Octorara Looking to Make $420,000 in Budget Cuts

Octorara Looking to Make $420,000 in Budget Cuts

The Octorara Finance Committee and Board of Directors met on Monday, January 18, 2015. All Board Directors were in attendance. The major discussions revolved around the 2016-2017 Budget, Legal services rates, and a potential efficiency audit by Leadership Consulting Consortium.

2016-2017 Budget Update

The current draft of the budget, based on the information at this time, includes a deficit of $1.5 Million. As we know from Herbein+Company’s Financial and Compliance Report last month, the District cannot continue to use the Reserve Fund to balance. The District not only has a policy that places limits on Reserve Fund usage, but protection of the Reserve Fund is necessary for the overall financial health of the District. Additionally, a strategy to replenish the Capital Expenditure Fund is needed in order to have sufficient funds to pay for capital expenses.

As a result, the Administration has created a plan to cut the 2016-2017 Budget deficit by $420,000. The strategy is for each grade (plus the Administration as an additional “grade”) work to find roughly $30,000 in cuts. The hope is that the grades could find creative solutions, but all options are on the table, including a reduction in teaching staff.

During the Finance Committee meeting, I brought up my concern that non-academics should be cut first. I did not want cuts that would affect Academic Performance and Growth, if it could be avoided. I don’t know if Dr Newcome was being intentionally obtuse, or was playing Devil’s Advocate, but he asked, “There is an argument to be made that everything is for the benefit of academics. What are you advocating, the elimination of sports?”

As an example, I noted that Octorara’s score for the Keystone Biology test is around 40, when the minimum standard is 70. Overall, the Octorara School District struggles with meeting minimum standards across all grades. I do not want cuts that would negatively impact Math, Reading, Science, and other core academics.

I also noted, the former Athletic Director was developing a plan to save the District by limiting the range teams would be allowed to travel for away games. This had the potential to save a considerable amount of money caused by travel. I would like to see cuts like this before any reductions in teaching staff, or other cuts that could negatively impact academic performance.

As a side note, not mentioned at the meeting…. three cuts I have been advocating for a long while would get us to the goal, and I don’t believe would have a much of an impact;

  • Return to Half-Day Kindergarten – $240,000,
  • Elimination of iPad program – $170,000, and
  • Elimination of Armed Security – $70,000.

The total savings would be $480,000. However, I still don’t believe there is support for these changes.

Legal Services Rates

The Board reviewed and approved changes to the hourly rates for legal services, provided by Kegel, Kelen, Almy, & Lord. Additionally, the Facilities Committee also reviewed the rates charged by other law firms, to other school districts, and found Octorara is paying almost twice the per hour rate for Partner and Sr. Partner services. While several Board Members expressed satisfaction with the legal services provided by the current law office, the differences in rates can not be ignored.

It was the direction of the Facilities Committee that the Administration take a more comprehensive look at legal rates and costs, and make recommendations before the renewal of the legal services contract in June.

Leadership Consulting Consortium

Back in October, the Finance Committee met with Joe Antonio and Preston McKnight of the Leadership Consultancy Consortium. The consulting group had presented a business consulting proposal to audit the District, and make cost savings recommendations by applying business practices, long established and used in the private sector. The goal is to reduce operating costs without impacting services or performance.

The Finance Committee looked at the final draft of the contract on Monday. There still remained some questions, and needed edits. However, the Committee chose to not hold up voting at the regular session Board Meeting, which passed “as discussed” with one dissenting vote.

Brian Norris voted against the contract. He noted his objection was not with having an audit; his issue was with the company’s owners, which are employees at other schools. His concern seems to be ultimately that these individuals are moonlighting, and Norris has some issue with their second job being in the same area expertise as their primary. I think I got that right. I was having a hard time truly understanding his problem.

Traffic Light Service Contract

You may remember last week, we discussed the Board paying a portion of a maintenance agreement West Fallowfield Township has with Signal Service, Inc. The payment would be to service the traffic signals on or near the campus, at the cost of $1,225 per year. Before the vote, I asked that since the lights are not truly a district liability, was there a signed agreement with West Fallowfield Township that we would accept responsibility for these costs?

The discussion that followed revealed:

  • The light is ultimately the responsibility of West Fallowfield Township.
  • There is no known written agreement that the District would take responsibility in perpetuity.
  • There is a possibility that West Fallowfield Township is receiving funds from the state for road maintenance, that would include the lights.
  • No one knows who’s electricity is being used to run the lights.
  • Both of the longest serving Board Members, Sam Ganow and Nelson Stoltzfus, stated the lights were put in before their time.
  • Dr Newcome believes the lights existed when he first came to the District, 20 years ago.
  • While it is said that the original agreement was the District would pay this cost indefinitely, there is no proof what the actual, original agreement was. It is possible that recollections of the agreement changed over time.
  • Municipalities are responsible for traffic lights. It is unknown if other Districts are compelled to pay such costs.

Sam Ganow believes that if the District did not pay this cost, West Fallowfield Township would pull the lights. My response was that there was PennDOT approval needed to put the lights in, and I believe it would require PennDOT approval to have them pulled. I don’t believe they would get that approval.

Here is my ultimate position… those lights were put in more than 20 years ago. While there may have been a strong argument the District help absorb initial costs, that time has long past. It is unreasonable that West Fallowfield Township ask the District to pay these costs into infinity, especially when it is not technically or legally the District’s responsibility. Therefore, I voted against it.

While I was the only dissenting vote, there does seem to be interest by some other Board Members to explore this issue further. We may have a different outcome next year.

7 thoughts on “Octorara Looking to Make $420,000 in Budget Cuts

  1. I would definitely support half day kindergarten. We moved to the district a year and half ago and our previous district (out of state) had half day kindergarten with an option of extending for $300 / month. Many 5 year olds would benefit from increased play time. Forcing kids to sit still for many hours is well documented to actually delay reading and other cognitive developments. I would additionally support the omission of ipads. They are handy for information and certainly some special needs students relay upon an ipad as a communication device, so barring any restriction for those students, the traditional student – especially in the lower grades would benefit from real hands on learning, not passive information dump via the ipad. Thanks again for your great reporting.

  2. I have children in 3rd, 6th and 8th grade presently. We came from the West Chester School District. One of my children went through full day kindergarten while the other was half day. I witnesses no benefit to having the full day kindergarten. The option to have the full day would be great and at the additional cost to parents. My thought on the ipads is that they can be eliminated. I very rarely see my son using it and for what he does use it mostly in the classroom he can just as easily use the old paper and pencil method. Again we came from West Chester where the activities were plentiful, computers were at our disposal and the taxes were a 1/4 of what they are for the Octorara. I know several factors make the funds up but to be honest it sounds like financially the system needs to be overhauled by the state to see that funds are equally distributed to all schools and I do believe there was talks with the property tax in doing this. All students would benefit and my taxes may not be as high as they are. I cannot elaborate because I have not fully looked into it. As for security can the school district not enter into some type of agreement with neighboring police to patrol occasionally and respond to incidents. This would eliminate the armed security at $70k per year. I feel the more I pay the more gets taken away from the kids. One occasion in particular in early September the 3-4th grade center had no AC in the classrooms, I honestly cannot see how my daughter can even concentrate on learning when it is 100 degrees in the classroom. Then I think wait how much do I pay in taxes?? Thank you

  3. Elimination of the ipad program wouldn’t be in the cards. We currently are phasing out text books and going to a digital format of these books and phasing out the paper print versions. Colleges are, if not already, moving in the digital direction. We need to stay in flow with what students do after high school to have a seemless transition. 1/2 day kindergarten, yes, in my opinion you don’t need it. Both my kids are in the high school now, and 1/2 day was plenty at that age. They were exhausted. Parents need to do what they can to be home with their kids, and giving them their time, not a teachers or day care. Armed security elimination is a tough one. We don’t SEEM to need them, but what happens the day we do, and we don’t have it? I can’t make an opinion on that one yet. Thanks for your article!

  4. What about the old run down maintenance building? Can that not be sold off to help with the costs sure it wouldn’t be much but any income would help the problem.

    • If I’m not mistaken, that is being used for storage. Regardless, it would be a one time shot, with little impact. The issue really is that the budget has been allowed to grow, not only at a rate greater than inflation, but greater than the Act 1 limit. There was also two years when the Board chose to not raise taxes, but allowed the Budget to grow at 3 and 3.5% respectively, which exacerbated the situation. Add to that, new spending, like the iPad program, which started the deficits rolling.

      The reality is I don’t think these cuts will be enough. I believe there will need to be more cuts next year. Right now, we are looking at increasing taxes 3%, raising $964,000 additional revenue, and hoping to cut $420,000. This will still leave a $769,000 deficit, which will continue to place the Reserve Fund at risk and no way to replenish the Capital Fund.

  5. I am looking at the feasibility of purchasing a home in the Octorara school district in order to be near my daughter who lives in Atglen. I have been shocked at the taxes being assessed in this school district. I currently reside in the Downingtown school district which consistently rates as one of the best in the State and my taxes are at least 35% to 50% lower than what I am seeing in Octorara. Someone needs to find out what Downingtown is doing and how they are doing it and apply it to the processes being used by the Octorara district.

    • Thanks for commenting. There are several issues that cause Octorara to have such high taxes. Some of it out of the District’s control, and some of it within the District’s control.

      Unter the category of out the District’s control is the very high percentage of property dedicated to farming, and the very limited amount of commercial and industrial property. Farmers, under Pennsylvania’s Clean and Green law, receive a significant discount on property taxes. That discount is paid by shifting the tax burden to other property owners. Because there is very limited commercial and industrial property within the District, that tax shift is primarily paid for by home properties.

      Under the category of what the District could control, the largest jumps in our tax rate were caused when the District over-built the campus. I have written about this in several blog articles, but the District speculated student population growth that did not materialize. In fact, at the time student population was supposed to peak (2014), we were facing a 20 year low. Despite the facts, you would be hard-pressed to get a majority of the School Board to admit building was a bad idea or consider consolidation as an option.

      These are by no means the only contributors, but they are the two biggest issues.

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