Pattye Benson

Community Matters

Ray Clarke

Tredyffrin’s 2012 Preliminary Budget Indicates 6.9% Increase . . . But the Math Doesn’t Add Up!

November 16, 2011
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At Monday’s Board of Supervisors meeting, our township manager Mimi Gleason presented Tredyffrin’s preliminary budget for 2012 that indicates a 6.9% millage real estate increase will be required to balance the budget. As she does each year, Gleason presented a budget summary, which was designed as an overview of the township’s current financial picture. Included in the summary are 2011 budget and forecasted revenue and expenditures through the end of the year plus the 2012 preliminary budget. Two summary tables marked ‘General Fund Revenue’ and ‘General Fund Expenditures’ are part of the township manager’s document dated November 10, 2011.

I do not know about you, but when I review budget data, I look at the totals, the ‘bottom line’ – just assuming that the math is correct. Laying no claim as a financial expert, when I reviewed the township’s budget memorandum, I accepted Ms. Gleason’s summary information as correct and her math as accurate. As the hired professional and chief executive officer of the township, in my view, she is the expert and I had no reason to question the accuracy of the information.

Resident and former township supervisor John Petersen reviewed Ms. Gleason’s budget summary and discovered multiple mathematical errors in the report. I learned of the mistakes in the budget information when I was copied on emails to Gleason, along with township supervisor John DiBuonaventuro and resident Ray Clarke.

In review of Gleason’s budget summary, the totals for the General Fund revenue and expenditure summary tables are incorrect. The 2012 budget revenue should be $16,467,175, and the difference vs. the 2011 Forecast is ($141,748). On the expenditure summary table totals, the 2011 Forecast should be $16,916,736 the 2012 Budget should be $16,926,204, and the difference vs. the 2011 Forecast should be $9,468. If you use these corrected totals from the revenue and expenditure tables, similar errors are now contained in Gleason’s summary description. In referring to 2011, Gleason states, “the year is forecast to end $377,000 under budget.” Due to mathematical error, this information is incorrect; the year is forecast to end $355,160 under budget, not $377,000. Gleason states the “General fund revenue is projected to decrease another $130,000 in 2012, for a total decrease of $330,000 versus the 2011 budget.” Correcting the math, the 2012 general fund revenue is projected to be $255,950 less than the 2011 budget, not $330,000.

What does all this mean to us the taxpayer and to the budget process? With declining revenues and increasing costs of our current economic climate, it is more important than ever to account for every dollar. As taxpayers, we trust that the financial information is accurate – isn’t this information checked and re-checked. After all, the township manager’s budget information would have multiple in-house reviews before it goes public, correct. Finance Director, Township Manager, Supervisor Finance Committee, Board of Supervisors . . . all of these people have access to this information before the public sees it. Where is the accountability? Are these kinds of mathematical ‘mistakes’ OK? These errors are in the budget summary . . . are there additional errors in the budget line listings?

Reading the township revenue and expenditure summaries, I find it confusing and difficult to understand. There is not an adequate breakdown of the department expenditures and the account detail worksheets do not provide sufficient explanation (particularly of increased costs). Can the public please have a complete township budget with all details? If you look at the school district, they are far more transparent, providing complete information, including every check written from TESD. The last budget update from TESD was 180+ pages and provided the public with complete information. The township budget is a fraction of the school district budget; should we not expect similar public information?

We were all caught up in the EIT campaign hype over the last month leading up to Election Day. We were inundated with Republican campaign mailers, robo-calls and yellow signs all claiming ‘No EIT’ and then the defense from the Democratic camp. As was the case when I ran for the Board of Supervisors in 2009, the Republican campaign materials implied that if voters elected a Democrat candidate, residents would be in line for an increase in taxes.

Election Day 2011 was only a week ago and we know from the results that Tredyffrin Township will continue as an all-Republican Board of Supervisors and the School Board will be Republican-majority in its membership. Democrats were not elected because they presumably would ‘raise taxes’. So how is it that a week after the election, the Republican Board of Supervisors present a budget that contains a 6.9% tax increase?

There were two 2012 township budget workshops, late August and October 1. The supervisors would have known that a tax increase would be required for 2012. Rather than indicate or suggest the possibility of a 2012 tax increase, the supervisors choose to wait until after Election Day. And the Republicans said it was the Democrats who would raise taxes . . . guess this is ‘politics’.

Between the tax increases from the township and the school district, what do you guess the overall increase will be for the Tredyffrin taxpayer . . . 10%, 12%?

 

No EIT for Tredyffrin Easttown School District in 2012!

November 15, 2011
48 Comments

Based on Ray Clarke’s notes below from the Finance Committee and the School Board meeting on the Earned Income Tax, sounds like it was quite a night! First off, the big news to report — there will be no EIT voter referendum question on the April primary election ballot. The same two people, Kevin Mahoney and Anne Crowley, favored taking the EIT to the voters as they voted similarly in October 2010. Please read Ray’s comments and I would like to hear from others who attended the meeting last night.

A couple of fascinating school district meetings last night. Bottom Line: a motion to advise the townships of a possible intent to put an EIT on next year’s ballot was defeated 7:2 (Mahoney, Crowley).

My own take, but watch the action for yourselves….

The usual arguments were rehearsed by both Board members and audience, but the ones that I felt carried the day were that “now is not the time” and “we’re going to try really really hard to get Harrisburg to find another of your pockets to take the employee pensions from”. Dr Brake had a well-reasoned position that also made the point that the current political climate would not allow a thoughtful debate and the Board could avoid “roiling the community” further by not putting it to referendum now.

But that was not what kept this audience member awake. Just about every board member (campaigning or not) berated the political machine for the campaign tactics.

Dr Brake contrasted legitimate “contrast pieces” with “offensive” “making stuff up”. Then Republican operative Tom Colman launched a defense of the election tactics, and acknowledged that he had orchestrated a personal campaign against the Act 1 tax in 2007. That brought up Jenny Wessels to state that she had been miss-represented in the campaign and to commend the Board for their non-partisan approach. Then followed Debbie Bookstaber, in a long soliloquy berating her colleagues for their political statements. Must see TV!

A few interesting audience comments:

Ed Sweeney: strongly against an EIT and wants the tax policy to attract the “right people” (high income earners?)

Melody Price: a thoughtful appeal for a balanced approach that considers all potential solutions.

Unknown audience member: “three words – Taxed Enough Already” (that was helpful!)

Barbara Morosse: There is more expense for the district to cut, including through teacher salary structure changes.

Notable board member comments:

Rich Brake: wants to completely recalibrate the teachers’ contract, do away with the matrix.

Kevin Mahoney: a) lest anyone thinks that companies are not interested in property taxes, consider the multi-million dollar GSK assessment appeals, b) maybe school districts should be freed up from rules that limit investment options to be able to earn returns like UPenn endowment’s 15%

Betsy Fadem: Don’t think we can use the Fund Balance to balance the budget because the School Board has committed it….

Which brings me to the evening’s opening act, the Finance Committee. Four things to remark:

[1] The minutes that Pattye had puzzled over were corrected: the administration proposals for the $1.3 million funding restoration were not authorized by the last Finance Committee but referred back to the Education Committee.

[2] A discussion of the Fund Balance commitments, which include $7.6 million of “vested employee services”, along of course with $15.4 million of “future retirement plan stabilization”. The accounting is much different to the GAAP I’m used to, but here’s my takeaway:

  • These amounts are based on arbitrary board policies
  • The PSERS commitment is based on the next five years, the employee services on almost but not quite the full lifetime liability
  • They are only commitments to the extent that it takes a Board vote to change them
  • Few if any other school districts have a commitment for vested employee services, and pay as they go.

So, “vested employee services” appears to be another way to sit on taxpayer money without fully revealing what the actual liability is, what the additions and payouts are from year-to-year, and where the funding for the liability comes from. And, in general, the PSERS liability is going straight up for the next 5 years, holds flat for the next 10, and then starts to decline. So would the policy mean that the district sequesters say $25 million of taxpayer money until that decline starts in 2025 or so?

I think that Mahoney committed the next Finance Committee to review the policy. At the very least it would be good to know exactly how all this works, and why it is that TE policies need to be different from other school districts.

[3] Groundwork laid for the ongoing property tax-to-the-max strategy: next year’s Act 1 Index estimated at 1.7%, Exceptions for PSERS and special education 1.7%, total property tax increase 3.4%, $2.9 million.

[4] The fourth thing was …… err ……. ooops …… oh yes:

The Finance Committee approved a contract with a marketing agency for selling promotional space on district property. The net annual revenue to the district is projected to be $160,000. The agency was the only one that responded to the district RFP. The contract states that the District has to approve all content, sponsors, advertisements; in the meeting it was stated that the Board approval is required.

If I think of any else, I’ll add it as a comment.

Vines are Strangling our Trees & Need Help . . . A great job for politicians!

November 10, 2011
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Now that the election is over and the committee people, the candidates, elected officials and volunteers have had a few days to recover, I can’t think of a better way to refocus on the community than to volunteer this Saturday, November 12, 9 AM – 12 Noon to help the Open Land Conservancy.

The Conservancy is once again holding a series of winter “Vine Days” to continue the successful campaign against invasive vegetation.  This would be a great bonding experience for the community to see our supervisors, school board members, former candidates and volunteers to all come out for this worthy cause!

An excellent opportunity for volunteers to make a visible and lasting impact on the Preserves.  Come check out the 600 trees that the Open Land Conservancy volunteers just planted! 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. If you have Boy Scouts and Girls Scouts in the family bring them along — there’s plenty to do for everyone!

The volunteers continue to wage their successful campaign against the invasive vines that are harming the tree development in the 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.

This Saturday’s ‘Vine Day’ will focus on the George Lorimer Preserve, located on North Valley Road in the Great Valley part of the township. The Lorimer Preserve encompasses 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. Honeysuckle, choking a tree.

Directions to the Lorimer Preserve from Paoli, take North Valley Road, cross Swedesford Road and keep going on North Valley Road about ½ mile to the parking lot on the right. Volunteers are asked to meet in the parking lot at 9 AM.

According to the conservancy, the Lorimer Preserve receives the highest number of visitors and is the most easily accessed.  However it is also the most affected by invasives and needs your help! Any questions, contact Open Land Conservancy Board member Ray Clarke, 610-578-0358.  Ray provides the following update on the Lorimer Preserve:

We are just finishing up the planting of 600+ native trees and shrubs in an area of Lorimer that a few years ago was nothing but vines and invasive bushes. Previous Vine Days allowed us to clear the way into the mess to then take out the bushes, and now we’ve had fabulous help from many sources to plant the trees. Particularly:

  • Volunteer tree planting groups from local corporations – Siemens Medical and Vanguard.
  • Trees and deer protection provided by a grant from the TreeVitalize program, funded by proceeds from the Philadelphia Flower show run by the Philadelphia Horticultural Society
  • Coordination and expertise from Green Valleys Association
  • A major donation by a private individual
  • Lots of effort by OLC volunteers

Like the “public-private partnership” that our Board of Supervisors candidates were so keen on! (Although of course, OLC is not a municipality).

The Vine Day on Saturday will spread out from this site, free up more trees and growing space for all the eventual offspring of the oaks, maples, hackberrys, sycamores, etc. that we just planted.

If anyone can’t make this Saturday, but wants to help, there will be Vine Days in other preserves on the second Saturday of every month, through April. Locations to be posted on the web site: www.openlandconservancy.org

 

Is EIT the answer for T/E School District — Tax Study Group Presents their Pros & Cons

November 4, 2011
13 Comments

Election Day is Tuesday and based on campaign mailers, signs and general rhetoric that we were voting on the Earned Income Tax. The EIT is not an issue for us on Election Day, at least not this election.

Much of this campaign discussion on the EIT stems from T/E School Board decision to form a Tax Study Group as part of their budget development process. The goal of the committee of eight volunteers, including Michael Abele, Michael Benning, Rita Borzillo, Marie Falcone, William Mullin, Terri Smith, Andrew Snyder and Edward Stevens, was to study the effect that an EIT would have on the residents and the school district and provide the pros and cons.

The Tax Study Group held 5 public workshop meetings and presented their findings yesterday at two public meetings. Based on the Tax Study Group’s findings, the school board will make a decision whether to include the EIT question on the April 2012 ballot. If the EIT question is placed on the primary election ballot in April, community members will hopefully be able to make an informed decision.

Although I was not able to attend the EIT meeting due to a prior commitment, it is my understanding that both were well attended. I am on record as saying that I believe the process for a fair and open discussion of the Earned Income Tax has been tainted by the last few weeks of campaign politics from school board candidates. Serious economic issues are going to continue to affect our school district and cause many challenges to the school board facing the 2012-13 budget and teacher negotiations.

If you were unable to attend either of yesterday’s public meetings by the Tax Study Group, the EIT presentation will be aired on TETV, Comcast Channel 14 and Verizon Channel 20 at 9 PM daily from November 4 through November 14.

Ray Clarke attended yesterday’s Tax Study Group and offers his candid remarks from the presentation:

The Tax Study Group matinee played to a packed house – probably a hundred or more residents in attendance. I whole-heartedly encourage anyone interested in the fiscal and educational future of T/E to attend the evening performance. Of the 30 slides, two thirds are devoted to background – really important to place the discussion in its proper context. The pros and cons of the EIT were fairly presented, although not weighted nor compared directly to alternatives (it was not the TSG mandate to do that). The audience seemed engaged throughout, and the questions at the end added much to the discussion.

The elephant in the room: what will be the attitude of the Townships? Will they take 50% of any money the voters may want to apply to their children’s education? Easttown and Tredyffrin may be very different, and I think we all need to have a very long memory about campaign promises made by Tredyffrin Supervisors. (The $30 million TESD fund balance did not go unremarked as a short-term support).

A lot of hard work and thought went into the research and analysis, and in developing a communication that is accessible to everyone. Shows how important the process was and what a travesty it is to try to short-change it. Hopefully many voters will be able to see the evening performance or the video and draw their own conclusions.

St. Davids Golf Club, Burned-out Light Bulbs & TE School District Finances!

October 18, 2011
34 Comments

I attended last night’ Board of Supervisors meeting and my friend, Ray Clarke attended the T/E School District’s Finance Meeting. Following my update on the supervisors meeting, please read Ray’s comments.

The agenda for last night’s supervisors meeting went quickly and there was no ‘new matters’ from board members. I was prepared for ‘new matters’ from citizens with two topics. Based on the supervisors meeting of October 3, I asked Supervisor Olson (Bob Lamina and EJ Richter were absent) if St. Davids Golf Club had been contacted. Olson deferred to Mimi Gleason who said yes, the club was contacted and said it was a positive conversation. I asked about the timeline for response from the club re the sidewalks and her response was that there was no time limit. In other words, I said the issue remains ‘open ended’ to which she responded yes. Bottom line, it may have taken us 21 months to get to this point in time with St. Davids Golf Club, but apparently nothing is going to move forward anytime soon, in the way of enforcement, etc.. Was the only way to receive an update (status) on the sidewalks at St. Davids was to ask the same question at every Board of Supervisors meeting? I guess that is correct.

Second citizen matter from me last night was the burned out light bulb situation in the township. Although I have focused on Chesterbrook and Duportail on Community Matters, I have noticed other area lights out (Old Eagle School Rd. as an example). My questions produced some interesting facts:

  1. The township (residents) pays PECO per light post, regardless if there are electrical issues or if the lights are working or not.
  2. The township has a yearly maintenance contract with Lenni Electrical to change light bulbs. Some have suggested that perhaps the township was trying to save money and maybe wasn’t calling the company for maintenance as a way to avoid service call expenses. Well, I discovered that the township (residents) pays a flat fee regardless of how many (or how few) times they come out to change the light bulbs!
  3. The pink ribbons are placed by township staff to indicate to Lenni Electrical where light bulbs need replacement. I noticed driving to the township building that there are pink ribbons on street lights that have working light bulbs and questioned why weren’t the ribbons removed when the light bulbs were changed? Obvious, I would think. According to Steve Burgo, township engineer, they know that this is a problem and are working with the contractor to get them to remove the pink ribbons.

Mimi cited ongoing electrical problems on Chesterbrook Boulevard as the cause for the non-working light bulbs. I suggested that the electrical problem with some of the Chesterbrook lights has existed for 27+ years. The response from Mimi Gleason, was that they were working with PECO and that State Rep Warren Kampf had been called for assistance.

After leaving the township building, I decided to do a more scientific study of counting the burned-out light bulbs on Chesterbrook and Duportail Rds. I drove down one side of Chesterbrook Blvd. to Valley Forge Road, turned around and drove back, counting as many of the burned-out light bulbs as I could find. This 2-mile (or less) stretch of roads doesn’t have 19 burned-out light bulbs, there are 37 non-working street lights.

Am I the only one who has a problem with this? We are all taxpayers and our money is paying PECO for these lights and our money is paying Lenni Electrical change the light bulbs. Where’s the accountability on this issue? I remain hopeful that at least one of our supervisors will take up the cause of township light bulbs.

Moving on to last night’s TE School District Finance Committee meeting. While I was busy sorting through the burned-out light bulb situation, Ray Clarke was at the Finance Committee meeting. He offers the following comments with his own editorial remarks. As always, I am appreciative that Ray not only attends the school board meetings, but takes the time to detail his thoughts for Community Matters. Thanks Ray!

The TESD Finance Committee meeting turned up a few points of interest on Monday night.

  1. The district’s 2010/11 financials got a nice boost from the decision to self-insure healthcare benefits coupled with better than projected claims experience. That turned out to be a $1.3 million favorable variance, which in turn generated a $0.9 million surplus for the year. So our Fund Balance, combined with an additional $0.5 million which under previous accounting rules was separate (I think), is (6/30/2011) now up to a munificent $31 million. (Note, I came in slightly late to this discussion, and there was no handout on this, so my numbers may not be precise)
  2. Also on the plus side, the Committee discussed what to do with the restoration of Corbett’s proposed cut to the state reimbursement of 50% of social security taxes, worth $1.3 million this year, which came in after TE’s 2011/12 budget was passed. The administration proposed ~$200K for postponed text-book buys and ~$300K mostly for technology spending. This generated a lot of debate, essentially asking the question: what is going to be the impact of, say, $60,000 for piloting applications for iPads, versus the current technology environment. To my mind this is the tip of a much bigger iceberg: how will we use technology spending to improve the analytic or creative skills of our students? If we need a pilot to answer that question, fine, but should we spend $60,000 for a pilot? It was agreed that this would be subject for future Board discussion.
  3. Important upcoming dates: November 3rd for the Tax Study Group’s presentation of the pros and cons of and EIT, and November 14thfor a special School Board meeting to consider notification of the intent to request a referendum on the April 24th ballot. Some important things (from my perspective) to bear in mind here:The official financial projection model is being modified to remove the assumption of a Act 1 index 1.7% property tax increase for 2012/13, so the base case is not both a property and an income tax. The base case gap for 2012/13 is currently $5.5 million. (It’s not clear that the model has been updated yet for the actual healthcare cost and fund balance outcomes.)
    1. The TSG’s approach is to present the features of an EIT independent of the alternatives; the Board (and potentially voters) will have to decide the merits of those pros and cons relative to its own assessment of the pros and cons of alternatives like cutting educational programs, raising property taxes or – for a few years – using some of that Fund Balance.
    2. Unknown actions of the townships, which would be entitled to claim up to 50% of the revenues from a voter-approved residential EIT, loom large. How highly would the BOS weigh education versus the township’s own needs?
    3. Of course, totally moot unless the School Board votes to ask the question, and the voters approve it, since there is no sign that the townships are mulling and EIT of their own.
    4. Of course, the Republican candidates for the School Board have already decided the EIT question for themselves without waiting for the TSG analysis. Presumably they are part of the minority in TE that a) does not pay the tax already, and b) has an income greater than 40% of the assessed value of their house, so would rather see any gap (after using some of that fund balance) made up from cuts in the education program or property tax increases.

On the TEEA contract: the district is required by the state to begin negotiations for the next contract in January. The way this all gets going is for the union to send a letter to the district at that time.

How creative can the parties be? Is there a way to trade-off much lower healthcare premiums/benefits (that encourage personal accountability) for maybe allowing step increases, keeping the total compensation cost within at the very least the increase modeled in the district’s current projection?

T/E School District’s Tax Study Group Kicks Off Earned Income Tax Process

September 15, 2011
27 Comments

The T/E School District held its first meeting of the newly created Tax Study Group. Thank you to Ray Clarke for attending and providing Community Matters with his personal observations and comments. I spoke at length with Ray in regards to the meeting. Based on our conversation and Ray’s notes below, it looks like the Tax Study Group could use the assistance of a tax attorney. If there is someone living in Tredyffrin or Easttown with that expertise, perhaps they could offer their assistance in the school district’s EIT project.

Below are Ray Clarke’s comments from the Tax Study Group meeting:

The kick-off meeting for the TESD Tax Study Group (TSG) was held on Thursday. It was a long meeting, focused on bringing the TSG up to speed on basic district financial and demographic information. The TSG clearly has a long way to go, but at the end some organization emerged that leaves me hopeful for the outcome. I think it will be important that they formalize a way to get direct community input. Some observations:

  • The TSG was supported by Art McDonnell and the same consultant from the PSBA that worked on the 2006 exercise. A majority of the Board was in the audience, plus Tredyffrin Supervisor Mike Heaberg and about half a dozen community members.
  • The core of the meeting was a presentation of basic district data by the consultant. Hopefully the large binder will be a good reference, but more focus might have helped. Also, much of the data was dated and there were a disappointing number of mistakes – one important one alertly caught by Ed Stevens of the TSG. But, good info on the district’s personal income and assessed values, both trends and distribution, which will definitely be important factors in the analysis.
  • My selection of good TE rules of thumb and factoids for armchair analysts (it was stated that the materials will be available on the TESD web site):

– $2.3 billion of personal income

– $5 billion of property assessment, distributed according to the 80/20 rule.

– Median household income for Tredyffrin ~$100,000, for Easttown ~$130,000

– 25% of the TE population under 18;

– 16% over 65 (both percentages higher in Eastown and lower in Tredyffrin).

– Huge bubble in earned and personal income in 2007 – up more than 30% over the previous year.

  • TSG organization: William Mullin emerged as the organizing force.
  • No meeting on September 29th; other meetings will last from 7 to 9:30pm. Possible final presentation to the community on November 3.
  • The objective of the TSG was reinforced many times: to present a set of Pros and Cons to the Board for consideration. In my opinion the TSG will provide the greatest service if it ensures that the set is driven by data and analysis, not anecdote.
  • One important area for up-to-date, authoritative data: what will be the impact of an EIT on Philadelphia workers? Can TE levy an EIT on those wages, or otherwise get any benefit (gaming revenues?). Under what conditions, and what are the (quantified) odds of those conditions applying? This will have an important impact on the possible revenues and the number of residents affected.

Tredyffrin Township Budget Workshop & T/E School Board meeting updates

August 24, 2011
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Monday was township’s budget workshop as well as the T/E School Board meeting. I attended the school board meeting and fortunately for us, Ray Clarke attended the budget workshop. Thank you Ray for attending and for providing your notes to Community Matters readers.

The long-range budget and economic situation continues as a major discussion of the school board directors. During the school board meeting, we were reminded of the Citizen Tax Study Group. The group was set-up to study the “possible effects of an earned income tax and presenting research to the school board and community”. The Tax Study Group meetings are open to the public. Here are the meeting dates and times from the T/E school district website:

Thursday, September 8, 2011 – 7:00 p.m.

Thursday, September 29, 2011 – TBD
Thursday, September 15, 2011 – TBD
Thursday, October 6, 2011 – TBD
Thursday, September 22, 2011 – TBD
Thursday, October 13, 2011 – TBD

Based on Ray’s notes from the township budget workshop, we can certainly see that our township is not exempt from the worsening economic climate. Township staff and services have seen major cuts so I’m not sure how the supervisors are going to manage to hold the line on no tax increases. On the revenue side, we do not see any significant commercial real estate transfers in the near future, so …what’s the answer?

According to Ray, there will be another township budget workshop (date not confirmed) that will focus on capital projects. This budget workshop had no mention of the township building’s HVAC system — I remember discussion between the supervisors and Steve Norcini that there were major problems with the current system so it will be curious to see if the HVAC system is on the capital project list at the next budget workshop.

Here are Ray Clarke’s notes from the township budget meeting:

The Township held a Budget workshop on Monday night to present a base case context for development of the 2012 budget. A good event – short, focused, and with significant implications – it was disappointing that very few residents attended. My takeaways follow; I recommend that anyone interested pick up a copy of the materials, hopefully Monday’s extras are still available.

1. The slumping economy is taking its toll on the Operating Statement. For 2011, instead of the budgeted small surplus, there is now a projected deficit of $422,000. Revenues are unfavorable to budget by $373,000, due essentially to a $191,000 shortfall in licenses and permits (especially a mis-budgeted road opening rate and volume??), an $87,000 shortfall in transfer taxes and a $77,000 shortfall in other revenues like camp fees. Expenses are unfavorable by $96,000, with $205,000 overspending in supplies (road salt), offset by $115,000 favorable in personnel costs.

2. Things are likely to get worse next year, based just on what’s knowable at the present time. Revenues will be down a further $124,000, largely due to reductions in state transfers. That’s before any impact of a reduction in real estate assessments. (And of course, before any changes in tax rate). Expenses will continue upward, driven by an increased pension contribution (due to a minor reduction in assumed return to a level that’s still ridiculously high……), offset by a hoped-for better snow clearing experience and reduced repairs and maintenance. Now, the key here is that all employee contracts are currently being negotiated: the base case assumes no salary increase and the current benefits plan. (A similar approach to that of the School District). I leave it to others to judge the realism of this. The base case does include a 3% increase in contributions to the fire companies. Bottom line: 2012 General Fund Operating Deficit of $667,000.

3. On the capital side, the Township is on track to spend about 60% of the capital budget across all the funds (General, Sewer, Trunk Sewer, Vehicle and Equipment). There are reasons for this; one seems to be that the township always budgets generously to assure that it is correctly positioned for grants. Another might be that we simply don’t have the resources to get done everything that needs to be done. The capital plan information that was presented was acknowledged to be very rudimentary, and it was agreed that another workshop be held (I think a Saturday in early October?) to discuss the projects and priorities in detail.

So, what’s the answer for the Operating Statement? Are there more cuts to be had? Seemingly it would be tough to make the staff any leaner on top of the layoffs of recent years. The crumbling state of the front steps to the township building does not indicate that recent repair and maintenance spending has been effective. Unlike the School District, it’s not clear that there’s much room in benefits. On the revenue side, the property tax rate has been unchanged since 2009 and has increased at an annual rate of less than 1.7% for the last decade.

Paul Olson contrasted recent property tax rate increases in Easttown (my data for 2010, 2011: +12%, +4%) and Radnor (+11%, +9%). Of course, rather than just layer on more property taxes, the net cost to Tredyffrin residents would be lower if the township took a percentage of any EIT that a large number of residents are already paying and that the School District may possibly put to referendum ……

TESD Finance Committee Notes, Including EIT Tax Study Group Members

June 21, 2011
12 Comments
As I was attending the Board of Supervisors meeting last night, I imposed on friend Ray Clarke to attend the Finance Committee meeting. Ray graciously attended and submitted his notes from the meeting for our review. I was pleased to see that the District released the information on the custodial outsourcing bid process. It is important for the integrity and transparency of the process, that the public receive the information – and I thank the school board members for providing it.
As Ray details, the 9 members of the EIT Tax Study Group have been chosen and were announced at the Finance Committee meeting. The members of the group include Michael Abele, Michael Benning, Rita Borzillo, Marie Falcone, William Mullin, Terri Smith, Andrew Snyder, Edward Stevens and Lauren Walsh. I am sure that you join me in thanking these community members for agreeing to serve on the tax study group.
As always, thank you for your notes from the meeting Ray — we are all most appreciative!
TESD Finance Committee Notes – Ray Clarke
Some important topics discussed at the Finance committee meeting:
1. This year’s projection. Revenues and expense roughly equal, without the budgeted $1.3 million from the Fund Balance. Helped of course by the PSERS rate reduction and internal programs more than offsetting revenue reduction. Somehow the district again manages to extract more money from taxpayers than is needed, and that will be especially true next year, with the just approved budget set for all worst contingencies. (Included is a just-received $225,000 bill from Blue Cross for 2009 expenses – a hazard of self-insurance [previously T/E was with the County consortium] that speaks to the need for long run funding, see later).
2. Fund Balance commitments. Regulations require the commitment of the fund balance for specific purposes. Previous designations seem to have been much looser and Finance Chair Mahoney is requiring a thorough analysis of the policy in the new context. The previous policy was to designate 5 years of PSERS increases vs the current year for “PSERS stabilization”. Which arithmetically means that the fund balance can only be accessed for stabilization when the cost starts to diminish (out in 2025 or so). Alternatively, should the balance be used when the increase is in fact ramping up, to mitigate the increase? Alternatively, should we not in fact assume that the state will have to come up with alternative funding anyway, and so return T/E’s money to the local property taxpayer? There is not enough money for the full five-year increase, as it is now anyway. Plus there is a need for a mechanism to smooth out health care costs in self-funded situation. An important issue.
3. Custodial out-sourcing. There were four bidders, all of which invested considerable time in their bids. The lowest bidder was Aramark, with a “base bid” of $1.3 million which was at least $500,000 below the others. The Administration concluded that the total cost would have been about $1.7 million, which they compared to the projected in-house cost of $2.6 million. If I have it right, the TENIG overtime changes and salary increase waiver (all TENIG members, not just custodians) closes $450,000 of the $900,000 gap. Of course, in future years as TENIG rates increase and PSERS rates escalate, the cost comparison for the out-sourcing solution will become more compelling. Hopefully all sides will continue to work on a satisfactory long run solution.
4. EIT study group. Members announced: Michael Abele, Michael Benning, Rita Borzillo, Marie Falcone, William Mullin, Terri Smith, Andrew Snyder, Edward Stevens, Lauren Walsh. As Pattye has reported, the selection process was based entirely on the demographics. Each applicant assigned a random number (1 to 186 total applicants), then the administration started from number 1 and filled up the various categories (6 T/3 E, 4 EIT/ 5 No EIT, 1 retired, 2-3 with school-aged children, 1 business owner, I renter, plus loose “as many age brackets as possible”, and “both genders”. Apparently they had to get down to #150 to fill all the categories. The essays only used to exclude those who had written “grossly inappropriate remarks” (none of those!). The group will meet six consecutive Thursdays starting the Thursday after Labor Day, and hold two “information sessions” for the public. A consultant from the PSBA will provide “information and data”. All meetings will be open to the public and hopefully will be used to solicit ideas for analysis and issues relevant to the Board’s decision on a referendum.

What’s the Price of a Hamburger in T/E? Property Taxes to Increase by 3.77%

June 14, 2011
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In case you have not heard, the T/E School Board voted to approve the final 2011-12 budget last night . . . and yes folks; the residents of TESD will receive a 3.77% property tax increase. The vote count on the budget was 7-2; Debbie Bookstaber and Rich Brake were the dissenting votes. I guess I should have expected this outcome, but was surprised nonetheless. I left the school board meeting feeling that the decision was preordained and that no amount of discussion was going to change anything.

At the June 1 school board meeting, the school board voted to accept the TENIG (Tredyffrin Easttown non-instructional group) union’s agreement amendment for no salary increase for 2011-12. The school board decided not to out-source the custodial service; thus saving $300K in salaries and additionally $150K in overtime costs, for a total of approximately $450K savings to TESD. Many of the custodial staff are T/E residents, so the board decision saved some local jobs.

It was my understanding that at last night’s board meeting, the public would have the details about the custodian outsourcing RFP bidding process – how many custodian companies bid the job, what was the range of their bids, etc. I was disappointed that custodian outsourcing was not on the agenda, nor was there any discussion on the topic. If I want further information, I guess it would require filing a right-to-know request. I am not suggesting that the school board’s choice was incorrect; I just think that the public has a right to know the details pertaining to their decision.

Ray Clarke also attended the meeting last night and I am pleased to offer his notes from the meeting below. You will note that Ray mentions school board member Kevin Buraks comparison of school district property taxes to the cost of ‘hamburgers’. Out of context, his comparison is difficult to understand; so I have included the video clip prepared by Bob Byrne, editor of TE Patch. To understand Buraks comparison of school district property taxes to hamburgers, you will need to click here for the video.

Ray Clark’s T/E School Board Meeting, 6/13/11 Notes

The School Board approved by a 7-2 vote a 2011/12 budget that differed only marginally from the preliminary one, a result of removing the $150,000 contribution from the food service fund, thus increasing the draw from the general fund.

Only Debbie Bookstaber and Rich Brake were consistent in standing up for taxpayers. (On the other side, though, only Kevin Mahoney, Anne Crowley and Kevin Buraks spoke up for the budget – at their peril, though, see below. And, does Jim Bruce ever contribute anything to important issues?).

The increase results in a millage rate calculated to six significant figures (18.6474), in order (as was stated) to capture every last cent of permissible blood from the taxpayer stone. This despite the points below made by most of the board that spoke – regardless of which way they voted!

1. The amount of year’s tax increase does not change the structural budget problem in subsequent years.

2. There is a $29 million general fund balance, earning next-to-no interest, and which will be depleted by less than 7% under the proposed budget (with another 7% contingency for everything including the kitchen sink).

3. Since the preliminary budget, the district has received $1.2 million of union sacrifices. The taxpayer sees no benefit of those.

4. Since the preliminary budget, the state house and senate are working on bills that will likely restore the >$1 million capricious social security reimbursement cut in Corbett’s budget.

5. The district has consistently over the years held the line at the Act 1 Index increase, up until now.

6. The aggregate metropolitan area is is managing with less than two thirds of T/E’s increase.

Crowley sees the maximum increase for 2011/12 as key to maintaining the education program long term, while Buraks likened the TE educational product to hamburger, priced (tax rate? tax amount? spending per student?) just less than Great Valley’s and more substantially below Lower Merion’s. Since the product is arguably at least as good, we should be just fine with increasing the price. The very same argument that the union have used for years to ratchet up compensation and get us into today’s mess!

Let’s just continue this analogy: People chose to live here because they appreciate hamburgers, and they like the value of T/E’s. Increases beyond the competition’s remove that value. They also like that the other customers share their values and that eating with them at the stand enhances the value of the meal, and indeed they volunteer at the hamburger stand to make the product even better. Nothing whatsoever to do with the amount spent for the burgers themselves. Also remember that T/E’s product is inherently better value because it has made lower cost restaurant location choices than, say, LM, and has better scale in its operations than, say, Radnor, and has more non-consuming commercial interests that contribute to its cost.

Another disappointing item on the “Consent Agenda”: the approval of pricing for contracted services for 2011/12. The Board voted to approve 10 pages of supplier prices for mostly special education services but also many facilities contractors, “orthopedic specialist”, lawyers, “schooldude.com”, etc. etc. This information was in the online agenda, but not in the meeting hand out. Why?

But that’s not the point. From the information presented there was no way to tell how prices compared with this year’s or where the spend is likely to be concentrated. We do know that the architect hourly fees are down and the solicitor costs are flat, but what about the rest? There’s a budget strategy to get supplier costs down – how much did this list contribute to that strategy? There is no indication that the Board received any information on which to base their approval of the pricing. Even though there is no commitment to purchase, this just is not acceptable governance practice.

Also: a) A lot going on in Harrisburg; unpredictable, but tending to shift the balance of power towards districts/taxpayers and away from unions, and b) Facilities wants to move forward with a trial rental of Teamer Field on week-ends, and battle lines seem to be forming.

Think End of Winter, Think Spring . . . and Help Save the Trees!

February 17, 2011
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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.

Chester County Open Land Conservancy could use some volunteers. 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, February 19, starting at 9 AM is the re-scheduled Cedar Hollow Preserve ‘Vine Day’. Although the volunteers generally work 3-4 hours, any help that you can offer would be greatly appreciated!

Cedar Hollow Preserve is 67 acres of meadows, woods, rock formations, large sycamore, ruins, Cedar Hollow run, and extensive trail system located in the western Great Valley area of Tredyffrin Twp.

Volunteers are asked to meet in the parking lot at 9 AM. Any questions, contact Ray Clarke, 610-578-0358. All that’s needed are protective clothing, gloves and, if you have them, tools such as loppers, pruners and hand saws to supplement Open Land Conservancy’s supply.

Directions to Cedar Hollow Preserve from Paoli, take North Valley Road to Swedesford Road. Turn left on to Swedesford Road. Take Swedesford Road towards the Great Valley Corporate Center and turn right onto Church Road to the parking lot right, just past St. Peters Road.

Upcoming Open Land Conservancy Events:

Tracks & Trails
Date: Sunday, February 27, 1-3 PM
Location: Cedar Hollow (directions above)
Description: Learn about the behavior of our local wildlife. Explore the preserve – its trails, woods, fields, creeks and rock formations. All are welcome – especially kids! Wear warm clothes and boots for mud.
Questions: Call Jack Chidester, 610-644-5040 office; 610-405-2778 cell; 610-647-5380 conservancy or email: jchidester@chidesterortho.com

Cool Valley Preserve Vine Day
Date: Saturday, March 5, 9 AM
Location: Cool Valley Preserve
Description: 33.2 acres of meadows, woods, extensive trail system through fields and along Valley Creek.
Questions: Ray Clarke, 610-578-0358

Snow didn’t keep volunteers from their work at George Lorimer Preserve on Vine Day in January! Below is a photo of Tim Lander preparing to tackle this tree’s strangling vines and the photo on the right is the ‘after’ photo of the satisfaction of a job well done!

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