[The following are the speaking notes for my report to the Board regarding the Business Affairs committee meetingdelivered at our recent legislative meeting.  These notes are provided for your reference only and are based on information I gathered during the preceding committee meeting.  They do not represent an official record of the meeting or an official position by the School District of Cheltenham Township.]

Since our last legislative meeting, there have been two budget-related meetings held.

First, the administration held a budget forum on March 26^th to review specific ideas and opportunities for future budget action.  Presentation materials with collected comments are available on the District website.

Second, the Business Affairs committee met on March 27^th.  I would like to provide some highlights of this meeting, but refer members of the board and the public to the District website for a copy of the materials presented.

I need to note that all of the information here is projected.  There will be a formal hearing on May 1^st at 7pm to hear all comments relative to the 2012/2013 budget.  At this time, we are on schedule to approve our budget at our June legislative meeting.

Highlights of our budget are as follows:

• Currently, we are projecting no increase in taxes for the coming year and all existing district programs will be maintained.  There are no planned personnel reductions.
• As planned, we are increasing our debt burden to cover the costs of construction for both Cheltenham and Wyncote elementary schools.
• On the revenue side, the current budget reflects a net reduction of revenues by slightly less than 1%.  Real estate taxes are projected down about 3% while state revenues are projected up by about 10%.
• On the expenditure side, as noted, we expect an increase in debt service by about 14.5%.  Salaries and benefits, still under negotiation but also reflecting retirements, are currently projected to decrease by about 3%.   Maintenance costs are projected to decrease, reflecting in part our newer buildings, while special education and charter school costs are projected to increase.  As a reminder, when a student transfers to a charter school, our costs do not decrease as much as we are required to pay to the charter school, but charter school costs are mandated by the state of Pennsylvania.
• Finally, our budget is still tentative as we await contract negotiations and the final state budget.  Public comments at the meeting reflected desires for both increases and decreases to the budget.

Overall, our budget reflects a total decrease of roughly $5M or about 5% over the past 2 years with no local tax increase.

We recognize, however, that we are not out of the woods yet.  The costs for the Pennsylvania School Employees’ Retirement System, or PSERS, are still projected to rise sharply in the next 5 years then stay high for another 20 years or so following.  This situation is largely due to the underfunding of the pension system going back 20 to 30 years or so and only partly due to the recent recession.  With retirements now looming, Pennsylvania must now begin to cover pension benefits.  To cover these benefits, our state must either borrow, cut costs elsewhere, or raise taxes; but even with these impacts, the pension system will not be fully funded until after 2040, based on current projections.

I am pleased to report that because of the diligence of our administration and steady improvements in our accounting systems, we are now in a good position to project our costs.  During our meeting, we discussed our projected 5-year budget, which reflects the PSERS impacts as well as our forecast construction costs.  Our long-term budget planning reflects the use of our existing fund balance as well as very modest increases in revenues.  There remain significant risks relative to real estate values, PSERS, our construction projects, as well as the normal risks of operations.

Cheltenham holds an AA- or Stable risk rating, which we guard carefully in these complex and challenging fiscal times.

For our district, we are among a relatively small group of districts, less than 20% across Pennsylvania, that are financially sound.  Already, nearly 50 districts are struggling to meet their bills.

This concludes my report.  The next meeting will take place, as noted, on May 1^st at 7pm for the formal budget hearing.

Thanks.

I went to college in a college town.  Blacksburg, Virginia, would almost not exist without Virginia Tech, and the school almost certainly would not have prospered without the local support of the community and leaders there.  Philadelphia would not be what it is were it not for the many schools in and nearby.

We are extremely lucky to have a university in our township.  Say what you will, and I could say a lot, about nonprofits and their impact on the local economy, but I make an exception for educational entities.  In a world where intellectual skill is and will forever be the stock of trade, we should rejoice that we have access to so much in our region and in our very midst.

The news that our school district is working to expand the relationship with Arcadia is terrific.  The potential for our district to reduce the cost of athletic field upgrades and maintenance while allowing Arcadia to grow more capable provides mutual benefits and continues to open the door to even more opportunities.

Indeed, our district already has a strong relationship with Arcadia through existing dual-enrollment programs for our high school students.  In these programs, students earn actual college credits for courses taken to meet their high school requirements.  And this isn’t just with Arcadia, but also with Montgomery County Community College, Manor College, and Penn State.  We are truly lucky to be able to offer these opportunities to our students.

But I’m going to present a few ideas in the hope that there might be more areas of collaboration possible from this burgeoning alliance.  These ideas go beyond just our school district in the belief that our entire community can both support and benefit from having Arcadia within our borders.

Here goes:

1. Cheltenham benefits from a strong citizenry that is engaged to work together in collaboration on many important topics.  Community access to classrooms for meeting spaces for a nominal fee to cover cleaning/energy use (especially spaces with video presentation capability) would be a great help to these groups.  If there could be 1 or 2 rooms available, it might help folks on the west end of the township have a place to meet versus driving to Rowland Community Center or having to use the too-large Glenside hall or too-expensive and too-imposing Curtis Hall.
2. Cheltenham residents believe in education and often possess a high level of education, which presumably means that many also believe in the concept of life-long learning.  Community access to audit courses for a reduced fee or reduced tuition for matriculated students once classes fill to a certain level could be mutually beneficial.  I know that Arcadia needs to make money to stay viable, but once a course fills to a certain level, adding a limited number of additional students (especially auditing students) would seem like getting free money at a modest or near-zero marginal cost.
3. Along with access to courses could come an expanded relationship with our library system to enable a richer resource for research and study than is possible through our public system.
4. We have long needed a community health club or similar facility.  Community access to other athletic spaces might be provided, again for a modest fee, that allows Arcadia to sustain their own facilities at a reduced cost.
5. We should continue to establish or expand relationships with the faculty, especially township residents, as a way to leverage their knowledge and research (along with their students) to discuss and guide the development of new solutions for our community.  Universities have access to funding that communities may not have.  There are bound to be opportunities for grants and other programs where collaboration is mutually beneficial.

By the way, I’m OK with fees and I’m not looking for a hand-out from anyone.  Fees limit access to only those with proper intentions and motivations.  Fees bring commitment to both parties.  Modest fees also keep the access relatively open while ensuring that costs are accounted for fairly.

I welcome thoughts on whether this makes sense, though.  To me, being able to tout this relationship through the realty community should be a nice feather in our cap for new home buyers, not to mention putting the benefits of living in Cheltenham and with Arcadia in the mouths of every homeowner and resident.  And to me, this is only win-win.