The Citizens Advisory Committee on Finance (CACF) unanimously supports the proposed Manhasset School District Budget of $81,094,279 for the year 2009-2010. The budget represents an increase of 0.87 percent over the prior year. The CACF, which is comprised of 12 residents of Manhasset selected by the board of education, is responsible for advising the board on financial matters, specifically on the annual school budget.
Once again, we note with appreciation the transparency of the budget process and the wealth of financial information made available by the administration. The proposed year-over-year increase of only 0.87 percent is quite an achievement, taking into account that: (i) there are an additional 66 students projected to be enrolled in the district for the next school year, (ii) all current instructional programs will be continued, (iii) there will be no increase in the class size guidelines, and (iv) all extra-curricular and interscholastic athletic programs will be maintained at this year's levels.
How is it possible to keep budget increases below 1 percent when prior year increases were higher?
• The budget is helped by the effort of New York State to keep health insurance increases at 1.2 percent for the period of July to December 2009, a significant reduction from past years.
• The required contribution from the district to the New York State Pension Fund is less than what might have been anticipated this year because the contribution is calculated on a five-year moving average of pension assets as of January 1. Therefore, the recent precipitous decline in the securities markets has been somewhat offset by stock gains in preceding years.
• As teachers planning to retire must now give notice earlier than under the prior agreement with the teachers union, it is possible to budget literally on a teacher-by-teacher basis. Moreover, by bringing some services in-house, and working with parents of special needs children, that portion of the budget has increased by a much lower percentage than comparable school districts.
• In order to ease the tax burden, the board has determined to appropriate $700,000 of district fund balance to offset the tax levy. Restitution of state aid through Federal stimulus funds, when received, will be used to avert possible future tax increases.
• To show support for the community, a number of administrators have agreed not to take wage increases this fiscal year, and there have been ongoing talks with the unions to find ways to reduce personnel costs and/or enhance productivity.
To conduct our review of the proposed budget, the CACF divided itself into various groups to focus on specific areas of district expenditures, including special education, technology, litigation, athletics and maintenance. Particular attention was devoted to those segments in which expense items in the budget increased compared to last year. As part of the process, the group met with the relevant district administrator and was satisfied that each area's budget was responsible and accurately presented.
We met several times with Rosemary Johnson, the assistant superintendent for business, and with board member Carlo Prinzo. We reviewed the budget in detail as well as the methodology of the budget preparation. We note that there have been a number of public meetings, which various members of CACF attended. We have had the total cooperation of the board and the administration throughout the budget review process.
We are satisfied that the proposed budget accurately reflects contemplated expenditures for the school year. We are mindful that New York State law prohibits the budget from being overspent without a special vote of the residents. Each year, there has been a surplus of less than $2,000,000, and that sum has increased the district reserves. Note that that annual surplus is only about 2.5 percent of the overall budget, i.e. not much of a contingency. This year, because of extremely tight budgeting, the unspent surplus promises to be lower.
Over the years, the per student spending in Manhasset has dropped from close to the highest in Nassau County to approximately 14th. Some say this is good news for Manhasset. Others are concerned that quality of education may suffer. However, we think that argument is for a separate forum. We are in a punishing recession, many people are hurting, and the CACF believes that at least for this year, spending must be limited. However, we are not prepared to recommend that instructional programs or services be curtailed or that class sizes be increased. We firmly believe that the residents of Manhasset expect and deserve a quality education for their children and grandchildren.
A caveat for next year: as the administration has announced, the expenditure required for the New York State Pension Fund will increase dramatically next year because of the decline in stock market values, the costs of health insurance premiums will likely increase substantially, and it may not be prudent to cushion future budget increases by again transferring surplus. Thus, there may be a substantial increase in the budget for next school year (2010-2011).
We commend the administration for its efforts in minimizing the increase in the size of the 2009-2010 budget for the Manhasset Public Schools. We support the budget and recommend that the community do so as well.
Paul Baumgarten - Chairperson
John H. Haberkern - Deputy Chairperson
On March 25, 2009, the Manhasset Board of Education unanimously resolved to renovate existing locker rooms and install new bleachers in the middle and high school gymnasiums. The Citizens Advisory Committee of Finance (CACF) unanimously supports and endorses that resolution, which still requires the affirmative vote of the residents of the school district to approve and implement the project.
History. On May 16, 2006, Manhasset's voters authorized the establishment of a Capital Reserve Fund of up to $5,000,000, to be funded from school surpluses, if any, and used for future capital improvement. Disbursements from the Capital Reserve Fund require voter approval and such funds may only be used for specified physical plant improvements.
Need. The Manhasset Middle and High School locker rooms are antiquated and inadequate. Unfortunately, because other areas of the physical plant were even more in need of upgrading, the locker rooms have not been improved for many years. The bleachers no longer meet safety code and are well beyond their useful life. The locker rooms and the bleachers present real issues to the district as to safety and supervision. Both are in dire need of replacing.
Cost. The district's architect has estimated the cost of the proposed renovations at approximately $3,582,000, including a contingency reserve of 18 percent, which will require the use of the entire balance of the Capital Reserve Fund of about $3,310,000 and about $272,000 of other reserve funds. We emphasize that the use of these Capital Reserve Funds will not have any effect on this year's annual school budget proposition or the tax rate.
Why Now? This project has been delayed for a number of years and the condition of the lockers and bleachers has continued to deteriorate. Anyone who doubts the need to approve this renovation should visit the school and view the deplorable condition of the locker rooms and the bleachers. During this economic downturn, district personnel believe that this necessary work can be done less expensively than might be the case in the future. We recognize that it is hard to be spending money in a year in which the economy is suffering and many Manhasset residents are unemployed, but as a practical matter, there are no other uses for the funds and these projects have been identified as pressing indeed. In this difficult economy, it may be possible to secure better pricing and the project may well cost less than is being budgeted.
No Other Permitted Use of the Funds. Note that, once the establishment of the Capital Reserve Fund was approved in 2006 and the $5,000,000 segregated from subsequent year surpluses, the moneys so segregated can, by statute, only be used for capital improvements. The funds may not be returned to taxpayers, nor transferred to surplus unless the board votes, in accordance with the words of the statute "...that the original purpose for which a reserve fund has been established is no longer desirable..." That simply is not true and the board could not so vote and properly discharge its fiduciary duties to the public. Therefore, the only options with respect to the balance of the Capital Reserve Fund is to: (i) do the work described above now, (ii) do the work later, (iii) spend the money on other capital needs (and both the administration and board are on record that these improvements are the most pressing), or (iv) continue to hold the money in the Capital Reserve Fund account. We believe that the only sensible option is to use the funds and do the work now.
Conclusion. The CACF believes that the board's resolution deserves the support of the voters, and we encourage each district resident to vote in favor of this proposition.
Paul Baumgarten - Chairperson
John H. Haberkern - Deputy Chairperson