructional Group) are once again going to find themselves front and center for the 2013/14 budget discussion.  In prior years, it often looked like the TENIG custodians were the target in the school district’s budget woes.  Privatization through outsourcing was seen by some as a way to preserve the classroom and its programming, but at what cost?

Outsourcing services that historically have been in-house functions with long-time employees is a major shift in institutional culture.  How does the possible cost savings of outsourcing compare to the quality of job performance and productivity?  How does one measure the safety factor that comes with the connection that current custodians have developed with the schools and the students?  It is difficult to measure the ‘safety’ intangible to in-house custodial services, plus many of the employees live in T/E and their families are part of the community.

For the 2012/13 school year, the custodial workers offered a 10% reduction in their salaries and they did not take the 4.5% increase, which were contained in their existing contracts.  In real dollars, the cost savings to the District was $197K in salary reduction, plus the additional percentage contractual savings for a total savings of approximately $285K.  By giving back, TENIG’s custodial workers helped the 2012/13 budget and the additional bonus of saving local jobs.

Beyond the custodial workers, it looks like all of TENIG will be under the microscope for possible outsourcing in the 2013/14 budget. The plan is for separate RFPs for each of the various TENIG job functions – security, kitchen, clerical, etc. in addition to the custodial workers. The possible outsourcing of TENIG workers is still in the early stages of the budget process,

The following are Ray Clarke’s notes, along with his thoughts from the Finance Committee Meeting, 12/10/12:

The main topic of Monday’s Finance Committee meeting was the 2013/14 budget, in preparation for the January 7th Board vote on whether to apply for Exceptions.

The basic discussion framework is the projection model we’ve seen before, based off an estimate for the actual current year results.  Since this 2012/13 estimate drives every out-year, its accuracy is critical – yet the numbers do not inspire confidence.

Total 2012/13 expenses are estimated at $107.8 million, $2.5 million less than the budget.  The difference is driven by $1.5 million lower benefits cost (estimated by our benefits consultant), $0.4 million from the new TEEA contract plans, and $0.5 million net salary savings from “breakage” offset by 3 additional FTEs.  So the year’s imbalance turns from negative to positive, which is the good news.

However, expenses are still $6.1 million (6%) higher than the year just completed.  No-one at the meeting was able to provide a breakdown of this increase.  I think that the PSERS increase is about $2 million of the number.  Where’s the other $4 million going?

One clue might be that the total healthcare and benefits expense for the following year is projected in the model to be flat (0% increase), based again on the consultant advice.  Could it be that this year’s expense is overstated in the model?  I don’t think this can explain the whole $4 million, though.

So, it’s hard to put much faith in the projected 2013/14 imbalance of $2.8 million as a basis for discussion of next year’s tax rates.  Moreover, this number also includes the one time TEEA bonus ($1.1 million?), which should not be built into the tax base.

It hardly seems worth spending much time on the model for the years beyond 2013/14, except to note that refinements in the current version include:

  • Total healthcare costs increasing at 9% per year (previously 10%, 15%)
  • Special Education costs split from “other”, and projected to grow at 7-10%, vs 2-3% for other
  • PSERS expense will increase by $1.4 million next year, then $1.1 million, then $1.2 million, and then level off.
  • An additional 6.2 teachers are projected to be needed next year to meet enrollment growth

A number of “budget impact items” were listed but not quantified.  On the saving side, these include outsourcing not only TENIG functions, but also aides and para-educators.  Each TENIG job function would be bid separately in an RFP which would, for example, allow discretion to select a supplier that met standards for benefits.  I didn’t catch how the educational staff “out-sourcing” would work, but I gathered that it would allow the district to avoid the PSERS expense.  On the increase side, the topic of adjustments (in base salary or one time) for non-contract employees is on the table.

Bottom line: we are clearly going into the next budget cycle with a smaller problem than in previous years (no contracted near double digit compensation increases).  At the same time, though, we seem to have been lulled into being much less prepared and thence likely to vote for an Exception application with information even more imperfect than it needs to be.  (Yes, Exceptions don’t have to be levied if approved ……) .

Separately, at the beginning of the meeting, Chair Fadem asked for the financials to be presented as more of a “vanilla” summary.  Not sure that’s the direction the district should be going in.

T/E School District: Surplus $3.9 Million in 2011/12

Ray Clarke attended T/E School District Finance Committee on Monday night and provided his notes for Community Matters readers.  After reading his notes, I spoke with Ray for clarification as I could not quite believe what I was reading.  The 2011/12 actual expenses of the T/E School District were $5.5 million less than the District forecasted in June 2012. The District revenues were also less than the June 2012 forecast.   Factor in the reduced expenses and reduced revenues and the District has a surplus of $3.9 million in 2011/12.  Wow!

How could it be that the District financial forecast was off by nearly $4 million!  We knew that the change in the medical insurance would be a cost savings but it is surprising that the surplus was so significant. The District has added the $3.9 Million to the General Fund Balance.

Ray’s Finance Committee Notes:

Monday’s Finance Committee meeting was most notable for a review of the full year 2011/12 finances in conjunction with a presentation of the draft audit.  It turns out that a number of things broke in favor of the district.

The table below compares the forecast for the full year 2011/12 when 2012/13 budget was approved in June with the actual outcome and with the 2012/13 budget (figures in $ million, rounded)

                                    11/12 Forecast          11/12 Actual       12/13 Budget

Revenues                     106.4                            105.6                109.2

Expenditures                107.2                            101.7                110.3

Budget Imbalance         (0.8)                            3.9                    (1.1)

So, expenses for the year to June 2012 turned out to be $5.5 million less than forecast in June 2012. (And about that amount less than budget).

Administration provided detail of the major drivers of the saving versus budget:

  • Lower Healthcare benefits:      $1.8 million
  • Fewer teachers:                           $0.4
  • Lower tuition reimbursement: $0.3
  • Less natural gas usage:              $0.4
  • Transportation savings:             $0.3
  •  “Breakage”                            $0.8
  • Other salary savings:                  $0.3

         Total                                          $4.3

“Breakage” is cost saving due to unexpected retirements, resignations, etc.; replacements are likely lower cost and there can be interim cost savings.

Clearly the final benefits accounting takes a while, but it seems quite likely that the 2012/13 budget and associated tax increase might have been predicated to at least some extent on an artificially high baseline.  As Neal Colligan pointed out to me, there needs to be strict oversight to ensure that the current year expenses do not inflate by a whopping $8.6 million to the budgeted $110.3 million.

The $3.9 million surplus goes into the now ~$25 million general fund balance, with the $1.8 million benefits saving planned to be committed to medical plan rate stabilization and the remainder to the ever-open PSERS rate stabilization fund.  On that score, it was announced that there’s a new GASB requirement that in 2015 districts  must recognize on their balance sheet their share of the $27 billion unfunded PSERS liability.  (Perhaps someone can work this out for TE, based, say, on TE’s % of teachers and a 50% share of the liability?).  [Note also that in the year to June 2012 PSERS returned 3.4% compared to the 7.5% built into the system’s accounting used to calculate that $27 billion].

And this continues on to the 2013/14 budget, which will be rolled out at the next Finance Committee meeting on December 10th.  It looks like we need to step up efforts to ensure that votes for tax increases are based on realistic projections.

On other matters, the Board continues with plans to harass tax-exempt non-profits.  An outside attorney is being used to review and identify property owners that will be sent a letter and questionnaire to confirm tax exempt property use in the light of changes in the state law.  This letter and questionnaire will be discussed at the January Finance Committee.  The Committee has already determined that the a large percentage of the total are parcels owned by government entities (like the district itself) and for rights of way.  Also, the district is planning to extend for six years the transportation agreement with Krapf; as presented, the terms looked reasonable.

Tredyffrin Township’s Proposed 2013 Preliminary Budget Indicates 5.5% Tax Increase

The proposed preliminary 2013 budget was unveiled at Wednesday’s Board of Supervisors meeting to a sparse audience – I didn’t count but there must have been fewer than a dozen residents in the attendance.  As stated in an earlier post, three of the seven members of the Board of Supervisors were absent from the BOS meeting, including Chair Michelle Kichline, Vice Chair John DiBuonaventuro and Phil Donahue.  Supervisor Paul Olson presided over the meeting as acting chair.

Acting Township Manager (and Finance Director) Tim Klarich presented the proposed 2013 preliminary budget, which includes a 5.5% tax increase, from 2.308 to 2.435 mills. Supervisor Mike Heaberg was the only representative from the Finance Committee in attendance at the BOS meeting and assisted Klarich with questions on the proposed preliminary budget.

According to Klarich, the 2013 expenses are slightly lower than the 2013 budget, but 7% higher than the 2012 forecast.  I noted that the 2012 forecast is more than $1M lower than the budget for 2012 due to vacancies and a mild winter.   The proposed 2013 budget indicates that the greatest expense increase next year, at 69%, is in salary and benefits category.  The 2012 budgeted salary and benefits at $11.4 million, however due primarily to unfilled vacancies the forecasted 2012 amount is $10.7 million.  Budgeted for 2013 in salary and benefits is $11.5 million which indicates the 69% increase. Currently there are 13 vacancies in the township, with the township manager vacancy to be filled shortly.  As to how many of the remaining 12 vacancies are to be filled in 2013, I am not certain. In the reviewing the proposed preliminary 2013 budget, it appears that there are police vacancies that will not be filled.

An open issue that I hope will be addressed prior to finalizing the 2013 budget is the results from the police department staffing study.  If you recall, this $49K consulting study was discussed at the June BOS meeting and then approved 6-1 at the July BOS meeting.  The one dissenting supervisor vote  was from John DiBuonaventuro; his non-support of the support of the study was that he thought that the money could be better spent on bringing the staff level in the department up to projected 47 officers (from the current 41 officers as of July 2012) or for police department equipment.  Police Supt Tony Giaimo appeared to supportive but asked that the consultant expedite the study and that the final report take less than 125 days.(Presumably, so that the results would assist in the 2013 budget decisions).  The consulting contract was approved in July, so it would seem that there should be results by this point.

However, based on the response given by Klarich and Supervisor Heaberg at Wednesday’s BOS meeting, it appears that the results will not be public prior to the Nov. 17 BOS meeting, when the final  preliminary 2013 budget is presented.  To be clear, I do not like the idea of paying more taxes (5.5% tax increase proposed) but I am more troubled that this tax increase may not include filling all police department vacancies.

 Is it my imagination or lately does there appear to be an increase in crime (auto, house break-ins, and robberies) in Tredyffrin and some of which have occurred in broad daylight?  So, if this is correct and that there is an increase in crime, how is it that the township can consider decreasing the size of the police department?  If anything, wouldn’t an increase in crime suggest the need for an increase in the police department? I would think that the report from this $49K police department staffing study would be vital to understanding the police department needs so that the BOS can make an informed decision for the 2013 budget.

According to Klarich without a real estate tax increase, the 2013 revenue be flat compared to 2012.  With the proposed 5.5% tax increase, 2013 revenue is 3% higher than 2012. Klarich explained that the four General Fund changes in 2013 are: (1) staffing and compensation; (2) Retiree medical funding; (3) Repair and maintenance funding and (4) Real estate tax increase.

According to the proposed 2013 preliminary budget, some (but not all) of the vacancies will be filled. Again, I am unclear how many vacancies will remain unfilled in 2013 and of those that remain unfilled; exactly how many are in the police department. There is a new health care plan that will save money but as Klarich explained, the new plan cannot be put into place until the police arbitration is completed.  He spoke as if arbitration may be close to resolution but will be it in time for the budget approval – I do not know.  There are raises in the 2013 budget – per contract and merit-based raises and bonuses for non-union staff.  There was no background information provided on the formula for bonuses/merit-based raises.  I would like to understand the criteria for employee bonuses.

Tredyffrin Township’s unfunded liability of retiree medical funding currently stands at $40M; $31M from uniformed retirees and employees and $9M from non-uniformed retirees and eligible employees.  The non-uniformed union has agreed to changes but as Klarich again points out, the police department remains in arbitration so any possible changes that could help in the future are unknown at this time.  Klarich explained that it is recommended that $2M should be budgeted annually to ‘buy down’ the $4M unfunded liability.  In 2012, the budgeted amount was $250K and Klarich has budgeted $500K for 2013. At a rate of $500K per year, it will take the township 80 years to pay off this debit (and that assumes that the unfunded liability does not continue to increase.)

Here are some highlights in the repair and maintenance expense category contained in the proposed 2013 preliminary budget – – an increase of $114,500 for streets drainage.  Considering only $15K was budgeted for street drainage in 2012, this is no doubt an increase that is long overdue.  Building maintenance was budgeted in 2012 at $76K but has been increased by $63,320 in the proposed 2013 budget for a total of $139,320. No details offered  as what is included in the $139K line item, AC/heating system for township building, repair of township building front steps??  I was disappointed to see that the proposed 2013 preliminary budget decreases maintenance in the township parks from $50K to $46,600.  If anything, I think that Wilson Farm Park could use additional funding not less.

Real estate tax generates ½ of the General  Fund revenue.  Real estate tax is based on the assessed value of properties as set by Chester County. Tredyffrin’s tax base was only growing marginally before the recession, due to little development.  Unfortunately, since 2009 the tax base has been declining, primarily based on successful assessment appeals.  Therefore, it stands to reason that without a tax increase, the revenue will continue to decrease.

The proposed 5.5% tax increase for 2013 includes 3.1% increase in funding for the unfunded medical long-term obligations (doubling the $250K contribution budgeted in 2012 to $500K  for 2013 – remember, the current outstanding debt obligation is $40 million!) and 2.4% increased funding for services ( $198K increase).  The proposed 5.5% tax increase equates to a $448K increase in the $16.7M budget.

Following the presentation of the proposed 2013 preliminary budget, residents Carol and Raymond Clarke asked whether there would be public budget workshops, as held in previous years.  There were also questions about a budget summary as former township manager Mimi Gleason prepared in prior years. If you recall, Gleason remained on as a consultant to the township after her resignation, primarily to assist Klarich and the other township department heads with the 2013 budget.  The Clarke’s and other audience members were looking for background and supporting information behind the preliminary budget numbers. Supervisor and Finance Committee member Heaberg suggested that he would be available to discuss the budget with individual citizens.  However, to the credit of Carol Clarke, she requested a public meeting so that all citizens with budget questions could attend.

Kudos to Carol for her follow- up with Heaberg; as a result, a public meeting to discuss the proposed 2013 preliminary budget is scheduled for Tuesday, November 13, 8:30 AM at the township building. If you have questions about the proposed 2013 preliminary budget, you are encouraged to attend.

The timeline for the 2013 township budget is for the BOS to approve the preliminary budget  November 19 and to approve the final budget December 17, with a public hearing on either December 17 or January 2 to adopt the real estate tax increase. I do not recall a public hearing last year, regarding the 2012 tax increase. Someone help me here – was there a public hearing for the tax increase of 2012 and I am simply not recalling it?

In case you forgot, the preliminary budget for 2012 included a 6.9% increase which was ultimately revised downward (and approved) to a 3.5% tax increase.  The township amended the 2012 preliminary budget by reducing professional fees, decreasing funding for IT, department expense reductions and deferring the equivalent of two police officers’ salaries and benefits until July 1, 2012.  Holding off hiring of two police officer’s for 6 months added $127,400 to the overall budget expense reduction.  Unfortunately, it looks like the 2013 budget may also going to include a decrease in the police department staff … stay tuned.

T/E School District and Teachers Sign New 2-Year Contract

After 9 long months, the T/E School Board approved a new 2-year (2012-13 and 2013-14) contract between TESD and T/E Education Association last night.  To read the contract summary of the teacher’s contract, click here.  If you prefer to read the entire contract, click here.

Ray Clarke attended the Special Meeting of the School Board and the Finance Committee meeting which directly followed.  In his review of the teacher’s 2-year contract, I thank Ray for offering the following highlights and his personal commentary on the contract.  As expected the teacher’s healthcare benefits and salaries are the primary focus of the changes in the new contract.

  • The basic details are more or less exactly the same as the first 2 years of the District’s 3 year proposal (as Keith Knauss predicted here).  Salary freeze, no matrix movement, furlough days equivalent to 1% salary reduction in 2013/14, slightly higher contribution to healthcare premiums and prescription drugs, two new (lower cost?) health plans, capped tuition reimbursement, and one time $2,500 per employee bonus (a “legitimate” fund balance use?) in 2013/14.
  • Net saving vs status quo/budget of $400,000 for the current year (2012/13); 2013/14 cost increases from that by $400,000 plus the $1.1 million one time bonus (but presumably a cost saving vs the status quo model).
  • The rest of the contract structure basically unchanged
  • No demotions in either year of the contract, but specifically on the table for the next contract
  • No resolution of the 6 period CHS grievance (a ruling in favor of the TEEA would require the hiring of 12 additional FTE – say $1.5 million ongoing cost (salary, benefits, PSERS) plus one time payment of I think I recall $3 million?)
  • The President of the TEEA is allowed to speak at TESD Board meetings
  • Family health benefits available to same-sex domestic partners

My general sense is that both sides went about as far as they could go this round.  This contract is only for two years, at which point we’ll see how the economy and political landscapes have progressed, and the Board members Rich Brake, Kevin Buraks, Anne Crowley and Betsy Fadem will have had to choose their election platforms, if running in 2013.

Interesting that the standard bonus helps those at the lower end of the scale more than proportionately (my concern, if teaching is to remain attractive for the next generation in an environment of benefits slashed in favor of the currently tenured), and that lead negotiator Deb Ciamacca keeps her higher-end CHS constituency happy by keeping the grievance on the table.

Following the Special Meeting of the School Board, the regular Finance Committee meeting followed.  Ray offers the following notes from that meeting:

The Finance Committee reported on the Act 1 index for 2013/14 – 1.7%.  Slightly higher than expected – someone in the state bureaucracy (or government?) made a decision to change the calculation method (to include a longer period for averaging state weekly wage increases) that raises the index by 0.2%.  Shenanigans?

The Finance Committee spent some time discussing how to establish that parcels currently listed as tax-exempt conform with recent PA Supreme Court rulings that narrow the availability of tax exempt status.  More details remain to be gathered on exactly what these rulings are and what entities might be affected.  I was pleased to see that while Committee chair Fadem was advocating a 13 part, multi-point data request be sent to all tax exempt property owners (mainly the townships, federal government, schools, churches, right-of-way owners and land trusts), Board members Brake and Motel were at pains to avoid an “undue burden” on both volunteer charities and the district.

Fund Balance Transfer, Another TEEA Grievance & Demotion Remains an Option in T/E!

I attended last night’s marathon Board of Supervisors meeting and public hearing continuation on the Trout Creek Overlay district.  For the first 20 minutes, Keene Hall was overflowing with a standing room only crowd to witness the swearing-in of Tredyffrin’s new Superintendent of Police Tony Giaimo.  Family, friends, co-workers and elected officials from the community and beyond, enthusiastically supported the appointment.  I also add my ‘Congratulations Tony’!

Three-fourths of the audience left following the ceremony and then it was back to ‘business as usual.’  Comments from the Trout Creek Overlay working group, a developer update and discussion from supervisors and residents took the public hearing to 11 PM.  I’ll offer my remarks in another post.  The T/E School Board meeting was held at the same time as the supervisors meeting and Ray Clarke kindly provided his notes on that meeting.

As I understand it, the teachers union, TEEA has filed two grievances against the District.  At the last District finance meeting, we were told of the one filing ($1 million expense), which pertained to the additional high school teaching period not covered in their contract.  Since September, the teachers have had 6 teaching periods rather than 5 periods.  However, the community learned last night that those teachers affected by the additional teaching period are seeking a one-time payment of $2.2 million, as compensation for this extra period of work.

Although the school board unanimously approved using some of the District’s fund balance for 2012-13 budget gap, the three budget strategies remain under consideration – (1) soliciting tax exempt property owners in lieu of taxes, (2) increasing class size and (3) demotion of professional staff for economic reasons.

Here are Ray’s notes from last night’s school board meeting:

There were two you-better-be-paying-attention moments in tonight’s drawn-out meeting, marked otherwise by earnest students delving at length into school funding and opportunities for tax increases and donations, restrained only by the Solicitor waving placards announcing that their time was up.

First, in a discussion about risks to the “Proposed Final Budget”, we were reminded about the $1.4 million of revenue risk from commercial appeals and the $1 million of expense risk from the union appeal of having to teach 6 periods.  Then the solicitor was asked to report on another grievance just filed by the TEEA.  As last time, much incoherent mumbling, but it appears that the new grievance covers the same issue as the first one, but it goes back to the current year, adds some kind of multiplier and that’s worth another $2.2 million.

Fast forward to the very end of the meeting, Karen Cruickshank reads a statement about the negotiations that essentially says:

  • It’s a new world
  • The district has nothing for salary, wages and benefits (SW&B) increases
  • All other employee groups have made concessions or had salaries frozen
  • The Board does not like asking people to work more for less, but that’s reality for many taxpayers
  • The next steps would be to revisit demotions and then all non-mandated programs
  • “Everyone has to give up something”, and if so, there can be a solution
  • In response to resident questions: a) Both sides are represented by professional negotiators because the stakes are high, and b) if the Board talked directly to teachers they would open themselves up to potential Unfair Labor Practice charges
  • The next negotiation session is on June 7th

You would think that the Board position would be straightforward: here’s how much money we have (assume tax increases of index plus exceptions; at some point PSERS and maybe even Special Ed increases will begin to tail off), work with us to figure out how it should be allocated.  The Projection Model for combined SW&B would be pretty much the line in the sand, you would think.

It appears as though the TEEA strategy is set up an extreme position for possible arbitration, and to seize as much as possible from the fund balance while it’s there, and keep the pressure on the citizenry to support new funding sources (sales or income taxes, or some change in the Act 1 index?).  The $1 million from the original grievance would be an ongoing expense, but – if I understood it right – the $2.2 million would be one time.

The budget with the $1.55 million fund balance contribution was approved 9-0, but it’s clearly not final.  They still have not updated the compensation costs for the retirements/replacements, which will bring a material saving.  And the class size and demotion issues are still on the table.  The next Finance Committee on June 11th (still at the TEAO) will hopefully bring us some decisions and accurate numbers.  (But not likely a negotiations breakthrough from June 7th – what are the negotiators doing for the next three weeks, anyway?)

If anyone wants to weigh in on the donations issue, it will be discussed at the Policy Committee on May 23rd at 6:30pm in the TEAO.  The June 14th Board meeting for Final Budget adoption will be in the CHS cafeteria.

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