Saugerties Central School District Business Manager Jane St. Amour recently detailed a potential $12.5-million budget gap by 2026 as part of a long-range financial projection presented to the Board of Education.
During a meeting held at Mount Marion Elementary School on Tuesday, November 9, St. Amour said that her estimates were based on assumptions, historical data and current trends. By 2026, the district’s expenditures ($76,532,018) could outpace revenues ($70,390,888) by around $6.14 million. The 2022 deficit is projected as a more modest $70,477 before potentially climbing to $1,003,002 the following year.
Revenues for the district include real property tax, state aid, federal aid and inter-fund transfers. Income that isn’t recurring is also considered revenue, such as sale of property. Over half of the district’s revenue comes from local property tax, with state aid comprising around half that same amount.
Instructional costs like salaries make up the bulk of the district’s expenditures, with the second largest piece of the pie employee benefits. For the latter, St. Amour identified a savings of around $200,000 in the ERS (employee retirement systems) due to a projected increase of 11.6 percent, down from 16.2 percent.
“That’s good news for the district,” St. Amour said.
Active employee and retiree health insurance increases are projected to remain static at four percent over the next five years.
“That’s about where it’s been for the past few years when there have been increases,” St. Amour said. “We’re running at about 12 percent, but we’re hoping to remain stable at four percent.”
St, Amour’s estimates include speculation on salaries, with the district facing a number of negotiations with various bargaining units in the coming years. The ASPA (American Society for Public Administration) bargaining agreement expired on June 30 of this year, while the STA (Saugerties Teachers Association) bargaining agreement is due to expire on June 30, 2023, and the SESA (Saugerties Educational Support Association) bargaining agreement on June 30, 2024. St. Amour kept staffing levels flat in her projections and did not include temporary positions recently added with federal COVID aid.
The district could see a financial boost with the end of PILOT agreements for the Partition Street Project (2021-22) and Central Hudson (2022-23), but agreements with Blue Stone Solar and Lightstar Renewables are both set to begin in 2023-24. The next difference between those expiring and those getting underway is around $170,000.
The SCSD should also see an increase in state aid of around $500,000 over each the next three years as the full phase-in of Foundational Aid is undertaken.
St, Amour said the district’s recent signing of a three-year fixed price natural gas contract provided some good financial news after a recent conversation with an energy salesman.
“I did have a gentleman call me the other day to see if he could get me a better deal,” St, Amour said. “I told him what we paid and he said he couldn’t come close. So that was good to hear.”
But a possible financial cliff is still looming, and there are only so many ways the district can make up the difference. Their unrestricted fund balance, currently at around $4.25 million, could be gone by 2025, when St, Amour’s projections show a deficit of $2.24 million. By the following year, that deficit is projected at around $8.39 million. The district has other reserves in fund equity (currently at $11.73 million) and non-spendable and restricted fund balance ($7.4 million), but St. Amour cautioned against the use of any excess funds for annual expenditures.
“Excess funds should be spent on non-recurring costs, which basically are capital projects or other equipment or things that we see coming up one time,” she said. “It’s not there on a recurring basis.”
The district has recently begun detailing options for closing one of its four elementary schools in an effort not only to rein in spending, but also to meet the needs of a dwindling student population. A recent district Governance Committee report showed a districtwide student population which peaked at around 3,500 in 2005-06 and has been on a steady decline ever since. The current student population is around 2,300, said Superintendent Kirk Reinhardt last month, and though there are numerous residential projects either approved by or being reviewed by the Town Planning Board, he said there is no reason to believe they will bring the numbers up to a level that supports four elementary schools in the SCSD.
Those plans have been met with some resistance from communities around elementary schools rumored to be on the chopping block, most recently at Mount Marion Elementary during the November 9 meeting of the School Board. A dozen people spoke against closing Mount Marion, which while not officially identified as the school that would close, was noted by Reinhardt as being a logistical option.
“The school that’s easiest to redistribute is Mount Marion based on geographics and roads,” said Reinhardt, adding that the Mount Marion school building wouldn’t necessarily be abandoned by the district, but could rather be repurposed as a pre-K and special needs hub.
“We believe this campus would be great for that,” Reinhardt said. “It is one floor, it’s got two very distinct wings and it’s also closer to places like Spectrum Services and Ulster BOCES.”