Ms. O'Connor reviewed the District's financial activities and described the tax cap calculation, which fluctuates by municipality and government entity. She noted that the 2014-15 tax cap for the Rye City School District is 1.64%. Ms. O'Connor further explained that although Teachers' Retirement System (TRS) and Employees' Retirement System (ERS) expenses continue to increase, their rates did not go up by the two percentage points that are required in order to make the District eligible for a tax cap exemption.

Of the 61.9 Full-Time Equivalency (FTE) staff position eliminitated since 2009-10, 27.9 were cut last year, representing the highest number of staff reductions to have been made in one year. The conservative use of fund balance, another cost-saving measure, has decreased reserves by 29% since 2009-10. The three types of reserves that the District utilizes most are: Tax Certiatori reserves, ERS reserves, and Undesignated Fund Balance. The majority of the ERS reserves have already been exhausted.

Also explained were the efficiencies that the District has made in the current school year as part of the 2013-14 budget. Dr. Alvarez noted that High School and Middle School schedules were aligned in order to allow flexibility with staffing and improved use of facilities. Throughout the District, roles of department chairs were redefined, staffing was adjusted based on specific student needs, and contractual obligations of staff members were maximized. Over the summer the District began implementing several tools including WinCap, AESOP, and dmPlanning, which have also provided greater efficiency. Additionally, Ms. O'Connor pointed out that the District explores every opportunity to use cooperative bidding and ensure the lowest possible pricing for its initiatives and projects.

Employer Retirement Contributions comprise some of the highest budget drivers. As noted above, tax cap exemptions for TRS and ERS costs are based on rate increases, which are different from expense increases. A rate increase of more than two percentage points is required for tax cap exemption. The projected TRS expenditure is increasing 9% in 2014-15, equivalent to $5,813,730. The contribution rate of 17.53% in 2014-15 is an increase of 1.28 percentage points. The projected ERS expenditure increase for 2014-15 is 2%, while the rate increase is a decrease of .8 percentage points. Despite that decrease, the contribution rate is still high, at 20.1%. Additionally, Employee/Retiree Health Care Benefit costs are anticipated to increase by 4.75%.

Other budget drivers include unfunded legislative mandates such as Annual Professional Performance Review (APPR), continued testing requirements, and the Common Core implementation, none of which are exempt from the tax cap.

The Board and Administration discussed State Aid, which remains lower than it was in 2008, and has been withheld from all public school districts since 2010 in order to close the State deficit. This was done under the Gap Elimination Adjustment (GEA) law, which took back funds that were originally allocated to school districts. The State is now in a surplus, but is not returning the lost funds to school districts. The State Aid amount has increased this year over last, but is still a decrease from what it was prior to 2008.

Enrollment is one of the District's greatest challenges, as it has increased 21% over the years. Enrollment increases are not exempt from the tax cap, which makes it difficult for the District to add the teachers needed for the larger population of students. Dr. Alvarez discussed the specific enrollment numbers and related elements within the budget and explained that, through tight budgeting and careful planning, the District would be able to provide acceptable High School class sizes through the addition of four teachers. With the new science wing slated for completion next September, the addition of one security guard as well as a custodian is necessary in order to accommodate the increase of 27,000 building square footage. Dr. Alvarez also pointed out the need to allocate funds for the Writing Mentor Program, to open this opportunity to all High School students. Last year, reductions were made to the program, and the Administration has determined that the limited program does not work and needs to be rectified.

The Superintendent's recommended 2014-15 budget is $79,470,000, leaving the District with a shortfall of $3,842,507 million. The budget-to-budget increase would be 3.53% with a 1.64% tax levy. Below are four options for the 2014-15 budget that were presented and discussed. 

1) Tax Cap Compliant

Tax Cap permits increase from 2013/14 of $1.13M (1.64%)

Plus use of Reserves or Reserves & Utility Tax of $3.84M*

*The Board is considering implementing a utility tax, which would enable the District to bill the community's utility companies that provide services such as phone, internet, electric, and gas. This would help to raise the District's revenues.   

2) 100% Tax Revenue (Override Required)

Tax Cap permits increase from 2013/14 of $1.13M (1.64%)

Plus override for additional $3.84M (5.58%)

Total Tax Levy Increase of $4.97M (7.22%)

3) Tax Revenue w/Override & Use of Reserves

Tax Cap permits increase from 2013/14 of $1.13M (1.64%)

Plus override for additional $1.54M (2.24%)

Total Tax Levy Increase of $2.67M (3.88%)

Plus use of Reserves Consistent with current 2013/14 of $2.3M

4) Use of Reserves & Budget Cuts (NOT RECOMMENDED)

Tax Cap permits increase from 2013/14 of $1.13M (1.64%)

Plus use of Reserves, TBD

Budget Cuts up to $ 1.7M

This scenario, which is not recommended, would result in the following:

• Elimination of approximately 17 FTE positions including teachers, elementary school librarians and clerical staff members
• Impact on class sizes
• Cuts to FLES, arts/electives, athletics, clubs
• Reduced technology and facilities funding
• Cuts to partnerships with community programs

The estimated tax levy could range from $69,989,093 (under a tax cap compliant budget) to $73,831,600 (100% tax revenue). The estimated taxable assessments for July 1, 2014 are currently $124,835,270, although this is subject to change. More information will be provided on the resulting tax rate per thousand of assessment as the process continues.  

March 11: Budget Discussions Continue

March 25: Open Topics Forum/Budget Hearing I

April 22: Budget Adoption

May 6: Budget Hearing II

May 20: Budget Vote/Board of Education Election