Tuesday, March 26, 2013

Promises, Promises

The full board meeting was held on Tuesday, March 25, 2013. Due to the inclement weather conditions, the student reports and student and staff recognition were postponed until the April 22nd meeting. Tuesday's meeting moved along quickly as most items were on the consent agenda. Two significant items were addressed. The first item was a board goal to maintain the current millage rate resulting in no property tax increase and the second item was an update on the teacher contract negotiations.

Below is the board goal as stated in the Property and Finance Committee Action Items for Monday, March 25, 2013:
Approval is requested for the Board to establish a goal for the preliminary budget that maintains the current 2012-13 millage rate, in consideration of cautiously optimistic economic indicators and our ability to maintain or increase our educational programs and services.

Mr. Carpenter indicated data would continue to be reviewed for increasing revenues and to see how expenses have come in. He stated a consistent millage rate would be a win-win overall. Let’s hope he is correct and the detailed budget presentation in April reveals efficiencies and revenue gains not yet factored into the monthly committee meeting financial presentation. Otherwise, approximately $4.3 million dollars from the fund balance savings account will be used to balance the 2013-2014 budget.

During public comment at the beginning of the meeting, Dr. Ricky Swalm, the former Board President, made the following remarks regarding millage maintenance:
I stand before you tonight to ask you to reconsider your Budget Goal as written in tonight’s Property and Finance report. While I realize a goal is not necessarily the final outcome, it does set in motion a position from which one guides one’s actions. If you do indeed follow through with your 0 millage increase you are in effect subjecting this district to what is akin to the affordable care act. You front-load the issue with attractive bait (no tax increase) to get everyone to bite (vote for those of you who are rerunning) and then in the out years everyone pays the consequences (not only must taxes increase because you painted the district into a corner, but you robbed Peter to pay Paul using the fund balance). David Copperfield would be proud of you. With a slight of hand you claim we can do this this year but fail to care enough about the next three years to weigh them against your decision. The only reason you are in this homeostasis this year is because you had the foresight last year to increase taxes (even though you took an oath not to do so when last you ran) so during the current election year you can play to the crowd. I prefer you play to the future and not write IOUs against our children’s futures or you are no better than Washington who has also mortgaged our children’s futures at the expense of current comfort. We as the caretakers of this District owe them much more. We owe them our best efforts and we owe them futures unimpeded by partisan politics.

Before the vote, Mr. Carpenter took exception to Dr. Swalms’s comments by remarking in years past there has been talk of politics and partisanship regarding raising taxes not being accurate yet the 8 sitting directors who were endorsed by the Republican Party all voted yes to support the millage maintenance goal. Mrs. Tiernan voted no to pass the goal and read the following statement:
Last Monday night I was surprised to hear Mr. Carpenter’s motion to hold taxes to 0% in the coming budget. Why does his motion concern me? We have not yet seen the preliminary budget for next year. That is on the agenda for April. We are negotiating a contract with our teachers. We are reminded each month by our own board members that the economy may not have completely recovered. We do know that PSERS costs will increase, as will health care costs. Dr. Scanlon told us at the P&F meeting that we could, indeed, live with a 0% tax increase this year, but the reality is we will have to have a tax increase the next 3-4 years in order to survive. Holding to a 0% tax increase this year may seem like an attractive option, but like all financial decisions, it has consequences for the future of our district. We are borrowing somewhere around 4 million dollars from our fund balance so that we can have this 0% tax increase. Had we engaged in a vigorous public conversation about this motion, I would have said that I’d prefer a modest increase this year to put us in an even stronger position as we face the next 3-4 years. Let us see the budget next month. Let us work out a contract with our staff. Let us be careful and look 3-4 years down the road as we budget. My vote on this motion is no.

Mr. Murphy read the following negotiations update which is available on the District website:
With state mediator Robert Brinbrauer in attendance, the West Chester Area School Board and West Chester Area Education Association Negotiating Teams held a bargaining session on February 20, 2013.

Although both sides remain far apart with regard to total cost of a contract, the Board and Association have agreed to delay the scheduling of the next negotiating session. Both sides are well aware of Governor Corbett's attempt to modify the current pension system and the impact this would have in the cost of future contracts. If the Governor is successful in his effort to modify the existing pension legislation and essentially freeze existing employees under the old system, the District’s cost in funding the Public School Employee Retirement System (PSERS) program could be reduced.

As a result of the recently proposed governor’s budget, the Board has agreed to wait and see what might transpire with the state budget before scheduling another negotiating session.

Corbett’s budget proposal for the upcoming year addresses the pension issue by cutting the contribution rate for the state and local school districts for the next 5 years. The Governor justifies the reduction based on pension reforms for current and future employees. Current employees will see a reduction in future benefits while future employees will enter into a new 401(k) style plan. It appears our Board has elected to follow our Governor’s lead, placing much emphasis on pension reform to alleviate the need for tax increases and help solve our contract negotiations. In January 2013 Governor Corbett cautioned he would not cut funding to basic education assuming some pension reforms got done. Just leaves one question, what happens if nothing happens?

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