Pattye Benson

Community Matters

tax increase

Residents Speak Out about Critical Race Theory with CBS News Videotaping — and TE School Board Approves Tax Increase for 17th Straight Year!

A very long night, the public needed to stay at the school board meeting until midnight for the vote on the 2021-22 final budget. As expected, the taxpayers of TE School District will have the 17th straight year of a tax increase. The board vote was 7-2 in favor of a 2.5% tax increase.

Most of the standing room only crowd had left before the budget discussion and board vote because the first two hours of the meeting was devoted to resident comments regarding racial equity, critical race theory (CRT), the Pacific Educational Group contract with the District, etc.

By my count, at least 29 TESD residents spoke on different aspects of the curriculum and the teaching of diverse perspectives on history. Local newscasters from CBS attended the meeting and videotaped a segment for the 11 PM evening news.  Here is a link: https://philadelphia.cbslocal.com/2021/06/14/tredyffrin-easttown-school-district-meeting-on-new-race-curriculum-draws-full-house/

I would encourage everyone to watch the school board meeting when it is available online and really listen to the words of the many residents who spoke. But equally important, I would encourage you to listen to the remarks of two school board members which followed the resident’s comments.

The first board member to speak personally attacked residents with which he disagreed, disrespected several people in the audience and a political rant comparing the board meeting to the January 6 violent attack on the US Capitol building.

The TESD Policy 9370 Code of Civility for Board members, states in part the following words, “The School Board expects its members to be role models of civility while attending District sponsored events on or off District property. The Board expects its members to promote a respectful environment ….“. Policy 9370 further states, “Individuals who believe that a Board member has violated this Policy may report the perceived violation to the Board President or Vice-President. Policy violations will be handled on a case by case basis …”.

In stark contrast, the words of school board director Scott Dorsey were thoughtful and with meaning — he gave me hope for the future and I thank him.

Will the TE School Board Break the Cycle of Annual Tax Increases? The Countdown is on!

The countdown is on for the final approval of the TESD 2021-22 budget. At the finance committee meeting on Monday, June 7, 7 PM, the budget specifics will be reviewed, and the school board will vote on the District’s 2021-2022 final budget and property tax rate at the June 14 regular board meeting.

It is unclear why the upcoming finance committee meeting on June 7 remains virtual but that the school board meeting on June 14 is in-person at the high school!

In early 2021, the school board voted to approve a resolution certifying that the tax increase for the 2021-22 budget will be 3% or lower. Should the District’s final 2021-2022 budget include any tax increase, it would mark the 17th straight year of tax increase to its residents.

As the 2021-2022 budget process moved forward this year, there are board members committed to a zero tax increase – most notably Scott Dorsey. On flip side, there are school board members who favor the highest tax increase possible. Although Scott has championed the zero tax increase cause during his tenure on the board, he (and the taxpayers) never enjoyed majority support.

To watch the video of the May finance committee meeting, click here. About three hours into the meeting (watch at 3.04.40 – 3.04.50) a finance committee member comments that the state says we are “not taxing enough” to our residents. All I can say is thank goodness for the Act 1 index which limits our maximum tax increase.

We saw what happened last year – amid the pandemic most of the board ignored the public and voted instead for a tax increase! Will the vote on June 14 finally break the cycle of the annual tax increase? We’ll know in a couple of weeks, and in person!

For those of you that follow Community Matters, you will recognize the name Keith Knauss as a regular contributor. Keith is a former school board director of Unionville-Chadds Ford School District, serving for many years, several as its president. UCFSD and TESD share striking similarities in rankings, test scores, etc. As a result, Keith follows our District, particularly its budget process and sent a detailed email regarding finances to the TE School Board last week.

Keith provided me a copy of his email titled “District Financial Programmatic Decisions Based on Quicksand” offering that it could be shared on Community Matters (see below). His message is clear and direct to the school board but will it make a difference? Keith points out that all deliberations, by law, must be made in public so that the public can provide feedback. Wouldn’t it make sense to have the June 7 finance committee meeting in person!? Did any of the school board bother to respond to him?

District Financial and Programmatic Decisions Based on Quicksand

To: TE School Directors

From: Keith Knauss

This note may help you with your current budget deliberations.

Each year your administration presents the board with revenue and expense numbers for the upcoming school year. They are supposedly their best estimates of revenues the district will collect and the expenses that will be used for the education of the children over the next fiscal year. Your job, which you’ve already begun, is to bring the budget into balance by either cutting programs to reduce expenses or increase revenue by either increasing taxes and/or user fees. Your deliberations, by law, must be made in public so the residents can provide feedback.

  • Currently, you and the public have been presented with budgeted revenues (before any tax increase) of $150.2M.
  • You and the public have been presented with budgeted expenses of $156.7M.
  • That leaves you with a $6.5M hole to fill to achieve a balanced budget.
  • That’s a pretty large hole to fill and the situation cries out for you to raise taxes to the maximum amount allowable (3%) to bring in an additional $3.6M to partially fill that $6.5M hole.
  • In the end, after raising taxes by 3% you’ll close the budget gap by using $3M from your savings account which is officially called the Fund Balance.

In summary: The administrators, using their wisdom and experience, supposedly gave you and the public their honest estimates of revenues and expenditures for the next fiscal year. You are deliberating before the public on tax increases, user fees, program cuts and use of savings based on those budget numbers.

But what if the administrators are not very good at estimating or, worse, are purposefully presenting a false financial picture? What if the administrators have a history of underestimating revenues and overestimating expenses so as to present a bleak financial picture scaring the board and public into either cutting programs, instituting user fees and/or taking the maximum tax increase possible?

To see if there is any evidence of previous fictitious budgeting we can examine the latest two independent financial audits – 2019-20 and 2018-19. The audit is the only place where the budget numbers used to justify taxation are placed side-by-side with actual year end results. How did the administrators do in 2018-19?

As can be seen from the graphic above, budgeted revenues were underestimated by $2.4M and budgeted expenses were overestimated by $2.2M for an aggregate error of $4.6M. To put the $4.6M error in perspective, that year’s tax increase of 2.4% brought in an extra $2.6M. If the board and public had better budget numbers they could have contemplated a lower tax increase, no tax increase or even a tax decrease.

How did the administrators do in 2019-20?

As can be seen from the graphic above, revenues were underestimated by $1.6M and expenses were overestimated by $5.0M for an aggregate error of $6.6M. To put the $6.6M error in perspective, that year’s tax increase of 2.6% brought in an extra $3.0M. If the board and public had better budget numbers they could have, again, contemplated a lower tax increase, no tax increase or even a tax decrease.

What about this year – 2020-21? The fiscal year won’t be done until June 30th and the audit won’t be available until December. However, the administration has already indicated their budget numbers will have underestimated revenues and overestimated expenses by at least $1.8M.

Bottom line:

  • School directors make taxation and program decisions based on revenue and expenditure estimates supplied by the administration.
  • The administration has a history of providing inaccurate revenue and expenditure estimates so as to make informed budget decisions impossible.
  • The board should ask probing questions to determine whether the revenue and expenditure estimates for the upcoming fiscal year are a true picture of expected results or whether the estimates are “padded”.
  • The board should make the public aware of how inaccurate revenue and expenditure estimates can adversely affect taxation and educational program decisions.

Feel free to contact me for further clarification or comments.

Ignoring Community Outcry, TE School Board Approves 2.6% Tax Increase, the Elimination of ERB Testing & Salary Increases to Administrators

The voices of Tredyffrin Easttown School District residents were unified in their message to the school board. It took the District solicitor 1-1/2 hours to read into public record over sixty well-written, meaningful comments from residents and far less time for the School Board to ignore!

Resident comments focused on the District’s proposed 2020-21 budget, the proposed 2.6% tax increase, the elimination of the ERB testing as a cost-savings measure and the administrator raises. One lone resident supported the proposed budget; the remainder of the comments loudly and eloquently opposed.

To the many residents who spoke out during the 2020-21 budget process, thank you. Your collective voices do matter but, sadly, not to the TE School Board. Although technically the budget vote occurred during the meeting, it could have easily occurred before the meeting even started! Elected to serve the residents of the Tredyffrin Easttown School District, the Board remained unmoved by the outcry from the community.

At midnight, the School Board approved the 2020-21 budget (7-2) with a 2.6% tax increase – the largest increase permitted this year, marking the 16th straight year of tax increases to T/E residents. The Business Manager and some on the Board actually had the audacity to mention that it was the lowest tax increase in years – the truth is that 2.6% is the maximum tax increase permitted by Act 1, making those remarks ridiculous!

I would be remiss if I did not salute TE School Board director Scott Dorsey, the only real voice for the community. From the start of the budget discussion in January, Rev. Dorsey declared his opposition to any tax increase. Again, last night he highlighted the additional suffering in the community due to the pandemic – the increased unemployment, the struggling small businesses, etc. but gained no support for a zero tax increase. We heard you Rev. Dorsey and your words mattered to this community.

Although the proposed budget materials clearly listed that ERB testing (and associated $85K cost) as a cost-savings strategy, several Board members argued that the elimination was not a strategy to save money. To the viewing public, the remarks were ridiculous (and untrue). Nonetheless, with the approval of the budget, the District eliminated ERBs for the 2020-21 year.

In part, my comment to the School Board read, “Eliminating ERB testing is eliminating accountability…” It was no surprise to hear that TEEA (the District’s teacher union) supported the removal of ERB testing. There was much talk that that the elimination of the ERBs was for the 2020-21 school year only, leaving open the possibility of the testing to return the following year. If anyone believes that there is a remote chance that ERBs will reappear in future budgets, I think there’s a Brooklyn Bridge for sale.

Another consistent remark from residents was opposition to administration salary increases and bonuses for 2020-21, asking for fairness and shared sacrifice n the budget. A number of residents cited the past failings of the Business Manager and called for his removal. Not surprising there was no response from the School Board and Art McDonnell continues as the District’s Business Manager with a raise and bonus. All Administration, Supervisory and Confidential employees will receive salary increases for 2020-21.

Because of the Covid-19 crisis, we are all suffering. Residents have lost their jobs, and every segment of our economy, including our local small businesses, are feeling the effects of the pandemic. Almost all of us are in worse financial shape and a tax increase under these conditions was wrong.

Our voices should have mattered — Shame on the TE School Board for ignoring the residents and shame on the School Board for approving the maximum tax increase of 2.6% and eliminating the ERBs.

The Clock is Ticking Down to TESD Budget Vote, Monday, June 8: Includes 2.6% Property Tax increase, Administration Salary Increases (Business Manager +3.1%) and Elimination of ERB Testing

T/E School Board votes on the 2020-21 final budget on Monday, June 8, 7:30 PM. Due to Covid-19, the meeting is held virtually — to access the meeting visit the T/E School District website, www.tesd.net.

Last chance to have your voice heard as the clock ticks down – Send your public comment to the school board at virtualboardcomment@tesd.net If you sent a comment prior to the June 1 Finance Committee, I suggest that you send another comment! Comments must reference Priority Discussion topic Final Adoption of the 2020-21 Budget and must be received before 6 PM on Monday, June 8. Make sure you include your name and township of residence (Tredyffrin or Easttown).

As it now stands, the District budget includes a 2.6% tax increase – the largest increase permitted by Act 1 guideline. Should the School Board approve the 2020-21 budget with a tax increase, it will mark sixteen straight years of a tax increase to the District’s residents. How does the School Board respond to raising property taxes to people who are losing their incomes?

At a time when residents have lost their jobs, and every segment of our economy, including our local small businesses, are feeling the effects of the pandemic, could the School Board at the very least ensure no increase in property taxes. Most all of us are finding ourselves in worse financial shape — freezing property taxes for District residents should be more than a nice thought!

At the Finance Meeting on June 1 (click here for video), it was obvious that I was not alone in my concern about the proposed tax increase. At the end of the meeting [and only stopping because of video time constraints] at least twenty-five resident comments were read — and all but a couple asked for no tax increase and/or no to the elimination of ERB testing.

To his credit, Scott Dorsey has remained a constant, the only school board director who echoed the words of residents and asked for a zero tax increase in the 2020-21 budget! Thank you Rev. Dorsey for understanding that we are all suffering because of the Covid-19 crisis and that now is not the right time to raise our property taxes. Two other board members, Michele Burger and Mary Garrett Itin, asked for a 2% tax increase with the remaining six members apparently in favor of a 2.6% tax increase.

As noted in the 2020-21 budget agenda materials (see pgs. 311- 314), the School Board will vote on salary increases and bonuses for the District’s administration, supervisory and confidential employees. Thank you to resident Ray Clarke for providing commentary on the proposed employee increases:

Once again, the final fiscal year Board materials contain proposed salary increases and bonuses for Administration, Supervisory and Confidential employees.

And, as usual, there is no information provided to allow the Board to assess the appropriateness of the increases, and perhaps we now see the reason why.

Increases have moderated this year, but the increases for employees in all these categories still add $141,987 to the annual budget, moderated a little by the replacement of some Supervisory/Confidential personnel by lower paid employees. The straight average of increases for personnel in place both last year and this is 2.25%. Increases are mostly in the 2% to 2.5% range, with the maximum of the Act 1 Index 2.6% being received by a few.

Note that the total of Administration increases still exceeds the 1.7% stipulated in the Act 93 contract. At a time when other school districts are freezing salaries, it seems unlikely that this exceptional increase is required by “the competitive job market”.

However, there is one exception to the Index limit, and that is listed only in the Employment Agreement section of the TESD website. No increase comes close to Business Manager Art McDonnell’s 3.1% annual increase to $216,427/year, stipulated by contract, regardless of the Act 1 Index, inflation, or taxpayers’ ability to pay. This increase is worth $6,507, and amounts to 4.6% of all the salary increases.

These increases average at about $2,000 a year for Supervisory/confidential personnel and $3,500 for Administration. I hope that the Board considers the appropriateness of these substantial additional payments at a time of such economic uncertainty.

Adding insult to the residents, who are struggling in the midst of an uncertain future and a proposed 2.6% tax increase, is that the School Board would consider salary increases that exceed the Act 93 contract for administration, supervisory and confidential employees. And further, that TESD Business Manager Art McDonnell will receive the highest salary increase, +3.1%!

There are school districts in Pennsylvania that are freezing employee salaries as a cost-savings measure for 2020-21. Not only is TESD not freezing the salaries, the Board’s vote to approve will increase salaries above the contractual agreement. School Board, how is this possibly fair to the taxpayers?

The administration, supervisor and confidential employee increases will add $142K to the District 2020-21 budget with no discussion to freeze the salaries for one year. Yet on the other hand, the proposed budget includes the elimination of ERB testing to save $85K as a cost-savings measure. Budget savings should not come at a cost to our students!

A form of assessment to guide instruction and reading, ERB testing has been used in TESD for many years to measure students’ progress and to identify the strengths and weaknesses of the District’s curriculum. TESD has no other tests that give grade level snapshots of students’ performance in reading and math – it is the only test of its kind!

ERBs are particularly important given the distance learning challenges faced by District families because of Covid-19. Parents need to know that their children are on track academically and many support the continuation of ERB testing as evidenced by the number of comments previously received by the District.

BUILD T/E, an advocacy organization in TESD for parents of children with learning differences, fully supports ERB testing in the District and opposes its elimination in the 2020-21 budget. Click here for BUILD’s latest blog post concerning the proposed elimination of ERBs in budget.

Do you have a comment for the School Board regarding the 2020-21 budget? Do you OPPOSE a 2.6% tax increase? Do you OPPOSE the elimination of ERB testing? Have a comment about employee salary increases in the proposed budget?

Send your comments to the School Board NOW — email the comments to Virtualboardcomment@tesd.net. If you sent a comment prior to the June 1 Finance Committee meeting, I suggest that you send another comment!

Comments must reference Priority Discussion topic Final Adoption of the 2020-21 Budget and must be received before 6 PM on Monday, June 8. Make sure you include your name and township of residence (Tredyffrin or Easttown).

T/E School District News: 3.91% Tax Increase, District to Correct $1.2M Accounting Error & School Board Member Resigns

The five-hour marathon school board meeting last night lasted until 12:30 AM, albeit the audience was kept waiting with a 30-minute late start. For those community members who stayed the course until the end of the school board meeting, thank you!

Although I was unable to attend the meeting, I received multiple updates throughout the evening followed up with several phone calls today. The significant takeaways from the evening included the (1) 2019-20 tax increase decision of 3.91%, (2) the Board vote for the District to take responsibility for the accounting error and to correct the Annual Financial Reports (AFR) with PA Department of Education (although sadly all Board members were not in favor of “doing what’s right”) and (3) the announcement of the resignation of a school board member.

Luckily, we have Ray Clarke providing comments on the school board meeting until he left at 11 PM (following the 3.91% tax increase vote). At that point, Mike Heaberg picks up the commentary until the meeting finally ended at 12:35 AM. See their remarks below — thank you both!

From Ray Clarke:

– Dramatically larger attendance than a typical meeting, which multiplied the persistent disregard for the community’s time when the meeting started half an hour late

– A long plea from the rugby club for Varsity status, but notably none stayed for the Budget discussion which might have suggested funding limitations

– The Board based its discussion around just the 3.91% tax increase, not all the other options (2.8% or 4.33%)

– The Board agreed to amend the 3.91% budget motion with an investment in the new elementary reading program as a $300,000 one-time “below-the-line” expense, contingent on a number of conditions. This did not satisfy parents who are advocating for parent involvement in selection of any new program

– The amended motion passed 7-2, with Kate Murphy and Ed Sweeney allied for a lower number. Todd Kantorczyk and Roberta Hotinski reluctantly went along with a lower number than they would prefer, the former (correctly) noting that budget and actual deficits cannot continue, while the latter continues (inexplicably) to want to move the following year’s – potential – exception forward into the coming Budget year.

All Board members seemed to agree that the Budget process is broken. Board President Scott Dorsey wants to separate the budget from the routine Finance process. He spoke forcefully about his outrage at this and the $700,000 expense surprise revealed at the last meeting. He warned of “someone paying the price” for any similar issues in the future.

– The District’s Solicitor (reportedly with financial experience, not Ken Roos but from the same law firm, Wisler Pearlstine) advised the Board that Annual Financial Reports to the state CAN be corrected, provided that there are new audited statements and if certified by a new auditing firm or individual. The Business Manager reported logistical, cost, PDE and outcome risk issues with this, although to the audience it seemed that those were grossly over-stated.

– A wide cross-section of community members spoke compellingly in favor of the District basing its decisions on the correct financials, about the pattern of behavior that has got us to this point, and about the need for process and personnel changes

– Unfortunately many had to leave at 11pm after the budget vote, but the AFR revision discussion continued.

Mike Heaberg picks up the commentary on the school board meeting at this point, including the Board’s acknowledgement of the administration’s accounting error and subsequent vote to correct the District audits, the Annual Financial Reports (AFR) and resubmit. Thanks so much Mike!

From Mike Heaberg:

– After the Board acted on the consent agenda, other action items, and “final” public comments, Ed Sweeney made a motion to begin the process of correcting the District audits and Annual Financial Reports for 2016-17 and 2017-18. Kate Murphy seconded it.

A long Board discussion ensued including input from the District’s Solicitor, Business Manager, Superintendent and the public. At one point, Todd Kantorczyk made a motion to table action until a future meeting – the next scheduled is August 26. On a roll call vote, his motion failed 5-4. After more discussion, the vote was held via roll call. It won 6-3. Voting in favor of correcting the audits and AFRs were Ed Sweeney, Kate Murphy, Scott Dorsey, Michele Burger, Heather Ward, and Tina Whitlow. Todd Kantorczyk, Roberta Hotinski, and Kyle Boyer voted against correcting the audits and AFRs.

– At the very end, about 12:15 AM, Heather Ward announced she is moving out of the District and resigning from the Board effective 6/16/19. The Board has not sorted out the replacement process. Heather made gracious comments and her colleagues offered thanks and praise for her service to the District.

The 2019-20 budget process was one for the books with final changes and decisions coming in at the eleventh hour (or in this case 12:30 AM!). I am appreciative that in the end, school board member Ed Sweeney had the resolve and courage to push forward for correction of the District audits and Annual Financial Reports. I thank him and the other five Board members (Kate Murphy, Scott Dorsey, Michele Burger, Heather Ward and Tina Whitlow) for “doing what’s right” and voting to correct the District audits and AFRs but simply do not understand why the other three Board members opposed the action.

Over many months, much time and energy was expended by the public in urging the Board to do “what’s right” — I’m left wondering why it took months of meetings, emails and phone calls (many by resident financial experts) plus an official letter of complaint to the PA Dept. of Education to finally achieve this goal.

In my opinion, there is an imbalance in power and control in the school district administration. All roads lead back to (or through) Art McDonnell, the Business Manager and the 2019-20 budget process debacle was a direct result of his actions. The Board (and the District’s taxpayers!) are ill-served by this business manager and we deserve better! When is enough, enough?

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

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

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

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

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

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

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

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

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

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

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

T/E Finance/Budget Workshop Results: 6% Tax Increase Continues & re District Accounting Error, the School Board Dismisses Community Financial Experts to Support Business Manager … Good Governance?

This post continues to follow the T/E School Board’s proposed 6% tax increase and what some in the community believe is a significant accounting error in the District. I attended the Finance Committee meeting this week which was scheduled for 7 PM with the Budget Workshop to follow at 7:30 PM.

First off, let me say that this is not the post I want to write nor had hoped would be necessary! The scheduled half-hour Finance Committee went on for two hours, with the first opportunity for the public to ask questions not coming until 9 PM. The Budget Workshop started at 9:30 PM and went until midnight.

At the end of the 5 hour meeting, the public knew no more than when the meeting started. The tax increase remains at 6% and for many school board members, there is reluctance for “doing what’s right” regarding the accounting error. Instead, there is a preference to “stand by our man” Art McDonnell, the District’s Business Manager.

I don’t claim to be a CPA or have a lengthy financial career but fortunate for us, there are many in this community that do – including residents Neal Colligan, Mike Heaberg and Ray Clarke. Each attended the Finance Committee meeting and Mike and Ray stayed until midnight for the Budget Workshop. In my world, you should always “play to your strengths”; it would have been extremely valuable to the public if the school board really listened to these community members, rather than choosing to negate, dismiss and at times insult them.

It was obvious from the first comment period following the Finance Committee meeting that this was not going to go well, when the chair interrupted my comments to say he didn’t like my “tone”. Mind you, that is after the public had waited TWO HOURS to comment!

I found it incredulous that since the last school board meeting two weeks ago, the Business Manager had not found time to review the impact of the accounting error on this year’s tax increase! But more shocking was that School Board director Heather Ward stated she had asked McDonnell several times for the information and the Board still had not received it. McDonnell’s response as to when he would have the information – by next Finance Committee meeting a month away!! It should be noted that Ray Clarke, Mike Heaberg and Neal Colligan have already done the analysis caused by this accounting error yet the business manager doesn’t have the time.

The public was told at the March 23 School Board meeting to come to the Finance Committee meeting for answers! The only answer that we now know is that the District’s accounting error occurred in Oct/Nov 2016 and that the School Board was not told about the situation until January 2019 – 14 months later. I actually told the school board that I felt sorry for them in this regard – guess the Administration didn’t think that a $1.2 million accounting error was all that important. I also stated that we elected them (the School Board) for District oversight, not Art McDonnell, the business manager.

The continuing to “kick the can” on the accounting error by the school board is not just frustrating but shows a lack of leadership and ability to govern even as some in the public make suggestions of possible legal action.

Although the Finance Committee meeting was not televised and it becomes a “he said, she said”, the public can see the video of the Budget Workshop. You don’t have to watch the entire video but I beg you to PLEASE review the comments which starts at time stamp 1:34:45. Click here for the video.

It is extremely important that you hear the comments of Mike Heaberg, former member and chair of Tredyffrin Township Board of Supervisors and a financial management executive. After waiting over four hours to make his remarks regarding the District’s serious accounting error, perceived impact on the tax increase, possible legal action, etc., Mike’s comments were thoughtful and important. After the public comments, continue to watch and hear the responses from the school board, in particular the Finance Committee chair’s response to Mr. Heaberg. Truly unbelievable and this from the man who told me hours earlier that he didn’t like my tone!

The public needs to wake up (although one School Board member would have you believe that those in the audience don’t represent the community!) Let me repeat, Mike Heaberg, Ray Clarke and Neal Colligan are financial experts and have done the accounting analysis (even though the District business manager has not found time!) All three come out at the same place with regards to the impact of the accounting error on the proposed 6% tax increase. Who on this School Board comes close to their financial backgrounds and depth of understanding? However, for many on the school board, the choice is to dismiss the comments/suggestions of the community financial experts in favor of the business manager – even as the trust in their ability to govern is questioned.

The end result of five hours of Finance Committee/Budget Workshop meetings and where the public expected answers – there were none. The tax increase remains at 6% and with suggestions of legal action afloat regarding the District’s accounting error, many on the school board remain committed to Art McDonnell. Not my brand of governance or leadership!

Because I left following the Finance Committee meeting (I did however watch the Budget Workshop), Ray Clarke provides his remarks and commentary for us – and we thank him!

The combined Finance Committee/Budget Workshop on Monday was a five hour marathon, ending past midnight. Unfortunately the audience, and possibly a few of the Board, came away as perplexed as before.

We heard a high level outline of the source and timeline of the error, pinned to a clerical mistake in the Department of Specialized Student Services that resulted in the CCIU invoices being recognized after the 2016-17 audit was complete in November 2017. The auditor signed off on the incorrect financials for 2016-17 which then were submitted to the state. A year later the auditor also signed off on the 2017-18 financials, and the two incorrect state reports then became the basis for the district-authorized Exception request to the state for next year’s Budget. It appears that the Board learned of this sometime in 2019.

The Chair of the Finance Committee relied almost exclusively on the auditor approval to support his conclusion that the issue is not material. Others felt that even though the numbers are incorrect, that’s OK because in their view moving the expense from one year to another just changes when the Exception can be taken. (Partially but not totally true: packing expenses into one year increases the amount that is above the Index; and even if an Exception were allowed last year, the Board might not have taken it – as they claim they so often do not!). There were no numbers presented in support of this, although Ms Ward said that she had requested the information two weeks ago. She obtained a commitment from Mr. McDonnell that the analysis (which in essence has already been seen here on Community Matters) would be presented at the next meeting in four weeks’ time.

In the Workshop, the Board spent a lot of useful time debating the merits of individual programs that could be used to balance the budget in the event of a lower than 6% tax increase, which seems to be the universal desire. There are strongly diverging views on the merits of selective fee increases that increase the cost to families (who choose to move to T/E “for the school district”, remember) versus elimination of headcount additions for, say, security. There are certainly opportunities not yet baked into the Budget – areas like staff retirements and use of up-to-date assessment information (here, as Ms. Ward said of the tax issue: “show your work“). However the Board did not come close to meeting President Dorsey’s goal, and the Admin request, to set parameters for the tax increase and deficit. The best we got was his own preference for a 3.8% tax increase (which would be roughly the rate with the right Exception), and general discussion that implied that a $1 to 1.5 million deficit would be livable. On the latter, it’s important to note that District Policy does not allow Fund Balance to be used for operations, so it will be important to identify programs like the $300,000 cost of setting up a new reading program that are legitimately one-time expenses – IF the expense is taken out of future year’s budgets.

Those of us in the audience were chastised by Mr. Boyer for not actually representing the community. My own sense from the people in my orbit about this is very simple:

– Regardless of the impact, the Board should not endorse incorrect state reporting

– If the district is to be managed effectively going forward, correct numbers must be used to analyze trends and cost drivers

– The District should limit the 2019/20 tax increase to the allowable maximum

– There’s a real trust problem when:

A Board does not learn of an issue that impacts taxation for over a year

A Board member has to ask the Business Manager to “show your work”

That request for information is not complied with

Looking for public updates from the TE School Board on District lawsuits, teacher contracts … but none given!

Communication + Transparency = Trust

I attended the final TESD school board meeting of the 2016-17 school year on Monday night for several reasons.

First, I wanted to hear the District’s statement about the two important lawsuits filed in the last couple of weeks.

  • On May 17, Thomas Batgos, an assistant Conestoga High School football coach fired by the T/E School District in the aftermath of the alleged hazing and sexual assault filed a lawsuit against District administrators – Superintendent Dr. Richard Gusick and Conestoga High School Principal Dr. Amy Meisinger. The lawsuit cited defamation of character, misrepresentation, fraud, improper termination, etc. and seeks damages of at least $50,000 in compensation plus punitive damages.
  • On May 8, a Federal lawsuit was filed against T/E School District and Conestoga High School Principal Dr. Amy Meisinger. The lawsuit alleges that District administrators and teachers at Conestoga HS tolerated a culture whereby Arthur Phillips, a 67-year-old instructional aide could repeatedly sexually abuse a 15-year old female student. The lawsuit filed by the parents of the student, seek damages of at least $75,000 in damages and calls for the resignation of Dr. Meisinger.

There was no statement from the school board on these lawsuits. Nothing, nada, zippo … I get that this a legal matter but what about an acknowledgement from the school board that the lawsuits exist? What about a reassurance that all policies/procedures related to suspected sexual abuse will be reviewed and updated as needed? The TE School District is more than school rankings and the number of college acceptances — it is the safety of our children!

The law firm in the federal lawsuit, Ross Feller Casey, has won record-setting awards for its clients, including victims of predatory sexual abuse like seven men who were victimized by Penn State football coach Jerry Sandusky. This lawsuit has the potential to bankrupt the District financially and yet the board makes no public statement.

Secondly, I attended the school board meeting to receive an update on the District teachers’ contract, the non-instructional employees (TENIG) contract and the Act 93 (administrators) agreement – all three of these contracts are due to expire in two weeks, on June 30, 2017.

There was no statement from the school board on the status of the TEEA or TENIG contracts.

The school board did however approve a raise of 1.7% plus a 1% bonus for District administrators to extend the Administrator Compensation Plan (Act 93 Agreement) through June 30, 2018.

And finally, I attended the school board meeting to see how the school board was going to handle the passing of the final budget for 2017-18 given that the TEEA and TENIG contracts and the Act 93 Agreement account for 70% of the budget and these items were labeled ‘TBD’ (to be decided) in the budget. During the budget discussion prior to the vote, there was no discussion about needing any contingencies for these (soon to expire) contracts in the budget.

Although the preliminary budget had contained a 3.435% tax increase, the board agreed to lower the tax increase before approving the final budget. The school board passed the budget 9-0 with a 3.2% tax increase for 2017-18. The newly passed budget assumes no increases for teachers and non-instructional employees. By my calculations, this budget for 2017-18 marks 13 consecutive years of tax increases. You would have to go all the way back to the 2004-05 to find a ‘no tax increase’ year.

I attended the school board meeting expecting to hear updates about specific important issues facing the school district. Instead I left the meeting feel very disheartened about the lack of information. The school board has a responsibility to involve the community and to communicate clear information to the public. The importance of transparency and providing public information to the community cannot be understated.

Downingtown Area School District Approves Zero Tax Increase for 4th Year in a Row – TE School District Set to Approve 3.6% Increase (12th consecutive year of tax increase)

Tax-increase 2016

At tonight’s TE School District meeting (7:30 PM, Conestoga High School), the school board will vote on the 2016-17 final budget and property tax rate.

In January, the board had adopted the preliminary budget which contained a 4.3% tax increase – they approved the budget with the Act 1 Index of 2.4% and allowable Act 1 Exceptions of 1.9%. At the April 25, 2016 regular school board meeting, the proposed final budget reduced the property tax rate from January, from 4.3% down to 3.875%.

According to the meeting agenda and budget materials (click here) the board will vote on the District’s 2016-17 final budget with an Act 1 Index of 2.4% and Referendum Exceptions of 1.2% for a 3.6% tax increase to the taxpayers.

The following chart shows TESD tax increases over the last twelve years. 2004-05 was the last zero tax increase year.

  • 2015-16: 3.81%
  • 2014-15: 3.4%
  • 2013-14: 1.7%
  • 2012-13: 3.3%
  • 2011-12: 3.77%
  • 2010-11: 2.9%
  • 2009-10: 2.95%
  • 2008-09: 4.37%
  • 2007-08: 3.37%
  • 2006-07: 3.90%
  • 2005-06: 1.40%
  • 2004-05: Zero Tax Increase

The TE School District residents can take solace that they are not alone in their tax increase. According to Adam Farence’s Daily Local article, 11 out of the 12 school districts in Chester County contain 2016-17 budgets with tax increases.

The only Chester County school district without a 2016-17 tax increase is Downingtown Area School District. DASD recently approved their 2016-17 budget with no tax increase but what is more fascinating is that this is the fourth year in a row without a tax increase!

Looking at TESD tax increase chart above for the last four years, you have to wonder how it is that DASD delivered zero tax increases to its residents during the same time period. According to the Daily Local article, the DASD chief financial officer Rich Fazio “attributes the four-year streak of not raising taxes to the foresight of prior school boards.” Fazio states that, “We were fortunate to prudently allocate funds and accumulate savings. Because of that we have not had a tax increase for four years.” He further indicated that DASD “will strive to duplicate a zero increase in taxes for as long as possible.”

The total operating budget for Downingtown Areas School District is $210 million versus TE School District operating budget of approximately $129 million. DASD has a fund balance of approx. $24.5 million versus approx. $32 million in TESD indicating that both districts understand the importance of saving for the future.

Someone is going to have to help me understand how these two Chester County school districts can operate so differently financially – and yes, I understand that TESD is ranked academically higher than DASD.

TE School District has always been an academic powerhouse, so other than 20 miles of separation between the two Chester County school districts, how is it possible that DASD repeatedly holds the zero tax increase to its residents and TESD has had 12 consecutive years of tax increases? Perhaps TESD business manager Art McDonnell could have coffee with DASD chief finaicial officer Rich Fazio to compare notes and discuss financial strategies!

DASD proudly displays the following 2015-16 tax increase chart on their website:

Tax Increase vs Act 1 Index Chart

According to the agenda budget materials for tonight’s TE School Board meeting, there were spending cuts before, during and after budget approval to reduce expenditures in the 2016-17 budget. An explanation of those specific reductions would be helpful to taxpayers.

Back in January, school board members Ed Sweeney and Scott Dorsey spoke out against the preliminary tax increase of 4.3% as unacceptable … will they now be OK with 3.6% tax increase? Instead of a typical roll call vote on the TESD 2016-17 final budget, I encourage board members to be accountable and offer the public an explanation of their vote.

Many of the newly school board members used fiscal responsibility and accountability as a campaign platform – now is the time to deliver on those promises.

Update on TE School District’s Finance Meeting

school-financeMy friend Ray Clarke attended the TESD Finance Meeting last night and kindly provides us with the following notes. Thanks Ray! Others in the community attended the meeting; I encourage you to offer your comments.
Some brief and arbitrary personal notes from last night’s TESD Finance Committee. There was fair community attendance and engagement, so hopefully others can supplement.
The attendance may have been encouraged by the prospect of “drilling down” into the expense Budget that requires the 4.3% tax increase, but once again we were left flat on our backs as Lucy pulled the football away. For example, we learned that Special Education purchased services are slated to increase by $0.9 million, but have no idea why, beyond “unfunded mandates”. Maybe someone can point out any new mandates, and indeed offer a quantitative analysis of how the $20+ million a year Special Education enterprise spends that money, where the increase is going next year, and why exactly the projection model has the expense increasing at 10% a year for the full five year length of the model. Committee Chair Lastner again held out the prospect of sharing more with the public in future meetings.

The community is also struggling to understand the trajectory of health care costs. Since the district went to the current self-funding model, experience has fluctuated considerably, $1 million or more ahead or less than budget. Analysis of this is left to the insurance broker/administrator, so we have not seen the thinking that supports next year’s budget projection of a 5% increase and subsequent 8% annual increases. If taxpayers are to be comfortable accepting perpetual tax increases to cover this benefit for our employees, it would be nice to see some “drilling down” here, too. Let’s look at the five year trend, understand what’s driving that trend, including any change in the demographics of the covered population and the employee contribution, budget to that long term trend and use the $5 or $6 million of taxpayer money tucked away in the Fund Balance to systematically smooth out the inevitable fluctuations.

A comparison of budget to actual for the last three years was notable for one factor: in every year, actual employee compensation costs have been better than budget by at least $1 million and in 2013/14 more than $2 million to the good – because the impact of retirements and unpaid leaves of absence (both of which bring replacement with lower cost staff). And a similar outcome is projected for the current year. But we were told that this over-budgeting – which leads every year to a higher than needed tax increase – can not be budgeted for because the district only officially learns of retirements after the budget is completed. Somehow we can estimate cost increases (eg: healthcare), but can not manage to deal with decreases?

More information to come re the laptop plan (hardware choice, roll-out timing, cost-sharing, etc.). I gather the Education Committee approved the educational rationale, so maybe a good start for communicating that rationale to those of us who bought their own log tables and slide rules would be to provide a white paper documenting how educational outcomes will be improved.

Since the passage of the District’s preliminary budget last month which contains a 4.3% tax increase, it is not good news to read that there’s been no movement in the direction to decrease. At the time the preliminary budget was passed, I recall that the Finance Committee Chair Virginia Lastner told the public that this only to “keep the options open”. Lastner stated that all expenses would be reviewed ‘line by line’. Maybe that discussion will happen at the budget workshops.

On Thursday, February 18. the Facilities Committee (with Virginia Lastner, chair) will return to the discussion of the fencing project at Valley Forge Middle School and the consultant’s report. Interestingly, a review of the meeting agenda indicates a strict time schedule — public comment is from 5 PM – 5:05 PM. Five total minutes for public comment — what is that about?

Community Matters © 2021 Frontier Theme