Octorara’s 2014-15 Budget: The Initial Good, Bad, and Ugly

goodbaduglyThe main event, of the December 9, 2013 Octorara Regular Meeting Agenda, was Dan Carley’s 2014-2015 Budget Presentation. As we have previously discussed, the District will be opting out of exemptions, and will be limited by Act 1. As a result, the Board will not have to vote on the initial Preliminary Budget.

The Good

The 2012-2013 Budget was $46.6 Million. Actual costs were around $44.2 Million. The difference is roughly $2.3 Million.

The original 2013-2014 initial budget included a year-over-year increase of $1.2 Million. The final increase was a difference in 2013-14 and 2012-13 budgets of just over $882,000.

The initial 2014-2015 Preliminary Budget is $48.2 Million. The 2013-2014 Final Budget was $47.5. The difference is an increase of just a little more than $700,000.

The Bad

Tax Rates!! The starting 2013-14 millage, caused by the State mandated and controlled re-balancing, is 36.98 mills (not the actual 36.66) for Chester County and 27.71 for Lancaster County. Because of the re-balancing, Chester County millage starts higher than the present year… even if the District budget remains flat.

The Act 1 Index limit, of 2.6% for the 2014-2015 fiscal year, means a maximum tax increase for Chester County property owners from 36.66 mills to 37.94 (more like a 3.4% increase), and Lancaster County from 27.71 to 28.43. Re-balancing effectively raises the Index limit for Chester County.

The Ugly

Public School Employees’ Retirement System (PSERS) and Obamacare!! The cost increase to the Retirement System, and the new costs associated with Obamacare, exceed the total increase to the initial Proposed Budget for 2014-15. The increase to benefit alone is $750,000.

Obamacare creates a number of new costs for the District. The largest of the initial costs is the “Reinsurance Fee” to help pay for the exchanges. It squeezes the District for $45,880, but that is nothing compared to what is coming down the pike.

In the near future, the District could potentially be on the hook to pay Obamacare’s 40% Excise Tax (called the Cadillac Tax). This part of Obamacare is levied on the most generous health plans, and is designed (in theory) to bring down overall health costs by making companies and workers more cost-conscious. When it comes to public employees, this could potentially be little more than a massive Federal tax shift to regular citizens, hidden within higher State, County, Municipal, and School District taxes.

The Remainder of the Board Meeting

Elena Wilson did a brief overview of the Comprehensive Plan. However, it was such a brief overview that I can’t say the presentation did it justice. I encourage the public to review the plan, and attend the Education Committee Meetings with your comments, questions, and concerns.

The Board passed this month’s list of bills and Action Items, with mostly little comment. My one concern was with the late addition asking the Board to approve an extension of unpaid Family Medical Leave. I voted in favor of the Item based on Dr Newcome’s assurance the late submission had special circumstances, which were later explained in Executive Session.

The Policy Committee met yesterday evening, reviewing  “Policy 801: Public Records” (second reading) and “Policy 806: Child/Student Abuse” (first reading). Policy 806 had some additional questions, mostly revolving around consistent wording and school volunteers. The Policy Committee plans to review Policies 303, 404, and 504. They also plan to explore adding a Volunteer policy and an Extra Curricular Drug policy.

The evening’s Finance Committee Meeting was primarily a review of the 2014-2015 Budget Presentation provided during the Board Meeting. The I.U./C.A.T. Board did not meet this month, and therefore no report was given this evening.

In Visitors’ Comments…

David Jones (Parkesburg, PA) spoke at yesterday’s Board Meeting. He was concerned that $100,000 of new spending has been added to the 2014-2015 Preliminary Budget for an armed School Resource Officer, a possibility that has been discussed over the last several months. Jones asked the Board to use careful consideration, believing armed SROs provide only the sense of security. He stated security policies, such as background checks for volunteers, would be more qualitative, providing more measurable results, at significantly lower costs.


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