Fortunately for us, Malvern resident Ray Clarke not only attended last night’s Finance Committee meeting of the School Board, he also took copious notes. With his email that accompanied the following notes from the meeting, Ray also referenced the attendance at the meeting. Unfortunately, Ray reports that only about 4-5 residents and 3 teachers attended! How is this possible — are we all so focused on the township budget that we don’t have time to be concerned about the school district budget? Far more of our tax dollars are spent on the school budget than on the township budget. If we can fill Keene Hall with residents for the township budget, why not the same attendance for the schoold district budget discussion? I know that the township budget contains a number of emotional issues (including the proposed cut to the fire company, libraries and nonprofits) but our wallets are going to take a far larger cut with the proposed school district tax bill, if we don’t get involved and offer some oversight.
Please take the time to review all of Ray’s notes and comments. We all owe him a debt of gratitude for not only taking the time to attend but to write up his notes!
Ray Clarke’s meeting minutes from December 14 TESD Finance Committee meeting:
- The projected 2010/11 budget deficit, assuming no changes to programs, is now $9.2 million
- This is driven by increases vs the current year of: $3 MM (+6%) in compensation, $3.7mm (+24%) in benefits, $0.8MM (+15%) in professional services and $0.7MM (+8%) in other purchased services. Projected revenues are more or less flat
- Teacher compensation is driven by a contractual matrix based on credits and -wait for it – LONGEVITY
- If this preliminary budget in approved in January, the district can go to the State to request the ability to increase taxes by another 3.7% on top of the Act 1 maximum of 2.9%.
- The resulting 6.6% increase, $292 per median household, would raise $5.5MM of the needed $9.2MM, leaving $3.7MM to be found
- Administration has identified $2.5MM of reductions, of which many could be equally as contentious as a 5% reduction in Township support for firefighters (eg: reduce funding for High School Clubs; reduce art, music, etc in Grades 7, 8; ..…)
- The teachers have refused to open their collective bargaining agreement.
- Unquantified, but possibly meaningful additional expense reduction items include self-insuring for medical benefits, a 7 period day at CHS and reductions in non-teaching staff.
- The gap rises to TWENTY FIVE MILLION DOLLARS three years out, in 2012-2013. Driven by the ongoing 6% annual compensation increase plus (net) benefits that increase from the current $14MM to $27.5MM, largely due to the state teacher’s pension plan funding needs.
- $25 million on the back of current real estate taxes of $81 million, would be a 30% PROPERTY TAX INCREASE.
There could be options to draw down some of the $30 million fund balance to offset this, and this apparently ties in to the proposed bond issuance, but I couldn’t follow the explanation. The bond issue item was dropped from the agenda. Note that there is $13 million in the General Fund for “Designated Future PSERS Rate Stabilization”, but the administration said that they do not want to use that. (But what is it for, then?)
When asked directly if they would be interested in reclaiming their share of the >$2.7 million EIT paid by Tredyffrin residents to other municipalities, the $2 million that would be paid by non-residents (with a1% EIT), and of the equivalent amounts from Eastown, the board members were completely dismissive. Only when pushed, did the administration offer that TESD can indeed start the process by telling the Township by November of the preceding year that it wants to implement an EIT. (No good for 2010/11, of course).
The hoary old arguments were raised: the TSC (which loaded the deck, but admitted that it would have a different conclusion in different times), the 2007 public vote (on a completely different question), the variability of earned income (based on personal anecdote), etc.
There’s definitely a sentiment to approve a preliminary budget that gives TESD taxing flexibility up to the 6.6% increase. In theory, residents can then weigh in on their preferences between tax increases and program cuts, and I believe that the administration at least is working hard to be transparent and to facilitate that. The final budget and tax rates will be set in June.
A final point, the Board claimed the ~6% annual compensation increases (and benefits packages) were negotiated based on assumptions that the revenues would cover the increases, but those assumptions were not explained. Presumably a combination of development that increased the tax base (in our pretty much built-out township?) and tax rate increases?
Thank you Ray!