December 4, 2001

Without a tax increase or drastic cuts in programs, Brandywine School District faces a theoretical budget shortfall which will start to show up in the fiscal year beginning next July and could reach more than $14 million by 2007, its chief financial officer told the school board.

Michael Shockley said his estimate was based on a straight-line projection of current spending of local money for operations adjusted only for moderate inflation. It factors in annual increases of 2% to 3% in salaries, which are by far the largest item in the district's budget.

"You have two choices: You can either cut services or go to the community for a referendum," he said. "This is what would happen if we did nothing and just continued our present business." 

The shortfalls, which the projection shows more than doubling each year, are theoretical because school districts are not permitted to operate at deficits not covered by previous surpluses.

While presenting a five-year income-and-expenditure projection to the board at a workshop meeting on Dec. 3, Shockley said the district is likely to finish this year with an $841,000 local-funds balance but would find itself in the hole to the tune of $1.2 million a year later.

Just to eliminate that size deficit without having to resort to staff and other cutbacks, he said, would require an increase next year of about 14 in the present 76.4 operations tax ceiling. That would have to be followed in subsequent years by increases of 2, 1.4, nothing, and 3, respectively. The tax rate is applied to each $100 of assessed property value.

It is widely assumed that Brandywine in late winter or early spring will go to referendum to seek a tax increase. However, board president Nancy Doorey has publicly insisted that that decision has not yet been made. 

Although Shockley did not make a point of it in his presentation, there was an implication that the district might look to increase the tax in annual steps rather than levy the full rate immediately, as has been common practice in the past in Brandywine and other districts.

The present operations tax rate has been at the ceiling since just after the last operating-tax referendum in 1994 and is the largest component of the district's total 98.4 tax rate. Of the operating rate, 32.6 is levied by Brandywine and the rest is a county-wide school tax whose revenue is split among the districts in proportion to their enrollments. In addition, Brandywine this year is charging an additional 3 in operations tax to finance construction of running tracks at its three high schools. That one-time tax was authorized in a capital-spending referendum last May. 

Shockley presented the board with a final operating budget for the current fiscal year which, as previously reported by Delaforum, projects revenue from all sources totaling just over $108 million. Proposed spending is put at $111.6 million. A 9.5% increase in expenditures over last year, is entirely the result of capital improvements and resultant debt service authorized by voters last May, he said.

Operating expenditures are down slightly "as a result of continuing to budget in a way that will not adversely impact students directly," he said.

Nevertheless, there were indications in other contexts at the meeting of additional pressure on Brandywine's budget.

Shockley reported that the bill for liability insurance coverage has jumped from $60,000 to $107,000. In part, he said, that reflects the district's poor claims experience during the past couple of years, but it is mostly the result of the financial impact of the Sept. 11 terrorist attack on the World Trade Center. "That has turned the insurance business upside down. A lot of people are not writing that kind of coverage," he said.

He did not identify which company, selected by an insurance borkerage, will write Brandywine's policy.

A previously reported decline in enrollment resulted in the loss of state support for 22 teaching positions. The district had only expected to lose the equivalent of 9. Shockley said there has not yet been an analysis of why the enrollment projection was so far off and where the students went.

"It's pretty scary to be losing 400 kids and I don't think that should be happening," board member Mark Huxsoll said. Doorey suggested that there be direct follow up to determine the reasons to the extent the loss has been to charter and nonpublic schools.

The board spent much of the meeting discussing the content of a 'vision and priorities' document now being drafted. While it does not yet include cost estimates, superintendent Bruce Harter said a rough estimate would place pricetags of $3 million and $5 million, respectively, on the first two years of implementation.

It was noted, however, that a selective opinion survey conducted recently as part of the development process found considerable support for 'aggressive' recruitment of teachers, including willingness to pay higher salaries to attract top job applicants.

"I'm surprised to see the survey results ... telling us the public puts high value on making sure our teacher salaries are competitive in the region, not just in Delaware," Doorey said. "To make any credible difference would make a major hit on local tax money."

2001. All rights reserved.

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