Proposition 3 Explained
By Eric Byrne, Ed.D., Superintendent of Schools
On June 11, the Rye community will have the opportunity to vote on three propositions. The first two are related to a new Capital Bond Proposal, and the third proposition is to establish a Capital Reserve Fund for the School District. A Capital Reserve Fund is exactly what its name suggests: a fund for school districts to save money for future capital repairs or infrastructure projects at no additional cost to the taxpayer.
Establishing the fund would allow the School District to set aside a certain amount of surplus budget funds each year to be prepared for future facilities or infrastructure needs. The Fund can be used to support future projects that would typically require bonding. The work would be paid for with Fund monies and thus would have no impact on taxes.
By New York State law, the community must vote to create a Capital Reserve Fund. If approved by the voters June 11, the School District can begin to allocate surplus funds to build up the Capital Reserve over time. In order to withdraw funds to be used for capital projects, Rye citizens will vote again and give approval for the monies to be utilized.
In addition to being smart fiscal tools that help address the tax burden, Capital Reserve Funds are a means of supporting the District’s financial strength – the amount of reserve funds held by a school district has a direct impact on ratings from credit rating agencies such as Moody’s. Additionally, strong reserves are a key component of the fiscal strength evaluation conducted by the NYS Comptroller.
Establishing a Capital Reserve Fund is a win for the entire Rye community. It creates a mechanism to address future infrastructure and facilities needs without additional taxes.
