Octorara’s Libraries, Track Spending, and Locker Rooms

The Octorara Area School District Board of Directors held their monthly Work Session Meeting on Monday, June 13, 2016. Prior were the Policy and Facilities Committee meetings. Hank Oleyniczak was absent.

2016-2017 Budget Update

Ok, the original budget was $52.4 Million in total expenditures and $49.4 Million in revenue. The Budget next week will include a 3 percent tax increase for Chester County, a 5.63 percent tax increase for Lancaster County, and $537,800 in budget cuts that will include eliminating the K-6 Librarian position. The total expenditures are now $51.9 Million and the total revenue increased to $50.9 Million. This leaves a budget deficit of more than $1 Million.

The anticipated use of Fund Balance is only $316,883. This is because the budget includes a $350,000 Budget Contingency, and we are receiving a one-time Debt Service Savings of $340,000 from refinancing. Keep in mind, this means the 2017-2018 budget starts in the red by more than $656,000 before any budgetary increases.

Also, you may remember last month Mr. Curtis informed the Board that the state is delaying around $500,000 in reimbursement. Depending on when those funds are paid, we may or may not have a very large deficit for the 2015-2016 school year, creating a very large surplus in 2016-2017. This is the kind of insider baseball that is important to know. The 2016-2017 year may get misrepresented by some Board members as a successful budget. Don’t get duped when the time comes.

K-6 Librarian… GONE!

The K-6 Librarian is being cut. Julie Bowers of Atglen spoke to the Board on behalf of the Octorara Library & Literacy Team. Since mid-May, the group collected 384 signatures, from both parents and community members, hoping to change enough minds on the Board to save the position. Members of the community group have been calling and emailing Board members, and sending research documenting the importance of school librarians.

Board members did not change their minds, and most did not defend their positions or even address the group’s concerns. Lisa Bowman and Brian Fox did make comments that seemed to suggest they believe Librarians are outdated and irrelevant in today’s world. Anthony Falgiatore did again offer up cutting the Traffic Control Office position as a way to keep the Librarian, but it does not cover even half of the cost. While Falgiatore made the suggestion, he made no comments that the Librarian is a deal breaker for his vote.

I wanted to attack the notion, being put forth by the Administration, that either nothing changes for the children or that somehow things will be better. If nothing changes, how was the District able to take credit for Library as a Unified Arts Class before the cut, but after the cut, it is just “book exchange”. Dr. Newcome’s position is that it has been just “book exchange” for years. At the end of it all, I still had no idea how Library was a class yesterday, but not a class after next week and everything will stay the same.

The New Math: How $1.3 Million Becomes Zero

At the Octorara Area School District Board Meeting (Monday, May 20, 2013) we were informed, as of this moment, the final budget will include a zero increase for Chester County. Lancaster County will increase from 27.49 mill to 27.71, a tax rate lower than 2010-11 because of district re-balancing. Even with the rate freeze Chester County residents may still see a tax increase, dependent on final numbers from state gambling revenue.

The original proposed 2013-14 budget was $47.9 Million. The spending with this final budget, to be voted on no later than the regular meeting in June, is $47.5 Million, a reduction of approximately $400,000 or less than 1% in cuts.

The 2012-13 final budget was $46.7 Million. The original proposed 2013-14 budget was an increase of $1.3 Million or 2.7%. The current version is an increase in spending of roughly $800,000 or 1.7% additional.

Despite the increase spending of around $800,000, the final budget needs and includes over $1 Million in “savings account” funds in order to balance, and keep the tax increase to zero, a gap of more than $200,000.

Keep this in mind… there were no real cut to spending, only spending less than originally proposed in the initial budget presentation.

Looking forward to 2014-15

The average increase to proposed budgets, over the last four years, has been 4.7% (2008-09 & 2009-10 were not included in the Budget Process History report provided to the public in February). The average increase over the last five budgets is 2.44% (including the unofficial 1.7% for 2013-14, and excluding the 7.27% from 2008-09).

Based on the historical data, it is reasonable to presume an initial proposed budget of $49.7 Million for 2014-15 by the district, with a tax rate of approximately 39 mills, an increase of 2.34 mills for Chester County.

Of course, we will be told the budget is a process. Therefore, looking at a reasonable projected expectation for a final budget, the historical data provides us to reasonably expect a final budget of $48.7 Million, in 2014-15, with an estimated tax rate of 38.2 mills, an increase of 1.54 mills.

Harrisburg can’t fix problems the district created

While we can all agree that Harrisburg does create issues for districts, they did not create our high labor cost issue, our over-building, or our debt. These are issues it seem some long-time board members do not want to address, and we will not see the board address these issues until they are motivated by the actions of citizens, taxpayers, and voters.

Off-Topic: The Primary Election

As an off-topic note, I will mention that today is the Primary Election for School Director seats in Region 2 & 3. Polls will be open from 7:00AM-8:00PM.

Take a look at the sample ballots for your area:

• 2013 Sample Ballots REP
• 2013 Sample Ballots DEM

Region 2 has only one person running, incumbent Samuel Ganow, with two seats available. Both Republicans and Democrats looking to make a difference should write their names in, and ask your friends to write you in as well.

Region 3 has two seats available, with incumbent Nelson Stoltzfus running against Timothy Alexander (me), and Frank Dangelo.

I call this off-topic because the only time the election has been mentioned at a school board meeting was the day I announced my candidacy. One can only speculate as to why the board would not attempt to encourage greater citizen participation with some attempt at promoting the election.

Smoke And Mirrors From The Great And Powerful Oz

Ken Knickerbocker (former school board member, former Parkesburg borough council member, and owner of the ParkesburgToday blog) is upset. I believe there is more to it, but he accuses me of “[having] bluntly accused the nine-member all-volunteer Octorara school board of 1) having “narrow, rigid vision,” 2) spending “like drunken sailors,” 3) intentionally deceiving Octorara tax payers, 4) ignoring events leading up to 2008 epic economic collapse and intentionally deceiving Octorara tax payers and 5) misrepresenting academic achievement.” (link)

This is what happens when people pull back the curtain. Most school board apologists don’t have answers. They just want to take the focus off spending, and silence dissenting opinions. They vigorously avoid discussing why controllable costs have not been better controlled. They avoid discussions about Octorara’s high labor cost issue. They avoid discussions about why the High School renovation was not at least delayed when the economic climate became harsh, and taxpayers asked them to reconsider timing and cost. They avoid talking about academic achievement data.

I’ve tried to ignore Mr Knickerbocker’s ad hominem attacks and logical fallacies, but things can only go so far before something needs to be said.

1. While I do talk about the board as a whole political body, I’m not accusing every member of the board of anything. The Board is responsible for this situation, just like Congress is responsible for our national budget crisis. The Board is responsible for governing the school district.
2. That the board is “all-volunteer” is irrelevant to any argument about cause and effect. It is also an insult to taxpayers to try and assert being a board member has no personal value, and is always done with selfless motives. I’m not questioning motives. I am questioning decisions.
3. The vision of the board being rigid is my opinion, based on my analysis of the facts and data. It was only when the well started to run dry that there any attempts to make real cuts to the budget.
4. Saying the school district spent like drunken sailors was insulting… to drunken sailors, who are spending their own money.
5. Was there an attempt to intentionally deceive taxpayers? I don’t think I specifically made the accusation of deliberate lies, and I think the facts speak for themselves.
6. Where there misrepresentations of the school’s academic achievement? Misrepresentation may be too harsh a word. I would say there was a concerted attempt to downplay or take focus off things like achievement scores, graduation rates, and college readiness.
7. Did the board ignore events leading up to 2008 epic economic collapse? The foreclosure and credit crisis existed long before final approval to proceed occurred, and the major collapse was happening and ignored while contracts were being awarded and the vote to proceed happened. This is fact. They either ignored what was going on, or… what?

The school district leadership does not want to be held accountable for past decisions. They instead want to switch the subject, and make it a conversation about shrinking State and Federal contributions, about farming tax waivers, and about the community rejecting vigorous development. They want the blame to be on people who send their kids to charter schools, taking funds out of the budget, not the school district.

They don’t want us talking about…

• When faced with a global financial crisis, considered by many economists to be the worst financial crisis since the Great Depression of the 1930s, the school district chose to move forward with the High School Renovation schedule.
• When people spoke up about taxes, and wanting them to take pause and re-evaluate the possibility, extent and financing of renovating the high school, they were told it was too late to voice their objections.
• The fact Ocotrara has had a labor cost issue, going back before 1999 that only escalated.
• The budget increase and tax hike of $1.2 Million, after other debits and credits, is almost completely labor costs of $1.1 Million.
• Labor costs (salaries and benefits) represents $27.6 Million of the total $47.8 Million 2013-14 budget.
• Salaries representing $19.2 Million of the $27.6 Million labor cost.

The Complexity Conundrum

The argument that the school budget is too complex for the average voter or “novice activist” to grasp, and even comment on, is a false argument. It is merely an attempt to keep taxpayers and voters from peeking around the curtain, and invalidate the opinions of those who have the audacity. Information seems often presented in a way to have people looking away from cost that are/were controllable, and upset with uncontrollable costs and funding issues.

It is true that the issue is complex, but the complexity comes from large amounts of information being disjointed, and presented in an incomprehensible way. It is done in a way that keeps many from even attempting to pull all the information together, and making comparisons.

The Personal Attacks and Name-Calling

From feedback, I feel confident most people recognize Mr Knickerbocker’s ad hominem attacks. I have no idea what his thought process is other than since he can’t prove the facts I post wrong, or my assertions invalid, he must attack me personally. He’s a veteran of the school board, and has a vested interest in trying to not have people digging too deep.

The ParkesburgToday blog is commentary packaged as news. It is not true coverage of the area. For all the saber-rattling, there has not been any substantive analysis. He just sits there screaming it is too complex for the average taxpayer to understand.

When we compare mill value, tax rate, and total student body, we see our tax rate should probably be around 31 mills, not a projected 37. Our spending should look more like Oxford and Solanco, not West Chester and Great Valley. Even then, West Chester’s spending is much more controlled… remember, they have almost 12,000 students compared to our 2,600.

The reason one would resort to attacking the messenger is because they can’t refute the message. Mr Knickerbocker has not provided his own analysis. He has not provided any information or data that refutes the facts I have posted, or invalids my point of view. He is not trying to solve the problems facing our community. The ranting is just an attempt to silence opinions which he does not share, nothing more.

The Budget vs Inflation Rate

A person asked me if I would investigate how the budget had grown in comparison to inflation. He believed that the rate of the school budget’s growth far outpaced inflation, and this was the prime reason it was causing taxpayers pain. This type of analysis gives me a headache. Get ready to glaze over, or just jump to the bottom section. 🙂

The numbers for this exercise where obtained from the Octorara Area School District May 2012 Finance Committee Meeting report, and the 2/14/2013 Budget Process History report. Statements assume that 1 mill equals $800,000, as was stated in the Feb 11th Board Meeting. If calculated out, both methods below show spending $42,553,183.59 in 2013-14 represents flat growth.

Method 1

	Actual Budget	Inflation Adjustment (2006-07)	Rate*	Difference
2006-07	$37,216,717.00
2007-08	$38,527,872.00	$38,630,952.25	3.80%	-$103,080.25
2008-09	$42,102,280.00	$38,476,428.44	-0.40%	$3,625,851.56
2009-10	$44,021,839.00	$39,092,051.30	1.60%	$4,929,787.70
2010-11	$46,026,385.00	$40,342,996.94	3.20%	$5,683,388.06
2011-12	$45,757,576.00	$41,190,199.87	2.10%	$4,567,376.13
2012-13	$46,664,375.00	$41,313,770.47	0.30%	$5,350,604.53
2013-14	$47,920,581.00	$42,553,183.59	3.00%	$5,367,397.41

This exercise actually starts with the 2007-08 budget, the year before the Wall Street Crash and start of the Great Recession. There are a few different ways to do this. However, no matter what the method, the numbers are all really close. In Method 1, we use a fixed reference (2006-07), and compare the Actual Budget verses the 2006-07 budget adjusted for inflation. We see the spending above 2006-07 adjusted dollars in the difference column.

Using a generous projected rate of inflation of 3%, we see an extra $5,367,397.41 in the projected 2013-14 budget, or 6.70924 mills. That would take the proposed rate down from 37.59 to 30.88. This rate is still high compared to many other districts, but can be easily defended. If spending would have been held at the 2006-07 level, and only adjusted for inflation, we would have saved taxpayers $29,421,325.14.

Method 2

	Actual Budget	Inflation Adjustment (Year-Over-Year)	Rate*	Difference
2006-07	$37,216,717.00
2007-08	$38,527,872.00	$38,630,952.25	3.80%	-$103,080.25
2008-09	$42,102,280.00	$38,373,760.51	-0.40%	$3,728,519.49
2009-10	$44,021,839.00	$42,775,916.48	1.60%	$1,245,922.52
2010-11	$46,026,385.00	$45,430,537.85	3.20%	$595,847.15
2011-12	$45,757,576.00	$46,992,939.09	2.10%	-$1,235,363.09
2012-13	$46,664,375.00	$45,894,848.73	0.30%	$769,526.27
2013-14	$47,920,581.00	$48,064,306.25	3.00%	-$143,725.25
Total:				$4,857,646.85

Under this method, the inflation is not a fixed point, and done year-over-year. It looks to be a little more forgiving, but only slightly. I also baked in a generous projected inflation rate into the calculations for the proposed 2013-14 budget, greater than the budget increase. The difference column, and any increase or decrease, is only from an inflation adjustment for the previous year. This is how politicians argue they have cut spending, at the same time they are spending more.

The total of all overs and unders, from each year, show the total increases. This shows there was added a total of $4,857,646.85 in new spending year-over-year, for the sample years. This method is really best when comparing two years back-to-back, because it skews the numbers, but I thought it was good idea to include it. The 4,857,646.85 is close to if there have been no budget growth, but then the 2013-14 budget was the same. It translates into 6.0721 mills, and would take the proposed rate down from 37.59 to 31.5179.

I want to make special note of the 2011-12 budget. If you received a copy of Dr. Newcome’s “Budget Process History” form, you would have seen the final budget reduced spending by 0.58%. That saved taxpayers $1,235,363.09 in adjusted dollars from the previous 2010-11 budget. In Method 1, we also saw the positive effects. However, the millage rate was still increased from 35.12 to 35.28 mills. Why was there no savings passed on to taxpayers?

The 2006-07 millage rate was 28.37. If the school district held spending growth to inflation taxes would have gone up, but we would only be paying 30.88 mills. If there was a commitment to cut the lesser $4,857,646.85 in year-over-year additional spending, we could reduce the rate to 31.5179 mills. These rates are still high, but then the arguments about home values, green space, and farms would have merit.

Controllable & Uncontrollable Costs

We now have our hypothetical ideal budget. Unfortunately, over the same sample period the school district had to deal with debt service, reduction of revenue for federal and state sources, Public Charter School tuition, and increases to in Retirement Fund. When we add together these numbers, provided in the budget talking points memo, we have $5,489,000.00 additional we have to deal with.

Since 2007, the school board made cuts in staff and operating costs of $4,149,500.00, and “Revenue Enhancements” of $460,940. This amounts to $4,610,440.00, and offsets the additional money we have to pay to a net increase of only $878,560.00.

Add the net increase into our hypothetical ideal budget and it adjusts to $43,431,743.59.

The difference between our adjusted ideal budget compared to the 2013-14 proposed budget is $4,488,837.41 or 5.611 mills.

Our petition asks for a tax freeze this year, and a reduction in the budget of $4,666,437.50 over 5 years.

*The Consumer Price Index (CPI-U) data provided by the U.S. Department of Labor Bureau of Labor Statistic. The CPI data covers up to January 2013.

Octorara Per-Student Spending

Lisa Bowman, Octorara School Board President, stated at the February 11 meeting, “All we do is cut.” The way the school board discusses the budget, one would think spending has been cut to the bone, and any more cutting would compromise students’ education. Is this true?

The local lancasteronline.com, Intelligencer Journal’s online version, reported this past November:

For the 2012-13 school year, the county’s 17 school districts plan to spend a total average of $14,196, or $411 more than the previous year, for every student they educate.

All but two districts — Columbia and Manheim Central — anticipate spending more than they spent last year.

The per-pupil spending figures are derived by dividing budgeted expenditures by a district’s Oct. 1 enrollment figures.

Octorara schools have the highest average per-pupil cost, at $18,207, followed by Pequea Valley ($17,754), School District of Lancaster ($15,272) and Cocalico ($15,189).

Elizabethtown has the lowest cost, at $12,435 per student, followed by Solanco ($12,808), Conestoga Valley ($12,820), and Penn Manor ($12,823). (Read more…)

Octorara spends $4,000 more per-student

The main reason, cited by the school board, for our high taxes is that we live in an area with lower home values, less business, green space restrictions, and farms. However, they make these comparisons to communities to our east: West Chester, Great Valley, Tredyffrin. When we compare ourselves to communities that look more like us, we see that it is not a tax base issue, but an issue of spending. Octorara schools have an average per-pupil cost of $18,207 compared to Lancaster County average of $14,196.

Blaming farmers and green space

There is no way to argue that the City of Lancaster suffers because of farmers and green space regulations the way Octorara does. What does that have to do with per-student cost anyway? Lancaster pays $15,272 per student. If our per-student cost was within a reasonable range, and taxes were still high, then the school board’s argument would hold true. In reality, our high taxes go hand-in-hand with high per-student spending.

Labor costs have been allowed to get out of control

It has been reported that the average teacher salary was $66,523 for the 2011-12 school year, within the Octorara Area School District. Additionally, for the 2013-14 school year, the starting salary will jump to over $49,000. The lancasteronline.com article already notes labor as being the largest portion of Octorara’s high per-student cost. How do we compare with a broader look?*

Nationally, Average salary $40,358-$43,944
Pennsylvania, Average salary $43,825
Philadeliphia, Average salary $43,230

Therefore, while the average teacher’s salary seems to consistently average around $43,000 everywhere, the Octrara School District is starting teachers at over $49,000. Average salaries are not available for 2013-14. This does not include benefits.

Don’t blame the union

It is easy to place blame on the teacher’s union, and the school board did just that at the last meeting stating, “We are dealing with a very powerful union.” The union is only doing what a union is suppose to do, negotiate in the best interest of their membership. If they try to be “fair” to the school district, taxpayers and students, they would breach their duty. The school district has a responsibility to negotiate the best deal possible. Our high labor costs are not the fault of the union. It is the failure of the school district.

Labor is not the only issue

Other, non-mandated programs and spending is also a problem. One example is the school district’s iPad program, as reported on ParekesburgToday. The school board is promoting it as a cost saving measure. The program will cost $300,000, will replace 400 computers with 900 iPads, and will also be used to phase out traditional textbooks with e-books. It does save money, but there is more to be saved.

If the numbers hold true, the iPads will cost roughly $333 each, a significant discount to the iPad-2’s cost of $399. However, there are many tablet options retailing under $300, and I’m sure most can be purchased with a bulk or educational discount. If the purpose is to replace text books, could the Kindle Fire HD Tablet ($199) be a better choice? (To compare the 7″ model of Kindle Fire HD vs. iPad mini, click here.) The cost savings is an additional $120,897 paying full retail for Kindle Fire HD Tablets verses the discounted iPads.

In fact, we could get more powerful devices for a comparable price. The Dell Vostro 2420 Laptop is retail priced at $358, and you are getting a much more powerful and functional machine. The Toshiba – Satellite 15.6″ Laptop has 4GB memory and a 320GB hard drive for under $300 at Best Buy. Tablets tend to be a more expensive alternative to laptops when we compare power and performance.

Who said anything about easy?

There is a former school board member who accused me of not understanding the complexity of school finance, and wanting an easy solution. Who said anything about easy? There is nothing easy about telling the teachers union we can’t raise taxes again in this economic environment. There is nothing easy about going thru the budget line by line, cutting programs. There is nothing easy about making a choice not to hire new coaches. It seems easy is the route the school board wants to take.

The numbers don’t lie. We pay our teachers a premium wage compared to national and state averages, and we have the highest per-student cost compared to similar school districts. As a result, we pay the highest school property taxes. Taxpayers can no longer accept the ever increasing tax burden.

*PayScale has collected salary and career data from more than 35 million people, covering 12,000 job titles and 1,100 distinct industries in 150 countries. PayScale regularly provides data and insights around salary and career topics for various publications including Time, CNBC, U.S.News, and Forbes.

Related articles

• The School Tax Vise: Taxes Soar, But Districts Still Struggle (octorarataxes.wordpress.com)
• Octorara Area School District Real Estate Market Watch (parkesburggazette.wordpress.com)
• Octorara to combine bus runs with new contract (parkesburggazette.wordpress.com)