No tax hike in proposed 08-09 budget

By JIM RUNKLE — jrunkle@lockhaven.com
RENOVO — The Keystone Central School Board approved a preliminary budget with no tax increase Thursday evening — but only after a lengthy and bitter debate and split vote that restored building funds to their former levels.

The board is expected to adopt a $61.07 million budget showing an increase in revenues of $1.76 million and no negative impact on real estate taxes, when it votes on the final proposal in June.

Most of the ruckus last night focused on how to use a carry-over balance of $300,000, and whether that money should be used to restore building budgets that were reduced by an average 12 percent the previous year.

The real question appeared to be a matter of trust.

Board members appeared evenly split between those who would trust principals to deal with costs like art and miscellaneous room supplies, and those who would require principals to come to the administration with their requests, allowing Superintendent Dr. Donald Wills and his financial staff to maintain tighter controls.

Last week, the $300,000 carry-over was reduced to about $177,134 when board members restored about $100,000 to the building maintenance fund and reserved about $50,000 for long-delayed new uniforms for sports teams.

Board member Butch Knauff recommended the money be placed back into the individual building accounts so “principals don’t have to go to Dr. Wills all the time.”

Board member Deb Nicholas, however, objected to the move, saying the shift made no sense, since the money was already in the budget.

“I remember the administration saying if it was there and set aside,” she said, “there was trust it would be available when needed ... I have never had an administrator call me and say his or her needs are not being met, and there have been opportunities,” she said.

The 12 percent decrease, she suggested, actually represented the dumping of a traditional surplus used by principals as a hedge against unexpected costs.

“I believe these new figures were based on real numbers instead of an inflated budget,” she said.

But board member Keith Kelly asked why, if administrators wanted $100 for art supplies, they should have to go to Wills.

“The trust works both ways,” he said.

Wills, as he did at last week’s meeting, called upon some administrators to explain the process of budget creation to the board. It was a move that almost backfired.

At the urging of Wills, Career and Technology Center Director Scott Owens said he felt comfortable with his budget, and developed the plan by comparing what was requested in the past with what was traditionally spent, and in conjunction with the year-end balance.

Board member Jeff Snyder, a staunch supporter of restoring money to the individual schools, took that to mean the Career and Technology Center didn’t need the additional funds. He made a motion to restore the percentages for all schools, except CTC — a move that drew some umbrage from board members who felt that exception was an effort to punish CTC for speaking the company line.

“He’s not going to be punished for standing up and being honest,” board member Patrick Johnson said.

“You can criticize me if you will,” Wills said, “but you can’t criticize me for my support of education.” Wills said his focus ... either in policy or finance ... has always been to bolster and support the educational process.

“What we did was go back and ask everybody to look at what was spent. We found we had excess money left in some accounts. This budget (reflects) what we need with some flexibility, instead of just budgeting what we did last year,” he said.

Johnson noted he has learned of a situation with Liberty-Curtin and Renovo elementary schools where supplies were short and field trips were canceled because of the administration’s focus on frugality.

Snyder said he had asked Business Manager Kimberly VanGorder for a list of actual line items cut from the building budgets, and had never received the specifics.

Snyder said it’s OK to be frugal, but there’s such a thing as being too tight with money. He pointed to Jersey Shore School District’s 26 percent budget increase, and suggested it was the result of just that type of too-conservative fiscal efforts that led to the situation.

Board President Jack Peters and Kelly both suggested that in the larger realm, arguing about where $300,000 or less (several figures were mentioned) might be placed as individual line items in a $61 million budget was not an effective use of the board’s time or consideration, especially with a healthy fund balance of $4.8 million.

“Why don’t we quit trying to micro-manage?” Nicholas said. “We pay these people a lot of money to do these things for us.”

“Because I do get telephone calls,” Peters replied. “I’m not going to rubber stamp anything.”

Knauff said he knows of many incidents in which individual teachers purchased teaching supplies out-of-pocket rather than seeking money from the administration.

VanGorder sought to protect the budgetary reserve account, saying the $300,000 was placed there in case CTC suddenly needs a piece of equipment or a school’s boiler system has a major malfunction. She said a cushion exists in the budget, even with the $700,000 increased costs for the charter school, and she and her team were acting responsibly in their approach to the financial picture for the district.

“I apologize for the edge in my voice,” she said, “but I wasn’t contacted with regard to this budget by anybody... I needed to know if there were concerns. I would have given you a revised budget and you would be passing it at this meeting. You tell me what you want to do... I’m trying to come up with a more realistic budget.”

She also said the budget had to be honest from the start because several factors might come into play before final approval in June, given the additional layer of complexity created by the governor’s real estate tax-reduction plans, gambling money, and existence of homestead and farmstead exemptions that followed those state policies.

“I apologize for my frustration,” she said, “but I am frustrated.”

The situation drew a retort from board member Dan Brooks as well.

“I hope you are embarrassed in the paper tomorrow,” he said, although he specified no individual board member, “because you deserve to be. You think you know more than they do. It’s an embarrassment... Cocky and know-it-all people, who know more than the administration.”

Kelly turned to VanGorder, and told her if the proposed changes “devastate this district, you can blame me.”

In the end, the money (without CTC) was restored to the individual building accounts with Johnson, Peters, Nicholas and Brooks voting no.

“I would make sure if the motion passes... I would hope Mr. Johnson brings a motion (to restore CTC’s funding)... I called on him to explain how things should be done and to have it end like this is appalling.”

Johnson did made the motion to restore $75,835 to CTC, and the move was approved with Nicholas casting the sole dissenting vote.

Snyder, stung by the implied criticism, said he had done nothing for which he was embarrassed. He said his motion concerning CTC was simply a response to the administrator’s belief that his budget was sufficient for the year.

“I believe what I’ve tried to do is in the best interests of my constituents and the district,” Snyder said.

Finally, the preliminary budget was approved by a vote of six to three, with Brooks, Johnson and Nicholas voting no.

If final approval is granted in June, property owners who qualified for Homestead and Farmstead exemptions will pay about $233 less than they paid this year in real estate taxes. Clinton Countians in the district would not pay any increased taxes, but Centre County residents of the district would pay about $15.17 more and Potter County residents would pay $21.97 less than a year ago.

Under the current formula, the district will accrue $25,473,931 from local taxes, $33,669,299 from state revenues and $1,928,576 from the federal government.

The figures represent a 3.4 percent decrease in local revenue, a 10.3 percent increase in state revenue and a 20.5 percent decrease in federal revenue, according to the numbers presented to the board last night.