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Ray Clarke

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

October 16, 2012

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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!

May 15, 2012

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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.

Vine Day … Open Land Conservancy Could Use Your Help on Saturday!

April 12, 2012

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Has this winter left you suffering from cabin fever and a need to get outside for some fresh air? There’s a perfect opportunity this Saturday, April 14 to help the community and celebrate the end of winter!

The Open Land Conservancy of Chester County will be holding its last Vine Day of the season on Saturday at George Lorimer Preserve, 9 AM – 12 Noon. Vines will be cut back so you will need to wear appropriate gloves and protective clothing. Volunteers are asked to bring tools if they have them — prunners, saws, clippers. But not to worry, the volunteers from Open Land Conservancy will have extra tools. Open Land Conservancy invites you to give back to your community by helping with spring property maintenance.

Lorimer Preserve is 88 acres of meadows, woods, ponds, stream, and extensive trail system are managed to provide a variety of habitats for wildlife in a beautiful rural setting.

Volunteering for the Open Land Conservancy is a great way to make a difference for the lands and communities of this region while having fun and meeting new people!

Directions: head north on North Valley Road across Valley Creek, to entrance and parking lot on right. For further information on Vine Day and Open Land Conservancy, click here. Any questions, contact Ray Clarke at 610-578-0358.

No Custodial Outsourcing for 2012/13 but looks like Sports and/or Activity Fees Could be a Reality in T/E

February 14, 2012

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Based on attending the TESD Finance Committee meeting, it looks like the custodial outsourcing in the school district is ‘off the table of consideration’ for another year. If you recall, the most significant cost-saving measure to the District remaining from last year’s budget was ‘outsourcing of custodial services’ with a savings listed as $950K. After internal TENIG (non-instructional union of TESD) discussion, the custodial workers made an offer to the school district, which was presented to the Finance Committee by school board president Karen Cruickshank.

For the 2012-13 year, the custodial workers of TENIG have offered a 10% reduction in their salaries and they will not take the 4.5% increase contained in their existing contract. In real dollars, the cost savings to the District is $197K in salary reduction, plus the additional percentage contractual savings for a total savings of approximately $285K!

Beyond the generosity of the custodian workers offer, the Board realizes that it is difficult to measure intangibles in the in-house custodial services … many of the employees live in the T/E and their families are part o the community. With that comes a level of safety that is difficult to measure. Although the custodial workers offer has to be reviewed internally by the District attorneys, the it received overwhelmingly positive support from the Board.

A $285K savings to the school district plus the bonus of saving local jobs … congratulations to TENIG, custodial workers, District staff and Karen Cruickshank (on behalf of the school board) for such a positive outcome early in the 2012/13 budget discussions.

Ray Clarke also attended last night’s Finance Committee meeting and I thank him for his willingness to share his thoughts and opinions below:

Notes from Ray Clarke, TESD Finance Committee Meeting

A relatively well-attended TESD Finance committee meeting on Monday, and some important topics discussed – in varying depth and with varying data quality – the two not always correlated.

1. A significant announcement from Mrs Cruickshank at the end of the meeting: the janitorial staff in the TENIG union have offered to take a 10% reduction in wages for the 2012/13 school year. Their contract entitles them to, and the preliminary budget assumed, a 4.5% contractual increase. By my math, starting from the $1.97 million compensation line item provided by Dr Waters, this means a total benefit versus the budget of $286,000. In return the union asked for the district to remove the outsourcing option for 2012/13. (Also, with no further actions next year, the salaries would revert in 2013/14 to the contracted level – a 20% increase that would not of course be a tenable option).

After getting the numbers sorted through, the Committee was very appreciative and broadly in favor of this offer, weighed against a potential outsourcing saving three times the offer, but with risk and the uncertainty of basing the alternative on now-expired bids.

This looks to be a good result for all concerned. Employment security is maintained and compensation continues to move towards market levels. Importantly, it can continue to do so assuming similar flexibility next year and a more equitable benefits program in the next contract.

2. Much information was shared regarding possible fees for “sports and activities”. Most neighboring school districts have either implemented some kind of fee or are considering doing so. There are as many approaches as there are school districts. Significant money can be raised: at $100 per sport/activity (with a cost to the district), the revenue would be about $150,000 for both high school students and middle school students. For context, about 1700 of the 2050 high school students participate in at least one sport/activity of any type; the middle school numbers are similar.

There seems to be a consensus that the district should charge only for those activities for which it incurs costs for either extra teacher time (EDRs) or for transportation. (An interesting issue thus raised: the process by which a club gets the status of having compensated teacher oversight). Also clear is that there should be a process to ensure that no student should be prevented from participating for financial considerations.

Decisions still to be made:

The same fee for any sport or activity, or some kind of tier system loosely based on cost?

A fee per student regardless of number of sports/activities or a fee per sport or activity up to a maximum?

The amount of any fees

The administration was charged with coming back with further permutations. It seems to me that it would be helpful to also tabulate other districts’ experience regarding participation levels and administrative costs. There seems to be a good argument for action here. For me, fairness would suggest some kind of tiered fee structure with a maximum, if it can be administered reasonably. The Committee is keen to give this air time at the Budget Workshop.

3. On revenues: no immediate bad news in the Corbett budget proposal. The move to bundle four separately calculated state funding items (basic ed, social security subsidy and public and non-public transportation) looks to me like a plan to cap future funding in a way that is unrelated to the actual underlying costs of those items. The one loss is a $50,000 grant that TE uses to fund the homework club.

Less good news on the property re-assessment front: $573,000 of lost revenue more or less planned for in the budget, but in addition $550,000 at risk from nine commercial assessments being appealed to the state courts and $820,000 at risk from a Vanguard appeal.

This illustrates the district’s vulnerability from relying solely on one tax that falls disproportionately on a class or classes of taxpayer that see no direct benefit from the tax, when many of those who get the benefit see their tax dollars going to other jurisdictions. But unfortunately any discussion of diversifying the tax base was hijacked in the last election.

4. A big mystery around the district medical benefits cost. Independence Blue Cross is apparently proposing a change in the way it gets compensated for administering our self-funded plan. Currently they get a 2.5% administrative fee (if only the overhead for the entire US healthcare system were that low!). Much perplexity about the proposal since it is being couched in terms of changing provider discounts. However, the net effect would be a $400,000 to $620,000 cost increase. I’m not sure there will be too much to be done about what is effectively a price increase, but more clarity needs to be provided.

5. No net surprises in the current district financials so far. We are on track for a deficit of about $0.75 million, as budgeted after adding back the $1.3 million budget reversal.

TESD Preliminary Budget Approved With $2.5 Million Budget Deficit

January 24, 2012

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I attended the Board of Supervisors meeting last night; Ray Clarke attended the school district meeting and has graciously provided his notes for use on Community Matters. The preliminary 2012-13 school district budget was approved with a $2.5 million budget gap — continuing to cut expenses or dipping into the fund balance? I know from attending the last Finance Committee meeting that the outsourcing of the custodial workers remains on the list as possible budget strategies.

In reading his notes, a couple of observations about the Facilities Committee are noteworthy. The District’s maintenance departments needs for storage facilities has been discussed for a number of years. There are preliminary plans for construction of a maintenance building on District-owned property on Old Lancaster Rd., down from the T/E Middle School. But according to Ray’s notes, it would seem that the Facilities Committee is now looking at other options, including non-District owned property. Maybe that option is for leasing facilities space rather than new construction – I hope the option is not suggesting that the District purchase additional property.

It is interesting to note that the Facilities Committee will revisit the IT plan at their next meeting – further discussion wireless in the school district. Maybe I am remembering incorrectly, but I thought at one point there was discussion of hiring an IT consultant to review the District’s current situation and to offer recommendations. I thought the consultant fee was in last year’s budget . . . perhaps I am not recalling this correctly.

Here are Ray’s notes – as always, I thank him for taking the time to send his commentary.

The preliminary budget was approved 8 -1. Liz Mercogliano changed her position with no explanation. As approved, there is a $2.5 million deficit that the Board has to close either through expense cuts or fund balance usage. Also, as approved, there is no increase in teacher salaries (but the same benefits plan and that 47% increase in the pension contribution). When asked if changes to the benefit plan are on the table, the comment from Dr Brake was that they “could be”. Of course they are! Why not say so?

Class room capacity was discussed in the committee reports. Computer labs are being repurposed at TEMS and Devon Elementary, but at the latter it seems that this will only buy one classroom and one year. There will be 7 or 8 sections of first graders there next year. The administration has been charged to study options for 2013/14; these could include re-districting. Devon has 550 students, Beaumont has 450. It wasn’t completely clear, but I thought I heard that the enrollment trends will require another 3.6 FTEs beyond the 444.4 budgeted for 2012/13.

Important topics for the next Facilities Committee on Feb 17th at 2pm. First, the never-ending discussion of facilities for the maintenance department will continue, with a presentation of non-district owned options. Second, the IT strategy discussion has been resurrected, and we’ll hear a plan to make the schools wireless. Let’s hope for something that clearly promises improvement in educational quality and reductions in cost to justify investment of – dare I say it – some of that fat Fund Balance.

President Karen Cruickshank thanked Mrs. Graham for a “wonderfully thorough” legislative report, which was mostly a lengthy advocacy for the community to lobby the state for increased funding in advance of the Corbett budget announcement on Feb 7th.

Tredyffrin’s Board of Supervisors – ‘Team Players’ and TESD Budget Discussions Get Underway

January 4, 2012

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As is often the case, Tredyffrin’s Board of Supervisors meeting conflicted with the TESD Board meeting last night. I attended the BOS meeting and Ray Clarke attended the TESD meeting and graciously offered his comments from the meeting.

The Board of Supervisors meeting saw the swearing-in of four supervisors — Paul Olson and JD DiBuonaventuro returning for new 4-year terms, Mike Heaberg starting his first full-term and newly elected Kristen Mayock joining them. Although rumored over the past few weeks, it was probably still a surprise to some that Michelle Kichline was named ‘Chair’ and JD as ‘Vice Chair’ of the Board of Supervisors. The board members themselves nominate and vote on these positions and traditionally, these positions go to the longer serving members of the Board of Supervisors. However, in this case, Michelle received the unanimous support of her fellow board members for the chair position after serving only 2 years as a supervisor and neither as a vice chair. Congratulations to her and to JD as Vice Chair.

It was obvious from the moment that Michelle was named chair that there is going to be a distinctly different tone to the Board of Supervisors – starting with gifts for freshmen supervisor Kristen Mayock and for Tom Hogan, Tredyffrin Township’s former solicitor and newly elected Chester County District Attorney.

Michelle made a special point in describing the qualifications and strengths of each of her fellow supervisors and described the Board of Supervisors as members of the ‘team’ and here to serve all the people. This team approach and sense of community could provide a winning combination for moving the township forward in 2012. There have been some missteps by Board members in the past and we know the Board is faced with some unfinished business from 2011, so here’s hoping this upward movement and spirit of cooperation continues.

As I said, Ray Clarke attended the TESD meeting last night and provides us with some interesting notes below. He mentions the Catholic Schoolclosings and the possible effect this could have on T/E school district. I was surprised to learn that T/E has 600 students who attend Catholic Schools. My guess is that the Catholic school closings may not affect many of these students as it is unlikely that schools which typically draw TESD students like Villa Maria, St. Monica’s, Devon Prep, Malvern Prep and Archbishop Carroll would be on the ‘closing school list’. Nevertheless, this is another dynamic to consider in the school district budget discussions.

TESD Notes from Ray Clarke:

A fair turnout (~50?) for the TESD Board meeting on Monday. They voted 7-2 to apply for Exceptions that allow a property tax increase of 1.6% on top of the 1.7% increase allowed by the Act 1 Index. Much lip service paid to the fact that this was not a vote to actually increase taxes by that amount, although we do know how that works. Brake and Mercogliano were the two dissenters, with the former articulating the danger of the incremental policy-making that will just give us over the next ten years the 50% tax increase we had over the last ten. He wants to give taxpayers a break. He was also the only one to give a realistic assessment ofHarrisburg’s view of PSERS: the options are to increase taxes or reduce benefits – and neither is going to get any political traction in the near future.

Let’s think about PSERS for a minute, because no one seems to be being objective here.

The state allows school districts to increase taxes to fund the increase in contribution to PSERS. Next year that tax increase is $0.94 million, the net PSERS expense increase about $1.1 million – pretty much one for one. That tax increase is about 1%. All the other cost increases ($4 to $5 million in 2012/13) are for things other than PSERS, yet all the school board could do was blame Harrisburg. The PSERS increases for the next two years are a little more (about $1.3 million a year), and then fall $0.7 million in 2015/16, then little changed for a decade or so, before tapering off. We can deal with a $4.4 million net increase in PSERS costs with a 5% tax increase over 4 years, and if we use the $15 million of fund balance set aside for that purpose, we can spread out that tax increase over twice the number of years.

No one wants to think objectively and long term likes this, because that would force attention on the issues within the District’s control:

Pay salaries and benefits that the taxpayers can afford

Get really rigorous with suppliers of all purchased supplies and services

Manage the cost of in-house services (like janitorial, maybe maintenance?) to market levels

Accelerate the hard look at nice-to-have things like the extra paid in-service days

Much commentary that about the cuts in FTEs, programs and costs in recent years, but none about where all the money saved has actually gone: employee compensation (and not yet PSERS, either).

It’s time to stop passing the buck!

One factor outside the district’s control, and which could have a major impact on costs: which Catholic schools will the closed, and what will that mean for TE enrollment? There are currently about 600 students living in TE that attend Catholic schools. It was stated that there is to be an announcement of the school closings on Friday.

Another observation: new Board member Kris Graham was a consistent pro-teacher advocate, and tried to invoke the hoary old chestnut that the homestead exemption offsets the property tax increase! Not recognizing that the exemption actually makes the property tax even more regressive. Because the exemption is a fixed amount, unchanged for many years now, the lower the assessed value the greater the effect of a given millage increase. The 3.3% tax increase is actually 3.5% for a home assessed at $150,000 that claims the homestead exemption.

And finally: it was notable that Mike Broadhurst showed his hand, advocating for keeping the janitorial out-sourcing option on the table, not “going too far” with tax increases so that “Harrisburg’s hand will be forced again”, questioning many of the projection model assumptions, and drawing attention to the hardly-new-news that the employee benefit cost is $1,040 per year for a family (but not completing the calculation to show that this is merely 1.2% of the median $85,000 teacher salary).

Loss of $570K in T/E Real Estate Appeals & Outsourcing of Custodial Services Remains a Strategy Option for TESD

December 13, 2011

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There was a T/E Finance Committee meeting last night and although the entire school board was present, the Finance Committee is Betsy Fadem (Chair), Kevin Buraks, Jim Bruce and Rich Brake.

There were several interesting discussion items for me – Ray Clarke’s notes follow mine. There was much discussion about the school district’s decreasing real estate tax revenue. We learned that for 2011, there have been 147 successful residential real estate assessment appeals ($217K) and 41 successful commercial appeals ($352K) for a combined total of $570K in lost tax revenue. The largest commercial appeal was by Vanguard who was successful in five separate appeals. There was discussion about the school districting appealing the decisions on some of these successful commercial appeals. The example of Mealey’s Furniture and Big Lots was used – where a commercial real estate owner could have appealed their tax assessment while their real estate was vacant, received a lower assessment and then the property is leased and its value goes back up (but the commercial owner remains at the lower assessed rate). The case could be made by the school district that the assessed value of the commercial real estate has gone up and they should now pay more.

Appealing some of these commercial decisions could be a way to generate additional revenue for the school district. However, what was unclear was the ‘cost’ of these appeals to the school district (financial and staff time). In Harrisburg, there is discussion on requiring nonprofits organizations to pay real estate taxes. This was not discussed at last night’s meeting, but should this change occur, there is some new tax revenue to the school district. I wonder what kind of revenue could be generated from real estate owned by nonprofit organizations.

Another possibility for generating school district revenue was to shorten number of days on the school calendar. Apparently, TESD’s current school year is 9 days longer than the state requirement. For each non-teaching day, the district would save $200K in teacher and benefit costs. Shortening the school year by 9 days would yield $1.8 million in district savings. This is an interesting cost-savings approach and clearly the district cannot cut all 9 days. Some of those extra days are in the calendar if snow days require their use. But does it need to be 9 extra days — the last few days of a school year are not productive so what about cutting those half-days at the end of the year from the calendar.

(Note: It is not entirely clear to Ray Clarke and myself re the 9 days. Ray understood that strategy had to do with the 9 in-service days of the teachers ‘only’ and decreasing those in-service teacher days versus my understanding that the strategy involved decreasing the number of calendar school days. Ray has a call in to the school district for clarification and I will update when the information is available.)

A ‘new’ budget strategy under review for FY2012-13 was listed as ‘reduce equipment budget’ – $300K. I was clueless what ‘equipment’ this referred to – turns out the administration is suggesting reducing IT equipment purchases for the district. This is confusing because computer equipment was on the chopping block for the FY2011-12 budget and then when Corbett returned funding to the school districts (TESD received $1.3 million) the T/E school board discussed the putting the computer equipment back into the budget. Ultimately, the $1.3 million was added to the fund balance. So now here we are again with another round with IT equipment and a strategy to reduce the budget by $300K. Where is the school district’s long-range technology strategy? Taking technology ‘on and off’ the budget each year is not a strategy!

The outsourcing of the custodial services carried over from last year’s budget strategies and at $950K remains the most significant line listing of possible savings. The school district was able to save the in-house custodial services for the FY2011-12, helped greatly by the union members not taking raises for this year. As reported last night, their members are working with the school board on ways they continue to lower costs. More information should be available in January.

Ray Clarke’s comments from the Finance Committee Meeting:

At Monday’s meeting the TESD Finance Committee decided – I think – that it will recommend that the full Board on January 3rd 2012 not limit the 2012/13 tax increase to no more than the Act 1 Index increase of 1.7%. However, there seemed to be a sentiment that the tax increase in the Preliminary Budget (required therefore to be made available by January 5th) be capped at the Index plus Exceptions (a total of a 3.3% increase). Anything more would require a referendum.

A few observations:

The property tax rate goes up as the base goes down. Successful appeals have cost over $0.5 million in revenue for 2012/13. The Index increase raises $1.5 million. The Committee did not pay much heed to the linkage.

The Committee plans to raise property taxes through “Exceptions” that compensate for the increase in PSERS expenses just about dollar for dollar, while sitting on $15 million of taxpayer money in the Fund Balance earmarked for exactly that purpose and with no plan whatsoever as to when the money might be used.

With the $3.3 million tax increase and visible budget strategies worth $0.7 million, the 2012/13 deficit is projected to be about $2.5 million. On top of the quantified strategies, there was a report of constructive discussions with TENIG (for savings at some percentage of the $950,000 out-sourcing estimate) and the option to cut up to nine teacher in-service days, worth $0.2 million per day. It appears that these numbers made the Committee comfortable that any gap after the 3.3% property tax increase could be covered from the Fund Balance.

Notable that the largest expense decrease is $300,000 from reduced IT hardware spending. Is that the same line item that was last recommended for an increase to use of some of the $1.3 million state windfall? Is there an IT strategy at all??

There was mention of a sentiment inHarrisburgto again reduce the social security match, and also to even reduce the PSERS match. Not quite the direction desired by the advocates of a state solution to the problem!

The cost of the current benefit plan was mentioned in passing. $19,000 per year for family coverage. I have to think that a majority of union members would be willing to restructure the plan, if it meant more cash compensation and an overall benefit to the district. There was no discussion of any change to the status quo salary/benefits projection in the financial model.

It should be noted that this recommendation does not preclude the tax increase being lower than the Index plus Exceptions, but we know how that works!

Help Save the Trees — Vine Day at Cool Valley Preserve this Saturday, December 10

December 8, 2011

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Honeysuckle, choking a tree.

Save the Trees!

The Chester County Open Land Conservancy volunteers continue to wage their battle against the invasive vines that are strangling the trees in the Nature Preserves . . . and could use some help on Saturday.

Open Land Conservancy will once again be holding its series of winter “Vine Days” to continue our successful campaign against the invasive vegetation that limits development of the tree canopy layer in our Nature Preserves.

This is a great opportunity to get some fresh air, work with some of your neighbors and make a lasting impact on the Nature Preserves. Saturday, December 10, beginning at 9 AM is the Cool Valley Preserve ‘Vine Day’. Although the volunteers generally work 3-4 hours, any help that you can offer would be greatly appreciated!

Volunteers get out in the fresh air, take a mid-morning hot chocolate break and enjoy the companionship of like-minded neighbors. All that’s needed are protective clothing, gloves and, if you have them, tools such as loppers, pruners and hand saws to supplement OLC’s supply.

Volunteers are asked to meet in the Cool Valley Preserve entrance at 9 AM.

Any questions, contact Ray Clarke, 610-578-0358.

Directions to Cool Valley Preserve: Off Swedesford Road turn into Shadow Oak Drive. Follow to the end (circle). Turn left at circle one block to Cool Valley Road and turn right to Preserve entrance.

Preserving Open Space in our Community –

Help Save the Trees!

For further information on Open Land Conservancy, click here for their website.

Citizens Should Matter More to Township Staff and Elected Officials

November 18, 2011

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This is a follow-up to my last post on Community Matters. Without repeating the entire post, here is the short version – on Monday at the Board of Supervisors meeting, the township manager Mimi Gleason presented the 2012 preliminary budget including a power point overview of the budget. Copies of the preliminary budget and the township manager’s 4-page budget summary were available at the meeting and online. Included in the budget draft was a 6.9% millage real estate increase.

In his review of the preliminary budget, former township supervisor John Petersen found multiple mathematical errors in Gleason’s summary report. On Tuesday, Petersen sent several emails to Gleason detailing the mistakes. I was copied on all the emails as was resident Ray Clarke and township supervisor John DiBuonaventuro. Before writing my last post on Community Matters, I double-checked the budget summary numbers as did Ray Clarke and we agreed with John that errors were contained in both the revenue and expenditure summary tables. The errors when applied to the budget narrative further compounded the problems in the summary information,

With declining revenues and increasing costs of our current economic climate, it is more important than ever to account for every dollar. As a taxpayer, I want to feel confident in our local government. Beyond the troubling math errors, there was no response to any of John Petersen’s emails; absolutely no acknowledgement to him (or Ray Clarke or myself) from the township manager.

Our supervisors talk about the importance of communication to our residents, so what does this lack of response say? A resident takes the time to do an analysis of the preliminary budget and is not afforded the courtesy of a response. In addition to Petersen’s efforts, Clarke also reviewed the budget materials and reached a similar conclusion as to the errors. As residents and taxpayers in this community, do we not matter?

Here is another concerning point. Petersen, Clarke and I live in the western part of the township, in District 3 – Supervisor DiBuonaventuro serves this district (which explains why he was copied on the emails from Petersen to Gleason). DiBuonaventuro ran unopposed in last week’s election and was re-elected to the Board of Supervisors for a second 4-year term. During the early years of his first term, residents often remarked about DiBuonaventuro’s strong constituent service and quick resident response. The Petersen, Clarke and Benson families are all constituents in his voting district yet we received no email response or phone call in regards to this serious situation.

This got me thinking – if there is no acknowledgement from the township manager or response from our district supervisor, what does this really say about our local government. The supervisors received the budget information in their packets the week before the meeting so there was time to review the summary.

The township’s Finance Committee (supervisors DiBuonaventuro, Paul Olson and Phil Donahue) had been working with the township staff on the budget so it is expected they reviewed the preliminary budget before it was sent to the other supervisors.

If Gleason and DiBuonaventuro choose not to respond to the citizens, I then question if either of them bothered to advise BOS chair Bob Lamina of the errors in the budget summary. If the other supervisors were not told of the citizen concerns, how would they know there were mistakes in the budget summary – by reading Community Matters, TE Patch or the Main Line Media News?

This is not intended as some kind of ‘gotcha’ moment against the township staff or supervisors! We all make mistakes. Rather to ask where the respect is for the citizen who takes time to review the budget, sends emails and receives no response?

I want assurances from our elected officials that they are ‘watching the store’ for all the residents of this community. DiBuonaventuro should have responded with an email or phone call to tell us he appreciated the seriousness of the situation, and to assure us that, if warranted, the math errors would be corrected. Given that Supervisor DiBuonaventuro is a member of the township’s Finance Committee, our district supervisor and someone who repeatedly speaks from the dais on the importance of ‘due diligence’, I am disappointed.

Somehow, it seems we have lost our way. Township staff and elected officials – don’t you care about the residents of this community and doing what’s right?

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Pattye Benson

Community Matters