February 10, 2004


Bumping up its operating tax rate for the coming fiscal year to the present ceiling and sticking to the practice of "aggressive cost containment" should enable the Brandywine School District to keep its promise not to return to voters for approval of further tax increases before 2006, the school board was told.

The board, however, stopped short of renewing the promise after receiving a detailed analysis of the district's financial situation from chief financial officer David Blowman at a workshop meting on Feb. 9.

Stressing several times during his presentation that he was illustrating the effects of possible scenarios based on various assumptions and not venturing a prediction of future revenues and spending, Blowman walked the board through the arcane world of Delaware public school finances.

Given its volatility, relatively minor changes in circumstances can have a significant impact on a local district, he said. Enrolling 97 fewer students this academic year than last year, for instance, resulted in Brandywine's losing state authorization for 11 teaching positions.

Nevertheless, he said, "if we stay [fiscally] conservative and stay disciplined, we'll make it to [fiscal year] '07 without having to go back to the voters." But, he added that, as a result of pending and possibly unforeseen pressures on the district's budgets, "there are no guarantees."

More importantly, he added, sticking to the pledge could be accomplished "without giving up our commitment to our strategic plan."

The plan, which spells out specific goals in several areas contributing to improved quality of the education it offers, was Brandywine's key selling point to obtain approval for a 98.2˘ ceiling on the operating tax rate, up from 78.4˘, at a referendum in 2001. The rates, which include 46.8˘ collected countywide, are applied to each $100 of assessed property value. Brandywine levies its tax at the same rate on both residential and commercial property.

Rather than impose the maximum rate immediately, as had been previous practice, the Brandywine board agreed to phase in the increased rates beginning in fiscal 2003 and extending over each of the ensuing four fiscal years, not reaching the ceiling until fiscal 2007. A fiscal year is identified by its June 30 end date.

In addition to the possibility of increasing the tax rate to the maximum two years ahead of schedule, board president Nancy Doorey pointed out that, with its current budget, the district has somewhat compromised the strategic plan. It is running $385.000 behind its 2001 commitment to spend $1 million a year on teacher recruitment; $160,000 behind the commitment to spend $350,000 a year to provide full-day kindergarten to 'at risk' children; and $450,000 behind the commitment to spend $600,000 on preventive maintenance of its buildings. Spending in those categories was $350,000, $100,000 and zero, respectively, in fiscal 2003. Spending on academic rigor and enrichment this year is $34,000 more than the $300,000-a-year commitment while that spending was $150,000 last year.

The need to "stretch out implementation of the strategic plan," Blowman said, was the result of the financial crisis which came to light in March, 2002. Overoptimistic projection of the end-of-year surplus, he explained, was primarily the result of failure to accurately anticipate the effect of the opening of three elementary charter schools in the city of Wilmington and lower-than-expected revenue as a result of students coming to the district under the state's public school choice law.

Remedial efforts enabled the district to get through the crisis last year and it "has been restored to fiscal health," Blowman said, indicating that level of spending on elements of the strategic plan will be in line with commitments in the budget for fiscal 2005.

That is not to say that the outlook is now rosy.

On the contrary, Blowman warned that Brandywine will have to cope with serious endemic problems. Enrollments, on which the level of state support is based, will continue to decline, as the result of demographic factors, during the coming decade. "We could lose 100 [state-authorized] teacher units by 2013," he said.

While costs will continue to rise at a much faster pace, annual growth of assessed property value in the district, which determines the amount of local tax revenue, probably will not exceed 1%.

Then, too, the opening of new charter schools and the extent to which the district looses students through the choice law or to nonpublic schools will have an adverse effect. The opposite could occur with the closing of a charter school or an acceleration of the now-flat pace of students coming into the district.

As a result, Blowman said, a strategy of "being extremely aggressive" in efforts to woo parents of children now attending private schools or enrolled in charter schools to fill the district's excess capacity -- currently about 2,000 seats and otherwise expected to increase -- is in order.

More immediate, he added, are the demands imposed by implementing the federal 'no child left behind' law and possible state legislation to require districts to provide full-day kindergartens to everyone. "You can be quite sure there will be a local obligation connected to that," he said.

One possibility in regard to the kindergarten legislation, he said, would be companion legislation authorizing districts to finance the added cost through their tuition tax rate. That rate -- now 11.2˘ in Brandywine -- is set by boards of education and is not subject to approval in a referendum.

Superintendent Bruce Harter told the board there also is an effort to eliminate the countywide property tax in favor of allowing the four large northern New Castle County districts to levy it without having to split the proceeds on the basis of enrollment. At present, that would be the equivalent of 2.6˘ rate increase in Brandywine, which along with the Red Clay district 'subsidizes' the Christina and Colonial districts.

Also on the plus side, Blowman said he will request the board at its Feb. 23 business meeting to amend the current budget to apply an additional $116,441 in state money netted as a result of recalculation of teacher units connected with a special education pilot project at the Bush Early Learning Center to the amount the district is required to return to the state this fiscal year.

© 2004. All rights reserved.

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