The March 13 school board meeting featured momentary jubilation over passage of the bond measure punctuated with a brief shouting match between board members after the vote. The sparring laid bare a philosophical schism over the spending of reserve funds. The current reserve balance as of June is $14,856,904.
Reservations on School Reserve Funds
By Sarah Varney
The March 13 school board meeting featured momentary jubilation over passage of the bond measure punctuated with a brief shouting match between board members after the vote. The sparring laid bare a philosophical schism over the spending of reserve funds. The current reserve balance as of June is $14,856,904.
The trigger was the unveiling of the first full version of the tax-cap compliant 2012-2013 school budget totaling $73,558,490 with an accompanying tax levy change of 1.96%. The budget vote will be held May 15. Schools Superintendent Dr. Edward Shine presented a budget that includes cost savings of approximately $400,000 through opportune teacher retirements and a reduction in full-time secretarial and computer aide positions.
In response, a group of secretaries, nursing staff, and computer aides from each of the schools rose to protest the reduction in hours for some staff members. Group spokeswoman Dorothy Sorensen, secretary to Rye High School Principal Patricia Taylor called the proposed cuts unequal and unfair. “Bricks and mortar are important, but the foundation is the staff,” she said.
Ironically, the reserve fund skirmish was set off by good news when Business Manager Kathleen Ryan revealed that the district office had come up with an additional $300,000 over projected revenues.
The philosophical debate began with the question of what to do with this $300,000: spend it on one-time capital expenses or save it and add it to the reserve fund. The original proposed budget called for the use of $2.5 million in reserve funds with $500,000 slated for maintenance and repairs to facilities. The latest budget, reflecting the $300,000 savings calls for the use of $2 million from the reserve and $800,000 toward maintenance and repairs.
“The question is did we [the board] promise the community that we would deliver a tax-cap compliant budget with the use of $500,000 included in the $2.5 million use of reserves or did we promise to spend down $2.5 million in reserves this year?” said Board member Karen Belanger. The second option would seem to allow the use of the “extra” $300,000 for additional capital expenses — particularly facilities maintenance and repair — bringing this total to $800,000.
But the question remains: how to handle reserve funds.
Save the money for the rainy days that are coming, maintained Ed Fox, chairman of the finance committee. “The only way we’re going to sustain this program without burning the furniture for firewood is to maintain the reserve. The notion that we can just spend reserves is mistaken.”
On the other side of the debate are members who believe the reserve has gotten too large. “When do you reach the tipping point of prudence and over-taxation?” asked Board member Kendall Egan. “Reserve funds have doubled over my five-year tenure on the board. It is time to start deploying these resources. It’s much more important to meet one-time needs with one-time payments,” she added.
The other hot-button issue, particularly for community members who do not have children in the school system, is the notion that the existence of these reserve funds clearly indicates over-taxation.