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State Fact-Finder: Lack of "Sound Budgeting" Causing PMSD Budget Woes, Not Transportation Costs

Updated: Dec 12, 2019

A State Fact-Finder has issued a blistering decision blaming the Pocono Mountain School District Board of Directors for failing to follow "sound budgeting" practices for years, leading to budget shortfalls, while at the same time lowering taxes. The decision suggests that the Board was using the bus drivers as scapegoats for a budget problem of its own creation, and recommends against outsourcing student transportation.

The decision, which comes out of a dispute between the District and the union representing the bus drivers, stems from a late 2018 decision of the Board to explore cost-savings by seeking proposals to outsource student transportation services. That decision sparked a groundswell of support for the bus drivers and a grass roots campaign to unseat directors who voted for the change. In the November elections, incumbent school director John Davis was unseated by upstart anti-outsourcing candidate Ronnie Byrd. At the fact-finding hearing, the District emphasized the budgetary needs to the cost-savings projected to be realized by the change. The District said it's last six budgets were unbalanced due to retirement costs. The fact-finder saw it differently:

"Projected budget shortfalls are not caused by transportation costs nor will they be corrected by subcontracting them. They are the result of the District's . . . relying on excess revenue from the fund balance while unnecessarily reducing taxes instead of sound budgeting to maintain healthy reserves from reliable, consistent revenue development"

The fact-finder detailed several years in which the Board used fund balances to prop up an unbalanced budget, "while boasting about lowering taxes" to the public. The fact-finder went on to observe that the Board would use the savings from the outsourcing irresponsibly, and as a result, "the estimated gains to the District from the First Student proposal do not justify the greater loss to the affected employees while not substantially benefiting the public." The fact-finder also noted that, although the District represented that 95% of current drivers would be rehired, there was, in fact, "no guarantee" in the proposed agreement. Moreover, the neutral fact-finder noted, any employees who were hired by the new company would likely have a net reduction in income due to fewer benefits and the higher costs of health insurance. For those and other reasons, the fact-finder declined to recommend outsourcing and instead recommended the the District accept the offer of the drivers and mechanics to accept a wage freeze for several years, saving he District just under $800,000. The fact-finder ruled in favor of the District on the drivers' requests to changes in personal leave, vacations, and emergency closing procedures. The fact-finder's report is not binding and it is up to the parties to decide whether to accept the recommendations. Rejection by either side will send the parties back to the negotiation table.

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