June 19, 2002

Property owners in the Brandywine School District will see their tax bills increase by at least 21% in the coming fiscal year. Most of that will go to finance operations under a budget not yet prepared in preliminary form.

The school board will be asked at its business meeting on June 20 to set the tax rate at $1.1745 for each $100 of assessed value, up from 97.03 levied this year. Tax on a house with a market value of $150,000, assessed at the district average 44%, would increase by $134.77 to $775.17.

Data presented to the district's financial advisory committee indicated that homeowners who are 65 years old or older will continue to pay half of the first $1,000 of tax, but that Brandywine, following the precedent of previous years, will pocket, rather than pass on, the general tax-reduction on primary residences. Both breaks are financed by the state. The General Assembly has yet to provide money for them in the coming fiscal year but is expected to do so before adjourning at the end of June.

School and New Castle County property taxes are due on Sept. 30. School boards have until July 15 to set their tax rates.

The Brandywine board could boost the rate higher than recommended or could impose a lower rate, but neither course is very likely. In any event, the year which begins July 1 will be the first in which Brandywine's rate has exceeded a dollar.

Before agreeing to support, with a minor modification, the recommendation by Superintendent Bruce Harter, the financial advisory committee discussed the pros and cons of upping the operating-tax increase to the maximum authorized by voters in April despite the board's pre-referendum stated intention of imposing the full increase incrementally over the next five years.

They were persuaded against recommending imposing the full amount by board member Janice Tunell who said doing so would result in a public-relations fiasco. "Can we afford the publicity? I don't think we can," she said.

Tunell, whose term on the board expires on June 30, said parents and other district residents already are confused by

cutbacks in such things as the district arts program and physical education in elementary schools after the district was successful in securing voter approval of a significant increase in the ceiling on the operating tax.

Harter told the committee that the board will "take care of the art coordinator piece" at its meeting but added, "otherwise we are looking to make more reductions." Without going into detail, he mentioned assistant principals, nurses and secretaries as likely areas for them.

Harter said he is "very uncomfortable with where we are at the end of the [fiscal] year." In particular, he cited an

Brandywine school tax rates

Component 2001-02 2002-03* Change

Operations (county)
Operations (district)

$ 0.4680
$ 0.3260

$ 0.4680
$ 0.4880

$ 0.1620

Operations (total)

$ 0.7940

$ 0.9560

$ 0.1620

Debt service
Minor capital

$ 0.0513
$ 0.0950
$ 0.0155
$ 0.0145

$ 0.0780
$ 0.1220
$ 0.0040
$ 0.0145

$ 0.0267
$ 0.0270
($ 0.0115)


$ 0.9703

$ 1.1745

$ 0.2042

* Proposed.
SOURCE: Brandywine School District


expected local-funds balance of about $300,000, compared to the $1 million the district had expected as late as January to have on hand on June 30.

William Bentz, who has been serving as interim financial officer, said a district the size of Brandywine should have a carryover of at least $5 million to $6 million to meet its obligations, including payroll, until tax revenue begins to arrive in autumn. He said Brandywine this year will have to borrow from the state to do so.

Even with the proposed tax increase, Bentz predicted that Brandywine will still be cash short at the end of fiscal 2003. Pre-referendum projections called for restoring the balance to about $3 million.

Crux of Brandywine's continuing financial problem, Bentz said, is that "you exceeded your income this year by $3.5 million."

"We had expected overspending our revenue, but not to the extent we did. I don't know why we were so far off," Harter added.

He said a preliminary fiscal 2003 budget is not ready for presentation to the board, as is customarily done at its tax-setting meeting, because "several things are happening simultaneously" which will affect those figures. He did not elaborate nor indicate when a draft budget will be ready.

Within the proposed tax rate, Harter and the committee are going to recommend that the board impose a 48.8 district rate on top of the 46.8 rate that has been carried over from when there was a single countywide consolidated district. Taxes collected through the county rate are apportioned among the four major districts -- Brandywine, Christina, Colonial and Red Clay -- based on a ratio of number of students to total assessed property value. Brandywine taxpayers pay somewhat more than the district receives.

Voters in April authorized a district operating rate ceiling of 51.4.

The debt service component, which is recommended to be increased to 7.8, is used to pay interest on and serially retire bonds sold to raise money to finance the district's major renovation program. The committee decided to add a tenth of a cent to the rate he recommended after members questioned whether the balance in that account which Bentz projected would be sufficient.

He said he deliberately kept the rate "conservative" -- and lower than had been projected when voters were asked in 2001 to authorize the present bond issues --  because Brandywine property owners will face a "significant adjustment" in that rate next year as the renovation program moves forward. Brandywine expects to sell $13.6 million in 20-year bonds at an anticipated interest rate of about 6% when the state goes to the market in January. Bonds authorized for sale last year are to be sold with a state offering in August.

The board will be asked to raise the tuition tax rate to 12.2 to cover expected increases in the cost of sending students with special needs to school outside the district.

Because the combined minor capital expenditures and technology spending rate was set last year higher than needed to raise the money necessary to match state funds available for those purposes, a reduction of just over 1 has been proposed for that component.

Although Brandywine's pre-referendum promotion and information efforts focused mostly on the district operating rate component, Harter noted that the lower-than-expected increase in the capital expenditures tax resulted in a proposed total tax rate slightly less than the $1.18 anticipated in January.

2002. All rights reserved.

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