January 5, 2010

Dear Great Valley Community Member,

Like most school districts across the state – even the nation – Great Valley faces some challenges in developing a budget for the 2010-2011 school year. As we work to preserve the outstanding educational programs that afford our students with so many wonderful opportunities for learning and growth, we are also very conscious of our responsibility to you, our taxpayers. We know that many in our community have been impacted by these trying economic times. Our businesses are showing less growth, our home sales have slowed, and people in our community are seeing a loss in their savings and investments.

Now that we are into “budget season,” there are still a number of questions left to be answered about our revenues at the state and local level. Already in this school year, we are seeing less local revenue than what was budgeted … almost $1 million less, due to assessment appeals and sluggish property tax payments. The District is actively identifying ways to reduce expenses to close this gap. We expect to complete the year on a balanced budget.

Looking Ahead to Next Year
As we look toward next year, we see a more than $3.2 million difference between the estimated revenues and the estimated expenditures. Factors contributing to that deficit are:
 

• continuing revenue erosion
• contractual expenses
• increased rate of required contributions to the Pennsylvania School Employee Retirement System (PSERS)
• and rising health care costs.

In order for us to move our current budget forward into 2010-2011, preserving all our current programs and personnel in their current structures, we would need to impose a 5.42% increase, which, under Act 1 is not allowed without an approved voter referendum. Under Act 1 of 2006 a tax rate increase is limited to an annual statewide index. For 2010-2011, that index is 2.9%. The State does, however, provide exceptions to the Act 1 index which would allow the School Board to raise property taxes above the index of 2.9% without voter referendum. Great Valley does qualify for two exceptions: special education and state mandated retirement rate increase. Our School Board will be examining these allowable areas of exception in the coming weeks. If the exceptions in these areas are applied for and approved by the State, the Board has the option to raise taxes above the 2.9% index, up to 4.7%. While the exceptions provide the District with a solution to help manage the budget deficit, the drawbacks are the added tax burden to the taxpayers and a requirement to pass the preliminary budget in February 2010 instead of in April 2010.
As the District works to develop a budget that closes the funding gap, we continue to focus on minimizing the impact on the taxpayer. I expect that we will be unable to support any new programs or initiatives for next year. We may also need to restructure some areas to be more cost effective. We will see no new staffing. We will also be looking very closely at our spending – and will be scrutinizing to a greater level than ever before areas where savings can be realized. We will also be pursuing an alternate health care funding model that could result in savings. And, as staff members retire, we will be looking closely at their positions to determine if a replacement is really needed. We may also be considering a property tax increase.

I anticipate that some of the conversations we will need to have in the coming weeks will be difficult. In advance of those conversations, I thank you for your willingness to engage and be part of solutions. I can also promise that we will not lose our focus on students and their education. That is why we exist – and my commitment to our students is unwavering.

Staying Informed and Involved
So that you can be a truly educated partner in our budget discussions, we as a district remain committed to communicating and sharing information with you. Our new web site allows us to offer information in a cleaner and more streamlined way. Our goal is to make it easy for you to find the information we make available. And, our School Board meetings and Finance Committee meetings are videotaped and aired on both GVTV (Comcast Channel 14 or Verizon Channel 36) and on the internet via our web site. Many of the presentations made at these meetings are provided as links right from our site.

While the economy certainly presents challenges for us, I am confident that we will continue to find ways that support students while also being responsible to our community and honoring our staff. As we move forward in our work to develop a budget for 2010-2011, I and the School Board invite your participation and your feedback. We look forward to your continued partnership in providing the best educational experiences we can for Great Valley’s students.

Sincerely,

Alan J. Lonoconus, Ed.D. Superintendent