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Manhasset Schools Update

I have submitted a preliminary budget to the Manhasset Board of Education for its consideration and am recommending its adoption at the April 20, 2010 board meeting. I am prepared to defend and justify this recommendation at that meeting and, if adopted, thereafter. The proposed budget of $83,512,677 is 2.98 percent higher than the 2009-10 budget and will regrettably require an estimated 1.23 percent increase in the tax levy. Fifty-nine percent of the increase is mandated district contributions to the state pension system and workers compensation expense. If adopted, this preliminary proposed budget maintains all of the educational programs and services currently offered. If it fails to gain voter approval, there would be a corresponding $2,613,064 reduction in programs and services currently offered in order to implement a contingency budget.

After the Manhasset Board adopts any 2010-11 budget proposition, there will be legitimate taxpayer concerns regarding the cost of Manhasset public education. There will also be intimations, even accusations, that the district attorney should investigate “fraud” in the establishment and use of excess fund balance and reserves. Such charges have been incessant and incessantly inaccurate. Often cast in financial terms that have a ring of authority, they refuse to acknowledge repeated attempts by the district to explain the idiosyncrasies of school finance as reflected in its annual external audit reports. Apparently disappointed that the district was able to meet the requirements of the PERB order relating to transportation outsourcing and negotiate a complete settlement with MESPA regarding back pay and comparable work damages, these critics now claim that the very reserves they had decried had been secretly garnered and nefariously applied to their intended purpose.

In response to similar charges, I wrote in my May 1, 2008 Manhasset Press column, “Lawsuits and Accruals Affect Reserves,” as follows:

In fact, the Management’s Discussion and Analysis of the June 30, 2007 audited financial statements identifies the following board action as a financial highlight in the fiscal year ending June 30, 2007. ‘In June 2006, the board of education authorized the establishment of an insurance reserve fund of $2,000,000 and a liability reserve fund of $2,000,000 in reference to certain litigation matters pending against the district. The funding of each of these reserves was transferred from the general fund’s unappropriated fund balance in June 2006. In addition, the district provided for an accrued liability in the amount of $2,302,823 in relation to these matters on June 30, 2006. This accrued liability was increased by $965,287 in 2007.’ A similar disclosure was included in the financial highlights of the district’s June 30, 2006 audited financial statements. Public discussions of the need for these liability funds has been ongoing prior to and after the establishment of these funds in June 2006. A reserve fund established in 1995 that had no useful purpose was, according to regulations, passed through the general fund into the aforementioned liability funds. Unanticipated revenue and volatility in benefit expenses and prudent budget monitoring have also resulted in the unreserved or undesignated fund balances accrued for use with the auditor’s recognition of a perceived liability. All of these financial decisions were public and consistent with the board’s fiduciary responsibility and authority. To suggest a sinister private conspiracy of silence is a reckless statement ill serving the interest of serious policy review and criticism.

We have been repeatedly charged with overbudgeting to deliberately create excess district funds for some ulterior motive that has yet to be explained. Some who advocate no funds should be left over each year are sincere in the belief that a district can create an $80-plus million annual budget accurate to the penny. That goal is not recommended by our auditors or credit rating agencies, nor is it endorsed by the State Comptroller. Current estimates indicate a $1.5 million surplus in 2009-10 and $700,000 of this surplus will be used to directly reduce the 09-10 tax levy. We plan to use the remainder to fund a pension reserve to reduce the 10-11 tax levy by approximately $800,000.

Another concern that may be raised during this year’s budget discussions and debates is the immutability and cost of the current teacher’s contract. In February 2008, the district negotiated a four-year contract with the Manhasset Education Association that provided a compounded salary increase of 14.09 percent and required a 4 percent health insurance contribution increase to 22 percent. The previous four-year contract took 19 acrimonious months of struggle and ended with teachers engaged in informational picketing that diminished the first day of school in 2005 before an October settlement was achieved. We proudly published the details of the 2008-2012 contract in the Manhasset Press and believed the contract epitomized the reciprocity of respect we had mutually gained since the low point of labor relations in September 2005. This contract was in line with area settlements and a mega-settlement between the State and its employee’s union in 2008. It should be noted that this teacher’s contract represents 1.1 percent of the proposed budget’s increase.

When on September 15, 2008 the Lehman Brothers bankruptcy and the ensuing market collapse signaled a radical change of economic conditions in Manhasset and the nation, some believed teacher contracts in other districts would markedly reflect the radically changed economic climate. This did not immediately happen; settlements in 2009 were slightly lower than those in 2008. As the economic crisis fully hit state government and the pension system, state aid has decreased and pension contribution costs have increased. Current negotiations in other districts have begun to reflect this situation.

Teachers in Roslyn and Port Washington, after many months without a contract, have recently agreed to a one-year wage freeze as part of their negotiated settlements. I am not aware of any teacher unions with an unexpired negotiated contract who have agreed to a salary freeze. Some districts are currently in discussions regarding contract modifications or other concessions. Edward R. Vasta, president of the Manhasset Education Association, and I have for the past few months been discussing the cost pressures facing the district and he has authorized me to publish the following letter, which reflects his leadership and concern for the community:

April 8, 2010

Dear Mr. Cardillo,

I am writing in response to your letter of March 24. As teachers and taxpayers, the members of the Manhasset Education Association are very aware of the current economic climate and we share your desire to maintain the high standards of the Manhasset School District.

As you correctly stated in your letter, the Association’s agreement does not expire until June 30, 2012. However, given the difficult economic times, we are willing to discuss proposals you may have for cost savings.

Please contact so that we can discuss this further.

Sincerely,

Edward R. Vasta, President

Manhasset Education Association

Mr. Vasta represents 287 teachers, a majority of whom would have to vote on any change in the existing contract. His letter opens the possibility that the teachers may consider a give-back that may lower the tax levy for the community while not materially diminishing the economic circumstances of their individual families. I cannot and should not speculate on the potential savings that may result but I am pleased that our relationship with union leadership is at a point where such discussions are possible.

While this column comments extensively on some areas of concern, it is intended as an invitation to the community to attend the Tuesday, April 20, meeting to raise questions and air concerns. I note with some dismay the caustic commentary from critics who apparently believe the board and the administration are functioning behind a veil of secrecy. It is difficult to function well in an environment where discord makes dialogue impossible. I make no claim to the primacy of my vision for our schools. That is the responsibility of the board of education and the Manhasset community. I do, however, claim the right and responsibility to make the best assessment of the cost of that vision—within the constraints of law and regulation. The community has established and maintained high standards for its schools. The cost of these standards has become increasingly difficult to meet and this will continue in the foreseeable future. I welcome a respectful dialogue with critics and advocates alike. I look forward to such discussions on April 20 and at other meetings during late April and early May.