TESD School Board

T/E School District Tax Increase — Will it be 2.8%, 3.91% or 4.33%? “To Be Continued”

On the eve of June 1st and days away from the end of school year, the school board still does not have an agreed up tax increase number for the budget! How is that possible? What we do know is that the tax increase will be less than the 6% that we have heard since the middle of December and the increase was approved in the draft final budget.  However, we are left with three numbers — 2.8%, 3.91% and 4.33%.  Exactly how did the Board come up with these various numbers? What are the numbers based on? And how does the incorrect accounting of the Special Ed expenses factor into the tax increase?

Although I was unable to attend the school board meeting this week because it was the same night as the digital billboard appeal, Doug Anestad attended and offer his remarks below. Plus the video of the May 29 school board meeting is now available on the District’s website, click here to view.

After reading Doug’s comments, my first takeaway is that maybe the TESD 2019-20 budget process should be renamed, “To Be Continued …”!  

The school board met Wednesday night. The agenda was very light.

What was interesting was that no new budget discussions happened. It is very late in the game not to come to a final tax rate increase. Therefore, the 2.8%, 3.91%, and 4.33% tax increases are all still on the table.

The board proposed changes to Regulation 2110: Job Responsibilities for Superintendent of School. The proposed change says that if one or more invoices from the same vendor above $200k is accounted for in the wrong fiscal year, the Superintendent must be notified and the Superintendent must inform the school board.

Of course, this proposed change in regulation came about because the administration didn’t tell the the school board about $1.2M in special education expenditures from 2016-2017 that were wrongly recorded against 2017-2018. I spoke about the regulation and said that if you have to tell the administration when $1.2M is misstated they should notify the board, it is not a policy issue, it is a personnel issue and they should treat it as such. Kyle Boyer also had concerns about it being a personnel and not a policy issue. The vote was 8-1 on the regulation change.

When the administration started discussing the launch of updating the Strategic Plan at a cost of $50k, some of the board members raised concerns. This is highly unusual as this item is not even normally voted on as a separate item. Multiple board members said that they thought that the district was not in a position to deal with a Strategic Plan. The final vote was 5-4 with Michele Burger, Kate Murphy, Ed Sweeney, and Heather Ward all voting against the motion. I believe that this close vote demonstrates that multiple board members are not happy with the current situation and the administration.

Major kudos to Ed Sweeney for bringing up the issue of revising the finance numbers for the prior years to be the actual numbers. He asked, and the board agreed, to look into the financial and legal ramifications of fixing the numbers to be the real numbers.  They seem to be most concerned about double dipping next year since they already got a higher taxing authorization from the state based on the wrong numbers.

I am not sure why so many on the school board continue to be so hesitant to figure out the truth. Why have they still not asked the auditors when Art McDonnell informed the auditors about the $1.2M account error? Why haven’t they already figured out what the process is to correct the numbers? Why haven’t they asked the state how revising the financial statements to be the real numbers will impact their taxing authority?

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TESD School Board Member Kevin Mahoney Says District Budget Could be 15% Over Budget in 2 Years if Pension Contribution Rates Don’t Change

Interesting article in Daily Local newspaper by Dan Kristie (see below).  TESD School Board Member Kevin Mahoney says the school budget could be 15% over budget in 2 years if the pension contributions rates don’t change.  According to Mahoney, the only way to deal with the increasing pensions costs is to pass a large real estate tax increase!  Comments . . .

Retirement System’s Cost to Rise Dramatically Soon

 By DAN KRISTIE, Staff Writer

This is a dramatic increase, considering the district’s 2010-11 budget was $203 million and 60 to 70 percent of the district’s expenses are dedicated to salaries and benefits — a percentage that, because of contractual obligations, is difficult to reduce or change.

Schools across the state are facing similar increases in their retirement system contributions, and their budgets are similarly constrained.

School officials in Chester County expect the state Legislature will — somehow — adjust the retirement system so the increases will be less dramatic. But even if reforms are implemented, the retirement system remains dramatically underfunded. Local officials doubt any state-level solution to the PSERS crisis will save their own school districts from all the retirement system-related pain.

Officials are reluctant to speculate about what will be on the chopping block once the increased retirement system contributions come into effect. The consensus, however, is that if the increases are anywhere near as large as projected, educational programs will be affected.

Kevin Mahoney, the chairman of the Tredyffrin/Easttown School Board finance committee, said that if required PSERS contribution rates do not change, his school district in two years will be 15 percent over budget.

This will be the case, Mahoney said, even if Tredyffrin/Easttown sees no other cost increases except for a small increase in the cost of benefits. Mahoney added that the district is required by law to pass a balanced budget.

“You can only do that by increasing class size or eliminating curriculum choice,” Mahoney said. The other way for districts like Tredyffrin/Easttown to deal with the increased PSERS rates would be to pass a large real estate tax increase.

Act 1 is the state law that limits how much school districts can raise property taxes. Act 1, however, allows districts to exceed the limit in order to cover mandated pension contributions. Act 1 also allows districts to hold referendums if they seek to raise taxes beyond the limit.

Local school officials said Act 1 taxpayer referendums are extremely unlikely to pass in Chester County, given the economic climate and the mood of the electorate here. And, officials said, school districts would be unlikely to try to use Act 1 exemptions to pass the PSERS increase off to taxpayers.

“[The West Chester Area School] board has made it pretty clear we’re not taking exceptions,” said Jim Davison, the chairman of that school board’s finance committee. He added that the electorate in West Chester Area would never go for a referendum.

“I have no confidence in a referendum passing in this district,” Davison said. Davison, like Mahoney, said he believes his district’s educational programs could be in jeopardy if the state doesn’t reform the retirement system. He said, however, that West Chester Area will try to make other types of cuts — to facilities budgets and energy use, for example — and hope for the best from the state-level retirement system reform effort.

“But I don’t know if we can make enough of those types of cuts so we don’t impact the classroom,” Davison said. “That’s the million-dollar question. We may end up impacting the classroom — increasing class size, getting rid of programs.”

Bill Fagan, the chairman of the Downingtown Area School District finance committee, used the metaphor of a series of concentric circles to describe how the retirement system crisis might affect his district. “When you look at the concentric circle with the children in the middle, the farther out you get from that circle, those are the types of programs … more likely to be cut,” Fagan said.

Fagan said he was unwilling to speculate about precisely what type of programs would fall on the outer circles. But, he said, he hoped Downingtown Area could deal with the PSERS crisis without negatively impacting the classroom.

The state legislature in July voted to reduce the 2010-11 retirement system employer contribution rate from 8.22 percent to 5.64 percent, meaning school districts will be required to contribute less than expected this year to the fund.

Local officials said that, in the absence of other action, this only delays the retirement system crisis. “The state has been unwilling to change the benefit program,” Mahoney said. “We keep seeing this ski slope curve in front of us, and whenever we get close to it the state has changed the discount rate, which just makes the curb steeper but farther away.”

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T/E School Board Meeting Tomorrow – Agenda Posted

In addition to the Board of Supervisors Meeting on Monday evening, there is a Tredyffrin Easttown School Board Meeting; 7:30 PM at Conestoga HS.  Here is the agenda for TESD meeting.

Included in the agenda materials is the Treasurer’s Report as of November 30, 2009 which was interesting to review, particularly in light of the 2010-11 budget discussions.  The last section of the agenda materials included ‘Recommended Action’ that the following policies and regulations be adopted by the School Board Directors. I found some of these policy updates interesting to read. In some cases it had been several years since revisions were required (example, as electronic device usage increases, updated school policy is required)  I appreciate that the school board gave us the old version and shows up the redlined updated revision. 

– Policy 1310: Visitors to School District Buildings and Classrooms
– Policy 1310: Classroom Visits by Community Members, REPEAL
– Policy 5228: Awarding of Diplomas to Eligible Veterans
– Policy 5400: Students’ Freedom of Expression
– Policy 5414: Electronic Devises: Use by Students
– Policy 5420: Unlawful Harassment by and of Students
– Policy 5422: Student Accidents and Injuries – Treatment and Reporting
– Policy 9310: Regular Monthly Meetings
– Policy 9312: Parliamentary Procedure
– Regulation 9331: Review of School Board Policies 

We should review where we are with the TESD 2010-11 budget gap.  The projected gap between revenues and expenditures is estimated at $9.2 million.  The gap was a result of loss of revenues and increase of expenditures.  At the January 25, 2010 regular school board meeting, school board members voted that any property tax increase would be at or below 2.9%, the statewide index.  To close the budget gap, there was proposed strategies presented at the February 8 Finance Committee meeting.  The School Board and administration continue to evaluate each proposed budget strategy.  The following 1-11 strategies were reviewed in detail at the February 8 meeting:

– Restructure the 7th and 8th grade program delivery
– Eliminate the Foreign Language in the Elementary School (FLES)
– Contribution from food/nutrition service fund to general fund
– Restructure middle school special area classes
– Reduce number of regular education aides/paraprofessionals
– Eliminate all CHS classes with fewer than 15 students
– Eliminate Supervisor of Special Education position
– Education Services Center disposition
– Outsource print shop
– Reduce number of Extra Duty Responsibility positions and club sports contribution
– Reduce 2010-11 budget requests to 2008-09 levels

At the March 8 Finance Committee meeting (7:30 PM Conestoga HS) and March 15 Budget Workshop meeting there will be continued discussions on the remaining strategies to reduce the 2010-11 budget gap.  The School Board has not made any final decisions regarding the implementation of the strategies.  It is my understanding that the School Board and administration will continue to work towards balancing the budget between now and the June 14, 2010 School Board Meeting.

One of the Community Matters readers posted an article from the New York Times a couple of days ago about teacher seniority and working to change the system for teacher layoffs; I’ll work to get that article up for discussion shortly.

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