Schools

Mineola School Finance Committee Reviews 2011-12 Budget

Volunteer group says cost assumptions are "reasonable" for budget.

Time has not been gracious to the six members of the Mineola School District finance committee this year.

“Severe limitations” on the administration due to several bond votes left little time for the six-member volunteer group who analyzes the district finances and the proposed budget every year to review the 2011-12 budget, which calls for a .

“We didn’t get very specific direction or requests this year as to how the board wanted us to analyze the proposed 2011-12 budget,” committee representative Doug Schumacher said during the budget hearing last Thursday night at the , “so we used a format similar to what we’ve used in the past.”

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The 2011-12 budget includes the first year’s effect of the reconfiguration, which “will generate return cost savings” despite having to “require some non recurring expenses up front,” Schumacher said. That savings is coming in light of significant state mandated increases to both the teachers’ and employees retirement systems (TRS, ERS).

In the 2010-11 budget, the TRS accounts for 8.6 percent of payroll and is projected to increase to 11 percent in 2011-12. The ERS is set to jump to 16 percent from 11.5 percent in the current school budget. Costs for both the TRS and ERS are dictated by the state. The district’s health insurance premiums, the carriers of which are set in union contracts, are also set to increase from 4.5 percent to 10 percent.

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According to Superintendent Dr. Michael Nagler, expenses for Mineola typically increase about 5 percent each year. “The only way you get a tax levy down is to cut out from the expense side,” Dr. Nagler said. “There’s no more money coming in so you have to take out from the expense side.”

The planned reductions in staffing would offset much of the increases Schumacher said. Mineola is currently planning on excessing 19.2 full time positions.

“Only by reducing staff several times during the last several years has the district kept the annual increase in its budget and its tax levy from growing as fast as payroll costs would have otherwise,” Schumacher said, noting that the proposed and schools are paid for in the budget and by existing fund balance, without having to raise taxes.

“The good news is, these are non-recurring costs,” he said looking at the long term planning for the district. “Eliminating positions, reducing staff gives you sort of a one-time zig down in that line ut then it keeps on going back up at that same steep slope.”

In order to account for the budget, Schumacher utilized a budget roll-forward – a “way of summarizing what’s in the proposed budget compared to the current year.”

First taking the current budget of $80,129,000, he offered $78,871,000 as “baseline” since “that’s what it would have cost us to run this year’s program.” Schumacher noted however  that “that’s not going to pay for next year’s budget, some things change.”

The finance committee estimated  a $1.37 million increase in salaries and an additional, $500,000 worth of staff no longer being supported by ARRA (American Recovery and Reinvestment Act) funding. Closure of would yield reductions of 19.2 full-time teaching positions and would reduce costs by $2.32 million.

“This is where you see the impact of consolidating from seven buildings to six,” Schumacher said. “The savings, it comes from having fewer classrooms, fewer teaching, administrative and support positions.”

Due to reductions in staffing, class sizes would be increased, but not above maximum district guidelines.

The group thought the cost assumptions were “reasonable” for the 2011-12 budget, but couldn’t verify that $2.6 million would be the final number for renovations at the Hampton Street and Meadow Drive School.

The committee could only vouch that “that much has been provided for in next year’s budget,” Schumacher said.

will bring in $200,000 in “net revenue” according to Dr. Nagler. The renter – – is paying for all heating, electricity, maintenance, etc. The district is planning to conduct renovations to Cross Street which “will be bid and paid for by Solomon Schechter,” the superintendent said, and will receive $1.1 million in revenue over the full term of the contract.

“But one has nothing to do with the other,” Nagler said, “By closing both (Cross and Willis) over 2 years and fitting all the children in that’s more cost-effective, that’s where the savings is coming from.”

The district has projected saving $37 million over 10 years by closing two buildings, but the actual number may run “a little more” according to the superintendent.

Without any cuts or building closures, the tax levy increase for 2011-12 would be about 7 percent.

Mineola usually spends about 98 to 99 percent of its budget, a “prudent” practice in the committee’s view. The surplus for the 2011-12 budget is projected to be $1.008 million due to the additional spending for the school renovations, and down from the anticipated $1.258 million surplus from 2010-11.

“As our revenue continues to dry up and our expenses go up, that surplus will just get smaller and smaller,” Nagler said, admitting the “artificial” nature of the reductions. “Remember that we’re closing a building, that’s how we delivered our tax levy this year. Next year we plan to do the same. Year three there are no more cards up the sleeve.”

While the percentage of the budget directed toward salaries shrunk in 2011-12, “the number stayed the same,” Schumacher explained because “the pie got bigger so it looks like a smaller percentage and that’s due to the reduction in the head count.” There is an actual $300,000 decrease after  excessing the 19.2 full time positions, Schumacher said.

Employee benefits make up 23 percent of the 2011-12 budget, up from 21 percent in ‘10-11 and 19 percent in ‘08-09

“That increase just about absorbs whatever you’re saving in salary costs from reducing positions,” Schumacher said.

“So much of that budget is not in our control in terms of salaries, benefits, you have operating costs,” Nagler said. “So when you come down to discretionary spending for any school district, it’s two, three million dollars. When you get to really the heart of what the program is, what you have the option to spend things on the number is not big.”

State aid is also decreasing, with Mineola’s share being cut by about $140,000. “It’s not generally expected to be the solution to any budget problem going forward,” Schumacher said.

New York state is also planning to require that school districts set aside funds, to pay for all of the earned post retirement benefits that staff has accumulated instead of the current pay as you go system but “nobody knows when” it will happen Schumacher said.

Dr. Nagler said that the district is continuing to negotiate with the employee unions, saying that “our target is zeroes” for increases. Several surrounding districts have also negotiated either flat contracts or decreases. Four employees contracts expire at the end of this year. “Were looking at the whole picture of every contract,” Nagler said.

State , R-Mineola, was was present during the budget presentation, later sent a Twitter message in support of the budget, calling it “great work” by both the board and administration.


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