Springs Considers Drawing $934,000 From Reserves For Next Year's Budget

Apr 2, 2013 4:36 PM

Springs School District officials are considering a plan to draw $934,000 from reserves to keep next year’s tax rate below 3 percent and stay within the confines of a New York State 2-percent tax levy cap.

Springs is able to use the fund balance in part because the East Hampton School District overestimated high school tuition rates for Springs students by $354,000 this year. That allowed Springs to put money it had budgeted for tuition into the fund balance this year, officials said at a March 27 budget work session.

The district is projecting a total fund balance of about $5 million this year.

East Hampton School District also overestimated next year’s high school tuition rate, Springs officials said. That, combined with an overall reduction in the number of Springs students attending East Hampton High School, will result in a decrease in tuition costs next year as well. The total reduction between this year and next year is about $510,135, according to figures presented by Tom Primiano, the district’s treasurer.

East Hampton School District Superintendent Richard Burns on Tuesday attributed the overestimate to trying to work with a complex formula—the Seneca Falls formula—while using fluid numbers. Superintendents of sending districts to East Hampton School District have been meeting about tuition rates since September, he said.

Administrators have to account for where each staff member is during the school day, he said, and the Seneca Falls Formula assumes that district schools are divided into seventh through 12th grade and kindergarten through sixth grade units. “Obviously our schools aren’t divided that way,” he said.

Last week’s presentation was the third of four workshops Springs has held on next year’s budget. Administrators are pitching a budget for next year that would increase spending by about $905,400 to approximately $25.5 million. The budget has yet to be adopted by the School Board.

Springs School Board President Kathee Burke Gonzalez kicked off last week’s budget presentation by recapping the history of East Hampton High School tuition costs. She said that a year-long audit of East Hampton School District’s use of the Seneca Falls Formula—a calculation schools use to determine how much they can charge to other districts for tuition—revealed that the districts sending their students to East Hampton were being overcharged by 5 percent for regular education tuition this year. East Hampton School District notified its sending districts in a March 4 letter that this year’s tuition rate would be revised per student from $27,345 to $26,067. East Hampton also overstated its rate for 2013-14 high school tuition by about 4 percent, and will revise the rate from $26,863 to $25,789 per student.

Ms. Gonzalez reflected back on last year’s budget process, recalling that Springs had to cut $792,000 out of its budget to comply with a tax levy cap and what turned out to be an inaccurate hike in East Hampton High School tuition.

“Here we’re getting a $354,000 price adjustment and here we didn’t need to cut $792,000,” she said.

Springs School will continue to conduct annual audits of East Hampton’s figures, Ms. Gonzalez said. She added that Springs is going to contest the way East Hampton charges for certain non-teaching duties when it uses the Seneca Falls formula.

Springs plans to ask the New York State Education commissioner for a ruling on the matter because “hundreds of thousands of dollars are at stake,” Ms. Gonzalez said.

“I guess it’s just hard not to editorialize here, that we are the only ones pressing,” Ms. Gonzalez said. “There are many other sending districts.”

It’s the first time Ms. Gonzalez said she could remember high school tuition going down from one year to the next. This year, Springs School was dealt a 6.5-percent increase in tuition and budgeted about $7.2 million—an amount that ended up being inaccurate. Next year, the district will budget about $6.8 million for East Hampton High School tuition costs.

Mr. Primiano presented an overview of the proposed 2013-14 budget.

“Its been a rough several years, so suddenly we’re feeling like things are better,” Mr. Primiano began.

District officials are proposing to increase spending by $667,000 for employee benefits next year, $247,000 for payroll and $203,000 for capital projects such as creating a vestibule at the entrance of the school to increase safety.

The administration is recommending applying $303,000 to keep the budget under the mandatory tax levy cap. It is also recommending using $631,000 in fund balance to reduce the tax rate. In that scenario, the proposed 2013-14 budget would be $22.7 million, and the tax rate would increase by 2.87 percent, to $91.52 per $100 of assessed valuation.