Community Provides Feedback on Proposed 2014-15 Scarsdale School Budget

The School Board opened their April 7th meeting with some favorable news about the proposed 20114-15 Scarsdale School Budget. According to Assistant Superintendent Linda Purvis, the recently passed NYS budget will provide an additional $234,000 in state aid to Scarsdale, which includes a one-time $50,000 "bullet" grant that was obtained through Assemblywoman Amy Paulin's office. Additional savings of $50,000 in the retirement budget, $65,000 from debt refinancing and $6,100 in computer leasing expenses will mean a slightly lower tax increase for residents, pending approval by the Board and ultimately the community at the May 20th vote.

According to Purvis, the current estimate for 2014-15 stands at a 3.91% tax levy increase and a budget to budget increase of 2.99%, which will bring the budget in at $36,000 less than the estimated 3.94% allowable tax cap.

A discussion ensued about where to use these savings. Purvis raised the proposal of placing $15,000 back into a health reserve fund -- which state auditors had ordered the district to liquidate. She proposed placing the funds there as a placeholder while the district sought to appeal the decision. Without an existing reserve, Purvis argued, the district would never be able to get permission to create a new reserve. The reserve hedges the district against large or unexpected claims for their self-insured health insurance plan which according to Dr. McGill, has "saved the district millions" over the years. Purvis also noted that the $15,000 would not put the district over the 4% maximum allowable in undesignated fund balance so that Scarsdale would still have a "clean audit."

The Board debated whether or not to fund the reserve and ultimately decided to hold off a vote on the matter until the following meeting. Later that night, in the public comments section, Bob Berg objected to the funding of the health reserve calling it an "illegal placeholder."

Turning to the community, Board President Suzanne Seiden welcomed comments on the proposed 2014-15 school budget, saying that though some had called it a "stand still" budget, it does preserve and protect the program while including enhancements such as expanded course offerings, new interdisciplinary courses and funds for professional development.

Commenting on the budget that night were representatives from the PT Council, The League of Women Voters of Scarsdale (LWVS) and the Coalition for Scarsdale Schools (CSS). All spoke in support of the budget, and credited the Board with improved transparency and better communication with the community. They voiced their approval of the decision to add eight new faculty positions to maintain class sizes, to add new science labs at the high school and to retain architects to do a plan to improve district facilities.

However, all three groups cautioned against budgeting to the tax cap. Speaking for the PTC Executive Committee, President Pam Rubin said, "Each line item deserves to be vetted and analyzed to insure the proper value added, especially during these difficult economic years. However, we strongly believe that the reasons for the first budget defeat were not simple, nor were they of one voice. A conservative budget may be what is warranted but without knowing what is not in the budget the community cannot make fully informed decision as to what it can afford."

The statement from the League of Women Voters echoed that same concern, saying, "During this year's budget process it became apparent that the Board's approach to the budget process had changed and that it had in the fall, according to Board President Seiden, "made the tough call ahead of time" and "sent the signal in advance" to the Administration "to come in with a very careful budget." The League notes this divergence from the past approach in which the Administration has proposed a budget that funds education "as it ought to be," as the Superintendent has stated, and upon which the community has relied to inform it of the District's coherent vision of what is required to fulfill the mission of the Scarsdale Schools."

And Art Rublin, of the CSS said, "It appeared that the School District's Superintendent felt constrained to propose a fairly austere budget from the start, rather than a budget that, to use Dr. McGill's words, would fund education in Scarsdale "as it ought to be." With respect to the substance, we share the concern that certain community members, including one at the last Board meeting, expressed, that when the School District is effectively standing still, notwithstanding a rapidly changing world, it is in a certain way falling behind."

Concern about the long-term effects of drawing down reserves was also expressed. Rubin said, "We are concerned that after 5 years of belt tightening and dipping into reserves to reduce our tax burden, that we are compromising our future. " The League cautioned against the depletion of reserves, saying, "We learned from this year's budget discussions that, due to increasingly tight budgeting, drawn down reserves, the elimination of the health insurance reserve, and the recurrent use of surplus to offset tax levy growth in order to remain under the tax cap, the community will likely face next year a proposed budget that will require either a tax levy in significant excess of the State calculated tax levy limit or significant cuts to current programs and staffing levels."

Last, all three called for the Board to restore staff positions cut in previous years including a second librarian at the Middle School, an Elementary Helping Teach in Language Arts and a Computer Teacher at the Middle School.

Additional points raised by the League included:

• A statement of concern about the district's ability to manage the long-term risk of the self-insured health plan with a suggestion that they explore the possibility of joining a consortium of self-insured districts.
• A call for the Board to keep 4% of the budget in undesignated reserves to hedge against the risk of increases in a variety of expense items.
• A request for the Board to clarify the role of the newly-formed Scarsdale Schools Education Foundation in funding district projects.
• A recommendation that the Board "elicit widened input of the community so that it may be guided in its decision-making by a broad-based majority of the community and not by just of a few individuals who faithfully attend meetings but who may not reflect the views of many in the community."

It should be noted that the Board made considerable efforts to engage the entire community in the budget process this year, staging "TED" Style talks, open community forums, sending community-wide emails and posting video of all meetings on the Scarsdale Schools website. It is difficult to imagine what else they might have done to engage the community.

After last year's battle over the construction of a new fitness center at the high school and the defeat of the first proposed budget in May, 2013, this year's conversation seemed much more subdued. Noticeably absent were representatives from Scarsdale and Edgemont Family Counseling, CHILD and the Teen Center who customarily make statements at budget forums. Perhaps the specter of the tax cap has squashed appeals for additional funds from community groups who are well aware of the fine line the Board walks between fiscal restraint and maintaining Scarsdale's legacy for excellence in education.

Read the full statements from community groups here:

Pam Rubin: PTC Executive Committee:

Post Game Analysis

On behalf of the PTC Executive Committee, I would like to thank the Board of Education for its service to our community. Your dedication to education and to insuring that the values of our community are represented as fairly as possible in this budget should be commended.

We believe that the new budget discussion format was beneficial. The TED style talks framed the issues in bite size pieces throughout the year. This format allowed the community to focus on areas of particular interest and sufficient time to reflect and dig deeper where required before the budget was presented.

The use of technology to increase the transparency of the process is evident. With the amount of information on the website, VOD and Cable TV, there is little reason that anyone who wants access to information can not easily get it. You have made significant progress to insuring a well educated voting community. In particular, we especially appreciated the posted Preliminary Proposed Budget, Streamlined Budget Presentations and the Administrations list of Enhancements and Give-ups with the impact of those reductions. Your agreement with the village to share opt-in eblasts is an enormous achievement. The ability to reach those no longer connected to the school will help to ensure that the entire community can be involved, educated and have a voice.

Further, we appreciate the majority stated view of the Board that budgeting to the tax cap is not consistent with providing the "best" possible budget for our district. However, while many members indicated that the tax cap was not a target number, the PTC is concerned that the underlying tone of the TED discussions as well as the budget discussions were clearly directed at presenting a budget which came under the tax cap. Each line item deserves to be vetted and analyzed to insure the proper value added, especially during these difficult economic years. However, we strongly believe that the reasons for the 1st budget defeat were not simple, nor were they of one voice. A conservative budget may be what is warranted but without knowing what is not in the budget the community can not make fully informed decision as to what it can afford.

And now the Play by Play Analysis

The PTC supports renovating two science labs and additional staffing in the SHS and elementary schools to manage class size with increased enrollments. We were also happy to see a creative solution at the SHS to manage the Physical Education instructional needs. We remain concerned about the identified need by teachers and district leadership for an additional ELA Helping Teacher, especially in light of the effects of changing curriculum due to the common core. We are also hopeful that moneys can be found to restore the SMS 2nd Librarian which has been identified as critical to our inquiry based model of teaching at the SMS.

The PTC was happy to see the Administration looking for savings where it would least impact our students such as contracting out a physical therapist at $35,000 savings and leasing 3 buses vs purchasing two. We would like to make sure that both are monitored to make sure that there is no negative impact on students or safety. We believe that there are other non-core recreational expenditures, which could also be reviewed for additional savings with the hope that the Board considers adding an SMS librarian and Helping Teacher.

The PTC believes very strongly that the opportunity for teacher growth is essential, and a key reason why people move to Scarsdale. We are fortunate to have stability in our teaching staff. Like any professional, if teachers are to stay intellectually alive and vibrant we need to provide opportunities for collaboration and growth. We fully support restoring Center For Innovation funding by $25,000 to a total of $50,000.

With regard to our "STADIUM" or more commonly known as our "schools", we are happy to hear from our architects, KG&D, that while we have spent far less on an annual basis on our facilities than is generally recommended (2% per annum), our 900,000 square feet of buildings are in good condition though behind in terms of design for progressive 21st century learning. We recognize and applaud our facilities department for significant savings realized by projects which can be completed in house. The projects considered in this proposed budget are appropriate and necessary.

Further, we appreciate the attention to the Long Range Technology Plan, which involves upgrading digital art technology, offering Wifi in all elementary schools, expanding Chromebooks to 4th grade and increasing mobile technology at SMS. We anticipate that the board will continue to place an emphasis on technology (both the infrastructure and the curriculum) to keep Scarsdale competitive in this 21st century critical competency. This includes but is not limited to filling the network administrator position funded this year.

And our Final Four Wrap Up

We are concerned that after 5 years of belt tightening and dipping into reserves to reduce our tax burden, that we are compromising our future. This is akin to putting basketball stars, Andrew Wiggins or Jabari Parker on a diet. Their performance may not be affected in the first year, but if you cut back calories each year, all the while adding on additional games and practices (state mandates) performance will be compromised making our elite athlete just plain "really good." This is especially troublesome, as the Health Insurance Reserve was eliminated in one year instead of the recommended four years, which puts more stress on the declining general Reserve budget line.

We know that budgeting is a delicate balance between supporting the long-term mission of the Scarsdale Education for Tomorrow and maintaining fiscal constraint. We are not asking you to spend without check. Rather we ask you to take another look at potential savings from non-core areas in order to positively impact the long-term health of our team's game plan.

Mary Beth Evans and Carolyn Stevens, League of Women Voters of Scarsdale

The League of Women Voters of Scarsdale (the "League") thanks members of the Board of Education (the "Board") and District Administration (the "Administration") for addressing questions on the 2014-15 Preliminary Proposed School Budget dated March 10, 2014 (the "Budget") at the League's informational meeting held on March 17, 2014.

The League appreciates the opportunity to comment on the Budget. This statement reflects the consensus of League members on the topics included in this statement discussed at a League consensus meeting held on March 17th.

The Budget currently anticipates a 3.07% total budget growth and overall tax levy growth of 4.08%. The corresponding property tax rate is estimated to increase 3.93% for Scarsdale residents and 1.59% for Mamaroneck residents. Externally driven costs, such as retirement system contributions and health insurance costs, and staff additions based on student enrollment growth, account for the most significant proportions of total budget growth. The League acknowledges the positive impact of last year's renegotiated teacher contract, which includes a salary freeze and health insurance "premium equivalent" contribution, on containing budget growth for 2014-15.

The League supports the Budget for the 2014-15 school year and recommends that the community vote "yes" to approve the Budget on Tuesday, May 20th. The League offers its views and recommendations regarding certain budgetary items as well as the budget process, and we hope that our comments and recommendations will be considered as the budget is revised and finalized.

I. Reserves
A. Health Insurance Reserve. In connection with the determination that the maintenance of a health insurance reserve fund does not comply with applicable state law, the Board elected to eliminate the fund in its entirety this year, rather than over a number of years as permitted, applying $750K of the fund to the undesignated reserve and using the remaining $777K to offset tax growth for 2014-15. The League is concerned about the District's long-term ability to manage risk in the absence of a health insurance reserve. The League supports the Board's intention to review the District's options and recommends, in particular, that the Board explore both the costs and benefits of joining a consortium of self-insured districts.

B. Undesignated Reserve Fund. The Budget proposes an undesignated reserve balance of approximately $5.25 million or 3.53% of next year's budget, below the 4.0% maximum allowable under State law. The League notes its concern about the level of undesignated reserves, as the uncertainty surrounding the use of the reserve looms larger in light of unpredictable costs such as:
o Unanticipated large health insurance claims. As noted above, the Board has elected to eliminate the health insurance reserve fund in its entirety.
o Teaching positions to cover student enrollment. Historically, the Board has included one or more unassigned positions in the budget to meet unanticipated increases in student enrollment; however, it did not include any unassigned positions in the Budget.
o Costs that remain unknown for 2014-15, including special education and Teacher Retirement System contribution costs.
o Tax certiorari settlements that cannot be met through use of the Tax Certiorari Reserve, as occurred this year with the Quaker Ridge Golf Club tax certiorari settlement. We acknowledge, however, that we do not know whether tax certiorari claims will decrease generally as a result of the village-wide revaluation.
o Unbudgeted costs associated with the conclusion of contract negotiations for six District bargaining units.
The level of the undesignated reserve fund takes on additional significance since the District's credit rating can be negatively affected if either the undesignated reserve or total fund balance drops below a certain threshold, an important factor in the District's ability to issue bonds in the future.

II. Staffing
The League supports the inclusion in the Budget of eight additional teaching positions to meet student enrollment growth at the elementary and high school levels, while maintaining both elementary class size practice and the historical high school class size norm of no more 12% of classes each year with over 25 students. We note however the absence of an undesignated teaching position in the Budget (see Undesignated Reserve Fund above).

The League notes further that the Budget could compromise the quality of our education by not restoring positions funded in previous budgets, such as an Elementary Helping Teacher in English Language Arts, a second Middle School Librarian, and a Middle School Computer Teacher (.5). The League reiterates its earlier recommendation that the Board seek additional community input on these decisions. The League suggests that the Board engage the community as well on issues that in previous years may have invited "community controversy," such as those items identified in Dr. McGill's February 6, 2014 memo to the Board, including the Teen Center and security at Greenacres field.

III. Budget Process
One of the Board's key goals this year has been to respond to the requests from the community for improved transparency in the budget process. The League endorses this Board goal, and it is in this spirit of support that we offer our comments and recommendations regarding the following areas:

A. Availability and Accessibility of Information. The League commends the Administration and the Board for numerous improvements in the availability and accessibility of budget related information. We appreciate that informational outreach began earlier this year, with educative fall reports on various topics related to the proposed 2014-15 budget. We note, in particular, that this year's Administration reports, including new school level reports, as well as the Board's presentation of the proposed budget, were focused and streamlined so as to provide complex budget information to the public in a more digestible and intelligible format. The League further commends the Administration and the Board for making all budget related materials, including links to all documents and recordings of budget presentations and meetings, promptly available online and readily accessible via direct link from the home page of the District website.

B. Approach to Budget Process. The League has supported the approach that was used by the Administration and the Board in the last several years to prepare school budgets with the primary focus on maintaining and enhancing an excellent school system, while also recognizing the current economic pressures on residents.

During this year's budget process it became apparent that the Board's approach to the budget process had changed and that it had in the fall, according to Board President Seiden, "made the tough call ahead of time" and "sent the signal in advance" to the Administration "to come in with a very careful budget." The League notes this divergence from the past approach in which the Administration has proposed a budget that funds education "as it ought to be," as the Superintendent has stated, and upon which the community has relied to inform it of the District's coherent vision of what is required to fulfill the mission of the Scarsdale Schools.

The League notes further that the public was neither prepared for nor informed in advance as to the rationale for this change in the Board's approach. The League also notes that the Administration's list of possible "enhancements" to the budget came at the request of members of the community and was made available to the public, along with a list of possible further reductions, when the Administration presented its proposed budget.

The League reiterates its concern, expressed at the March 24, 2014 Board meeting, that the Board ensure it receives community input on the Budget. As the League has noted, at the time the community is traditionally asked to provide input, the budget discussion appears already to have been circumscribed by Board and Administration choices made within a set cost parameter in which, for example, items included in the Budget were said to require a trade-off with items excluded from the Budget.

The League also notes its concern that the Board endeavor to gain an accurate and current read of the community's priorities regarding what is funded in the Budget. We encourage the Board to elicit widened input of the community so that it may be guided in its decision-making by a broad-based majority of the community and not by just of a few individuals who faithfully attend meetings but who may not reflect the views of many in the community.

The League recommends that the Board now seek community feedback on (1) the decision to propose a budget that contemplates a tax levy that is less than the tax cap, and (2) the effectiveness of this year's approach in (a) promoting community understanding of what is needed to preserve and enhance Scarsdale's excellence in education, and (b) encouraging broad community engagement in the annual budget process to ensure the budget accurately reflects current community priorities and goals.

C. Scarsdale Schools Education Foundation (SSEF) Role and Procedure in Funding District Projects. The District has stated its intention that the SSEF "supplement, not supplant" its obligation to fund essential school programs and facilities. The League is concerned about the potential reliance on the SSEF for funding what may be considered essential to a Scarsdale education. The League recommends the Board provide the community with a better understanding of the role and procedure of the SSEF in funding District projects, with the goal of elucidating the difference between the SSEF supplementing, as opposed to supplanting, District funding of projects. The League also looks forward to a clarification of the Board's gift policy with respect to the SSEF as we have previously requested.

D. Impact on Next Year's Budget. The League understands that past and present budget decisions will have significant impact on future budget choices. We learned from this year's budget discussions that, due to increasingly tight budgeting, drawn down reserves, the elimination of the health insurance reserve, and the recurrent use of surplus to offset tax levy growth in order to remain under the tax cap, the community will likely face next year a proposed budget that will require either a tax levy in significant excess of the State calculated tax levy limit or significant cuts to current programs and staffing levels. Certainly, with a Budget that proposes tax levy growth under the allowable tax cap and modest budget growth, the starting place to develop the 2015-16 budget will be lower than the starting place if the Budget did not exclude certain items.

According to the Administration, if current projections for budget surplus are accurate, by the end of next year the District will have a deficit of about $1.6 million, which would mean over 1% added to the tax rate. The Administration further predicts that, without added surplus next year, by July 2015, the $5.25 million in undesignated reserves "will actually be down to something like $3 million – a $2.1 million deficit, unless taxes are raised, or expenses cut," with undesignated reserves likely depleted in three to five years if the District continues to try to keep tax levy growth below the tax cap. In addition, the Board's decision to use approximately $777K of funds from the eliminated health insurance reserve to offset tax levy growth for 2014-15 leaves a substantial revenue "hole" in the 2015-16 budget.

The League recommends that the Board engage the public right away in conversation about the challenges to be faced during next year's budget process as well as about the community's values, priorities and goals with respect to a Scarsdale education. We understand that the District is in the process of developing a strategic plan to develop a community vision for our schools and suggest that perhaps this conversation can be undertaken in that context.

In conclusion, we thank all the members of the Board and the Administration for striving to meet the best interests of our children. The League looks forward to the release of the Board's final budget iteration and tax levy resulting from having considered comments made by the community.

Sincerely,

Mary Beth Evans, Chair, School Budget Study Committee
Susie Rush, President, League of Women League of Women Voters of Voters of Scarsdale

(*see footnotes below)

Art Rublin: Coalition for Scarsdale Schools:

Good evening. Arthur Rublin, Donellan Road, Chair of the Coalition for Scarsdale Schools, speaking tonight on behalf of the CSS Executive Committee.

First, we very much appreciate the work of the Administration and the School Board on the Budget for 2014-15. We know that both the Administration and School Board have spent a great deal of time.

We support the proposed Budget.

We share the concerns that have been expressed previously by the League of Women Voters of Scarsdale Board, and again tonight, about the budget process. It appeared that the School District's Superintendent felt constrained to propose a fairly austere budget from the start, rather than a budget that, to use Dr. McGill's words, would fund education in Scarsdale "as it ought to be." With respect to the substance, we share the concern that certain community members, including one at the last Board meeting, expressed, that when the School District is effectively standing still, notwithstanding a rapidly changing world, it is in a certain way falling behind. We are also concerned about the revenue holes that have been left for next year and subsequent years.

I recognize that Ms. Seiden has tonight suggested that this Budget would not have the District standing still. I think reasonable people can in good faith have differences in perspective on that. I will respectfully submit that at a time when, for example:

- the curriculum specialists in the elementary schools have been reduced from six to two in recent years despite expressions of concern from Ms. Shain;
- a library position has been cut at the Middle School;
- a Middle School computer teacher position was cut and not restored;
- Dr. McGill's recommendation last year to introduce Mandarin at the Middle School, and suggestion this year that it be considered, has not been adopted,
-
the forward progress facilitated by the proposed Budget is unfortunately limited.

In a posted memo to the Board before the Budget study sessions, Dr. McGill suggested a dichotomy between x) a Budget that funds education as it ought to be, as he said a number of community residents had expressed an interest in, and y) a Budget, "just as it has to be to preserve what we already have (also possibly eroding it at the margins)." 

With all of that said, we take note of the fact the proposed Budget:

1) Would carry forward the District's elementary class size practice;
2) Would add teachers at the High School to address class size concerns there;
3) Preserves educational program; and
4) Includes some enhancement, albeit very limited.

We also appreciate that it was expressly recognized in the course of the presentation of the proposed Budget last month that in future years it may not be possible to preserve program without overriding the presumptive tax cap.

Ultimately, we believe it is important for voters to approve the proposed Budget, lest we be faced with a Budget defeat and pressure for cuts.

We thank you again for your work.

*Footnotes to League Statement:

[1] “This ‘premium equivalent’ is an estimate of what the plan’s benefits would cost if we attempted to purchase the current plan in the insurance marketplace. Since the District’s plan is self-insured, there is no actual premium cost.” In addition, according to the District, “Employees have a high out-of- pocket contribution to their own health care relative to those in other districts, whether self- or industry-insured.” See “Scarsdale Public Schools Health Insurance” ePaper: http://www.scarsdaleschools.org//site/Default.aspx?PageID=15946.

[1] In 1988 the District switched from a traditional Empire-insured health plan to a self-insured, “user-payer” health care model. Since then, the cost-saving features of the Scarsdale Health Care Plan have worked to moderate rising health care costs and to reduce significantly Scarsdale residents’ health care related tax burden. For example, the District has realized an estimated $5.5 million in cost savings over the last two decades. At the same time, the plan has added a considerable level of financial risk to the District due to excessive claims volatility. From 1990 until this year, the District managed this volatility with a combination of stop-loss insurance and a Health Insurance reserve fund. “This reserve was reported annually to New York State, disclosed in the annual financial statements, reviewed and approved by the District’s external auditors and auditors from New York State’s Office of the Comptroller.” See “Scarsdale Public Schools Health Insurance” ePaper. We understand that the District was informed two years ago that maintaining this reserve was not valid.

[1] “Under state insurance law, health consortiums are required to maintain fairly large reserve funds, sometimes as high as 25 percent of their total expected claims…. The amount required may be far in excess of actuarially sound requirements.” New York State School Boards Association, “Can Health Insurance Consortiums Rein In School District Health Care Costs?” September 2009: http://www.nyssba.org/news/reports/2/.

[1] “Program Reductions (DRAFT 2)”: http://www.scarsdaleschools.org//site/Default.aspx?PageID=15945.

[1] Board President Suzanne Seiden, Budget Study Session 1, February 3, 2014.

[1] Seiden, Budget Study Session 4, February 12, 2014.

[1] The League Board also commented on this change in approach at the February 10, 2014 Board meeting.

[1] Superintendent Michael V. McGill, memo to the Board dated January 31, 2014 regarding Program Enhancement.

[1] Business Manager and Treasurer Jeff Martin, Budget Study Session 4, February 12, 2014. According to Mr. Martin, a revenue shortfall greater that $1m resulting from reduced prior year surplus accounts for about .32% of tax growth in the 2014-15 budget, an increase that could have been closer to 1% if the Board did not use $777k from the dissolved health insurance reserve to ameliorate tax growth.

[1] Assistant Superintendent for Business Linda Purvis, Budget Study Session 4, February 12, 2014.

[1] Purvis, Community Budget Forum 2, January 29, 2014.