School budget hearing: Residents question reserves and spending as families are impacted by Covid-19

The+schedule+of+reserve+funds+from+the+2020-21+Property+Tax+Report+Card%2C+with+the+Tax+Certiorari+line+highlighted.

The schedule of reserve funds from the 2020-21 Property Tax Report Card, with the Tax Certiorari line highlighted.

During the public hearing on the proposed $77.6 million Pelham school district  budget, residents questioned why the district is adding to reserves, spending on pre-purchases and accelerating maintenance while families are struggling because of the coronavirus pandemic.

Board members and administrators on the YouTube hearing did not respond to comments or questions. Board President Jessica DeDomenico said that she planned to refer the questioners to the appropriate school official.

That means anyone else listening to the state-mandated hearing won’t know what the answers were.

All questions were emailed in and read out.

Donna Gammon said a higher schedule of reserves in the proposed budget will result in larger than necessary property tax levies because the reserves were not being used to fund operations.

Gammon said the district’s reserve fund schedule does not show previous tax certiorari liabilities, which are funds set aside for payments made to settle real estate tax challenges. “Would you include then within your budget a list of all payments that have been made from this account, or direct us to where we can find the historical data?”

She also asked the board to provide lists of prior data for each type of reserve going forward. “It would give us a good indicator of the appropriateness of the reserve, and the subsequent increases proposed in this, as well as future budgets.”

Richard Gorski pointed to the effect of the Covid-19 pandemic on the finances of people in Pelham.

“Many taxpayers are now struggling to put food on the table and struggling to pay mortgages and utilities, not to mention that they’re struggling to save up to be able to pay for their property taxes,” Gorski said in his email. “Many business owners have shuttered their businesses, and some have never reopened. Given this, is now really the best time for the district to be pre-purchasing items or accelerating maintenance?”

“Is now really the best time for the district to be funding additional reserves to account for future district uncertainties when so many taxpayer households are struggling financially?” he said. “As a result of the pandemic, it is a certainty now that the many struggling households in town need this $1.5 million to $2 million of (building) closure savings to pay their bills, but the potential loss of $1.4 million of future state aid is not a certainty (e.g. a partial federal bailout).”

Many taxpayers are now struggling to put food on the table, and struggling to pay mortgages and utilities…”

— Richard Gorski

Among other issues, Gorski also asked why the district wasn’t allowing the building closure savings to be realized in the current budget, what is the minimum reserve level that the district is seeking to maintain its AAA bond rating, why the funding for tax certiorari rose to more than $5 million in the proposed budget and whether the district was considering having portions of personnel work from home to lower costs and lessen the need for office space, even after the pandemic.

Reserves for tax certiorari settlements are $3.7 million in the current budget.

Resident Daniel Bowlin said, “Given that the majority of the budget increase is driven by increases in salary and benefits, and given the significant economic headwinds most Pelham residents will face in the coming months and years, why has the BOE declined to follow the example of our neighbors in Mount Vernon by freezing or at least curtailing those salary and benefit increases, at least in the near-term?”

Bowlin also asked why there have not been more significant decreases to the spending other than heating and electricity in the face of the economic crisis spurred by the pandemic.

Superintendent Cheryl Champ recapped her budget presentation from the board meeting two weeks ago, details of which can be found here.