August 5th BOE Work Session - Finance

[David Skolnik]

The BOE meeting on August 5 didn't delve into athlete field preferences.  That was a tangent to Ari Wallach's concern about a reference to the possibility of future rental of the Reynolds facility.  Wendy strove to put that concern to rest on this list, yesterday.  It should neither distract from the substance of Monday's meeting, nor be entirely overlooked.

The meeting was, as announced, predominantly about financing.  Much of the discussion centered around the pros & cons of using some portion of the Capital Reserve (CR) to fund part of the growing project expense.  I won't try to explain it here, as I'm just lucky I can read my notes, but, by the end, there seemed a tending consensus in favor of using part of the CR, however, there also seemed to be enough genuine wrestling with the information and concepts that that consensus could still change.   Lisa Litvin had expressed some concerns about the use of Capital Reserves  at the July 10th Work Session.

The meeting was highly focused and did not include public comment, however, before the Board adjourned into executive session, Lindsay Hicks, again, expressed her deep dismay at the thrust of the entire project as it relates to what many of us view as the destruction of Reynolds Field.  I am grateful to her for her continued courage. 

I am hoping an intelligible video of this meeting will be posted soon, as I think the discussion was important to hear, even if, ultimately, not definitively enlightening. 

David Skolnik

[zcod...@aol.com]

I commented at a BOE meeting a few weeks ago that I believed we shouldn't use the capital reserve fund to finance the school and field improvements.  My reasoning is that I am fearful that we will not have significant funds to replenish the CR fund, and that the CR funds should be saved to deal with other improvements that our aging facilities already need or will need in the future.

I have been on the Citizen Budget Advisory Committee for several years, where I have learned about the CR fund and also about the school budget.  (If I get anything wrong, please correct me.)  The fund was created to hold surplus money that the district had at the close of the school (fiscal?) year.  So if the money budgeted for the full year wasn't completely used, the leftover would go in this fund.  These CR funds would be used for capital improvements or repairs, I believe, and can only be released by a town vote.

Here's the problem:  our budget for the coming year, and going forward, I am told, will likely not result in any significant surplusses at year's end.  Albany is mandating us out of existence, especially with its heavy emphasis on costly testing, paid for by us.  We must pay significantly into the state pension fund, and the amount we pay is set by the state, and, again I am told, pension costs will likely go way up in the next several years.  To keep under the governor's 2% tax levy cap and make these payments, our budgets have had been trimmed to the bone and there is no "fat" left.  What this translates to is that we have a lot of expenses forced on us by the state; the state keeps reducing its aid to us; and the state limits how much we can raise our budget, so we have to keep our spending to an acceptable minimum.  While we are lucky to still have enough this year to run a high performing school district, it's doubtful we'll have excess.  And there's no reason to expect any difference in next year and the next year.  It may even be worse in those years, because of the pension formula.

Forgive the long explanation, but that's why I'd like to keep the CR fund we currently have intact, to save for a rainy day, as we likely won't have leftovers in the future to meaningfully replenish to CR fund. 

Lisa

--
You received this message because you are subscribed to the Google Groups "ReynoldsField" group.
To unsubscribe from this group and stop receiving emails from it, send an email to ReynoldsFiel...@googlegroups.com.
For more options, visit https://groups.google.com/groups/opt_out.
 
 

[Douglas Rushkoff]

The problem is, if the money to service the loan falls under there 2% NY State cap, then it's trouble either way. 

Eileen emailed me saying that the money we use to service the loan - our monthly payments - definitely do not fall under the 2% cap. So they would not have to reduce or take from other parts of the budget to make our payments. 

But at the meeting, it was stated that the money to service the loan definitely *does* count toward our 2% cap. 

So I am back at the very beginning, looking for a way to understand where the money comes from. 

Douglas Rushkoff, PhD

Digital Literacy Advocate

http://codecademy.com 

http://rushkoff.com

[Lisa Eggert]

I found this PDF online, discussing the details of cap calculation.  I have not read it carefully, but if anyone has the time and inclination, the link is:

http://www.empirecenter.org/Documents/PDF/Property%20Tax%20Cap%20Guide.pdf.

On page 2, the document states:

"The basic cap of up to 2 percent is subject to the following exclusions ....Capital costs (including debt service) for school districts, which cannot borrow money for capital purposes without voter approval."  (emphasis in original)

Lisa

Sent from my iPad

[Douglas Rushkoff]

That's a great find! 

So the Board members who said Monday that this counts toward our cap should be shown the passage, so they understand better how to calculate the budget impact (as well as how to manage these finances). Perhaps Eileen knew this already, but didn't see it as the right moment to correct the other board members' misunderstanding. 

[Wendy Naidich]

I guess I should listen to the tape, but I do not remember anyone saying that the debt service was included in the cap.  And I certainly understood that it isn’t. 

It’s certainly possible that one of us misunderstood, but it’s also possible that someone asked a question to make sure that a particular term or point is clear to the public.  We try to do that as much as possible.

Wendy

[davids...@optonline.net]

If debt service is not included in the 2 pcnt. cap, is it free? It has to show up somewhere...no?

David S

On Thu, Aug 8, 2013 at 11:20 AM, Wendy Naidich <el...@optonline.net> wrote:
I guess I should listen to the tape, but I do not remember anyone
saying that the debt service was included in the cap. And I certainly
understood that it isn't.
It's certainly possible that one of us misunderstood, but it's also
possible that someone asked a question to make sure that a particular
term or point is clear to the public. We try to do that as much as
possible.
Wendy

FROM: Reynol...@googlegroups.com
[mailto:Reynol...@googlegroups.com] ON BEHALF OF Douglas Rushkoff
SENT: Thursday, August 08, 2013 9:19 AM
TO: reynol...@googlegroups.com
SUBJECT: Re: August 5th BOE Work Session - Finance

That's a great find!
So the Board members who said Monday that this counts toward our cap
should be shown the passage, so they understand better how to
calculate the budget impact (as well as how to manage these finances).
Perhaps Eileen knew this already, but didn't see it as the right
moment to correct the other board members' misunderstanding.

On Aug 8, 2013, at 9:14 AM, Lisa Eggert wrote:
I found this PDF online, discussing the details of cap calculation.
I have not read it carefully, but if anyone has the time and
inclination, the link is:
http://www.empirecenter.org/Documents/PDF/Property%20Tax%20Cap%20Guide.pdf

[2].

On page 2, the document states:
"The basic cap of up to 2 percent is subject to the following

exclusions ....CAPITAL COSTS (INCLUDING DEBT SERVICE) FOR SCHOOL
DISTRICTS, which cannot borrow money for capital purposes without

voter approval." (emphasis in original)
Lisa
Sent from my iPad

On Aug 8, 2013, at 8:58 AM, Douglas Rushkoff wrote:
The problem is, if the money to service the loan falls under there 2%
NY State cap, then it's trouble either way.
Eileen emailed me saying that the money we use to service the loan -
our monthly payments - definitely do not fall under the 2% cap. So
they would not have to reduce or take from other parts of the budget
to make our payments.
But at the meeting, it was stated that the money to service the loan
definitely *does* count toward our 2% cap.
So I am back at the very beginning, looking for a way to understand
where the money comes from.

an email to .
For more options, visit https://groups.google.com/groups/opt_out [8].

--
You received this message because you are subscribed to the Google
Groups "ReynoldsField" group.
To unsubscribe from this group and stop receiving emails from it, send

an email to .
For more options, visit https://groups.google.com/groups/opt_out [10].

Douglas Rushkoff, PhD
Digital Literacy Advocate

http://codecademy.com [11]
http://rushkoff.com [12]

--
You received this message because you are subscribed to the Google
Groups "ReynoldsField" group.
To unsubscribe from this group and stop receiving emails from it, send

an email to .
For more options, visit https://groups.google.com/groups/opt_out [14].

Douglas Rushkoff, PhD
Digital Literacy Advocate

http://codecademy.com [15]
http://rushkoff.com [16]

--
You received this message because you are subscribed to the Google
Groups "ReynoldsField" group.
To unsubscribe from this group and stop receiving emails from it, send

an email to .
For more options, visit https://groups.google.com/groups/opt_out [18].

--
You received this message because you are subscribed to the Google
Groups "ReynoldsField" group.
To unsubscribe from this group and stop receiving emails from it,
send an email to ReynoldsFiel...@googlegroups.com.
For more options, visit https://groups.google.com/groups/opt_out

[19].
Links:
------
[2]
http://www.empirecenter.org/Documents/PDF/Property%20Tax%20Cap%20Guide.pdf
[8] https://groups.google.com/groups/opt_out
[10] https://groups.google.com/groups/opt_out
[11] http://codecademy.com/
[12] http://rushkoff.com/
[14] https://groups.google.com/groups/opt_out
[15] http://codecademy.com
[16] http://rushkoff.com/
[18] https://groups.google.com/groups/opt_out
[19] https://groups.google.com/groups/opt_out

[Ted Mason]

It strikes me that if debt service is not included subject to the cap the board can borrow as much as they think the tax payers will approve and then we all get to pay capital and Interest charges in addition to the cap amounts and all else that goes on top of the cap for years to come.

So taxes go up even more than you may be expecting.

Municipal entities do it all the time, but those who borrowed the money are long gone when it is time to pay the piper. Detroit is the latest extreme example.

The municipal bond funds on whose boards I serve had a conference call addressing this subject just this morning. Key question "what is the financial health of entities below the State level and what is there ability to meet their debt service together with their ridiculous pension and health care obligations".

Our funds extend from RI to HI and the question is the same. Central Falls in RI went Chapter 9; pensions were cut to 55% as part of the settlement. Fortunately our RI mutual bond fund did not own Central Falls bonds - but you see the point; prior obligations could not be met.

Ted Mason
Managing Director
Eastwind Power Partners, Ltd.
380 Madison Ave. Suite 2300
NY, NY 10017

Office 212.697.6666
Cell 914.310.1228

Sent from my iPhone

> For more options, visit https://groups.google.com/groups/opt_out.
>
>

[David Skolnik]

Hold on there Rushy, not so fast.  Somewhere in the August 5 meeting discussion, Maureen mentioned that there is some amount that could be directed at this project, either from operating budget or operating reserve fund.  I wish I had the tape so that I could verify, but it's a point I'm hoping to clarify.  Jeanine said she hoped to have the tape up by tomorrow.

But I have to do a Lindsay, and remind you, and others, that the money is only part of the issue.  We're still talking about what some of us still feel to be a gross disservice to the space, and community.

David S


At 06:50 PM 8/8/2013, Douglas Rushkoff wrote:

I look at it as good that it is not under the cap.  I don't love more
taxes but I do like that the expenditure does not reduce what is
permissible to spend under the law.

Sure, we are limited by how much money we can actually raise, but at
least we won't reach that ceiling by decree of Cuomo.

In essence, there is no direct impact on the operating budget.

rush...@rushkoff.com

-----
No virus found in this message.
Checked by AVG - www.avg.com
Version: 2013.0.3392 / Virus Database: 3209/6562 - Release Date: 08/08/13

[Douglas Rushkoff]

I look at it as good that it is not under the cap. I don't love more
taxes but I do like that the expenditure does not reduce what is
permissible to spend under the law.

Sure, we are limited by how much money we can actually raise, but at
least we won't reach that ceiling by decree of Cuomo.

In essence, there is no direct impact on the operating budget.

rush...@rushkoff.com

On Aug 8, 2013, at 3:46 PM, Ted Mason <tedm...@mindspring.com> wrote:

[David Skolnik]

It's relatively short, intense, sound is good, lighting, eh!

http://ensemble.lhric.org/app/sites/index.aspx?destinationID=tlHvQalerkiuhe-Fae_iLQ&contentID=CZ5cf-vcmEaMBjc1JTD0yA&pageIndex=1&pageSize=10

David Skolnik