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U-CF School Board votes for 2.7 percent millage increase

05/17/2016 10:54AM ● Published by J. Chambless

The Unionville-Chadds Ford School Board.

By John Chambless
Staff Writer

The good news at the May 16 meeting of the Unionville-Chadds Ford School Board was that extra money had been discovered that could amend the tax increase for Chester County for the coming year. The debate was focused on how to allocate the savings.

District superintendent John Sanville explained to the board how the recommended weighted tax increase proposed by the administration on Monday night had gone from 2.88 percent to 2.47 percent.

“The 2.88 percent budget included the use of $193,000 in fund balance was the administration's recommendation on May 2. Since that time, there has been a realization of other savings across a number of categories,” Sanville said. “It's been shared with the board. Those areas include an increase in state funding through the basic education funding formula, the property tax reduction allocation which the state had previously not provided, and an interest earnings savings of $50,000. We've had additional retirements, which has realized some savings. And there's a reduction in the funding of a strategic plan. All of those changes result in a change in the budget, which is noted in the most recent options here. So what you have now is a discussion wrapped around what to do with those 'found savings,' for lack of a better term.”

Board member Michael Rock said, “When we started the budget conversations, we asked the administration to come forward with its proposed budget. And you did that. You came with a proposal of 2.88 percent. Since then, some members of the board have not been happy with that, and so the proposal we have before us is not the administration's proposal. It's the proposal of one or more members of the board who wanted to push the tax rate down. It's important to state that that's what happened.”

Board president Victor Dupuis responded, “That's not entirely accurate. What is happening is our original budget proposal, which was recommended by our administration, called for the use of fund balances totaling $193,000. With the savings that we are now realizing with some changes in expenses and revenue, that same budget requires a lower millage rate. Now, as a board, do we want to stick with the same use of fund balance to fund the recommended budget that the administration has provided, or do we want a different usage of fund balance – higher or lower – to create a different tax rate? The administration is not recommending a tax rate, they're recommending an expenditure of money , and it's up to us to decide how we pay for that.”

Board member Jeff Hellrung explained, “The administration did come forward with a budget that meets all of our current requirements and all of our new educational initiatives, and it called for a 2.88 percent increase. Since they did that, because more information became available, additional savings were identified that were unknown when the 2.88 percent increase was suggested. The administration has not spoken with, or gotten advice from, any school board member. I knew nothing about this until all the other board members did, in a note from the superintendent. He said we could raise taxes by 2.47 percent weighted average, with the same change in fund balance that was planned from the beginning. There are other things we could do with the newly found savings.”

Dupuis summed up three options provided by Robert Cochran, the district's director of business and operations. “One: We keep our tax rate exactly what it was in the original proposed final budget, and that would mean that we go from spending $193,000 of our PSERS fund balance to adding $61,000 to our uncommitted reserves. That keeps our tax rates at the same 2.88 weighted average.

“Option two is the one proposed, which is to keep the use of the PSERS fund balance at the same dollar value as it was in the original budget, and reduce the weighted average to 2.47. There's a third option, which brings us to essentially a zero fund balance usage and reduces the weighted average from 2.88 to 2.77. So in effect, option three is going to the other extreme – going from using the fund balance to lower taxes, to using the surplus to lower the fund balance.”

Cochran clarified that, “All three options give us the ability to proceed with borrowing. It's just that, under an option where the millage is lower now, as opposed to higher now, it's going to be more difficult to phase that in, and a greater challenge. But all three would facilitate phasing in a couple of $7 million bond issue initiatives over the next four to six years.”

Dupuis said, “My preference would be to avoid the use of reserves. I don't have a 'sky is falling' philosophy, I don't want to be the district bank of taxpayer money, but I do have concerns about using too much reserve capital this year, in anticipation of some of the restrictions we're going to have in the next two to five years, between the long-range plan and the lessening flexibility we'll have as a taxing authority.”

Board member Gregg Lindner made a motion to approve a weighted average rate of 2.77 percent. “I am suggesting we move to the third option, which is a weighted average of 2.77 that would not use any of the reserve dollars, or close to zero reserve dollars,” he said.

Cochran summarized the figures: “In the total expenditure amount of $82,487,929, Chester County's millage will be 27.72 mills, which is a 2.70 percent increase over the current year. Delaware County will be 23.59 mills, or a 3.06 percent increase over the current year. That represents a weighted average increase of 2.77 percent.”

Sanville added, “Nothing is final in the budget until you vote on June 20. The option that was on the table would have used $193,000 from the PSERS reserve. The current motion that's on the table uses no money out of fund balances or PSERS reserve.”

Cochran clarified that, “The balance expense is nothing statistically – it's a $5,630 deficit spend.”

Before the vote, Lindner said, “There's no issue that we're holding money. We're spending money, and we're spending it on the right things for the kids.”

In a vote to approve the the proposed final budget at the amended millage rate of 27.72 for Chester County and 23.59 for Delaware County, for a weighted average increase of 2.77 percent, the motion carried, six to three.

The board will meet on June 20 to vote for final adoption of the budget for 2016-17. For more information, visit www.ucfsd.org.

To contact Staff Writer John Chambless, email jchambless@chestercounty.com.


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