District’s financial health strong, Neidig under budget and 5 teachers set to be added

District’s financial health strong, Neidig under budget and 5 teachers set to be added
Posted on 05/15/2019

Good evening!

There are two financial topics that I would like to bring you up to date on: the Neidig Elementary School Renovation Project and QCSD's Budget for 2019-20.

On May 6, the Quakertown Board of School of School Directors brought the district one step closer to having all 21st Century schools. They approved the bid for renovating/constructing Neidig ES (circ. 1955) at $27 million, with another $1.9 million set aside in contingency. The project will break ground at the end of May by starting to build a new bus loop behind the school. Construction will be completed 15 months later with doors open in the August 2020-21 school year.

Many of you recall the 2016 Community Facilities Committee discussions and findings. At that time, simply bringing Neidig up to code would cost $10 million. In December 2017, six months after the Board voted to close Milford Middle School and Tohickon Valley Elementary School, the Board adopted the Community Reassignment Committee's report that recommended to add 200 classroom seats to the Neidig project at an additional cost of approximately $10 million. This was done with the intent for the Board to reconvene the parent led Reassignment Committee after Neidig construction was completed to cross level students to reduce building and class sizes.

With the Board's guidance The Schrader Group, the district's architectural firm for the renovation/construction project, was asked to create equitable spaces that students and teachers have in Pfaff Elementary School, e.g. a standalone cafeteria, gym, music and art classrooms, and office spaces. The new projected cost for construction jumped to $29.9 million. When construction bids were opened two weeks ago, we had an unexpected surprise: $27 million is a much better number! The $1.9 million that is contingency is set aside for unexpected problems. In August of 2020, we will have a wonderful and welcoming new Neidig Elementary School.

You may wonder how does the Neidig project fit into QCSD's long term facilities and overall financial strategies. Other challenges include, how can we best contain costs to retain and continue to improve student programs, reduce class size, properly maintain our facilities and be excellent fiscal stewards of taxpayers precious resources - with minimum disruption?

It comes with an approach that executes mission, vision, and beliefs and optimizes all of the precious resources that we have and synchronizing multiple strategies with precision. With the Forecast Five software system and PFM Five-Year Budget Projection modeling, we can examine different possible COAs (Courses of Action) for the Board to consider. We can even compare it to what other school districts are doing within each functional area of school operations, then reflect on how we can make us more efficient and effective. We do know that QCSD's local tax increases over each of the past six years - approximately $11.5 million, barely covers the state-mandated PSERS (retirement) and debt service increases. Local property tax increases alone have not covered these two funding obligations.

QCSD has a strategy to contain spiraling debt service obligations and sustain what we have. In the short term, to renovate/construct Neidig, the district has already borrowed just under $20 million of the $27 million. The debt service (mortgage payment) for $20 million increases to $650,000 a next year, and is already figured into next year's budget. In the short term, we plan to pay the remaining $7 million by a combination of using the $2 million that the district already received for selling Tohickon Valley and Milford, adding a few million dollars from fund balance, and then borrowing a comparatively much smaller final number. That smaller number will be added to the debt service for the project in the 2020-21 Budget. That number would be smaller than we have projected in our PFM modelling.

In the mid-term, the Board has an opportunity create greater efficiencies and return expenditures for debt service back to the budget for re-allocation to other priorities. With declining student enrollment expected to last for at least the next five years, there will be seat and classroom capacity to reduce class size, and further strategically approach student assignments. For example, after Neidig construction is completed and students return to the new building, the Board may convene a parent led redistricting committee that considers several options for elementary student assignments. In the long term, the annual $1 million capital projects allocation in the budget will allow the district to properly maintain all of our facilities. While we create greater financial efficiencies, our objective is to keep professional staffing levels constant over the next five years. We do know that next year the professional teaching staff to student ratios will be back to the 2012-13 school year levels, and the teacher aide to student ratio will be the best ever.

As graduation for the Class of 2019 is only a month away, the Board's scheduled approval of the Final Budget 2019-20, is even closer - June 6 at 6 pm. On April 25, the Board of School Directors received the Final Budget presentation. At that time, the vote was 9-0 for the Final Budget that would raise local property taxes 2.7 percent and add $1.9 million of new revenue to the budget. The Final Budget 2019-20 also supports adding five professional staff FTE positions - two special education teachers - Elementary and High School, one behavioral analyst, one health teacher at the High School, and one Mandarin/ELL teacher for Strayer Middle School. It also adds an assistant principal position to supervise The Academy at Quakertown - our alternative education program, and a second supervisor in special education. With the ever increasing mental health and emotional challenges we have every day, we need more staff to support our most fragile student population.

Thank you for taking the time to read my blog. I hope you will drill down into the data that we put together for the Board and clearly see for yourself the progress that we have made in our systems development over the past few years. Today, student academic achievement is flourishing - thanks to the hard work of students and teachers, the financial health of district is excellent, our facilities will shortly be 21st Century, and we have systems in place to keep the momentum going for continuous improvement. As always, your feedback to the Board and me is invaluable. Please share your thoughts with us.

Thank you for your continued support.

Bill Harner

Superintendent

Twitter: @billharner

Email: wharner@qcsd.org

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