The Upper Dublin School District’s Board of Directors passed its 2024-25 school year budget, which included a 2.07 percent tax increase for its area’s residents. The approval came on the heels of a last-minute attempt by two board members to decrease the upped amount.
But first, public opinion…
Before the board could vote, they permitted the legally-required public comment from those in attendance. Several residents had something to say about raising their taxes.
Rita Brewster, of Fort Washington, spoke as the first member of the public, questioning the amount the board was approving to save in the capital reserve. With totals floating around $7 to $10 million, she said she did not understand why a tax increase was still being recommended.
“Whether it’s $7 million, or whether it’s $10 million, all you need to offset any tax increase to give us zero, as you well know, is a little over $1.7 million,” said Brewster. “My point here is, there is plenty of surplus to put a good chunk, millions, into the capital reserve, while you would give us a zero percent tax increase.”
Brewster added that, since March’s meetings, she’d only heard two of the board’s members advocate for a lower increase, though she said that effort should have been to make no increase the prerogative.
“Vote ‘No’ to the budget,” she said. “You are the ones that were right. You’re representing the taxpayers to try to go lower. It’s very unfair to seniors, to people on a fixed income.”
Brewster also said that she and other residents of the community were still struggling with tornado repairs, making finances all the more difficult.
“I’m not against a savings fund,” Brewster said of the district’s capital reserve. “I am against overtaxation. To raise taxes every year, while you’ve got a big surplus, is not only unfair, but I think it’s unethical.”
Dr. Joan Frizzel, a former college educator now in retirement, said that she’s lived in Upper Dublin since 1991. She has noticed others her age moving out of the district “because of our high tax rate.”
“I also know people who, as a result of the tornado, decided that the cost of rebuild with the added cost of taxes, and the trauma from the tornado, made the decision to sell and move,” she said. “In my cul-de-sac, the night of the tornado, only 5 out of 30 homes were liveable.”
She said that, with such a recent major disaster, the residents of the school district were still impacted greatly. She echoed Brewster, noting the “overages” in taxes going into savings continued, while tax increases also were raised.
“It’s always good to have a rainy day fund,” said Frizzel. “But, when I look at the fact that it’s been more than $7 million into the rainy day fund this year, for capital expenditures, and that you’re close to about $30 million, I am here as a local resident dealing with a lot of the issues that other people are dealing with, saying wouldn’t it be great to give us a zero tax increase?”
Ginny Vitale, of Ambler, and Dave Dougherty, of Fort Washington, also spoke during the public comment portion of the board’s meeting, asking why a new assistant superintendent was being added, and if such budgetary concerns were “needs or wants.”
A word from the Superintendent
District Superintendent Laurie J. Smith, Ed.D., responded to the questions, noting the decision to add to her administrative staff was very much a “need,” stating it is a position
“There were several staffing requests this year, and each one is valued based upon a need or a want and prioritized,” said Smith. “We certainly are not able to meet all of those needs. We present what we believe are appropriate and fiscally responsible needs for our district.”
Smith also said that “not all of these [new hires] are based on enrollment,” including an administrative role, such as assistant superintendent, a role she said “is critical for a district of our size.”
She said that the hiring of a new assistant superintendent was aimed at bridging student services with teaching and learning, a point she outlined in her Entry Plan.
“I believe that is a very important position for us,” said Smith of her new hire. “When we presented that to the board, we did have a conversation about potential future restructuring of the teaching and learning department, which may come in the future as we think about our positions.”
Clarity from the Upper Dublin CFO
Andrew Lechman, chief financial officer for the school district, attempted to respond to the public’s question about the capital reserve.
“I think the question was [about] the] $7.2 million is the projected surplus,” said Lechman. “So, that’s the recommendation that’s on there tonight.”
In addition to the 2023-24 budget surplus, there was also $3 million budgeted and approved in March earmarked to be contributed to the same fund.
“That transfer was approved by the board in March, and already transferred,” explained Leachman.
To budget, or not to budget
While unique line items in the budget might not be ideal for each director, the board’s president said that passing a budget is crucial in continuing the workflow of business for the district.
“If we vote ‘No’ to a budget, it means we don’t have a budget,” said Wallack. “There is actually a slight distinction, just so that people appreciate, between voting ‘No’ to the budget and perhaps disagreeing with, as we’ve all had discussions up here and we’ve had them in Finance, in terms of what a piece of that budget may be, visa ve a tax increase to the community.”
The board of directors’ president said that he thought the board put in a solid effort, even when disagreeing on different points, to act in the best interest of the district and its residents.
“I appreciate all of the comments, the board always does,” he said. “When I hear comments that the board doesn’t care, I think we all sit up here because we do care. We need to make decisions, and sometimes we need to make hard decisions, but we base those on information. We base those on information from the administration, from our school district, from our community. We make the best decisions we can, and I believe they’re all made in an ethical fashion.”
No matter the figures, Wallack said that this time of year is always a challenge, to find a balance between the needs and wants, and be fiscally responsible for the entire community and the school district.
“It’s a tough decision tonight, a decision we have every year when we get to this point in the school year, in our budget cycle, and in our meetings,” said Wallack.
The budget was separated from other Finance Committee recommendations, and voted via a roll-call of each director.
An attempt to amend
However, prior to the vote, Director Jenna Evans, who attended the meeting via teleconnection, made a motion to reduce the tax increase from 2.07% to 1.55%. She noted that the reduction in budget should be removed from the already-transferred $3 million, making the new amount $2.55 million, down $450,000 from the previously planned $3 million. This motion was then seconded by Dr. Mary Beth Thomas.
“My second to that amendment is to signify my desire for our budgeting to be more precise,” said Thomas. “That way, we don’t have such a big surplus to be transferring on the backend.”
The director said that her concern stemmed from items that were seemingly missing from the 2024-25 budget.
“And then also, my previously stated desire, that the administrative salary budget doesn’t include the outgoing CAO position because it would offset the hire of the new superintendent,” said Thomas. “And, kind of when we had those discussions about adding that position, we talked about a restructure that may make the addition of that position revenue-neutral.”
Evans reiterated her feelings which, she noted, she’d said in the previously held Finance Committee meeting.
“We sort of have a rough rule of thumb we’ve been working with, from ICS, sort of a recommendation, I guess I’d call it, that we save between one and three percent of our total facility value,” said Evans. “Since that is currently $325 million, three percent of that would be $9.75 million. So, just walking through the math of how I got here, we have a $7.2 million surplus from the school year that’s about to end, and that’s a projected surplus, but we feel pretty good about it. Then, on top of that, we have a planned or proposed, planned transfer in our current budget of $3 million, which would take us to $10.2.”
Evans said that, since the $10.2 million figure would be over the three percent recommendation, that “though it is not a hard and fast ceiling, that’s not as though we can’t go over it,” she felt a number closer to three percent made more sense.
“In my view, it still affords us ample savings, both this year and looking ahead for the next five-plus years without any further transfers,” said Evans. Evans said that, her assumption aside, the board is aware of other planned transfers and potential surpluses in the future that would make the capital reserve even larger.
“To the extent that this passes, I can’t promise that we’ll be able to stay this low in the future,” she said. However, the director said she felt strongly that the amount of surplus from the prior year’s budget should be taken into account when considering the future year’s transfer amount.
She said the topic had not been broached earlier because the amount of surplus went up from last month to this one.
“That increase put us over that three percent,” said Evans.
Opposition from the board
Director and Board Vice President Mark Sirota said he was opposed to the motion Evans put forward.
“I appreciate the approach that Jenna [Evans] is bringing to this, and the way she got there on the math,” he said. “It’s the three-percent number as a figure to use and a formula that she’s proposing that I don’t really like.”
“It was one-and-a-half to three percent that we heard from ICS,” said Sirota. “When we asked ICS for a source for that recommendation, they couldn’t actually find one. It’s a recommendation they’ve used in their industry for some time, but couldn’t find a source. The only source they found, and I also independently found this source from the federal government, that recommends two to four percent for your total maintenance and repairs budget.”
Sirota said he’d prefer a four percent figure, as he had found a citable source for that recommendation figure. However, the statistics were not the only concern for him.
“More importantly, I think it’s too late,” he said. “I don’t want to be making these adjustments at the last minute. We did that last year, as well. It’s a mad scramble to get the budget complete and submitted by the end of the month to the state.”
He said that all comments and concerns have already been discussed in the months prior.
“We’ve talked about it enough that I feel we should stick with what we already had, and not be making these very 11th hour adjustments that aren’t well thought through,” said Sirota. He noted he did not mean Evans’ math or figuring, but instead what the motion, budget, figures, or details would “look like” with this scenario.
“Exactly what numbers we’d be tweaking? We don’t have that in front of us,” he said.
Director Alima Redding said she too was opposed to the motion to amend.
“When we think about where borrowing interest rates are, we’re at about six or eight percent, and that’s today,” she said. “If the district was to borrow $10 million today, that would cost an additional $11 million to borrow that money.”
She said that the amount of work the district is looking to do with the capital revenues, more is needed to keep the fund afloat.
“We have over $32 million worth of projects over the next five years we need to also consider,” said Redding. “We can never put that back into the budget. Every year we’re going to have to make this decision to reduce, reduce, reduce.”
Instead of cutting away from the future capital expenses required, Redding said she favored adding more funds now to offset later costs.
“It’s not a recurring expense, it is a one-time expense,” said Redding, explaining saving money now as opposed to borrowing it later.
She said that the board’s choices are not just about today’s concerns.
“I personally want to not only think about the current taxpayer, but what do we do about our future taxpayer,” said Redding. “I would rather see a slight increase year-over-year, about two percent, than have that future taxpayer have to breathe in that five percent because of a decision we made today.”
Redding said that even a 2.07 percent increase in taxes was below inflation rates, which she said were at 3.3 percent, and below salary increases for district employees, which she said was 2.5 percent.
She continued that figures shared at finance committee meetings showed that removing the $450,000 now with a lessened tax increase, would mean that the district would see a “deficit” as soon as next year, and “no longer see that break-even.”
“For me, it is too much of a risk,” she said.
Director Jennifer Iannitti said she also did not want to change her vote from previous discussions at the finance committee.
“The reason for me to keep it [the tax increase] at 2.07 is just knowing we have these upcoming projects,” she said. “When we did our last facility assessment, that didn’t even include Jarrettown, which is a huge project, so I think 2.07 percent is a reasonable request.”
Director John Held, who, like Evans, had called into the meeting remotely, said he too did not want to waiver from the budget in its current form.
“I’ll be on the record, I’d love the taxes to be as low as possible, but you run the risk of cutting them too much, and then having to raise them higher than you’d like long-term,” said Held. “Jarrettown is top-of-mind for me, as well.”
Held, whose own children had and are attending Jarrettown Elementary School, said that, while an analysis is still yet to occur and its needs not yet established, “at some point that building will need some attention.”
“That’s going to cost money,” said Held. “The hope is that we don’t have to increase taxes even more down the road. I think where [taxes] are now is the right place.”
Director Titia Scherpbier said, she too, was most comfortable at 2.07 percent for a tax increase, noting it was not the amount of 11th hour work, but more the future needs of district facilities.
“This is about our long-term stewardship of the community funding,” she said. “I understand that it is tempting to lower the rate this time, but I am very concerned that, then the next time, we’ll be bumping up much more.”
Redding said that the timing was still of concern for her. She said, if it was the board’s goal to have lowered tax increases, that they should begin the budget talk with that in mind, “when the conversation starts, not at the last meeting of the [budget] year.”
“To do this at the very last minute, when we’ve already made a year’s worth of decisions based off of an anticipated adjustment that we were going to have, to me is just irresponsible,” said Redding.
Evans said that, according to the May Finance Committee’s figures, the projected surplus was $5.6 million. The June change to $7.2 million is what made her change her position on the 2.07 percent tax hike.
“I don’t want anybody to get the impression that I was sitting here waiting for the last minute to make things exciting,” said Evans. “It increased to $7.2 million in a month’s time. That was a big change for me. That put us over that three percent benchmark.”
A failed amendment, but approved budget
The motion did not pass, as Evans and Thomas were the only “yes” votes for the concept.
The unamended budget then went to its roll-call vote, with both Evans and Thomas noting publicly that they would value having a budget over not having a budget, hence their seemingly “changed” votes. Should a board of directors not approve a budget in time, there are state-related penalties and fees associated with the delay.
That said, all nine directors voted in favor of the 2024-25 budget, which includes the 2.07 percent tax increase.
