Pattye Benson

Community Matters

Tredyffrin Easttown Education Association

T/E Teachers Union Appeals to School Board to Accept Fact Finder Report

President of Tredyffrin Easttown Education Association (TEEA Laura Whittaker has released the following appeal in advance of Monday’s TESD vote on the Fact Finders report. The statement urges the school board to vote to accept the report at the special meeting. Whittaker claims that the school board has not moved from their original position of last February although TEEA has offered “significant financial sacrifices”.

The clock is ticking down to September 4, the first day of school. If the school board does not vote to accept the Fact Finder’s report, is a teachers strike on the horizon … ?

Board’s decision to reject impartial Fact Finder’s report further exposes its inflexibility

Tredyffrin-Easttown Education Association President Laura Whittaker is calling on the members of the Tredyffrin-Easttown School District board to reverse their decision to reject an impartial Fact Finder’s report intended to settle the district’s expired contract with TEEA members.

In the fact-finding process, a neutral, third-party arbitrator reviewed the contract proposals of each side and made recommendations intended to settle the expired contract. The review took 40 days. Once the fact finder issued the report, each party had 10 days to accept or reject the fact finder’s recommendations.

The TESD board rejected the report at its August 9th meeting, and will vote again on the issue during its Monday, August 20, special school board meeting. The meeting starts at 8 p.m. in at the Tredyffrin-Easttown Administrative Offices.

TEEA members voted to accept the Fact Finder’s report even though it contained significant financial sacrifices on their behalf, including approximately $500,000 in lost wages, a reduction in health care benefits, and a loss of tuition reimbursement for professional development.

“School board members have not met with us, and they rejected the Fact Finder’s report without having moved from the original proposal they gave their negotiator in February. They now have another opportunity to vote to settle this contract,” Whittaker said.

Whittaker urges all members of the T/E school community to turn out for Monday night’s school board meeting and make their voices heard. “Parents do not want their children’s education interrupted because of the school board’s stubborn inflexibility,” she said.

“If the board would be reasonable and accept the impartial Fact Finder’s report, it would assure that the school year can start on time and without disruption,” Whittaker said.

T/E Teachers Union Weighs in on Fact Finder’s Report

Last night I received the following press release from Laura Whittaker, president of teacher union Tredyffrin Easttown Education Association (TEEA).

TEEA Votes to Accept Fact Finder’s Report, Asks for Community Support

On Monday, August 6, the members of TEEA met to discuss and vote on the Fact Finder’s report. Acting as an independent third party, Fact Finder Mr. Timothy Brown carefully examined all of the issues in dispute as well as the District’s finances and revenue potential. By law, TEEA members were required to accept or reject the report in its entirety, and the membership voted to accept the report.

Under the provisions of the Fact Finder’s report, professional employees would be frozen at the current salary for a year and a half. Association members also agreed to a choice between two less expensive health care plans as well as increases in premium sharing and prescription costs. The report linked no demotions of professional staff with a reduction in tuition reimbursement during the second year of the agreement, a provision that built upon the previously established Memorandum of Understanding which reduced tuition reimbursement in exchange for no demotions during the first year of the contract. Furthermore, the Fact Finder acknowledged the District’s desire for cost savings by allowing the District, in the second year of the contract, to furlough teachers for up to two full days with a corresponding salary reduction, a provision currently non-existent in any teacher contract in the state of Pennsylvania. TEEA estimates that the furlough days alone would cost TEEA members approximately $500,000 in lost wages.

“We are disappointed by the School Board’s choice to reject the report and stated efforts that they would like to continue bargaining,” TEEA President Laura Whittaker said. “By voting to accept the report, TEEA members have acknowledged the need for shared sacrifice. We believe that the report offers a fair and reasonable contract settlement. We urge members of the public to read the full Fact Finder’s report that is available on our website and ask the community to support acceptance of the Fact Finder’s report in order to reach a contract settlement so that we can all focus on the education of the children of the Tredyffrin-Easttown School District.” The School Board will take their second vote on the Fact Finder’s report on Monday, August 20 at 8 pm at the Tredyffrin-Easttown Administrative Offices at 940 West Valley Road, Suite 1700 in Wayne.

T/E Fact Finders Report — TESD and TEEA at Odds on Salary and Health Care/Insurance

The Fact Finder’s report has now been released (click here to read). In a quick review of the report, salary and health care/insurance appear to be the issues of major conflict between the school district and the teacher’s union. I offer the following summary and my personal remarks, but encourage you to review the report and weigh in with your own opinion. The public has 10 days to review the Fact Finder’s report and then the School Board votes again on Monday, August 20.

Salary

District (1) proposes that as of July 1, 2012 freezing teacher’s salaries at the 2011-12 contract year level; (2) proposes that as of July 1, 2013, freezing teacher’s salaries at the level at which they were at the conclusion of the 2011-12 contact year; and (3) proposes no column and step movement during the term of the Agreement.

Union proposes (1) that for the 2012-13 freezing salary at the 2011-12 contract year and (2) for the second year, 2013-14 year, there will be column and step movement throughout the salary schedule and that those bargaining unit members at the top of their respective columns will receive a payment of $1,000 off-scale bonus.

Recommendation: (1) 2012-13 freeze salary at the 2011-12 contract level and (2) for 2013-14 year, freeze salary for the first one-half of the school year at the 2011-12 contract level and for the second half of the year, there will be column and step movement. Those bargaining unit members at the top of their respective columns will receive a payment of $300 off-scale bonus.

Health Care/Insurance

District proposes to make available health benefit plan to full-time employees (including full-time Health Room nurses). I do not see a coverage option for employee’s spouses and/or dependents (even if the employee pays the difference).

Union proposes a shift to Personal Choice C2 health plan, which would include an increase in copays for doctor’s office visits. Union also agrees to increase its premium share from the current 5% to 7% of premium costs in year one of the Agreement and 8% of premium share in year two.

Recommendation: The Fact Finder report took real issue with the District in regards to health care, stating, “… considering the realities of its financial condition, and its educational and financial goals, there is absolutely no good reason why this School District would not offer more than single medical insurance coverage for its teachers. … There is no defensible reason for this School District – this School District that is one of the richest and best performing school districts in the state – to champion any proposal that would pressure and weaken the families of the teachers who serve the District’s families; removing medical insurance coverage from the children and families of teachers would do just that and I cannot recommend such.” The Fact Finder believes that the District should offer health plan options for teacher’s spouse plus children and family options, suggesting that the District will pay 90 -95% of the premiums and employees 5 – 10% of the premium based on Year One or Year Two of contract.

I’m not certain that I correctly understand the recommendation about ‘who’ is paying for the spouses and/or children of employees. To be clear, I totally disagree with the District on the subject of health care insurance – employees need to be able to have an option of insurance coverage for their spouses and/or families. It does not appear that the District offers that option. Although I am of the opinion that employees should have their individual insurance covered, perhaps the employees should be responsible for the additional costs of insuring their spouses and/or children. If I read the recommendation correctly, that does not appear to be an option.

Tredyffrin Teachers Union Accepts Fact Finder Report, T/E School Board Rejects

The results from last night’s special meeting of the T/E School Board were anticlimactic and expected. Tredyffrin Easttown Education Association, the teachers union, voted to accept the fact finder’s report from the PA Labor Relations Board. With a vote of 7-2, the School Board voted to reject the report. Kris Graham and Anne Crowley provided the two dissenting votes in support of the fact finder’s report. The recommendations in the fact finder’s report must be accepted or rejected in its entirety.

According to Jeffrey Sultanik, TESD contract negotiator, no public discussion of the fact finder’s report is permitted until the report is published. It is expected that the PA Labor Relations Board will release the report today. During the next 10 days, the public can weigh in on the report and on then at a second special meeting on Monday, August 20, the school board will take another vote on the report. If the school board votes again to reject the report, traditional negotiations will resume between TEEA and TESD.

T/E School District Teacher Contract Update … Special Meetings to Consider Fact Finder’s Report

Back on June 19, the contract negotiations between the T/E School District and the teachers union, Tredyffrin Easttown Education Association (TEEA) reached an impasse and both sides requested that the PA Labor Relations Board (PLRB) assign it to a ‘Fact Finder’. The neutral third-party was to review the proposals of TESD and TEEA and then make a recommendation.

On June 30, the contract deadline for the T/E teachers came and went with no new contract signed. As of July 1, the school district and the teachers union, TEEA entered the ‘status quo period. Status quo freezes the teacher’s salary at the 2011/12 salary until a new contract is signed. The teachers continue to receive their salary at the current rate until either (1) a strike or lockout within the terms the 1992 Act 88 or (2) they enter into a new contract. The teachers health care benefit plan remains intact (based on the expired contract term) during the status quo period.

The Fact Finder’s report was issued on July 30 and TESD and TEEA has 10 days to notify PLRB as to whether they accept or reject the report. The School Board and Administration are expressly prohibited from making any statements about the Fact Finder report until after PLRB releases it for publication. But PLRB will only release it for publication after either or both sides formally inform the PLRB that they are rejecting the report.

Here’s what I don’t understand – the School Board is holding two special meetings (August 9 and August 23) to consider the Fact Finder’s report. If the School Board is prohibited from making statements until the report is released and they only release it if one or both sides reject the report, how is it then possible that the School Board can now have special meetings to consider the report? Jeez, I must be missing something here on this process. Another question … is TEEA likewise prohibited from discussing the Fact Finder’s report. Keith Knauss, if you are reading Community Matters, can you help me understand how this process works.

I am curious, so I will attend this week’s special meeting on Thursday at 8 PM in the Tredyffrin Easttown Administration Office, 940 W. Valley Road, Wayne, PA.

TE School District … Teacher Contract Costing

Keith Knauss, Unionville-Chadds Ford School District school board member, and regular contributor to Community Matters, has written ‘TE Contract Costing’ that may help us all better understand the teacher-school board contract negotiations process and the reasons for certain decisions. I thank Keith for his research and for sharing the information with us. I have provided an overview below along with my comments. (If you have a problem reading the numbers in the tables, click on the graphic and a larger version will open in a new window.)

In his opening remarks, Knauss states …

“ … Understanding contracts has taken on new importance since Act 1 of 2006. Previous to Act 1, school boards could negotiate contracts and raise taxes to whatever level was necessary to balance the budget. Since Act 1, many districts have had to, with great reluctance, reduce staff and programs to keep budgets within the limits of the ‘cap’.”

Employee compensation is the major factor determining the size of a school district budget and, subsequently the real estate tax rate increase. If the District budget is to be balanced under the restrictions of Act 1, close attention must be paid to the terms of the contracts.

In the following table, Knauss presents the TE offer summary – the initial 1/9/12 offer by TEEA, the TE School Board 2/9/12 offer and TEEA 6/18/12 offer. The table indicates the average teacher compensation and taxpayer impact. According to Knauss, “The percentage increase in Average Teacher Compensation is more than the percentage increase of Local Tax Impact for 2 reasons … state subsidies and attrition.”

The following table reviews the salary and benefit packages of TE teachers. Krauss provides the approximate compensation (salary and benefits) for the average T/E teacher using the current teachers contract. The numbers are supplied by the District or are multiplications of the salary and the appropriate rate (PSERS and FICA).

Knauss presents the following Salary and Benefit table, offering that the “… Total Teacher Compensation is a straightforward multiplication of the Average Teacher Compensation and the number of Employees. Total Teacher Compensation is the money taken from the taxpayers (local and statewide) for the services provided by TE teachers.”

Here is an interesting graphic from Knauss, indicating the funding sources for teacher compensation. The major source of funding – local taxes and a secondary source of funding is from state and sales tax for half of PSERS and half of FICA.

Krauss looks at the effect of any contract settlement on the T/E taxpayers, and whether it can be financed within the Act 1 limits. He looks at two different costing methods – “One method looks at the total cost of the contract to all taxpayers, local and statewide; the other method looks at the cost of the contract to the local taxpayers to reflect the local tax impact of any other offer by ‘backing out’ the statement reimbursement for PSERS and FICA.”

The Local Tax Impact is calculated by “backing out” the state contributions to FICA and PSERS. Notice that the state contributes $3.0M in subsidies to lessen the Local Tax Impact.

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When reviewing a teacher contract offer, Knauss supports the use of the following criteria:

  • Is the offer economically sustainable under Act 1 limits?
  • Are the compensation increases of the offer in line with the current economic climate?
  • Is the compensation appropriate to attract and retain employees of quality?

Knauss answers a question that many have wondered … what happens if the teachers and the school board cannot reach a settlement? Due to substantial differences between TEEA and TE School Board, the union requested fact-finding by the PA Labor Relations Board. The independent fact finder will review both TEEA and TESD proposals and then make recommendations … however, remember the recommendations are non-binding.

The current teachers’ contract ends on Saturday, June 30. If an agreement is not reached, the teachers enter the “status quo” period, meaning that they continue to teach … to the expired contract. The teacher’s benefits and salary remain the same as in the expired contract. It is obvious that the School Board would not want an extended ‘status quo’ status for the teachers because it precludes any change to heath care benefits, compensation, etc. Knauss points out, that although the teacher compensation is frozen at its current level in ‘status quo’, legally the District must absorb any increases due to PSERS contributions or healthcare.

However, the situation is different from the teachers’ standpoint. During better economic times, the teachers would not want their contract settlement in ‘status quo’ state because working under the expired contract would mean that they would receive no additional compensation for years of service increase. But what choice do the teachers have?

According to TEEA website, the teacher’s last offer included a reduction in health care benefits and salary freeze for the first year. In their rejection of the union’s offer, the School Board instead asked the teachers to take a compensation reduction of $8,000 per teacher – which equates to as much as 13% for some teachers. There is little surprise that TEEA rejected that District’s offer, opting instead to go to the PA Labor Board. Why would the teachers want a new contract … status quo also keeps their current salary intact and preserves their current benefit package intact.

Knauss provides a multi-year analysis, assuming status quo and average compensation. He presents his analysis in several slides, giving us an idea of what certain scenarios would mean to the average taxpayer. To read Keith’s full report, click here.

TEEA and T/E School Board Reach Contract Negotiation Impasse

With only a few days remaining in June, it does not appear that a new contract will be signed in the T/E School District by the June 30 deadline. According to the Tredyffrin-Easttown Education Association (TEEA), attempts to resolve the contract differences between the school board and teachers have reached an impasse, and therefore they are requesting independent fact-finding from the PA State Labor Board.

On Monday, June 18, TEEA made a 2-year “off the record” proposal to the school board that “… included a reduction in health care benefits, an increase in health care premium share including a shift to percentage-share, a reduction in advanced studies assistance, and a full salary freeze in the first year. In return, TEEA asked for salary schedule advancement for non-master teachers in year two, a one-year-only “off-schedule” salary premium for master teachers in year two, and “no-demotions” language for the duration of the contract. This offer was rejected.”

The counter-offer from the school board asked the teachers for a salary reduction, approximately $8,000 per teachers. According to TEEA, the reduction could equal as much as 13% for some of their members. Earlier in the month, the teachers had agreed to modify their contract regarding tuition reimbursement. Their offer which was accepted and at last week’s School Board meeting, a Memorandum of Understanding was entered into which modified the existing contract for one year. The MOU represented a savings of more than $400K; as a result, teacher demotions were taken off the table as a budget strategy.

It has becoming increasingly more common for PA teacher unions to take the route to request an independent arbitrator from the PA Labor Relations Board. Under Act 195, this is a process used to resolve contract negotiations when the parties have reached an impasse. The severe economic times and decreasing revenue are creating major challenges for school districts; therefore making reasonable teacher negotiations almost impossible. As I understand the process, the independent arbitrator will hear both sides, with TEEA and the School Board presenting evidence to support their position. Based on the fact-finding, the Labor Relations Board will issue a report containing their findings along with recommendations for settlement. It should be noted that the report is non-binding and the recommendations require the approval of both TEEA and the School Board.

According to a recent Daily Local article, West Chester teachers and their school board are also far apart on their new contract negotiations. Like T/E School District, Jeffrey Sultanik is serving as West Chester School District’s chief negotiator.

However, unlike TEEA, the West Chester Area Education Association is proposing a salary increase of 18.3% over the course of the 3-year contract, with a cost of living increase plus a salary step movement equating to 5.57% increase first year, 5.81% increase in year 2 and 3. The union is also requested expanded health care benefits and additional pay for meetings and a reduction of 2 work days. All I can say is WOW! I have to believe that TEEA and our School Board are not nearly as far apart as the School Board and union in West Chester.

T/E School Board Passes 3.3% Tax Increase; Highest Percent Increase in the Area

The T/E School Board meeting on Thursday night was rather anticlimactic. Most of us who have been following the budget process were not surprised by the 3.3% tax increase (1.7% Act 1 Index, 1.6% referendum exceptions) for the 2012-13 school year. Based on the District’s average residential assessment of $252,601, this translates to an average increase of $155 per homeowner in their tax bill.

The Act 1 Index increase will produce projected revenue of $1.5 million and the exceptions increase projected revenue of $1,498,916. The total revenue produced by the 3.3% tax increase is $2,998,916. The 2012-13 tax will be levied at the rate of 19.2628 mills, on the assessed valuation at a rate of $19.2628 per $1,000 assessment; an increase of .6154 mills from the 2011-12 tax rate.

How does TESD tax increase of 3.3% increase for 2012-13 school year stack up against neighboring school districts? The following local school districts have approved their budgets for 2012-13 and needed to include the following tax increases:

  • Radnor School District: 3.21% tax increase
  • Great Valley School District: 3% tax increase
  • Haverford School District: 2.73% tax increase
  • Lower Merion School District: 1.99% tax increase
  • West Chester School District: 1.7% tax increase
  • Downingtown Area School District: 1.7% tax increase
  • Phoenixville School District: 1.66% tax increase
  • Unionville-Chadds Ford School District: proposed 2.65% tax increase in Chester County and a 1.74% decrease in Delaware County (the difference comes changes in the gross property valuation of the two counties) to be approved at UCFSD meeting on Monday, June 18.

Following the final budget summary, discussion and resident commentary, the school board members were presented the opportunity to weigh-in on why they were voted for or against the 2012-13 budget. The 2012-13 budget passed 7-2 with school board members Liz Mercogliano and Rich Brake providing the dissenting votes. Brake provided a lengthy 30-minute oration, which offered historical details of what brings the District to this point and his reasoning for voting against the 2012-13 budget.

Ray Clarke also attended the school board meeting and offers his thoughts on last night’s School Board meeting. Thanks Ray!

Comments from Ray Clarke …

1. Karen Cruickshank reported that the tone in the TEEA negotiations is “increasingly positive”. One small signal of this is the memorandum of understanding that removes the requirement for the district to pay for “advanced studies assistance”, in return for dropping the demotion idea for 2012/13. Amazingly, this saves $360,000 – and it’s not even all the tuition that is paid! (Payments are continuing for those on the lowest Bachelors steps).

2. The General Fund Balance debacle continues. At its root is the fact that the Board treats this as a completely discretionary slush fund, with absolutely no rules about how it is to be used. I believe that it is completely unacceptable for $30 million of taxpayer money be be treated so cavalierly. Just one example: last year the “commitment” for PSERS “stabilization” was $15.4 million, this year it’s $3.6 million. It’s not that the difference has been used to stabilize PSERS, it’s just that the number is a plug for when other things have been accounted for. Ridiculous. Why even have that item in the first place – we plan to raise taxes for it anyway.

Having said that, the changes in this year’s commitments do move us in the right direction. $10.4 million will be moved into the Capital Fund, where it will be used for the one time expenses that we’ve discussed here are the appropriate uses for the Fund Balance.

Also worthy of mention is the commitment for the liability for vested employee services. This went up by $0.8 million. The actual payment was $0.3 million; It’s interesting that the actual employment expense was therefore $0.5 million higher than was recognized in the operating statement, another problem deferred for future taxpayers.

3. Which gets me to Dr Brake. He treated us to a half hour analysis of the school district’s finances and the changes over the last decade or so, with desktop slides. I encourage all to look for the video. He voted against the tax increase, and argued for “an entirely new status quo” for the school employees. Here are some notes I took with my commentary:

– The drop in revenues from assessment appeals offsets the increase from increasing the tax rate for the exceptions. He used this to suggest we have reached taxing capacity.

– Special education is a “ticking time bomb” and the increased costs of autism “threaten public education”. Relatedly, we heard in the Policy Committee how parents of non-residents, shopping for schools, want the right to come into classrooms to observe TE”s special education programs.

– All entities (governments/households, US/Europe, etc) have a “pathological addiction to spending beyond our means”. [An OT comment: In a long run he’s right that this is unsustainable, but in the short run, national governments able to determine monetary policy can have a stabilizing role when consumers all of a sudden come to that unsustainable realization. The problem in the US is that the political actors cannot agree on the long run plan to get the house in order, and in Europe, they have a completely crazy monetary union without a fiscal union].

– For TE routinely taxing to the max is unsustainable and not the solution. I note that the agreed 3.3% tax increase this year, and the subsequent annual 3% increases in the 4 year projection model accumulate to an increased tax bill of $600 per year for the average residential assessment. And there’s still a $4 million deficit in 2016/16.

– He is now going to pay more attention to the Fund Balance. Good!

Unionville-Chadds Ford School Board Approves Teacher Demotions, What does this mean for T/E teachers?

Sixteen months ago, I wrote an article titled, “Looking at Unionville-Chadds Ford School District – Is the ‘Handwriting on the Wall’ for TE?” The Unionville-Chadds Ford School District (U-CF) is similar to the T/E school district and the districts are often compared. Students from both school districts enjoy similar academic performance; both top performing school districts. On the SAT and PSSA, the performance of the districts places each in the top 1% statewide. We often seen the districts listed together for the similar quality of their education.

You may recall, the U-CF teacher contract expired June 30, 2010 without the signing of a new contract. The talks between the school board and teachers union continued but after six months, the PA Labor Relations Board assigned an arbitrator to resolve the bargaining impasse through a fact-finding report. The school board voted to accept the findings of the report whereas the teachers union rejected the report.

Two major suggestions contained in the report – (1) a provision for each union member to receive a one-time, nonrecurring paying in lieu of a raise in year one and an increase in the final two years of the contract and (2) that union members move to a new, cost-saving healthcare plan, Keystone Direct, in the second year of the contract. The U-CF school board sought to maintain quality care at a reduced rate and they suggested, “that the economic times are hard and that the teacher union has benefited greatly when times were good but they must now share in the sacrifice as the others.” The teacher union rejected the independent report and recommendations.

The U-CF school board and teachers union finally reached an agreement in September 2011, sixteen months after the expiration of their contract. I wrote of the agreement on September 13, 2011, and asked the question if there were any lessons for T/E as a result. What did the U-CF school board and teachers union finally agree to – Terms included:

  • Year 1 (2010-11) no pay increase for 2010-11
  • Year 2 (2011-12) 1% increase on the pay schedule, step movement, prep level movement
  • Year 3 (2012-13) $300 in each cell on the matrix, $700 one-time bonus, step movement, prep level movement

One of the sticking points in the U-CF school board – teacher contract negotiations had been over healthcare benefits (sound familiar). In the final U-CF agreement, the teachers contributed 7.5% in 2011-12 and 10% toward their healthcare costs.

Although the U-CF school district contract does not expire until June 2013, according to the Daily Local, their school board and teachers union members have been quietly meeting unofficially since January of this year, for preliminary contract talks without the expense of outside legal counsel. According to U-CF school board member, Jeff Leister, the early talks were “an attempt to find common ground, achieve greater certainty about the future and to avoid a lengthy process later in the year.” However, what’s the saying about the “best laid plans of mice and men” ? Unfortunately, the school board and teachers union are too far apart at this point, and both sides decided to end the preliminary contract discussions.

Leiser did comment that going forward the school board would adhere to a three-tier approach –

  1. What is in the best interest of the students and the quality of education
  2. Is the agreement sustainable under Act 1
  3. Is the agreement consistent with current economic conditions, and what I fair to ask of residents financially.

In reviewing the U-CF school board agenda of May 21, I did note something of interest:

Demotion Resolutions (2)
1. Approve the Demotion Resolution for Employee No. 2797, as attached
2. Approve the Demotion Resolution for Employee No. 866, as attached

The discussion and approval of demotion resolutions may explain why the preliminary contract talks have ceased between the U-CF school board and teachers union. Curious as to the contents of the demotion resolutions, I filed a right-to-know request with their open records officer. (If I receive a response, I will certainly post it).

In the Souderton School District, their school board and teachers union were unable to resolve contract negotiations and were aided by a state mediator. The mediator’s proposed bargaining agreement between the Souderton school board and teachers union was released – to read the overview, click here. The school board and the teachers union accepted the recommendations of the state mediator and signed a 5-year contract. The contact contains a salary freeze in the first 2 years; elimination of 2 “masters-plus” salary schedules; increased health care premium share; and reduced tuition reimbursement. There is a 1.6% reduction in the teacher salary schedule in the first year; no “step and column” movement for the first two years; then a 1 percent salary schedule increase in the last year and a return to “step and column” starting in the third year. It appears that significant concessions were required on behalf of the Souderton teachers union.

The Souderton school district budget of $107 million for 2012-13 includes a 3 percent real estate tax increase. The harsh reality of Souderton’s budget deficit required school board members to make some tough decisions to balance their budget, including eliminating middle school teaching positions, demotion of a language teacher, reducing the budgets of technology, facilities and supplies, increasing student parking and activity fees, etc.

Whether it is Souderton, Unionville-Chadds Ford or T/E, the reality of the economic crisis in Pennsylvania’s public school, is forcing school boards to make some very difficult budget decisions. A state assigned mediator was required in the contract negotiations of Souderton and U-CF to push their contract impasse, I wonder if the same will happen in T/E? Maybe having a hired professional negotiator will make the difference for TESD — I’m not sure if Souderton and U-CF took this approach. It would hard for the taxpayers to pay Jeffrey Sultanik’s legal bill if in the end, the negotiations still require an independent arbitrator.

Should School Districts (TESD) Use Fund Balances Instead of Educational Cuts and Teacher Demotions?

Should school districts, such as TESD use fund balances instead of educational cuts and teacher demotions? The answer according to Governor Corbett and some other Pennsylvania lawmakers, is yes.

Tredyffrin Easttown School District has amassed an enviable fund balance – $32 million; one of the largest in the state. There are those in the community that support the school board holding on to the “rainy day” reserve funds; primarily because of the dramatically increasing PSERS contributions over the next few years. We understand that the traditional package of retirement benefits for state employees and teachers has become unaffordable and pension reform is sorely needed (and sooner rather than later). I support the state switching to a defined-contribution model (401(k) type model) for new hires but that only prevents the underfunded-pension liability problem from worsening … the state has a current multi-billion dollar hole. But unlike T/E, the state has no “rainy day” fund. Trying to manage their budgets, the state’s pension crisis has pushed school districts across the state to the edge of the cliff. There are those that praise T/E for the good job they have done in holding onto their fund balance in spite of the pension crisis.

But not everyone in our school district supports T/E holding onto the $30+ million fund balance; suggesting that this money represents past overtaxing and belongs to the taxpayers and should be returned. Then there is the teacher union’s position that the fund balance should be used before utilizing budget strategies such as demotion or increasing class size. Some residents fear that as school district’s budget woes push them over the cliff, the state will look to Districts (such as T/E) to bail out their fellow school districts.

Governor Corbett has sent a message to Pennsylvania’s school districts; he believes that they should tap into their reserves instead of cutting programs or laying off teachers and staff. During a recent radio interview with Dom Giordana on CBS channel WPHT, Corbett said if school boards want to cut programs instead of spending more of their financial reserves, than the public should blame them – not his budget. According to Corbett, “Well, I look at the reserves as – it’s a rainy day fund. And this is a rainy day – we are in a rainy day.” If you are a supporter of our governor, then the message to T/E school board would be no educational cuts, spend the fund balance.

Taking Gov. Corbett’s message for school district’s to use their fund balances, a step further are State Rep. Mike Vereb (R-Montgomery County) and Mario Scavello (R-Monroe County). These two Republican lawmakers are developing legislation that would force school districts to use their reserve funds to balance their budget before they would be allowed to raise taxes. Vereb and Scavello want to either limit the amount of money that districts can hold in their “rainy day” reserves or ban the school districts from raising taxes if the money needed to balance the budget is available (in the fund balance).

In an article on Watchdog.org , “Pennsylvania School Districts have Tripled Savings in 15 Years”, it was stated that Pennsylvania school districts have more than $3.2 billion in reserve funds. Data from the PA Department of Education indicates that the reserve accounts have nearly tripled from $1.1 billion in 1996-97 to more than $3.2 billion last year.

The article included an interesting table listing the largest reserve fund increases in Pennsylvania since 1996-97; Tredyffrin Easttown School District has the distinction of coming in 7th in the state. In 1996-97, T/E had $4,333,661 and in fifteen years increased by more than $26 million to a current total of approximately $32 million. Amazing.

Largest Reserve Fund Increases Since 1996-97
Rank District 1996-97 2010-11 Increase
  1 Pittsburgh $47,013,209 $148,871,185 $101,857,976
  2 Downingtown $183,005 $50,803,447 $50,620,442
  3 Abington $1,509,021 $45,937,675 $44,428,654
  4 Lower Merion $6,584,556 $43,405,136 $36,820,580
  5 Altoona $1,509,021 $45,937,675 $44,428,654
  6 Bensalem $1,674,721 $28,564,360 $26,889,639
  7 Tredyffrin-Easttown $4,333,551 $31,026,455 $26,692,904

 

 

 

 

 

 

Vereb is “furious to find that many of the state’s school districts that are crying poor and blaming the state for their fiscal problems are sitting on surpluses, including one that totals $148 million.” Although Vereb supports school districts having an emergency reserve, he feels that the taxpayer is deserved an explanation as to why school districts with large fund balances are cutting programs and teachers and raising property taxes but refusing to use fund balances. That’s the reasoning behind the legislation that he and Scavello are working on — forcing the hand of school boards to use their fund balances before raising taxes.

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