Pattye Benson

Community Matters

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

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

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

Ray’s Finance Committee Notes:

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

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

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

Revenues 106.4 105.6 109.2

Expenditures 107.2 101.7 110.3

Budget Imbalance (0.8) 3.9 (1.1)

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

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

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

Total $4.3

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

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

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

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

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

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  1. Ray, How is that this financial forecast is so far off — $5.5 Million less in expenses? I would love to know when the school directors found out this information, I’m sure that T/E teachers would like to know when the school board knew! Crying poor with the teachers but come up then they come up with $3.9 Million surplus. Something doesn’t sound right about this! Was anyone at the meeting from the teachers union

    1. It does take a while for all the medical bills to come in, and that is the single biggest contributor to the lower costs. Even for that, though, there had been indications earlier in the year that the experience was going to be favorable.

      The administration has historically been conservative in its forecasting, but this does appear extreme.

      I think that the two community attendees other than Neal and I were from the TEEA.

  2. I expect there will be some heated questioning over the $3.9M surplus. I think the unexpected “attrition” savings of $800K, the transportation savings of $300K and the utility savings of $400K are easily understandable. The largest portion of the surplus and one that will raise the most eyebrows is the favorable healthcare experience of $1.8M. Was the District playing “games” as suggested by Interested T/E Taxpayer?
    I’m guessing the healthcare budget for TE was around $10M. How could the estimate be off by around 20%? Well, a variance of this magnitude (positive or negative) is not unusual for a self insured District. If anyone is interested, I can go into details.

  3. Wow…Ray is really becoming a good financial reporter…could we see him on a spot on CNBC soon?? OK. let’s not go crazy…

    As far as the Audit report presentation goes…the size of the surplus was certainly a surprise. At +/- $4 MM it is almost the exact size of the prior year’s tax increase of +/- $4 MM (3.77%). The district has a fine accounting staff and they work hard so that there are limited year-end Audit surprises. In this case, the majority of the expenses savings were related to the cost estimates used for healthcare benefits. Remember, that this is only the second year of the District’s new healthcare system…a self-insured base coverage supported by Blue Cross insurance coverage over a pre-determined limit. The health savings were discussed during finance meetings at the end of last year but the scope wasn’t fully determined until recently and the Audit detailed the ultimate result. Caution is warranted here as those “savings” are likely not repeatable in future years as the District’s budgeting gets better with more years of data to rely upon. Still it’s a nice result as many times Audit adjustments can go the other way…
    This of course brings up the obvious question of “what do you do with a surplus”? Taxpayers should not expect dividend checks in their mailboxes any time soon. There was discussion of Fund Balance re-allocation and committing the current surplus to the Future Retirement Plan Rate Stabilization (PSERS) commitment. I support this as that commitment totaled some $15.3 MM until the end of last fiscal year when Fund Balance Commitments were re-allocated leaving only $3.6 MM for this important taxpayer protection. The bigger question is will the Board ever use this commitment for its stated purpose? The PSERS increases are happening now yet they’ve (to date) been covered by tax increases allowed under the State’s Referendum Exception tax increases. I was a bit shocked that this account was so heavily re-allocated at the last finance meeting of the 2011-12 fiscal year. $10.4 MM was used to create a Capital Projects Fund (note here to Ray..I believe this is a separate fund and is no longer included in the general fund balance making the fund balance total you noted lower by $10 MM). My thinking of capital spending was that it was financed on a longer term basis (and projected budget) with bond financing. The last District Bond issue was in 2010…what happened in the last few years to create the need for $10 MM more in capital proceeds? Did we over-spend; under-borrow…both? What about the taxpayer who collectively had a $15.3 MM deposit with the District to protect us from PSERS increases that was reduced by the stroke of a pen to $3.6 MM. Is this account really just the District piggy bank? Is it ever going to be used for its stated purpose? The metaphor I’ve used here (Ray doesn’t like this one) is if someone owed you a $100 and they told you the following “the good news is that we’ll say I now owe you $1,000 but the bad news is I’m never going to pay you”…would you be happy or sad?

    The key obviously is what this all means going forward. Are we really going to spend an additional 9% this fiscal year? Will next year’s budget still leave taxpayers with the maximum allowable tax increase as in the last few years? Does this surplus change some of the thinking regarding tax increases? We’ll be watching.

    1. A quick note on the Fund Balances – the total as of 6/30/2012 was $44.7 million, of which $9.7 was “restricted for capital projects” and and additional $10.4 was “committed for capital projects” (and I believe has since been restricted), leaving $24.6 million. Of this, a further $0.6 million is “assigned to Athletic Fund expenditures”.

      1. Right…thanks Ray. Was trying to make the distinction between “Funds” that have been created and the “restrictions” in the general fund balance. The Funds created…Capital Projects; Athletic, etc. can not be re-assigned to another purpose. The “restrictions” of the general fund balance can be changed by Board vote at any time…and they have.

        Sorry to get in the weeds…!

    2. I enjoy reading this website a nd the public participation. I think Neal and Ray may be describing what is referred to as “cross-charging” and is or should be prohibited — it is the obligation of funds for one purposes explained at a public budget approval meeting and then transferring those funds later to the general fund if not needed. This occurs too often using special education funds approved as an authorized exception to an Act 1 index limit but also in other situations. The following articles may be helpful”:

      Keep up the good work

      1. Actually I think we’re talking about something much more straightforward – commitments in the General Fund vs funds like the Capital Fund that are restricted for a specific purpose.

        There was much commentary about the size of the General Fund and so the Board decided to transfer $10.4 million to the Capital Fund. That amount shows as a commitment as of 6/30/12, but I believe it is now actually moved to Capital.

        Commitments of course can be changed at any time. Which is why that PSERS commitment fluctuates so much. It’s just a plug for anything they can’t come up with a specific number for. As Neal says, they can tax for the PSERS increase, so to my mind there’s little purpose for this “stabilization fund”.

        The commitments will be confirmed as part of the Consent Agenda at the next Board meeting. There was no discussion at the Finance Committee of committing the $1.1 million or so for the TEEA 2013/14 bonus. We’ll have to make sure they don’t forget this next year, though, and try to tax for that one time payment.

        Also, another reason for vigilance on next year’s budget is the impact of the new contract on the current year. If they start with the 2012/13 Budget there will need to be explicit adjustments for that and the factors that lowered expenses last year.

        As others have said here, healthcare costs can fluctuate a lot depending on a few specific cases. Last year there were none that met the $200,000 stop loss limit, as opposed to I think three in the previous year. But it’s also important to remember that they can not tax for the “worst case” now they have the $2.75 million “stabilization” commitment.

        Time to place close attention! Next Finance Committee December 10th, budget on the agenda.

  4. The 2010 bond issue was never “used” for any specific project to my knowledge….it was just cheap money. And in the same way the health care was a windfall, it could just as likely have gone the other way.
    There are outstanding lawsuits and assessment appeals going on and the purpose of raising taxes is to adjust the base rate with the state capping increases.

    As to the point of double counting for PSERS — I have attempted to argue that before, and quite honestly it’s too strategic to get this board to consider. Their hands are tied by the state as to increases, so they will increase taxes the only way they can to protect the programs.

    Not so sure this is wrong — and remember the wage freeze for teachers is offset by $2500 a person next year (?)…which is about $1.2M.

    As to the fact that this year’s actual vs. next year’s projected (budgeted) costs, the devil will be in the details. When the agenda shows “Administrative Compensation” or any transfers to fund balance, that’s time for the RTK request. Or before hand would be even better so that you know what it costs and what the implications of any across the board increases would be. These are market driven to the extent that retention is a goal, but I have said that 2.5% additional accrual to their pension isn’t a bad reason to hang around either.

  5. Did we also forget that tha Custodial dept took a 10% paycut as well, so they could keep their jobs? Where’s the justice for these folks who despite taking such a cut also have forgone getting raises in two years as well!! I’m sorry but when do all the lies and cover ups stop!!!

    1. I agree Centerville. We have elementary school principals making up to $153,00 per year, we have a 3.9M surplus and we cut the custodians salaries 10%? Is that who we are?

  6. Centerville,
    Could you be more specific about how you came to the conclusion that there are “lies and cover ups”? And who are you accusing? These are accusations that deserve careful documentation and deliberation.

  7. 3.9M sounds like a lot, but it really isn’t. The truth is, that savings is already gone to the pension obligation. I am sure TEEA is upset, but their members will get the money anyway. Taxpayers didn’t save a penny, they just spent it a little earlier.

  8. On Tuesday the Lower Merion School District approved a 3 year teacher contract. There was a short article in the Mainline Media News with 3 reader comments. Details of the contract (e.g. horizontal movement, vertical movement) were scarce. There were no financial projections either during negotiations or after the signing. It’s an interesting contrast with the scrutiny of the TE contract by the TE community aided by Community Matters.

  9. I have no doubt that the district has a fine accounting staff that works hard. (as Neil said) And I too agree that it is a nice result that probably won’t be repeated in the coming years. (see Neil’s post)

    What about that collective taxpayer 15.3M deposit that was reduced , with the stroke of a pen, to 3.6MM? If this account really is the district piggy bank, let’s use some of it to reinstate the custodians salary.

    As far as “market driven” administrative compensation plans…. We have an elementary school principal who makes more than the CHS principal…… one of the top ranked public high schools in the country. This is not in line with a market driven compensation plan.

    We are fortunate to have Community Matters which provides easy access to information about and discussion of these very important topics in our district. That’s all it is though, information; until someone takes the information and organizes members of our community to get together and demand that elected officials serve the public and the children they were elected to serve.

  10. I do understand your point on the custodians Centerville but, as is usually the case, there’s always more to the story. The non-instructional employees CBA (Collective Bargaining Agreement) has a clause in it allowing the District to take the custodial function and outsource it to a private vendor. When this was included in the “Budget Strategies” last year the cost savings figure placed on it by the District was $958,000…ANNUALLY. The agreement reached with the Custodians was for a one-year pay decrease ($300,000 savings). While I do understand the human cost here and the impact this would have on these individuals, this settlement and background still tells me that we’re over-paying some $600,000 annually for this function. If the private market can do the same job with the same people (the CBA also obligates the District, that in the event they contract outside for these services, they will try to get all of the current employees positions with the new firm) for less…I think it has to be seriously considered. The agreement was made in an off-the-record negotiation and adopted within a week by the Board. They have the all the necessary authority to make these deals.

    The ultimate goal (again my opinion) is fairness to the taxpayer who provides $.86 of every dollar spent in the District. The taxpayers have had their property taxes increased almost 55% in the last 13 year and in the last several years, we’ve faced “the maximum tax rate increase allowable in the Commonwealth”. Last year’s surplus was in fact almost the same amount as the tax increase. Would it had been different if we knew for certain the outcome of the fiscal year…maybe… The key I think is to continue to ask our elected to representatives to efficiently manage the finances of the system with the dual goals of excellence in education and fairness to the taxpayer. You, me and all of us in this community will be the judges…

    1. Unfortunately, our economy has reached a stage where every expenditure is under scrutiny. Unfortunately is probably an unnecessary word here, as the scrutiny is not only helpful, it’s instructive. But thinking it doesn’t make it true. Where do you see Lies? Coverups? Please.

      I would ask that people here not make blanket statements without attributing the information. For instance, the claim that we have an elementary principal making more than the high school principal. Use names please. We do have an elementary principal that was the former LM Ass’t Superintendent, Dr. Tom Tobin. He started his career in TESD as a Principal at New Eagle. He then lead the transition team when the 5th grade was moved to the MS and the 9th grade was moved to the HS. Is this the person you are referencing? Should we examine the duties of that principal and what he does for TESD? If you mean that many of TESD administrators are highly qualified, you are right. TESD has identified and developed most of our administrative staff. And it’s fair to say we stockpile talent. If you look around, most districts have to do major searches to fill positions. Except in unanticipated departures, TE has typically had a “succession plan” in place for most spots. So to compare the salaries of one administrator vs. another, as opposed to the outside market, is misguided.

      Custodians took a pay cut to keep their jobs, not just to help control costs. It’s a sad fact that there are market driven costs, and cleaning the schools is one of them. Cleaning the schools as a TESD employee brings benefits and a pension. People make choices, and those working as custodians are not obligated to take the cut. They can work elsewhere. It’s a sad fact that the bus drivers of over a decade ago would love to have been allowed to take a paycut, but the union refused to allow any negotiations and the district contracted the service.

      “Is that who we are?” is not really a fair question. And there are absolutely no lies or cover ups associated with the reality of contracting.

      Now, a TESD employee could be faced with a serious health problem, then self-insuring might not prove to be cost effective.

      I will say that I agree with State College above that the redirecting of fund balance for other uses so that the tax exception can be used is sketchy. Maybe Keith can tell us how the school code addresses it. (I have long since stopped reading updates from the state).

      1. Andrea,

        I don’t think you know it, but your post proves my points.

        It’s interesting that you are so protective and defensive of the administrators and it’s clear you’re determined to justify their very high salaries. Just a few short months ago, the teachers did not enjoy the same support and attitude from you. I am curious about that.

        Board members, ex board members and administrators seem out of touch with what the citizenry of this community are going through.

        I am not going to name names but I am happy to post the website address for teacher and administrator salaries in PA if anyone requests it. You gave me the idea to go to he school district website for the names of the administrators there. Wow!

        Your comments about the custodians and bus drivers are chilling

        “They’re not obligated to take the pay cut? They can work elsewhere? Your insensitivity speaks for itself.

      1. NSN-
        You cannot say you agree with Neil as he makes the economic case for outsourcing custodial help, and then suggest a real life event where the bus drivers were sacrificed BY THEIR UNION is insensitive.

        1. There is no case for outsourcing anything…especially the custodians…what do you want turn over after turn over… You will get what you pay for a the schools will go to pot!! I certainly don’t want my kids around if that crap happens ..I know time are tough but c’mon show a “little” gratitude because it came the other way not only for job preservation but because these folks are proud and do care!! Isn’t that worth something to get back?

        2. Reader,

          My post was unclear so therefore confusing.

          I find myself agreeing with Neil on many topics and ideas.

          His posts are informative and well written and I appreciate that he and Ray go to meetings and come back to report what they learned.

          I did not, however agree with his post regarding the custodians. I found it to be cold and insensitive.

          We are not talking about a corporate takeover here where 90% of employees are let go or take a salary reduction by the company taking them over.

          We are talking about a community school system where some of these folks have worked for 35 to 40 years. Some have served the parents of the children who go there now. Centerville is right. They do MUCH more than clean. And they know alot more than you would think they know about the system and how it works which makes them valuable assets to administrators and teachers alike.

          It doesn’t seem right to me, that these folks suffer financially while others do not.

      2. Didn’t mean to give you a Chill..and I appreciate the nice words. I was trying to point out that all of these economic decisions have far-reaching impact. Maybe the human side of the custodian issue (pretty sure I mentioned that) would have out-weighed the economic…I would just have liked the issue fully considered and discussed not “decided” in an off-the-record meeting…that’s it. But the Board HAS that authority and uses it…even the new TEEA contract had a negotiated MOU attached to it before it was put to the public.

        The big cost driver here is the previous Teacher’s contract that gave 30.8% average salary increases over a four year period…a recessionary economic period at that. Combined with a run-up in the costs of benefits to the District over that same period, the costs likely totaled some $16-$17 MM over a four-year interval that saw decreasing real estate values and tax base. This is not the bargaining unit’s “fault”…they negotiated a terrific deal for their members. We can’t put that genie back in the bottle…but if we don’t start thinking about these issues in a different light and making some tough economic calls; we’re going to stay on our current track of maximum tax increases and deficit budgets. We all know that is unsustainable. I just haven’t seen enough forward planning that puts us on a sustainable, realistic, achievable path. Much of the Finance Committee’s deliberations concern revenue enhancement but it doesn’t add up to much in the long run. Our current cost structure needs some serious consideration…my opinion again.

        1. Neil,

          I always enjoy your posts and this one was no different . I’m warmed up now and would like to hear your ideas (if you have any) on how we can see these issues in a different light. I’m curious to know what (specific) tough economic calls you would make if you had the authority to do so.

  11. Custodians do more than clean lets just clear that up here and now!! If you got a contracted service in to do their jobs,you’d have to hire 5 or six other ones to fill in the rest of the duties they perform. Yes they took a cut to save their jobs but how are do you step on the necks of the workers and then turn around and all of a sudden money appears and a bunch of new equipment is purchased around the district while folks are struggling to pay the boils mortgage…there was a time when people worked together …who ya gonna get the sunshine janitorial company that slept all summer long. You can have em …

  12. Chilling? What is chilling is how little people pay attention to to reality and disregard hyperbole.
    I am not going to waste energy explaining anything, because your response presumes it is my strategy and not my observation.

    “Step on the necks of workers?”.

    Not so new: “Lost touch with the community?”. I’ll suggest that comment demonstrates 1) No context 2) Your lack of understanding school code/law and 3) an obvious bias against management/administration.

    Do you want answers or reasons?

    Unions can produce chilling outcomes. And clearly the sitting board put thought into the custodians or they would not have accepted reductions that did not mimic “contracting”….which would include pension contributions.

    Oh–and I’ll state again that I am not supportive of much of what this board has negotiated. I’ll also tell you that behind the scenes, I have contributed to cost and salary controls. I don’t rely on internet links to get my data. I have sone many, many RTK requests and I also went on several “searches” for talent when I was on the board. Do a little research on what other districts do to hire talent.

    One more “out of touch” comment: My house is for sale. I am downsizing to another area. I put in my time…20-30 hours a week for 3 terms. 10+ years ago. We current (Keith) and “former” board members don’t hang out together and yet we have similar analysis. maybe it’s because we KNOW stuff….not just guess at it.

    PEOPLE WITH ALL THE ANSWERS RARELY HAVE ALL THE INFORMATION. But keep trying. Try reading the school code, and maybe 10 or 12 other district contracts…as a start.

    Sorry for the tone, but I am done.

    1. Andrea,

      If I have a bias against management/ administrators, then you have a bias against teachers. Were you not critical of them in their negotiations with the board? I think administrators and teachers alike need to make compesation and healthcare concessions. I don’t understand why you and others focus only on the teachers and the custodians for concessions.

      Please let me know if my “internet link” regarding salaries is wrong, otherwise I don’t find anything wrong with using it as a source.

      Thank-you for past service. I’m sure it is not easy to leave an area you have worked so hard to make a better place. I hope you have many happy memories that you can take with you as you start the next phase in your life.

  13. Nsn– stick to current posts. You are incorrect in your assessment of my alliances. I am very comfortable with my views and my fairness. I think you could ask any member of any bargaining group that I was associated with if I dealt fairly and honestly. We had a 6 year teacher contract where TEEA only ratified the first 3 years and allowed me and one of their members to do the final 3 years with parameters meant to reflect health care costs, retirements and population growth. My only “bias” is based on affordability and market influences.

    Internet links report what the districts report. It is impossible to use most published information to make comparisons without reading compensation plans and contracts. Tredyffrin police contract is an example. Devil is always in the details.

    1. And you are incorrect in your assessment of my alliances. I am very comfortable with my views and fairness as well. The teachers and the administrators should make compensation and healthcare concessions.

      I agree with Neil, the ultimate goal should be fairness to the taxpayer. To be fair, if I am calling for concessions across the board then I suppose one could argue the custodians should be included. As From the West stated, 3.9M is really not that much of a savings and it’s probably going to be allocated to the ballooning, crushing pension obligation anyway. I think it is morally and ethically wrong for the board to squeeze $300,000 out of the salaries of custodians when it is not a drop in the bucket towards meeting our financial obligations. There is little to no benefit to the district while the financial pain and suffering to the custodians is very high. My only “bias” (I don’t know why you posted bias in quotations when you’re the originator of the term in this context) is for the custodians.

      “The TEEA allowed me and one of their members to do the final 3 years………..”

      And they received a gold standard healthcare plan that we can’t afford. “stick to current posts?” What does that mean? That you know the board gave away the store but that was 5 years ago and now you’re trying to undo that by asking the teachers to take concessions?

      As a knowledgeable person posted a couple of months ago, the board will not consider his rational, reasoned, well thought out healthcare plan that would fix this whole mess instantly because the administrators use the same healthcare plan that the teachers use. That was my aha moment. Now, he did not give context to that statement so I concede that I am reading between the lines when I conclude that the administration and the board are partners. Until the board members become more independent and stop relying so heavily on the administrators, we will continue to have these unafforable contracts.

      I’m going to pay close attention to the next contract negotiation. If the board allows the administrators to be in on the negotiations,(alone or with board members) we’ll know the tax payer is not being served again and the teachers will know they have nothing to worry about because the administrators, just like this time, will not be earnest in trying to get concessions and rollbacks because they don’t want to be subject to the same in their own agreements.

      If internet links report what the districts report, why can’t I use it as a reliable source of information.

      Having served as a board member, it is probably difficult for you to hear information that runs counter to your own notions about anything concerning the school system. We can’t keep doing things the way we did them 5 years ago. Administrators and teachers across the country and in this area are taking salary reductions. They are not leaving their jobs either. They are grateful to have them.

      I am glad you are not done. Your voice is a valuable tool in educating the public on how things work. Folks may not interpret the information the way you would like, but that does not mean we are not listening.

  14. Andrea,

    I agree. The devil is in the details. Let’s examine the example of the custodians taking a 10% pay cut. Did the Board “step on the necks” of the workers as one poster lamented?
    First, we have to ask, “10% of what?” Were the custodians making $20 per hour? or $15 per hour? and how does that compare to custodians in the private sector or at other districts? I don’t know what TE custodian make, but at UCF custodian start at around $15 per hour and, with experience, make over $20 per hour.
    Second, we have to examine benefits to get a comprehensive picture of total compensation. Here is the compensation a representative custodian receives from the taxpayer. I’ll estimate the salary rate is $15 per hour.
    Salary: $30,000
    FICA: $2,300
    PSERS: $3,700 (going to $5,000 next year)
    Healthcare: $11,000
    Total: $47,000
    Note that a large percentage of the compensation is benefits that are “invisible” to many as they don’t show up in a paycheck, but, still, are very valuable. I’ve taken a look at retirement benefits. Typically, a private company will match the first 3% or 4% of salary as a 401k contribution. That’s $1,200 for the private sector vs. $3,700 for the District. I’ve taken a look at healthcare plans. Typically, a private company will offer a high deductible plan with a 25% employee premium share. That’s $6,300 for the private sector vs. $11,000 for the District.
    Third, the Board is obligated by the state constitution to provide a thorough and efficient education to our students. In the context of salary administration, “efficient” means offering a compensation package that is just sufficient to attract and retain quality employees. I look very closely at resignations in our district. It’s the most sincere form of compensation feedback. I wonder if any TE custodians have left for better jobs.

  15. Keith,

    That was a thorough examination of custodian pay and benefits. We have also thoroughly examined teacher pay and benefits through board member presentations of success and sustainability.

    It’s probably safe to assume that the administrative pay and benefit cost is at least as large as the custodian pay and benefit cost, yet no one has examined it.

    We have transparency for teachers, we have transparency for custodians, and we have transparency for bus drivers and all others including aides and greeters. Has anyone ever publicly examined administrator pay and benefit. I’m curious what the cost savings of a 10% reduction in pay and benefits would reap from that segment.

    My only bias is towards the Custodians

  16. No one has examined it.
    Sort of a broad presumption. Not true.

    And I will say that when I examined it, I communicated with the administration and the board on the topic. But I will again suggest that you take some time and ask several districts for the same documents: Administrative Comp Agreements, Superintendent Contract, benefit plans. None of it is secret. But looking at one district is also useless, as this is a MARKET driven event. There is no union for administrators.
    Quoting from an “emergency” approval for Radnor School District before the hiring an interim while they searched for Linda Grobman:
    “Whereas the Board finds that there is a shortage of highly qualified personnel in the Commonwealth”

    Being an administrator requires additional certifications. I do not know the last raise given to the TESD administration. I have suggested that freezing salaries for those at the higher end of the salary scale is appropriate, as tenure adds 2.5% to their pension each year. For those newer to administration, remember that they have the right to return to the teaching ranks at any time — so the differential between what you can make as a teacher (a shorter work day and work year for the most part) needs to be retention based….

    Good luck.

  17. In the end, you get what you pay for…whether it’s an administrator, teacher, custodian.

    If you want to put in new bathroom in your house, and you hire the cheapest contractor, the bathroom may look good when it’s completed. However, over time…the grout will crack, tiles get loose, plumbing fixtures leak, drywall screws pop.

    Same goes for your professional talent and blue collar workers.

    Of course, if your children aren’t school aged or you send your children to private school – you don’t care.

    Most people are inherently motivated by self-interest…no one cares about outsourcing until it happens to you…until your company job gets shifted to contractor status (losing all benefits) or your job gets sent overseas.

    1. And with that sweeping generalization, which I think most agree with — how does it get fixed? We live in Pennsylvania, which statistically (at least at the last census I believe) has the highest percentage of native residents…which means so, so many only know what they ahve always known. If you have never lived anyplace else, your Shand Tract house cost $45,000 in 1960. Your taxes on that same house today are 3 times what your mortgage ever way…minimum. Now, the fact that you have half a million or more in equity — who cares….:? The fact that you don’t pay a hospital tax, or an emergency services tax, or a local income tax (unless you work elsewhere and pay the EIT) is meaningless. It’s the deal you wanted. “Let those others pay for it.”
      Social security? NO CHANGES….because those people vote. Social Contract: “I’ve paid into it. I’ve been paying school taxes for 50 years and my kdis are long since grown and gone.”

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