BOARD OF EDUCATION
MIDDLETOWN, NEW YORK
SPECIAL MEETING
SEPTEMBER 7, 2004
A special meeting of the Board of Education of the Enlarged City School District of Middletown, New York was held Tuesday, September 7, 2004, at the Board of Education Office, 223 Wisner Avenue, Board President Vincent Crescenzo, presiding.
Present: Dr. Best, Mr. Estrada, Mr. Geiger, Mrs. Knapp,
Mr. Perrino, Mrs. Botti, Mr. Crescenzo – 7.
Absent: Ms. Tobiassen – 1.
Others Present: Kenneth W. Eastwood, Superintendent of Schools
David Allardice, Allardice & Associates, Inc.
Mr. Crescenzo called the meeting to order at 7:30 p.m.
Dr. Eastwood said that last May the voters approved a budget in the amount of $92.6 million for the 2004-05 school year. The District has now been provided with all the necessary information from the Office of Real Property Tax Service to set tax rates and the assessment roll. Dr. Eastwood shared the school tax rate increases for 2004-05 with and without STAR exemption amounts for average homes in the City of Middletown, and the Towns of Wallkill and Wawayanda. The increase for an average home in the City of Middletown with Basic STAR will be $204.75; the increase for an average home in the Town of Wallkill with Basic STAR will be $277.26; and the increase for an average home in the Town of Wawayanda with Basic STAR will be $158.41.
Dr. Eastwood continued by saying that the District received $2,812,642 in unanticipated State aid that could be used to reduce the tax levy. Dr. Eastwood, however, pointed out that the unappropriated fund balance which is used for emergency situations was under funded in this year’s budget. He said that the District has no reserve accounts for items such as uninsured property damage, claims and lawsuits against the District, or workers’ compensation claims.
Dr. Eastwood said that in the current year, $4.7 million was used to lower taxes. If the District uses the extra State aid as well, this appropriated fund balance would be increased to $6.5 million. When developing next year’s budget, the costs of implementing the full-day kindergarten program and general inflation, plus the $6.5 million appropriated to lower taxes, would leave the District in the hole by approximately $8.5 million. He said that the District has a fiduciary responsibility to plan for emergency situations as well as for the future, and recommended that, for some measure of financial stability, the District use the unanticipated State aid to establish some reserve accounts.
Dr. Eastwood next presented the tax rate changes that have occurred over the last seven years. The seven year average tax rate change for the City of Middletown is 5.34%; Town of Wallkill is 7.85%; Town of Wawayanda is -2.44%.
Continuing, Dr. Eastwood also addressed the impact of 485b property exemptions which provides for tax exemptions for new businesses. He said that 485b exemptions have been considered as financially beneficial to municipalities because it is thought that they support growth, provide an expanding tax base and will bring jobs to the community. Dr. Eastwood said that the Board can rescind this exemption, but must do so before tax rates are set. Rescinding the 485b exemptions may benefit the taxpayers in one of the District’s municipalities, while raising the tax liability in another.
Mr. Estrada pointed out that the tax burden in Orange County is evenly distributed, with businesses carrying 51% of the tax burden and residences carrying 49%. Mr. Geiger asked to be provided with a list of the types of business taking advantage of 485b exemptions.
The Board agreed via a straw vote that the 485b exemption will remain in place for this school year.
The Board also agreed that the $2.8 million in unanticipated State aid will be used to set up reserve funds.
Mr. Allardice will be presenting an analysis of District finances and a long range financial plan at a future meeting. Mr. Allardice said that because of our pending construction project at the High School, the District must be able to present its best financial picture to Moody’s in order to maintain a good credit rating. He stressed the importance of setting up reserve funds.
Dr. Eastwood noted that the structure of building a school budget is impacted by two items over which the District has no control: equalization rates which are set by the Office of Real Property Service some time in May, and State aid which is unknown until the State passes its budget. He said that these two volatile unknowns can cause extremes such as the tax levy differences in the Town of Wallkill in the past two years.
Mrs. Botti made a motion, seconded by Mr. Estrada, to approve the following resolution:
Resolved, that the school tax collector be authorized to make collections of the school tax levy in the amount of $37,515,716 in one installment from October 1, 2004 to and including November 1, 2004 without penalty; thence from November 2, 2004 to and including November 30, 2004 with 2% penalty added, for the twelve month budget of the Board of Education, covering the period beginning July 1, 2004 and ending June 30, 2005;
And be it further resolved, that a STAR application to New York State be made in the amount of $5,953,866 for school year 2004-05.
Ayes: Best, Estrada, Geiger, Knapp, Botti, Crescenzo – 6. Noes: Perrino – 1. Motion was declared approved.
Mr. Estrada made a motion, seconded by Dr. Best, to approve the following resolution:
Resolved, that the assessment roll in the amount of $531,103,063 and the tax rates as listed below for the 2004-05 school year be accepted:
School District
Middletown 95.380011
Wallkill 80.759832
Wawayanda 26.862023
Goshen 28.127097
Ayes: Best, Estrada, Geiger, Knapp, Botti, Crescenzo – 6. Noes: Perrino – 1. Motion was declared approved.
Mr. Crescenzo noted that changes in tax rates do not necessarily reflect the change in a particular taxpayer’s school tax bill. Changes in tax rates may be offset to some extent by STAR credits if the taxpayer was granted such an exemption by the assessor. Individual municipality tax rate increases vary due to New York State equalization rates. Wallkill residents will incur a 21.97% increase over 2003-04. (Wallkill’s increase was 0.40% last year.) Middletown’s increase is 8.85%.
Mr. Estrada made a motion, seconded by Mr. Perrino, to amend the agenda to include an opportunity for visitors to address the Board.
Ayes: Best, Estrada, Geiger, Knapp, Perrino, Botti, Crescenzo – 7. Noes: None. Motion was unanimously approved.
John Gennarelli requested that this meeting be re-broadcast several times to give residents an opportunity to see this evening’s presentations. He also spoke about the roles played by municipalities in the establishment of tax rates and suggested that the Board consider removing tax exemptions for businesses. Dr. Eastwood spoke about the possibility of the District meeting with the towns for discussions, particularly as they relate to potential tax increases.
At 9:40 p.m., Dr. Best made a motion, seconded by Mr. Estrada, to adjourn the meeting. Motion was unanimously approved.
There being no further business, the meeting was adjourned at this time.
Respectfully submitted,
Alicia E. Olsen
School District Clerk