Phoenixville Area School Board votes twice, can't agree on budget

PHOENIXVILLE — Despite voting twice in a meeting that also featured two executive sessions and a break to try to contact their solicitor, the Phoenixville Area School Board couldn’t secure the five votes necessary to pass the district’s 2013-14 budget.

The mood as the meeting ended could best be described as wistful but not discouraged.

“It’s an interesting process,” said Board President Joshua Gould. “I’m a little disappointed that we didn’t pass a budget but we have until the end of the month to do it and it’s a shame we didn’t have all the people here because we could’ve gotten five votes one way or another.”

Board vice president Jan Potts and David Ziev weren’t present at the meeting.

“I’m very disappointed because I don’t think we need a tax increase,” said board member Irfan Khan. “I think we have sufficient funds.”

Votes on the budget hinged on the proposed tax rate and where it would be set in light of one board member’s suggestion to eliminate the provision to add money to the unassigned fund balance for 2013-14.

As it stood, the proposed final budget of $79,021,839 carried a 1.88 percent tax increase, which translated to raising the district mill rate from 28.24 to 28.77. Such an increase would mean a property assessed at the district median value of $133,540 would see their taxes go up by $70.77 for the year.

Part of the Phoenixville Area School Board’s process for finalizing a budget includes taking proposed amendments to the budget and voting on whether to include them.

One such amendment brought forth by Kevin Pattinson sought to eliminate pay to play fees within the district for sports and other extracurricular activities.

“To me, it’s something that doesn’t need to exist,” he said. “I think it singles out a certain (group) of taxpayers.”

Additionally, Pattinson said the fees created more work than they were worth.

Board member Paul Slaninka defended them, saying that the fees allow for students on the free and reduced lunch programs to participate in activities without paying the fees while those that can afford it pay. If the fee were removed, the tax increase to cover approximately $45,000 associated with the program would be 1.98 percent,

In that case, Slaninka said, higher tax rates would be imposed on the entire community, including those who would’ve fallen into the group not paying activity fees.

The amendment eliminating pay to play passed 4-3 with Khan, Slaninka and Betsy Ruch dissenting.

The final amendment considered, which Khan proposed and had discussed in meetings before, included removing the $1,004,079 set for the unassigned fund balance in 2013-14’s budget.

In light of the elimination of pay to play, Khan’s amendment would bring the tax increase back down from 1.98 percent to 0.14 percent for 2013-14.

“I feel that we’ve had surpluses and that has been re-allocated into the fund reserve,” Khan said. “I don’t think that another million dollars is needed. I think we have an opportunity here to have a zero tax increase and I think we should take advantage of this possibility by eliminating the budget reserve from the 2013-14 budget.”

Ruch said she was concerned for seniors in the district with fixed incomes.

“If this amendment doesn’t pass, I would vote no for the budget,” she said. “If we don’t have to make a tax increase, we shouldn’t.”

Although Gould said he would like to lower taxes as much as possible, dropping the fund reserve was something he wasn’t comfortable with.

“We don’t know exactly what level (in the unassigned fund balance) we need to maintain in order to keep our credit rating where it is now,” Gould said.

Gould and Khan disagreed on what part of the fund balance made credit agencies got their ratings from, whether an emphasis was placed on the unassigned portion or not. Gould said a special emphasis was placed on the unassigned portion but Khan disagreed.

“We are maxed-out at the unreserved fund balance level,” according to state law, Khan added.

An executive session was called to further discuss what the fund balance meant in terms of the budget. When Kenneth Butera asked why it couldn’t be done in the public, Gould said the discussion would involve contracts and personnel.

In a vote, the amendment to use the unassigned fund balance to adjust 2013-14’s budget passed 4-3 with Khan, Slaninka, Ruch and Pattinson in favor of it and Dan Cushing, Butera and Gould opposing.

That brought the budget down to 78,017,768, but when it came time to pass that, only Khan, Pattinson, Cushing and Ruch voted for the new budget and Butera, Gould and Slaninka voted against it.

Because five votes, a majority of the whole school board, is necessary to finalize the overall budget, the vote failed.

Slaninka explained that he voted against the budget because he wants to do “Whatever it takes to get down to zero.”

However, with $77,733 necessary to get to zero percent, it became apparent some aggressive work would be needed to get to that point in the budget. Some ideas discussed briefly were budgeting less money in the medical operating costs or not re-hiring for a retiring teacher.

Superintendent Alan Fegley said rehiring would be necessary to keep class sizes where they were. In addition, there might be a necessity to promote a language teacher who was reduced to part-time back to full-time, given current enrollment trends. He also said experts advised the district to budget the amount of money they have in the medical operating budget and emphasized his reticence at going against their opinion.

Gould began discussing looking for another date when the full board could vote again on the budget. Stan Johnson, the district’s executive director of operations who serves as the board secretary, said the board would be required by law to wait at least ten days so a new meeting could be properly advertised.

At that point, Khan proposed voting again on the budget.

“I want a zero percent tax increase. But, then, if I could vote again and have it at a 0.14 (percent) rather than 1.98 (percent), I would give it another shot,” Slaninka said.

Khan said he believed the votes necessary to approve the budget were there this time.

Cushing urged the board to take a break and seek the advice of their solicitor over whether they could legally vote again.

Fegley left the room to get into contact with the district’s solicitor while the board took a break.

When Fegley couldn’t reach the solicitor, the board decided to vote anyway

“If it turns out to be an improper motion, then we’ll have to come back,” Gould told the board.

Khan made the motion to re-vote on the budget. In doing so, the board had to start with the final proposed budget they came in with and all previous amendments also had to have fresh votes.

This time, however, when going through the amendments, Khan’s motion to take the money budgeted for the fund balance out didn’t pass because Pattinson changed his vote.

“After giving it some more thought and the process we went through, I just kind of realized it might be better to be a little more conservative with the money,” Pattinson said after the meeting. “The unknown is something we need to be prepared for.”

Because of rising costs due to salaries, benefits and pensions, ramifications to future tax hikes could be amplified if the tax hoke is kept too low.

“The future is going to be tough,” Pattinson said.

With the budget reverting back to a 1.98 percent increase for a $79,021,839 budget on the second go-round, the yes votes became Cushing, Gould, Butera, and Pattinson while the no votes were Ruch, Slaninka and Khan.

Following that, the board decided nothing more could be done Thursday. No date was set for another meeting but the earliest possible date could be June 18, according to Phoenixville Area School District Comptroller Chris Gehris.

Adjourning into an executive session at the end of the meeting, Khan and Slaninka talked with each other as they walked to the private meeting room.

“We had it,” Kahn said. “We had it.”

“Twice,” Slaninka added.