The Octorara Area School District Board of Directors held their monthly Work Session Meeting, and Facilities Committee Meeting, on April 13, 2015. Eight Board Members were in attendance at the Work Session; Hank Oleyniczak was absent. Dr Tom Newcome, Superintendent, was also absent.
During the Work Session, the Board was presented the Agenda Items to be voted on at the Regular Meeting on April 20th.
Jeff Curtis, Business Manager, provided the Board with his projections for the 2014-15 Actual Expenses and Revenues.
The 2014-15 Budget expected revenues to be $47.7 Million. The current projected actual Revenue is $47.5 Million, or a shortfall of $175,299. Federal Revenues are the major cause, and is expected to be short by $143,979.
Expenses for 2014-15 were budgeted to be $49.2 Million. The current projected actual Expenses look to be coming in at $48.3 Million, for the end of the year, having the District expected to come under Budget by $819,391. The greatest saving came from Debt Service, in the amount of $382,153, thanks to the bond refinancing.
Another large savings (among others) came from Salaries, caused by (1) an unusual number of professional employees on unpaid leave, (2) retired employees being replaced by lower paid employees, and (3) new Administrators.
The difference between this year’s expected Revenues and Expenses creates a projected Deficit of $862,049.
Regular readers may remember, back in December, I reported the final audited numbers showed the 2013-14 School Year ending with a Deficit of $123,681. Deficit Spending has increased almost eight-fold in one year.
Those following these budgets know that over the last decade or more, the District has typically included Fund Money in Budgets to “balance,” while still taking large tax increases.
The reality of what was happening is the District was over-budgeting in a way that there only looked to be a need for Fund Balance to be used, and to justify massive tax increases. The tactic caused healthy Surpluses year after year.
However, over the last couple years, the District has kept taxes (in Chester County) flat without addressing the issue of spending and over-building the campus. The net result, in my opinion based on all the numbers I have seen, is there will be a continuation of large Deficits for years to come, even with the District taking the Act 1 tax increases.
Dan Carsley’s prediction more than a year ago, that the District is on a trajectory of going into a negative Fund Balance, is being proved correct. The District is on the path to going broke.
The Facilities Committee was provided with an estimate to repair the Tennis Courts. The proposal is at $33,250 for repairs that could last up to four years, but would come with no guarantee. Mr Curtis is getting bids for a full renovation, which could last as long as 25 years, and the item will become part of his 10 Year Capital Plan.
Mr Curtis is also collecting numbers on refinishing the High School Gym floor, which the current estimate is $18,500 with painted lines. Refinishing is a regular maintenance item that is typically done in-house, annually. However, the painted lines have started to come up. The District will be seeking information and estimates on refinishing with stained lines, which are believed to have a longer life expectancy.
The Committee was provided with information on black top repairs, filling in cracks and potholes. This is an annual maintenance item, to be paid out of the General Fund.
The District is also investigating the cost to build a 45,000 ft electrified fence, to enclose 12 acres of land, for the purpose of allowing the AG Program to raise beef cattle (on a part-time basis). The project has not yet been completely investigated, and still needs Board approval.
District Files for Fact-Finding
Lisa Bowman, Board President, read the following statement into the record:
Recently, the Octorara Area School District filed for fact finding with the Pennsylvania Labor Relations Board. This decision was made after approximately 15 months of negotiating with the Octorara Area Education Association. Fact finding is a process where the parties offer evidence to a neutral third party in the hopes they can resolve the impasse of negotiations. It is important to note, this process is non-binding on the parties, but gives the opportunity for a third party to review the issues and facts and make suggestions for a settlement between the parties. Over the years this process has led to settlements or at least the means for settlement after it has been completed.
This decision was not done in haste. The parties have meet over the last 15 months exchanging proposals and ideas in the hopes of settling the issues, to the point that we were able to agree to some items. Unfortunately, we are at a point where the parties cannot move any further. The Committee is hopeful this process will lead to a settlement sooner than later.