District News

District Response to Letter, Dated May 24, 2009, Published in Local Papers

Recommendation #1 Reverse the Spike

Statement: “The loan principal would be repaid with Prior Years’ State Aid payments from the State and interest would be totally paid by the State”.

Fact: The proposed bonds are not legal obligations of the State, and are based on a “Promise to Pay”. The bonds would become obligation of the Shoreham-Wading River District to pay for the principal and interest if the State failed to keep its promise. In addition to the potential payments becoming the responsibility the Shoreham-Wading River School District, under the conditions of the borrowing proposed by the Municipal Bond Banking Agency, the District would be severely restricted in the amount of Bonds that could be issued for the reconstruction of our school facilities.

Solution: Have the State of New York issue the bonds, guarantee the payment of the principal and interest, and pay the balance of the $35.8 million in State Aid that is due to the District.

Statement: “Instead of an increase of over 20% this year and over 15% next year, the tax gap could be closed over 5 years, with increases under 4% per year”.

Fact: The 2010-2011 tax increase would be in line with other District’s increases as it now stands. There would be no reason for a 15% increase for next year (2010-2011). The “tax gap” cannot be closed with a 4 % increase over 5 years, unless the Budget is frozen or reduced from the 2008-2009 level for the next 5 to 6 years. This may or may not be possible, and would severely curtail the instructional programs.

Fact: Implementation of the Proposed Budget and tax levy will keep the tax rate well below average for Brookhaven Township. In fact the proposed tax rate will be the third lowest of the 18 Districts within the Town.

Recommendation #2 Eliminate Interest Expense

Statement: “The interest expense for TAN’s and RAN’s could be eliminated since the District would have access to the PYSA in months, not years.” Saving of $400,000 ???

Fact: Based on the shortfall in PYSA in the current year, the District will be forced to borrow $3.8 million in RAN’s to payback the notes due on June 30, 2009. In addition, the District will not receive Property Tax funds until January 2010, therefore the District will be required to borrow $10.6 million in late June or early July. Therefore the allocation in the Budget cannot be eliminated based on a promise.

Fact: If the State of New York borrows the money directly, and pays the District the PYSA, the notes could be paid off when the actual funds are received.

Recommendation #3 Freeze Administrative Salaries

Statement: “full participation in a voluntary administrative salary freeze for next year”. Savings of $100,000 ????

Fact: The budget proposed in May did not include $100,000 in administrative raises, therefore, there cannot be a savings of $100,000. The Superintendent has offered to donate part of her raise to the School District. The majority of the administrative staff and budget allocations are covered by existing contracts under the New York State Taylor Law, and employees cannot be forced to take a freeze under an existing contract. Existing administrative salaries are about average for all Districts in Suffolk County.

Fact: The Superintendent and Board of Education are working with all negotiation groups to seek agreements that are fair to the employees and taxpayers.

Recommendation #4: Eliminate Overtime

Statement: “The savings from this single action could reduce the budget by over $200,000”.

Fact: Overtime represents less than 5% of the non-teaching salaries in the budget and is a necessary for the operation of programs in the schools. Although the District uses part time staff as much as possible, overtime is required for emergencies such as snow removal, use of the buildings on weekends, filling in when absent staff members when subs are not available, special events, maintenance repairs that cannot be completed during school hours, etc. For major events in the building, it may require the Head Custodian to be present.

The total dollars budgeted and spent on overtime is less than the proposed savings.

In Process: The District will continue to monitor overtime and the use subs when appropriate.

Recommendation #5: Freeze Spending on Auxiliary Services

Statement: “The District spends a significant amount on goods and services that support staff and students. This includes teacher training, legal and advisory services, information services, office supplies, BOCES services and health services. By freezing spending at last years levels for these services, the District could reduce the budget by over $200,000.

Fact: Many of these services are directed and controlled by events outside of the District’s control. Teacher training is required by the State for training in the correction of mandated test and the implementation of new courses or programs. Annual fees for legal services can set for basic services, but it is not possible to control fees for hearings and the defending claims not covered by insurance. Many of the BOCES Services are based on the number of enrollees and the services required by individual students. Health services are based on the number of students attending out of district schools.

In Process: Continue to monitor the expenses during the year.

Recommendation #6: Fine Tune Tax Accruals

Statement: “The increases forecasted for certain payroll tax accruals seem much higher than corresponding payroll increases”. By fine tuning these estimates, the District could reduce the budget by as much as $200,000”.

Fact: Payroll accruals and related benefits are based on estimates provided as much as six months prior to the start of the new year. There are reasons for the increases or decreases in the benefit lines in the budget. If health insurance increase of $414,719 or 7.5% is excluded, the total increase in all other benefits is 1.6%.
The estimated for Health Insurance increase published on May 18, 2009 by New York State Department of Civil Service is 9.9% for the 2010 year, which represents a shortfall of $118,000 in this budget line. Fine tuning may reduce some lines, but increase others. The Metropolitan Transportation Tax, which will exceed $100,000 must be incorporated into the Budget.

Fact: The overall benefit budget for 2009-2010 is on target.

The overall 2009-2010 expenditure budget proposed to the residents was and is a sound financial plan to support the education program. Fine tuning is done as the school year progresses. The School District will continue to monitor expenses, and be responsible to the taxpayers.