In July, 2016,
the district received questions from a non-resident and local television
station concerning the district's budgetary process. The questions
and answers posed and delivered to both parties are listed below.
the district anticipates a need, why are they not shared with
the public and budgeted? If there is documentation the needs were shared
can you please provide it?
Answer: The school
board Finance Committee works closely with the Chief Financial Officer of the
Downingtown Area School District and district administration and annually vets
the budget. The whole board receives monthly financial reports and discusses
finance concerns on a monthly basis. Throughout the budget process, the district’s
needs are discussed and vented in public during committee and board
meetings. The district's needs are anticipated to the extent possible in an
environment that is dependent upon an unpredictable legislative, national and
regional economic trends, assessment appeals, interest rates, real estate
growth, pension cost fluctuations, special education needs, energy costs and
health benefit cost gyrations for a self-insured school district. As part of
the monthly reports made available to the Board and public is a report that
reflects actual revenues and expenditures as compared to budgeted
figures. Below is documentation concerning our budgetary process.
1. As a
multiple year recipient of the Association of School Business Officials
Meritorious Budget Award, the district has presented budget and financial
information consistent with the criteria required to meet the standards of
excellence in preparing and presenting budgets as set forth by the Association
of School Business Officials. Click here for Information about the Meritorious Budget
district's assumptions for budget development have been publicly shared for
each budget's projected revenues and expenditures and have been incorporated in
every annual budget. Click here for Annual Budget Information
Financial statements by an independent outside auditor (Rainer and Company)
going back to 2004 can be found by clicking here.
Downingtown Area School District is one of only six school districts in the
state of Pennsylvania and one of eighty nationally to hold a AAA bond rating.
This rating is given to less than 1% of districts across the country and is a
testimony to the district’s financial strength, sound budgeting practices, and
NBC10 analysis showed the district with an average $12.6 million
surplus each year, overestimating expenses by an average of 7.1% during these
years according to the analysis. Was the district aware it was
overestimating actual expenses?
district's projection methodology, which resulted in a series of annual
surpluses over the past 20 years, has enabled the district to weather the 2008
Great Recession and kept district tax increases at bay for at least the
past four years.
capital spending (that is not reflected in the general fund) is approximately
$10 million per year over the next 5 years. These are needs within our
facilities, infrastructure, technology, and curriculum areas. These needs are
real and are being addressed by planned, anticipated, and budgeted surpluses
from the general fund.
Q. What do you
do with these surplus funds?
Knowing the solvency of the school district over the past several years, the
school board used a portion of these funds to pay down more than $65 million in
outstanding debt service. By applying the funds generated from prior year
surpluses directly to our outstanding debt service, we saved district taxpayers
more than $4 million in annual debt service expense. That strategy coupled with
resourceful educational programming over the past 7 years has enabled the
District to address the educational facility needs of a growing population at
the lowest impact possible on taxpayers. In 2008 the district faced in excess
of $220 million in construction costs, with the specter of building a third
full high school and third full middle school campus due to escalating growth
and already overcrowded buildings. After careful consideration since 2009, we
spent a fraction of those anticipated costs and relieved overcrowding by
opening a 3rd high school program in an existing facility and
building a new elementary school (6th Grade Center) rather than a middle school
saving taxpayers hundreds of millions of dollars in expenditures. Because of
this sort of fiscal responsibility and resourcefulness, we have created a situation
where DASD taxpayers - haven’t and shouldn’t - have tax increases for some
time. We are very proud of this accomplishment.
Q. Why did
your budgeting exceed what was spent for the past six consecutive years?
School Board and Administration firmly believes that the DASD has conducted its
business – including financial affairs – in a prudent manner that best serves
our constituents. During the six years in question, the District
saved $4.3 million. $94.3 was received in general fund revenues
and $90.0 million from our capital fund and debt defeasance was spent.
This 20 year budgeting process has directly benefited our taxpayers and
resulted in zero tax increases for the past four consecutive years.
Hartman, Professor of Education Emeritus at Penn State University and a
nationally recognized expert on school finance has observed; "School
districts throughout Pennsylvania have struggled to survive the Great Recession
of 2008, funding educational obligations in an economic environment of
geometric increases in PSERS expenditures, increasing health care costs, rapid
and extensive increases in payments to charter schools, shrinking tax bases as
the result of tax assessment appeals, historically low Act 1 indices, unstable
legislative climates and non-existent investment growth. Because of the
strength of the Downingtown area School District's budgeting over the past 20
years, Downingtown weathered this "perfect storm" better than any
other Chester County school district by essentially eliminating debt."