Tredyffrin Easttown School District Archives - Page 24 of 42

Tredyffrin Easttown School District

I attended Rep. Warren Kampf’s town hall meeting, which focused on the state pension system and its impact on the budgets at the state and local level, with specific attention on the additional burden for our school district. Kampf provided an in-depth overview of the state pension system for state workers and teachers and the need for reform. By the use of a slide presentation, Kampf offered background and history of the state retirement system and a timeline as to how we arrived at the current underfunded pension crisis and proposals for reform.

(To review Kampf’s town hall meeting pension reform slides, click here. There are 19 slides, so it takes a couple of minutes to load.)

What are the reasons that Pennsylvania is now facing a multi-billion dollar public pension crisis? Kampf offered three – benefits, stock market/rate of return and underfunding. The stock market declined in 2001 and then we saw the substantial losses of the market in 2008. The declining rate of return from the stock market had a direct impact onPennsylvania’s public pension plan.

As Kampf explained, the state has no ‘raining day’ fund to help with the pension crisis whereas T/E School District has one of the largest fund balances of all school districts in the state — $30 million. Trying to manage their budgets, the state’s pension crisis has pushed school districts across the state to the edge of the cliff. There was praise to our school district for the good job they have done in spite of the pension crisis.

Many in the audience wanted Harrisburg to ‘fix’ the current pension plan and change it not only for future hires but for those workers currently in the system. Kampf explained that due to the state constitution, that although not legally impossible, it would take years to change the constitution to enact any change affecting state workers vested in the current retirement plan. Realistically speaking, any proposed pension reform legislation should focus on future employees in the system.

Various options for changing the current pension retirement plan were offered and discussed – (1) a defined contribution 401(k) type of plan, (2) a hybrid plan with a defined benefit as a component. This plan sounds like social security and is viewed as a ‘half’ measure; it gets you somewhere but not far enough, and (3) a cash balance plan with mandatory employer contribution shared between shared between the state and school district but was not viewed as solving liability.

According to Kampf, the proposed pension reform legislation that he plans to introduce will suggest a 401(k) type of retirement plan. He was clear that the current retirement plan needs to change – the state needs to stop adding additional workers to the current system. As he says, the bottom line is that there is no easy way out and any pension reform will require discipline.

Kampf understands the pension crisis and appears to have a vision for how the state needs to move forward to correct the problem. The traditional package of retirement benefits for state employees and teachers has become unaffordable and I support pension reform – and sooner rather than later. For future pension benefits, I think that the state should switch solely to a defined-contribution model, akin to a 401(k) model, for new hires. This will help prevent the underfunded-pension liability problem from worsening while the state climbs out of its present multi-billion dollar hole. For the record, I do not support any change for those public workers vested in the current retirement plan; only for new hires.

If Kampf’s proposed legislation for pension reform includes a 401(K) type of retirement plan, his plan will have my support. State and local governments around the country are taking similar steps to reduce retirement costs, often prompting battles with labor unions. Structural and long-term reforms to the pension system could go a long way toward improving the fiscal outlook of state and local government. However, the issue of pension reform could be a political minefield for state legislator. Kampf’s pension reform is probably not going to be him in a favorable position with the teacher’s union (PSERS) or the state employees union (SERS).

Pennsylvania is not alone in its need for pension reform. According to the National Conference of State Legislatures, from 2009 to 2011, 43 states enacted major changes to retirement plans for public employees and teachers. I hope that through pension reform legislation, the burden pension systems place on state budgets and taxpayers can lessen, while still ensuring a stable financial future for government workers.

T-E School District has Projected $16 million Budget Shortfall but Underfunded Pension not the Only Factor

March 14, 2012

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Over the next few years, Tredyffrin Easttown School District will be faced with a $16 million budget shortfall; but the pension crisis is not the only contributing factor.

For many years, a growing economy propelled increases in stock prices, enhancing the coverage of many pension plans, public and private. In the old days, the nature of traditional pension coverage in the private and public sector was quite similar; the majority of all employees were covered by a defined benefit plan where the liability of the pension lies with the employer. However, there is a reason why in the last decade that the vast majority of private sector employees have turned away from defined benefit plans to some form of a 401(K) type plan – the challenge of keeping a defined-benefit plan, particularly in our unstable economic climate, has proven too great for most companies to bear.

Defined-benefit plans may provide the best financial safety net for employees, but most private sectors can no longer afford to maintain them – the strain on the company balance sheets has proved too large for firms to withstand. And even in the case where a company struggled to keep a traditional defined-benefit plan in place, the economic downturn has prompted plan changes whether they were preferred or not.

Pennsylvania, like many states in the country, is facing a multi-billion dollar public pension crisis and now is the time for pension reform in Harrisburg. The Public School Employees Retirement System (PSERS) and the State Employees Retirement Systems (SERS), the two systems administering retirement accounts for state and public school employees, are severely underfunded and will become insolvent without an increase in taxpayer contributions.

Pension reform will be to the topic of Rep Warren Kampf’s town hall meeting on Sunday, March 18, 4 PM at the township building. The school district’s public budget workshop on Monday, March 19, 7:30 PM in the Conestoga High School auditorium, will include discussion of the pension crisis and its impact on the school district.

Kampf plans to introduce legislation that would move state workers and school employees to a 401(K) style retirement program. All lawmakers should embrace fundamental pension reform but this type of reform legislation is likely to be met with significant political barriers in Harrisburg. A key driver of ever-rising retirement benefit costs is their hidden nature; it is easier today to promise retirement benefits that will not have to be paid out for years.

The true extent of the unfunded liability of the state pension plan needs to be fully understood. Most of the funding for pension payments – 69% over the last 25 years – comes from investment earnings. The state and school districts combined for 17% over those years, with employees contributing 14%. The causes of the pension-rate jump, PSERS officials say, were pension-payment increases made over the last decade or so that the legislature did not fund adequately, and investment-market declines in 2001-03 and 2008-09. A Pew Center study shows that the Commonwealth has contributed only 40% of what is actuarially required — the lowest percentage of any state government.Pennsylvania’s two major pension funds were 116% and 114% funded in 2001, but dropped to 83% and 79% by 2009.

We can accept that the pension crisis contributes to the projected school district’s $16 million budget shortfall over the next few years but is not the only factor that led to the current economic situation. Because school districts are so reliant on property taxes to fund their respective budgets, the last few years and the next several years will show an ever-decreasing revenue stream as property values and real estate transactions have tumbled. The unfunded and underfunded mandates serves only to exacerbate the already difficult fiscal situation faced in the school district.

Looking back at the last teacher contract, the economic picture in the Tredyffrin Easttown School District was very different in 2007 than it is in 2012 — the school board signed a contract that guaranteed 5%+ salary increases each year. Add to that the rising healthcare costs plus the required PSERS contributions, and the total yearly compensation increase package is much higher. Therefore, it is impossible to balance that increased expenditure when the Act 1 index plus exceptions is below 4%.

Rising healthcare costs and PSERS contributions coupled with decreasing real estate revenues and state and federal support … equals the unprecedented new fiscal reality of our school district.

No Custodial Outsourcing for 2012/13 but looks like Sports and/or Activity Fees Could be a Reality in T/E

February 14, 2012

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Based on attending the TESD Finance Committee meeting, it looks like the custodial outsourcing in the school district is ‘off the table of consideration’ for another year. If you recall, the most significant cost-saving measure to the District remaining from last year’s budget was ‘outsourcing of custodial services’ with a savings listed as $950K. After internal TENIG (non-instructional union of TESD) discussion, the custodial workers made an offer to the school district, which was presented to the Finance Committee by school board president Karen Cruickshank.

For the 2012-13 year, the custodial workers of TENIG have offered a 10% reduction in their salaries and they will not take the 4.5% increase contained in their existing contract. In real dollars, the cost savings to the District is $197K in salary reduction, plus the additional percentage contractual savings for a total savings of approximately $285K!

Beyond the generosity of the custodian workers offer, the Board realizes that it is difficult to measure intangibles in the in-house custodial services … many of the employees live in the T/E and their families are part o the community. With that comes a level of safety that is difficult to measure. Although the custodial workers offer has to be reviewed internally by the District attorneys, the it received overwhelmingly positive support from the Board.

A $285K savings to the school district plus the bonus of saving local jobs … congratulations to TENIG, custodial workers, District staff and Karen Cruickshank (on behalf of the school board) for such a positive outcome early in the 2012/13 budget discussions.

Ray Clarke also attended last night’s Finance Committee meeting and I thank him for his willingness to share his thoughts and opinions below:

Notes from Ray Clarke, TESD Finance Committee Meeting

A relatively well-attended TESD Finance committee meeting on Monday, and some important topics discussed – in varying depth and with varying data quality – the two not always correlated.

1. A significant announcement from Mrs Cruickshank at the end of the meeting: the janitorial staff in the TENIG union have offered to take a 10% reduction in wages for the 2012/13 school year. Their contract entitles them to, and the preliminary budget assumed, a 4.5% contractual increase. By my math, starting from the $1.97 million compensation line item provided by Dr Waters, this means a total benefit versus the budget of $286,000. In return the union asked for the district to remove the outsourcing option for 2012/13. (Also, with no further actions next year, the salaries would revert in 2013/14 to the contracted level – a 20% increase that would not of course be a tenable option).

After getting the numbers sorted through, the Committee was very appreciative and broadly in favor of this offer, weighed against a potential outsourcing saving three times the offer, but with risk and the uncertainty of basing the alternative on now-expired bids.

This looks to be a good result for all concerned. Employment security is maintained and compensation continues to move towards market levels. Importantly, it can continue to do so assuming similar flexibility next year and a more equitable benefits program in the next contract.

2. Much information was shared regarding possible fees for “sports and activities”. Most neighboring school districts have either implemented some kind of fee or are considering doing so. There are as many approaches as there are school districts. Significant money can be raised: at $100 per sport/activity (with a cost to the district), the revenue would be about $150,000 for both high school students and middle school students. For context, about 1700 of the 2050 high school students participate in at least one sport/activity of any type; the middle school numbers are similar.

There seems to be a consensus that the district should charge only for those activities for which it incurs costs for either extra teacher time (EDRs) or for transportation. (An interesting issue thus raised: the process by which a club gets the status of having compensated teacher oversight). Also clear is that there should be a process to ensure that no student should be prevented from participating for financial considerations.

Decisions still to be made:

The same fee for any sport or activity, or some kind of tier system loosely based on cost?

A fee per student regardless of number of sports/activities or a fee per sport or activity up to a maximum?

The amount of any fees

The administration was charged with coming back with further permutations. It seems to me that it would be helpful to also tabulate other districts’ experience regarding participation levels and administrative costs. There seems to be a good argument for action here. For me, fairness would suggest some kind of tiered fee structure with a maximum, if it can be administered reasonably. The Committee is keen to give this air time at the Budget Workshop.

3. On revenues: no immediate bad news in the Corbett budget proposal. The move to bundle four separately calculated state funding items (basic ed, social security subsidy and public and non-public transportation) looks to me like a plan to cap future funding in a way that is unrelated to the actual underlying costs of those items. The one loss is a $50,000 grant that TE uses to fund the homework club.

Less good news on the property re-assessment front: $573,000 of lost revenue more or less planned for in the budget, but in addition $550,000 at risk from nine commercial assessments being appealed to the state courts and $820,000 at risk from a Vanguard appeal.

This illustrates the district’s vulnerability from relying solely on one tax that falls disproportionately on a class or classes of taxpayer that see no direct benefit from the tax, when many of those who get the benefit see their tax dollars going to other jurisdictions. But unfortunately any discussion of diversifying the tax base was hijacked in the last election.

4. A big mystery around the district medical benefits cost. Independence Blue Cross is apparently proposing a change in the way it gets compensated for administering our self-funded plan. Currently they get a 2.5% administrative fee (if only the overhead for the entire US healthcare system were that low!). Much perplexity about the proposal since it is being couched in terms of changing provider discounts. However, the net effect would be a $400,000 to $620,000 cost increase. I’m not sure there will be too much to be done about what is effectively a price increase, but more clarity needs to be provided.

5. No net surprises in the current district financials so far. We are on track for a deficit of about $0.75 million, as budgeted after adding back the $1.3 million budget reversal.

TESD Preliminary Budget Approved With $2.5 Million Budget Deficit

January 24, 2012

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I attended the Board of Supervisors meeting last night; Ray Clarke attended the school district meeting and has graciously provided his notes for use on Community Matters. The preliminary 2012-13 school district budget was approved with a $2.5 million budget gap — continuing to cut expenses or dipping into the fund balance? I know from attending the last Finance Committee meeting that the outsourcing of the custodial workers remains on the list as possible budget strategies.

In reading his notes, a couple of observations about the Facilities Committee are noteworthy. The District’s maintenance departments needs for storage facilities has been discussed for a number of years. There are preliminary plans for construction of a maintenance building on District-owned property on Old Lancaster Rd., down from the T/E Middle School. But according to Ray’s notes, it would seem that the Facilities Committee is now looking at other options, including non-District owned property. Maybe that option is for leasing facilities space rather than new construction – I hope the option is not suggesting that the District purchase additional property.

It is interesting to note that the Facilities Committee will revisit the IT plan at their next meeting – further discussion wireless in the school district. Maybe I am remembering incorrectly, but I thought at one point there was discussion of hiring an IT consultant to review the District’s current situation and to offer recommendations. I thought the consultant fee was in last year’s budget . . . perhaps I am not recalling this correctly.

Here are Ray’s notes – as always, I thank him for taking the time to send his commentary.

The preliminary budget was approved 8 -1. Liz Mercogliano changed her position with no explanation. As approved, there is a $2.5 million deficit that the Board has to close either through expense cuts or fund balance usage. Also, as approved, there is no increase in teacher salaries (but the same benefits plan and that 47% increase in the pension contribution). When asked if changes to the benefit plan are on the table, the comment from Dr Brake was that they “could be”. Of course they are! Why not say so?

Class room capacity was discussed in the committee reports. Computer labs are being repurposed at TEMS and Devon Elementary, but at the latter it seems that this will only buy one classroom and one year. There will be 7 or 8 sections of first graders there next year. The administration has been charged to study options for 2013/14; these could include re-districting. Devon has 550 students, Beaumont has 450. It wasn’t completely clear, but I thought I heard that the enrollment trends will require another 3.6 FTEs beyond the 444.4 budgeted for 2012/13.

Important topics for the next Facilities Committee on Feb 17th at 2pm. First, the never-ending discussion of facilities for the maintenance department will continue, with a presentation of non-district owned options. Second, the IT strategy discussion has been resurrected, and we’ll hear a plan to make the schools wireless. Let’s hope for something that clearly promises improvement in educational quality and reductions in cost to justify investment of – dare I say it – some of that fat Fund Balance.

President Karen Cruickshank thanked Mrs. Graham for a “wonderfully thorough” legislative report, which was mostly a lengthy advocacy for the community to lobby the state for increased funding in advance of the Corbett budget announcement on Feb 7th.

Underfunded Pennsylvania Pension Funds Need Real Reform

January 21, 2012

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Pennsylvania is facing a multi-billion dollar public pension crisis – now is the time for pension reform in Harrisburg. The Public School Employees Retirement System (PSERS) and the State Employees Retirement System (SERS), the two systems administering retirement accounts for state and public school employees, are severely underfunded and will become insolvent without an increase in taxpayer contributions.

In discussing the need for pension reform, in December 2010, I wrote . . .

“did you know that more than half the state’s municipal pension plans are less than 90 percent funded? Calculated as the ratio of assets to liabilities, 644 municipal pension plans are labeled as “distressed” by the state’s Public Employee Retirement Commission (PERC). Of those, 26 are less than 50 percent funded and branded as “severely distressed.”

I cannot speak for the accuracy of those numbers thirteen months later, but I have to believe that they have not improved.

One of the last bills signed into law as Gov. Rendell was leaving office was HB 2497, which became Act 120. But instead of reforming the defined-benefit pension system, this legislation ‘kicked the pension can’ further down the road, by deferring pension payments and increasing the unfunded liability by billions of dollars in lost investments and interest – in essence, leaving the problem on the shoulders of our children and grandchildren.

In the old days, the nature of traditional pension coverage in the private and public sector was quite similar; the majority of all employees were covered by a defined benefit plan where the liability of the pension lies with the employer. However, there is a reason why in the last decade that the vast majority of private sector employees have turned away from defined benefit plans to some form of a 401(k) type plan – the challenge of keeping a defined-benefit plan, particularly in our unstable economic climate, has proven too great for most companies to bear.

Defined-benefit plans may provide the best financial safety net for employees, but most private sectors can no longer afford to maintain them – the strain on the company balance sheets has proved too large for firms to withstand. And even in the case where a company struggled to keep a traditional defined-benefit plan in place, the economic downturn has prompted plan changes whether they were preferred or not.

Teachers and state workers should not be targeted as public enemies because of their benefit packages. However, I just do not see how their defined-benefit plan (in its present form) is sustainable for the future. Clearly, pension reform should not affect any vested state employees or pensioners already in the system – changes should only affect future employees.

From the taxpayer side, we are angry because we have to make up the state’s pension fund losses as we watch our own 401(k) accounts depleting. The teachers argue they never took a vacation from paying into the system and that a pension is necessary to attract and keep good teachers. Pennsylvania State Education Association (PSEA) the state’s largest teachers union is on record that will oppose any proposed changes to Act 120, such as a 401(k) type of defined contribution plan. This is a catch-22 situation; we want to maintain a high quality of teachers and state workers in Pennsylvania, but we cannot afford the current pension price tag.

During the last election cycle, there was much discussion from school board candidates about the District’s financial situation and possible solutions, including imposing an earned income tax. Some candidates believed that because the financial problems were caused by Harrisburg, that it should be up to the state to find the solution, not the school districts (taxpayers). Candidate and now re-elected school board president Karen Cruickshank called on the state to “fix your mess” and suggested that residents contact their legislators and the governor to push for pension reform.

State Rep Warren Kampf (R-157) has an editorial, “Change the pension system to help taxpayers” in today’s Phoenixville Patch. In the article, Kampf states that his pension reform legislation,

“will require all new state employees and those hired by school districts to participate in a defined contribution plan (like the 401k-style plan that is prevalent in the private sector) where the taxpayer would be required only to match the employee’s contribution. This would be in lieu of the traditional defined benefit pension plan”.

Under Kampf’s plan, state employees would have a system similar to the private sector where an employee owns their 401(k) plan and takes it with them if they leave the job. In a Community Matters article from December 2010 (cited earlier) I wrote,

“. . . As another form of fiscal responsibility, Kampf announced that he would not be taking the state’s defined-benefit pension plan and will work on the creation of a defined 401K-type plan for legislators and state employees.”

I have not agreed with all of Kampf’s votes since he took office, but to give credit where due . . . Kampf’s promise to work on pension reform were made prior to his taking office in 2011, and today we learn that he plans to introduce his proposed reform legislation this spring. (Click here to read the Phoenixville Patch editorial).

Do Higher Teacher Salaries in Philadelphia Area School Districts Equate to Higher PSSA & SAT Scores? Not According to Research Study

January 11, 2012

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Periodically I have posted about the Unionville Chaddsford School District (UCFSD) and their ongoing teacher contract negotiation struggles of last year. Deadlocked contract discussions required the PA Labor Relations Board to intervene and assist with the bargaining impasse. However, even after the release of the fact-finding report, it took months for resolution and the signing of a new contract.

After working without a teacher’s contract for over a year and weathering the contract negotiation process, a new contract between the UCFSD and the teachers was signed in September 2011.

Academically, there is a similarity between the UCFSD and T/E school districts – both districts are top performing school districts in the state. On the SAT and PSSA performance, both school districts score in the top 1%. In my post of September 21, 2010, I wrote that “T/E School District ranks #2 for SAT scores and UCFSD is ranked at #5.” Using the high PSSA and SAT scores as a negotiating tool by the teachers union, I wondered if this was a tactic that would similarly be used in T/E and wondered if our school district could learn from the lessons in UCFSD.

All around we are seeing school districts struggling. We are watching Delaware County’s Chester-UplandSchool District as they try to figure out if they can make their payroll next week. Over in Bucks County’s Neshaminy School District, classes for 9,000 students are cancelled for the third day as their teachers strike. Having worked without a contract for four years, the teachers and the school board are battling over the contract and healthcare appears to be a major stumbling block on both sides.

If you follow Community Matters, you may recognize Keith Knauss as one of those that regularly comments on school district issues. Knauss currently serves on the Unionville Chaddsford School Board and brings first-hand experience, especially when dealing with teacher negotiations.

Knauss prepared a report for his own school district, which he has graciously offered for Community Matters readers. He looked at the 61 Philadelphia area school districts for factors that might explain the wide variation in academic achievement on PSSA and SAT tests.

Factors Knauss considered included:

Parental education
Poverty
Student to Teacher Ratio
Spending per Student
Average Teacher salary
Average Teacher experience
Average Teacher degrees

In his analysis of the data, Knauss uncovered some interesting results. He discovered that “only two factors are significant – Parental Education and Poverty and those two factors alone can explain the bulk of the differences in academic achievement.” Recognizing that “those two factors are beyond the control of the District”, Knauss notes that the “all other factors, where the District does have control over are not significant, including per student spending, class size, teacher salary, teacher experience, teacher education.”

While most of us might assume that the more experienced teachers, or those with the most education and the highest salaries would be factors associated with higher test results, Knauss research data does not support that theory, at least not in the 61 school districts in the Philadelphia area that he researched. Knauss concludes, “contrary to popular belief, there is no evidence from the 61 districts that spending or the number of teachers has a measurable effect on academic achievement.”

Click here to read Keith’s Spending Trends Presentation TE research study. I would encourage everyone to look at it – see which factors influence test scores in T/E. A fascinating study providing an interesting way to look at what may (or may not) contribute to PSSA and SAT test scores.

Going back to the Neshaminy School District, according to a November 28 PhillyBurbs.com article, the teachers in this district are the highest paid in the state. However, when you review the PSSA results, Neshaminy School District doesn’t even make the top 50 — but is number 245 among Pennsylvania’s 500 districts. Over half of the Commonwealth’s school districts have outperformed Neshaminy on PSSA tests for the last 10 years.

The SAT results in Neshaminy have the school district ranking number 156. And according to the article, over half of the teachers (337) make over $90K plus 64 teachers make over $100K. The average teacher’s salary in Neshaminy School District is $80-85K.

Neshaminy parents who are opposing the demands of the teachers, claiming that they are not getting ‘what they are paying for’ — believing that because the teachers are the highest paid in the state, it should equate to higher test scores. But as evidenced by Keith Knauss research data, their assumption would be incorrect. According to the research, higher salaries do not necessarily mean higher PSSA and SAT scores.

Custodian Outsourcing and Implementation of Activity Fees Remain TESD Finance Committee Options for 2012-13 Budget

January 10, 2012

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I attended the T/E Finance Committee meeting last night as did Ray and Carol Clarke. However, other than one other resident, the 8-10 T/E school district teachers in the audience outnumbered us. Presumably, as the District begins the teacher contract negotiation process, there will be a continued presence at school district meetings from the teachers union.

Highlights from the Finance Meeting:

It should not be a surprise to learn that real estate tax delinquencies are up from last year, albeit only slightly at this point. However, the District has a process in place for the collection of unpaid real estate taxes and has hired Portnoff Law Association to collect the delinquent taxes. Currently there are 320 delinquent taxpayers, 75 are commercial properties and the remainder residential . . . total outstanding delinquent taxes: $1.7 million.

The majority of the meeting was spent in discussion on 2012-13 budget strategies. The most significant cost-saving measure that remains from last year’s budget discussion is the outsourcing of custodial services. Although the savings remains listed as $950K, the Board recognizes that is last year’s number and will need to be updated. There is the possibility of outsourcing a portion of the custodial services versus all of the services. There was talk of different options, such as outsourcing 3^rd shift or segregating buildings to outsource. This will require a detailed RFP with specifics outsourcing options to bid. It was pointed out that some bidders may not be interested in bidding for a part of the custodial services.

There is an internal TENIG meeting on January 12, and the Board is hopeful that the union can ‘give back’ to help with expenses. The Board realizes that it is difficult to measure intangibles in the in-house custodial services . . . many of the TENIG employees live in the T/E school district and their families are part of the community. In addition to living in the community and protecting local jobs, there is a level of safety that comes from having in-house custodial services that is difficult to measure. The RFP is hold and the Board will wait to hear back from TENIG.

The implementation of an activities fee for participation in extra-curricular activities and transportation charges for some extra-curricular activities and busing for summer school remains on the 2012-13 budget strategy list. I recall the activities fee discussion last year, which the Board was able to avoid for 2011-12. However, because so many of the strategies are now in place, there are far fewer options in place.

The cost to the school district for non-mandated extra and co-curricular activities is $1.1 million. Because of the magnitude of the expense, the Finance Committee is looking at various options to help offset some of the cost, including an activities fee. In one scenario, a fee of $50 per student (high school only) involved in non-mandated sports or activities would net $70K to the District. This fee would be one-time only to the student, regardless of the number of activities. For those families unable to pay the fee, a hardship waiver would be in place. The cost-savings to the District for charging for transportation (middle school and high school) for some extra-curricular activities and summer school busing is budgeted at $140K. Of that amount, $20K is attributable to busing for summer school. Further discussion was suggested, including looking at other school districts.

Ray Clarke makes the following observation of the budget strategies,

There are no strategies for further meaningful deficit reduction beyond the possibility of TENIG concessions/janitorial out-sourcing. Reduction of in-service days ($200,000 per day) has been taken off the table during contract negotiations. To me, this means that we are looking at a deficit of at least $2 million. (One possible upside might be better healthcare cost experience – I read today of an S&P analysis that had private insurance spending growing in 2010/11 by 7.35%. Medicare growth was a low 2.6%. This mirrors TE’s experience, and suggests that cost growth has slowed for whatever reason and therefore the 10%/15% increases in the TE projection model may be too high).

The closing of St. Monica’s will affect approximately 150 students and the actual impact on the T/E school district is not clear. St.Monica’s will merge with St. Patrick’s in Malvern so for those students who change schools, there will be increased transportation costs to the District. For those families who decide on public education, there are increased educational costs. Devon and Beaumont Elementary are the public schools impacted by the closing of St. Monica’s. It’s too early to know the magnitude of the impact but it is possible that redistricting will be required to accommodate the additional students (specifically at Devon Elementary).

I asked for clarification on the teacher contract negotiating team. At the last school board meeting, members of the negotiating team included the hired negotiator, Art McDonnell (TESD Business Manager), Sue Tiede (TESD Director of Personnel) and Superintendent Dan Waters but no mention made of school board members. Although historically the District’s negotiating team for the teacher’s contract has always included school board members, it was confirmed that this time there would be no representation on the team by the school board. This decision struck me odd but it was explained that this was a Board decision and that the team would be given the parameters by the Board and receive ongoing updates. I know we have former school board members commenting on CM, who have been part of prior teacher contract negotiations, so I will be curious to know your opinions.

Perhaps, leaving the contract negotiations to the ‘professionals’ will keep the discussion focused and directed …? At this point, the negotiating team has not developed a strategy for public communication.

The Board is developing a communication strategy for the PSERS situation. There was discussion to include a special PSERS presentation for the public and updating the District website with PSERS information. Ray Clarke continues to believe that, “while it’s important for the public to know what’s driving the 1 – 1.5% tax increase that this [PSERS] represents for the next 4 years, it deflects attention from other issues under their [School Board] control.”

In closing, the Finance Committee presented a list of goals for 2012 that included (1) formulation of 2012-13 budget; (2) maintain 5-year budget projection model; (3) develop financial communication model and (4) develop steps for further EIT studies.

Ray Clarke asked the Finance Committee to explicitly address fund balance strategy as an additional goal. Clarke’s suggestion was rejected on the basis that it was included in goals 1 and 2 of the Finance Committee and was covered by the Policy Committee. As a reminder, T/E has one of the largest fund balances in the state — $30 million. Some in the community that would suggest that the fund balance is excessive and that as taxpayer’s money it should be used.

Chester Upland School District is Out of Money – Can Other School Districts be Far Behind?

January 8, 2012

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There is some chilling news for public education out of Delaware County. . . is this a ‘sign of the times’.

With no help from the state and no fund balance, the Chester Upland School District (CUSD) has announced they have no money to pay their teachers. CUSD has a cash crisis and this past week the district ran out of money. Unless emergency funding arrives immediately, the CUSD will not meet its payroll on January 18 – which means no paychecks for teachers. Also, means no money for electricity or heating in the schools. To satisfy the January 18 payroll crisis, CUSD needs $7 million immediately and approximately $20 million to finish the school year.

When Gov. Corbett cut the education budget last year, we know that the cuts hit the poorer school districts the hardest – such as CUSD. Because CUSD relies on the state for nearly 70% of their funding, the district now finds themselves in the hole by $19 million and unable to disburse paychecks.

In an impressive show of support for the students, the CUSD teachers resolved through their union, to stay on the job as long as they can. As altruistic as their intentions, how long can the teachers realistically work without a paycheck. Still it shows a remarkable level of compassion from the teachers and indicates ‘who’ really cares about the students.

In mid-December, the CUSD school board and teachers union begged Corbett and PA Department of Education (PDE) for an advance 2012 emergency funding of $18.7 million — $17.5 million for basic education subsidy plus $1.2 million for special education funding. (click here to read CUSD letter).

However, on December 24, CUSD received word from Harrisburg that their advance request was denied. It was suggested in the response from PDE that the CUSD’s economic crisis was a result of their own making — suggesting that the school board had mismanaged the school district’s operations and finances. As a result, regardless of their cash crisis, the letter states that no help will be coming to CUSD from the state. (click here to read PDE’s response to CUSD).

Before the start of the 2011-12 school year, CUSD already laid off 40% of their professional staff and 50% of their unionized support staff. Because of those actions, the teachers now have class sizes exceeding 40 students. If emergency funding does not arrive by January 18, CUSD may be forced to close schools.

As minority chair of the Senate Education Committee, Sen. Andy Dinniman had harsh words on Friday for the Corbett administration’s handling of the CUSD financial crisis, claiming that PDE is set on a path to destroy public education in the Commonwealth and an orchestrated attempt to fund charter schools versus public schools.

In his press release, Dinniman indicates that Corbett’s unwillingness to help CUSD is politically motivated, suggesting, “Is it just a coincidence that the operator of the for-profit charter school serving the students of this district [CUSD] is also one of the biggest Republican contributors in the Commonwealth?’”

Dinniman goes on to say, “The callous action to not advance the basic funds to allow the education of students in Chester Upland is not school reform; it is a purposeful and harmful attempt to destroy public education. No matter what side of the education you are on, all of us need to stand up to make sure that the basic funding continues to be available for the students in this district. We must stand as one to assure that the politics of education in Pennsylvania is not done on the backs of these students and these teachers.”

Sharing the sentiments of some of the T/E school board members, Dinniman looks to PDE for the answers. However, I don’t know how realistic this is – if PDE is willing to allow the Chester Upland School District to implode why should we think that the state will help the healthier, more financially secure school districts. The school districts, like T/E that are sitting on hefty fund balances are not certainly not going to find themselves at the front of the line, if and when, the state decides to offer financial assistance.

Several school board members have suggested that the financial problems facing our school district, and every other district across the state, is a problem that needs fixing in Harrisburg. I probably would not disagree that the state needs to help. However, based on CUSD’s dire financial situation, I think that the ‘hoping for Harrisburg help’ position may prove futile and unrealistic.

It appears that Corbett and the PA Department of Education is willing to throw the financial crisis back at the feet of the local school districts and their taxpayers.

Please, before anyone jumps in and suggests that I am somehow comparing T/E School District to Chester Upland School District– I am not. These two school districts represent opposite ends of the spectrum in probably every way . . . from property values to student test scores. And whereas, CUSD has no fund balance, our school district has one of the largest fund balances in the state.

BUT . . . realistically, how many school districts ‘away’ from a Chester Upland School District cash crisis is T/E?

Due to PDE funding cuts and looming PSERS costs, all the school districts across the Commonwealth are sitting on the edge of a cliff. Sure, T/E and other local school districts with their significant fund balances, may be at the end of the line to fall off the cliff but, . . . how far off is that fall?

Tredyffrin’s Board of Supervisors – ‘Team Players’ and TESD Budget Discussions Get Underway

January 4, 2012

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As is often the case, Tredyffrin’s Board of Supervisors meeting conflicted with the TESD Board meeting last night. I attended the BOS meeting and Ray Clarke attended the TESD meeting and graciously offered his comments from the meeting.

The Board of Supervisors meeting saw the swearing-in of four supervisors — Paul Olson and JD DiBuonaventuro returning for new 4-year terms, Mike Heaberg starting his first full-term and newly elected Kristen Mayock joining them. Although rumored over the past few weeks, it was probably still a surprise to some that Michelle Kichline was named ‘Chair’ and JD as ‘Vice Chair’ of the Board of Supervisors. The board members themselves nominate and vote on these positions and traditionally, these positions go to the longer serving members of the Board of Supervisors. However, in this case, Michelle received the unanimous support of her fellow board members for the chair position after serving only 2 years as a supervisor and neither as a vice chair. Congratulations to her and to JD as Vice Chair.

It was obvious from the moment that Michelle was named chair that there is going to be a distinctly different tone to the Board of Supervisors – starting with gifts for freshmen supervisor Kristen Mayock and for Tom Hogan, Tredyffrin Township’s former solicitor and newly elected Chester County District Attorney.

Michelle made a special point in describing the qualifications and strengths of each of her fellow supervisors and described the Board of Supervisors as members of the ‘team’ and here to serve all the people. This team approach and sense of community could provide a winning combination for moving the township forward in 2012. There have been some missteps by Board members in the past and we know the Board is faced with some unfinished business from 2011, so here’s hoping this upward movement and spirit of cooperation continues.

As I said, Ray Clarke attended the TESD meeting last night and provides us with some interesting notes below. He mentions the Catholic Schoolclosings and the possible effect this could have on T/E school district. I was surprised to learn that T/E has 600 students who attend Catholic Schools. My guess is that the Catholic school closings may not affect many of these students as it is unlikely that schools which typically draw TESD students like Villa Maria, St. Monica’s, Devon Prep, Malvern Prep and Archbishop Carroll would be on the ‘closing school list’. Nevertheless, this is another dynamic to consider in the school district budget discussions.

TESD Notes from Ray Clarke:

A fair turnout (~50?) for the TESD Board meeting on Monday. They voted 7-2 to apply for Exceptions that allow a property tax increase of 1.6% on top of the 1.7% increase allowed by the Act 1 Index. Much lip service paid to the fact that this was not a vote to actually increase taxes by that amount, although we do know how that works. Brake and Mercogliano were the two dissenters, with the former articulating the danger of the incremental policy-making that will just give us over the next ten years the 50% tax increase we had over the last ten. He wants to give taxpayers a break. He was also the only one to give a realistic assessment ofHarrisburg’s view of PSERS: the options are to increase taxes or reduce benefits – and neither is going to get any political traction in the near future.

Let’s think about PSERS for a minute, because no one seems to be being objective here.

The state allows school districts to increase taxes to fund the increase in contribution to PSERS. Next year that tax increase is $0.94 million, the net PSERS expense increase about $1.1 million – pretty much one for one. That tax increase is about 1%. All the other cost increases ($4 to $5 million in 2012/13) are for things other than PSERS, yet all the school board could do was blame Harrisburg. The PSERS increases for the next two years are a little more (about $1.3 million a year), and then fall $0.7 million in 2015/16, then little changed for a decade or so, before tapering off. We can deal with a $4.4 million net increase in PSERS costs with a 5% tax increase over 4 years, and if we use the $15 million of fund balance set aside for that purpose, we can spread out that tax increase over twice the number of years.

No one wants to think objectively and long term likes this, because that would force attention on the issues within the District’s control:

Pay salaries and benefits that the taxpayers can afford

Get really rigorous with suppliers of all purchased supplies and services

Manage the cost of in-house services (like janitorial, maybe maintenance?) to market levels

Accelerate the hard look at nice-to-have things like the extra paid in-service days

Much commentary that about the cuts in FTEs, programs and costs in recent years, but none about where all the money saved has actually gone: employee compensation (and not yet PSERS, either).

It’s time to stop passing the buck!

One factor outside the district’s control, and which could have a major impact on costs: which Catholic schools will the closed, and what will that mean for TE enrollment? There are currently about 600 students living in TE that attend Catholic schools. It was stated that there is to be an announcement of the school closings on Friday.

Another observation: new Board member Kris Graham was a consistent pro-teacher advocate, and tried to invoke the hoary old chestnut that the homestead exemption offsets the property tax increase! Not recognizing that the exemption actually makes the property tax even more regressive. Because the exemption is a fixed amount, unchanged for many years now, the lower the assessed value the greater the effect of a given millage increase. The 3.3% tax increase is actually 3.5% for a home assessed at $150,000 that claims the homestead exemption.

And finally: it was notable that Mike Broadhurst showed his hand, advocating for keeping the janitorial out-sourcing option on the table, not “going too far” with tax increases so that “Harrisburg’s hand will be forced again”, questioning many of the projection model assumptions, and drawing attention to the hardly-new-news that the employee benefit cost is $1,040 per year for a family (but not completing the calculation to show that this is merely 1.2% of the median $85,000 teacher salary).

Community Matters … A Year in Review (Part 2)

December 31, 2011

7 Comments

It was interesting to read through my Community Matters posts of 2011 and the hundreds of comments but choosing which ones to include in my ‘Year in Review’ was difficult.

Certain topics, including the school district and the primary and general election, were much discussed. For a second year in a row, the sidewalks at St. Davids Golf Club saw much attention on Community Matters. Land development and the struggles between the Planning Commission and the Board of Supervisors for ‘control’ over future projects will be interesting to watch in 2012.

Absent a crystal ball, my guess is that the T/E School District’s upcoming teacher contract negotiations and the State House 157 race will lead discussions in 2012. I am hopeful that our local economy will move forward in a positive way — maybe the new year will see a tenant for Genuardi’s in Chesterbrook. I have heard that a high-end gym may be in the offering. And Nudy’s will soon be filling the empty Jake’s space in Paoli Village Shoppes.

Below are my picks for the most interesting Community Matters posts of 2011, in chronological order. Here’s wishing you a wonderful 2012 … may we all enjoy good health and happiness in the new year!

1. Should Teachers Be Consulted in School Budget Discussion? January 14, 2011

Do School Board, administration, parents and taxpayers give adequate attention to the opinions of the teachers during budget discussions. As TESD teacher negotiations are to begin shortly, this Community Matters post and its comments are timely to read again.

2. Another Store Closing in Tredyffrin . . . A Suggestion for a Business Task Force February 3, 2011

Eleven months ago, I proposed a “township business task force … a volunteer group of local retired executives, small business owners, and corporate representatives. The group would meet monthly with a mission to spearhead ways to improve existing relationships and provide assistance and a resource for township businesses. This important support group for the business community could provide regular updates and suggestions to the Board of Supervisors.” We know that my suggestion was approved by the BOS, an advisory group set up but . . . nearly a year later, where does it stand? There have been a few stores and restaurants open (Big Lots, Mealey’s, McKenzie’s) but closings and empty stores are everywhere … Genuardi’s, Syms, Jake’s).

3. Looking at Unionville-Chadds Ford School District, is the ‘Handwriting on the Wall’ for T/E? February 22, 2011

A comparative analysis between Unionville-Chadds Ford and T/E School Districts encouraged 62 comments. Both of these school districts are top performing and enjoy similar academic performances. The teacher contract negotiation process in UCF was lengthy and time-consuming – teachers worked for over a year without a contract as both sides battled over the benefit package (specifically health care). Even an independent arbitrator was challenged over the UCF teacher contract process. Is this the handwriting on the wall for T/E?

4. Labor Dispute Between TEEA Teacher Union & T/E School District . . . Claiming Unfair Labor Practices re Online Course Programming March 11, 2011

Another very heated school district debate on Community Matters was the dispute over online E-learning in T/E. The teacher’s union took the stance that the school district was offering courses online to students that could be taught by teachers. They claimed that the work of instruction and assessing students taking online courses is no different from work performed by teachers in the classroom. The school district argued that the E-learning courses fall outside the scope of teacher bargaining.

5. Berwyn Banter . . . Ray Hoffman’s Remarks on Homosexuality Evoke Strong Response from Local Residents April 2, 2011

Ray Hoffman’s Banter column in the Main Line Media news of March 24, 2011 evoked strong response from many residents. In his column, he had referenced his moral outrage over the Catholic Church and priests involved in the child sex scandal. In my opinion, Hoffman stepped ‘over the line’ when he suggested in his column that pedophilia and homosexuality are synonymous; and “the work of evil incarnate and therefore unforgivable”. Although one can describe pedophiles that prey on innocent children as evil and their behavior unforgivable, how could Hoffman impose that same standard in his description of homosexuals? To grow up gay in America, faced with intolerance and persecution can prove an enormous challenge for today’s youth, which made Hoffman’s words all the more painful to read.

6. The Use of Community Matters on Campaign Ad without Permission . . . Illegal or just Disrespectful? May 11, 2011

The use of anonymous comments from Community Matters on political campaign literature without my permission was a very difficult time for me – and in hindsight, I came very close to closing down Community Matters as a result. I had discussions with several attorneys over the matter and quickly arrived at the conclusion that the use of Community Matters by the TTDEMS (without my permission) was not illegal. However, were their actions unethical and disrespectful? These same people had supported me the year before as “one of their own” supervisor candidates – I just could not understand how some of them could disrespect and hurt me in this way. What’s the saying … all’s fair in politics?

7. Unofficial Results from Chester County Indicate Duffy Won by 40 Votes in Tredyffrin’s Special Election . . . Reports of Malfunctioning Voting Machines Add a Twist May 18, 2011

This was one for the history books. Molly Duffy was declared the winner in the special election by 40 votes. Reports of malfunctioning voting machines turned out to be correct. A hand-count of the election ballots a week later found 61 uncounted ballots; as a result Mike Heaberg was named supervisor to fill the vacancy left by Warren Kampf.

8. What’s the meaning of ‘Good Government’? Does it Mean Something Different in Tredyffrin? June 21, 2011

The Board of Supervisors continues delay tactics over the St. Davids Golf Club sidewalk land development project. The supervisors decided that rather than honoring their vote of a few months earlier to leave the land development authority in the hands of the Planning Commission, they presented a new township land development process giving the supervisors more oversight. The issue should not be about sidewalks at St. Davids Golf Club but rather a 6-year old signed land development contract between the club and the township and why it is not enforced.

9. America’s Best High Schools But Where is Conestoga High School? July 23, 2011

It was very surprising to learn that Conestoga High School was missing from Newsweek’s list of best high schools in America. Regardless of whether you give any credence to school rankings, what did it say that every other public high school in the area was on the list but not Conestoga. We learned subsequently that someone in the TESD administration had ‘dropped the ball’ and somehow the paperwork was not returned by the deadline. Although I am still not clear exactly what happened, I am fairly confident that this same mistake will not occur again.

10. Tea Party Agenda by State Rep Warren Kampf; so claims Former State Rep Paul Drucker August 27, 2011

In an op-ed article in Main Line Media News, former State Rep Paul Drucker had some harsh words for some of the choices made by current State Rep Warren Kampf. Drucker accused Kampf of following a ‘tea party agenda’ and pointed out the state’s education cuts, the lack of taxing on Marcellus Shale drilling and the state’s decreased funding of social services. I questioned the timing of the editorial and asked Drucker if he was considering a re-match against Kampf for the 157 district in 2012. At the time I did not receive a definitive answer … wonder if the idea remains a possibility?

11. Light Bulbs . . . Who’s Responsible? Township staff or PECO? October 12, 2011

This was became the starting point for light bulbs in Tredyffrin. I discovered the problem with light bulbs in Chesterbrook has existed for 27 years since the light poles were installed. I did a more ‘scientific’ count and found that there were 37 lights out between Duportail Rd.and Chesterbrook Blvd. I know that the township staff, supervisors and PECO have now held meetings over the matter. I regularly receive emails from residents who report that they are seeing ‘cherry-picker’ trucks with light bulbs being replaced. I am hopeful that supervisor Richter will give a light bulb update at the next BOS meeting – plus here’s hoping for an update on the St. Davids Golf Club sidewalks too.

12. Why Must the Campaign Season be ‘Politics as Usual’ . . . Please, Can it be the Truth? October 26, 2011

One of the most highly commented posts (100+ comments) this was a discussion about the negative ads of election season. Republican and Democratic parties both lowered their bars to slinging mud against each other. The line became so blurred; it was hard to tell the truths from the lies. False and misleading information about school board and supervisor candidates was delivered regularly and had many of us questioning the disappearance of honesty and decency in politics.

13. Election Day 2011 is over . . . Looks like much will remain the same! November 9, 2011

The General Election results showed that all incumbents in the supervisor and school board races won. It should be noted that in the east, it was a very close race between incumbent Paul Olson (R) and Tory Snyder (D). In a nail-biter, Tory lost the race by only 13 votes, returning Olson to the Board of Supervisors for another term. I am not sure but he may have the distinction of having being the longest-serving supervisor. Tredyffrin’s Board of Supervisors will continue as an all-Republican board. Kristen Mayock’s election to the Board adds a third woman and it has been a while since we had that dynamic. In an upset. Jeremy Blackburn (R) was unseated by Analisa Sondergaard (D) as District Judge. Unlike Judge Blackburn, Sondergaard is an attorney who will now fill the seat as District Judge.

14. Police Chief Andy Chambers Tenders Resignation While on Suspension December 20, 2011

The township has a cloak of mystery and drama as the year ends. We learned of an anonymous letter sent to the township supervisors which contained two allegations against Police Chief Andy Chambers. The first allegation, which the Chief admitted was true, involved him allowing his 16-year old son to drive a township police car. While driving the car, the kid was involved in an accident but Chambers took full responsibility for costs of its repair. The supervisors suspended Chambers for (1) allowing his son to drive the police cruiser and (2) his failure to tell the supervisors. While on suspension, the Chief decided to retire on December 30 after 30 years of service. The second allegation contained in the anonymous letter suggested that Chambers had used township time to work on personal business. There was no mention of this allegation by the supervisors so it is not clear whether or not it was investigated or whether or not the allegation is true. The public was not told the reasons for Police Chief Harkness’ departure from the Police Department, so my guess is there will be no further information on Police Chief Chambers.

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Pattye Benson

Community Matters