Finance Committee Presentation 3/18/13

Included here is the complete Finance Committee Presentation from March 18, 2013. I was originally planning do a page by page commentary, but many of the pages are either self-explanatory, or need little clarification. If you have been following this blog, you can begin to see the district continuing to stressed certain information, attempting take focus off of other issues.

SpinThe current projected tax rates are 37.59 mills in Chester County, and 28.39 mills in Lancaster County. This number may change up until the final budget vote in June. The numbers will be affected as Federal and State funding is determined, and by decisions made by the board between now and the final vote. Your voice will influence those decisions.

The page titled “Steb Market Values” included commentary and an explation of why Chester and Lancaster Counties have different tax rates. Many people have questioned this. There is nothing nefarious here. It is simply because of differences in assessed property values, and percentages of each county represented within the district.

Move to the “Impact of Clean & Green (Act 319)” and we start seeing the blame game forming. More than $5.6 Million in taxes is shifted from farmers to other properties. This equates to an average of $1,389 in Chester County, and $859 in Lancaster County. Clean & Green is nothing new. The law that created this shift has existed since the early 1970s. There are few property owners today that even owned their home before this law was created. It is a red herring that has nothing to do in the current conversation about costs and spending.

As we move on, there is an explanation of how the budget has grown over the last 10 years. The commentary with the comparison between the 2003-04 and preliminary 2013-14 budgets was directed at taking focus off labor costs, and get us looking at costs associated with the CCIU, transportation, charter schools, and Voc/Tech. These are, for the most part, all cost which are out of the school district’s control. However, take a good, hard look at payments to bond interest and principle. These costs were controllable, and had the greatest growth.

There is no point complaining or arguing about things we have/had no control over. Whether one is for or against charter schools does not change the fact the district must make these tuition payments. It is not a choice. The remainder of what I will be discussing are the parts of the presentation the district has/had control.

Salaries & Benefits History

This is the area that truly irritates me when looking at this. The presentation tries to imply salaries have been controlled. It is true the total amount for salaries, in the projected budget, is lower than the high of $19.8 Million in 2009-10. However, if you go back to my salary analysis since 1999-00, we see that the greatest growth in teacher salaries have occurred in the last 4 years.

How is it possible the total amount paid has gone down, while teacher salaries have jumped? They cut staff. Since 2007, most within 2010-11 and 2011-12 years, the school district cut 56 positions, including 29 teachers. The teacher cuts “saved” the district $2.4 Million per year (in 2010-11 & 2011-12 dollars). Unfortunately, between the 2011-12 and 2013-14 budgets, that savings has almost been completely eaten by increases in actual labor costs. Another, $1.2 Million per year could have been saved if the rate of wage increases had been controlled since 2008-09, or approximately $2.1 Million if we never paid a premium to begin with. (reflects salaries only)

Debt Service

There is a graph on page 11. Please focus in on the 2008-09 number of Debt Service (Principle and Interest payment). Now, go back an read the article High School Renovation & The Great Recession. Any board member, who voted in favor of proceeding with the renovation and expansion of the high school, in September 2008, while the world economy was crashing all around us, is responsible for adding $2 Million a year to the budget.

To add insult to injury, current Pennsylvania Department of Education projections for enrollment expect Octorara’s student population to decrease to 2459 within 7 years, a drop of roughly 250 students from 2008-09, with an expected graduating class of only 167. The project was based on a  2003 feasibility study which not only fell short of expectations, was no longer valid by the 2008 vote.

Per-Student Cost

The per-student cost is called “expense per average daily membership” within the presentation. Average daily membership is shop-talk for a count of students for data collection needs. Members are students. The average cost was determined taking the total budget, minus outside tuition payments, divided by the “average daily membership.”

Compare the charts of pages 11 and 12, and we see between 2009-10 and 2010-11, the average per-student cost rose about $300. It also shows that compared to all other Chester County school districts, plus Pequea Valley and Solanco school districts in Lancaster County, Octorara has a higher cost except four. The neighboring districts of Solanco, Avon Grove, and Oxford have dramatically lower per-student costs.

Mill Rate & Mill Value

This is nothing we don’t know. Octorara has a dramatically higher mill rate, with a dramatically lower mill value. The argument from the district being, mill rates are higher because there is less value. The rate must be high to pay for education. In this attempt to persuade, the district leaves out certain inconvenient facts. It is not completely untrue, but the idea can cause false conclusions.

They compare West Chester’s $8.2 Million mill value to our $668,061 mill value, and maintain this is why they pay 18.87 mills and we pay 36.66. It is not a true apples to apples comparison. West Chester also educates 12,000 students compared to our 2,600. They have many more buildings to maintain, a robust athletics program, and larger administrative costs, among other costs, but has been able to keep their per-student costs lower than ours. Our small, rural school district should look more like Solanco, Avon Grove, and Oxford. We should not be trying to compete with West Chester, Tredyffrin-Easttown, and Great Valley.

Conclusion

Nothing new here, and more of the same spin from the district. Past choices have boxed us all in a corner. It will only be through a complete transformation, and refocusing of the district that responsible spending will be restored.

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