Octorara Board unanimously rejects Fact Finder Report

The Octorara Area School District Board of Directors held their monthly Work Session Meeting, and Facilities Committee Meeting, on June 8, 2015. All nine Board Members were in attendance at the Work Session.

During the Board Meeting, the Directors voted unanimously to reject the Fact Finder Report issued by Timothy J. Brown, and was presented the Agenda Items to be voted on at the Regular Meeting on June 15th.

2015-2016 Final Budget Presentation

At the next Regular Meeting, the Board will be voting to adopt the 2015-2016 Final Budget in the amount of $50.7 Million, and vote to increase taxes in Chester County to 37.51 mills and Lancaster County to 27.20 mills.

The tax increase, which is the maximum allowed by law without exceptions or voter referendum, raises $693,822 of the $2.5 Million needed to balance the budget. The remaining $1.7 Million will be paid for with the Reserve.

However, next year’s budget is only a $1.5 Million increase over the current budget. Of that increase, almost $1 Million are increases to Retirement and Medical costs, and another $519,225 for Special Education.

Medical costs for the District have increased from $1.8 Million in 2007-2008 to $2.8 Million in 2013-2014, and the District expects to end 2014-2015 again at around the $2.8 Million mark. The District’s cost for Retirement has grown from 4.76% of salaries in 2007-2008 to 21.40% of salaries in 2014-2015. Retirement will increase to 25.84% of salaries in 2015-2016, and is projected to become 29.69% of salaries in 2016-2017.

Octorara’s Reserve Balance was $8.3 Million in June 2013, but the 2013-2014 deficit and 2014-2015 deficit will have us ending this year with the balance reduced to $7.4 Million. By the end of the 2015-2016 year, the Reserve is projected to be only $5.6 Million.

The District’s policy mandates that a Reserve Balance must be maintained at 3% of Budget. So, for example, a $50 Million Budget requires that $1.5 Million be in Reserve. Once the Reserve Balance drops to that level, the District cannot use Reserve funds to balance. Taxes would have to be raised to make up any difference or, if taxes cannot be raised, programs and services will need to be cut. We are expecting to hit that wall in 2-3 years, even with no new costs.

Rejection of Fact Finder Report

The Octorara Area School District Board of Directors unanimously voted to reject the Fact Finder Report by Timothy J. Brown.

The Board identified two glaring mistakes in the report that made it impossible to pass:

  1. The Fact Finder recommended a three tiered benefit plan. However, Independence Blue Cross has informed the Board that no such plan is available.
  2. A prescription plan was not accounted for in the recommendations. This essentially would have removed prescription coverage from the contract.

[Click HERE to find the Fact-Finder Report.]

[Click HERE for the Board’s Official Statement]

However, even if these obvious errors were not an issue in determining whether to accept or reject the report, the Board would have rejected it due to the long term cost, and the impact the contract would have on the District and the education provided to our children.

The District must evaluate what the community can afford to pay, not what the Board Directors can legally levee in taxes, and the impact of costs on programs for students.

The District has offered a proposal that:

  1. Provides pay increases to all staff;
  2. Decreases monthly health care premium co-share to eligible employees, the result of which is more money in those employees’ pay checks;
  3. Contributes tax-free contributions into employee owned Health Savings Accounts, and
  4. Maintains jobs and programs.

The Board looks forward to returning to the negotiating table until a deal is completed that is financially sustainable, and will not impact the students in the classroom.

Graduation Class of 2015

I would like to congratulate the Octorara Class of 2015, who graduated on Friday, June 5th. Every speaker, both student and staff, had some special quote to help inspire these young adults in their future. This is one that I would like to share, and have carried with me for almost 25 years:

“Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan Press On! has solved and always will solve the problems of the human race.” ― Calvin Coolidge

No matter what your goals, no matter how you define success, dedication and persistence will be the characteristics that are most valuable.

I give you as an example, a man born into poverty, who faced defeat throughout his life, twice failed in business, and who even suffered a nervous breakdown. Despite this man starting with little means or education, with honesty and hard work he overcame numerous obstacles and failures to become one of the greatest Presidents in America’s history. That man was Abraham Lincoln.

No matter what obstacles get in your way, one only fails when one quits.

Octorara Graduation - 2015

I would also like to thank Dr. Newcome, Dr. Rohrer, and all those who worked so hard to make this a great event, and for the opportunity I was given to personally award my son with his diploma. It is an experience and memory that I will cherish, and I am deeply appreciative.

10 thoughts on “Octorara Board unanimously rejects Fact Finder Report

  1. Depressing..just depressing. We are looking at almost $600 per month in school taxes for our home…1900sqft on a third of an acre in a mediocre (some would argue less then that) school district. And did I read correctly that one of the boards proposals is to decrease district employees health care costs?? So while the rest of us in the real world are looking at ever increasing health care premiums..the bubble that is OASD is decreasing theirs..and raising our taxes. Time to get out of Dodge..

    • With the District’s offer, the proposed decrease in monthly health care premium co-share to eligible employees, as well as wage increases and contributions to an employee owned Health Savings Account, are paid for in part by switching to a Qualified High Deductible Health Plan.

      Qualified High Deductible Health Plans are common in the private sector, and are being included in school district plans… an example of such is neighboring Pequea Valley.

      I believe, once the District’s offer is understood, most will realize it is a win-win.

      • You say the decreases to employees’ costs are “paid for in part.” Where is the money coming from in total to give this perk to the employees?

      • I used the phrase “paid for in part” as a qualifier because the District is self-insured, which means the District directly pays the medical costs of our employees, not an insurance company. Over the long-term, being self-insured is more cost effective. However, in any given year, there is the potential for medical costs to exceed the budget. The offer that is proposed by the District was carefully crafted to be a win-win. Despite pay increases and decreased monthly health care premium co-share to eligible employees, the District’s plan can be described as budget neutral.

  2. The District’s cost for Retirement has grown from 4.76% of salaries in 2007-2008 to 21.40% of salaries in 2014-2015. Retirement will increase to 25.84% of salaries in 2015-2016, and is projected to become 29.69% of salaries in 2016-2017.

    Why has costs for retirement grown so exponentially and what if anything is being done to address this?

    I too have a problem with the ever growing burden of Octorara district taxes and more so wonder why we are not seeing direct results.

    • The issue with retirement comes from Harrisburg and the Pennsylvania Public School Employees’ Retirement System. The big problem is with the pension being a defined benefit plan, in my opinion.

      These types have plans have been almost completely eliminated in the private sector because the costs make them impossible to maintain. According to one CNN report, “The percentage of workers in the private sector whose only retirement account is a defined benefit pension plan is now 10%.” This is down from 60% in the 1980s. However, 80% of public employees are still receiving the benefit.

      There has been efforts to reform the system, and switch to a defined contribution plan, but the new Governor has a Progressive agenda which rejects any reform. But, we do have some limited control of retirement costs by controlling salaries.

  3. “Maximum allowed by law”, without exception or voter approval, why is that NO SURPRISE!
    Time to CLEAN HOUSE !! Area taxpayers are NOT a bottomless MONEY WELL.

  4. As A disabled widow on a fixed income,This is just depressing !!! My S.S. sure isn’t going to go up ! I already struggle and pinch pennies ! It’s time to pop the bubble on OSH ~ and start doing something for the taxpayer’s !

  5. 20% pay cut for all administration employees. If we can’t cut corners with the teachers compensation, cut where we can.

    Also:
    “The District has offered a proposal that:
    1. Provides pay increases to all staff;
    2. Decreases monthly health care premium co-share to eligible employees, the result of which is more money in those employees’ pay checks;
    3. Contributes tax-free contributions into employee owned Health Savings Accounts, and
    4. Maintains jobs and programs.”

    Where’s the “negotiations”? Seems like the school administration caved in to everything but the “health care premium co-share”.

    I’ve been really trying hard to not have a negative attitude towards the school because there are some good things coming out of it… but when I compare our taxes with neighboring districts, see how much people have to reduce the price of their homes that they’re selling as well as how long they are on the market, and the poor performance of the school compared to neighboring districts.. I can’t help but think that we really need a top down cleaning of the school. We can no longer throw money at an ever increasing problem.

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