001page. >> Apologies for we're back. Um, but where was I? So, January, February time frame as we are right now. Um, we just completed our our meetings with all of our department heads and building principles go through their detailed budgets and we're at the work session number one now where I'm going to tell you uh tell you a little bit more about the revenue sources for upcoming school year as well as tax. Um throughout the rest of the month of February, we're going to be working through our staffing needs uh set through central administration. Um any consideration of new enhancements that we add to the budget. Uh develop a list of capital projects um which may or may not require voter authorization. So if we're going to fund capital projects in the future using the
002restricted reserve that would require voter authority to do so. Uh and then ultimately this culminates in the preliminary direct budget being sent to superintendent and then board of education. This year, a new uh new new enhancement we put in our professional development cycle is we're going to be having an off-site budget retreat with our with the board of education to go through a detailed review of the 2627 proposed budget in March and April. Uh couple deadlines that we are working up against. March 1st is the deadline for the tax levy limit calculation. I'll talk a little bit about what we estimate that to be today, although there are some pieces of information that we haven't received yet that can give us a final tax cap number. Um our second budget work session will be March
00317th which case at what point we'll be doing a little bit more detailed review on the expense side of the house final decisions on voter propositions and then the budget hearing notices go out and the budget gets adopted April um and hearing happens on May 5th budget vote date this year is May 19th 2026. [clears throat] So, um, school budget, the East Rockway School budget, 75% of the budget is is effectively salaries and benefits. Our product is our people. So, as you'd expect, um, salary and benefits for our staff um, makes up the majority of our school budget annually. For 2526, um, our our budget was 25.6 million for all of our staff, inclusive of teachers, administrators, our non-instructional staff, our nurses, our custodial staff. Um, >> [clears throat] >> our monitors, our our teacher
004aids. Uh for 26 27, assuming no changes in staff, we stay exactly the same as we are today. We're looking at a projected increase about $1.1 million in salary. That doesn't take into consideration things like health insurance increases, um dental insurance, uh TRS, ERS contributions if you're if you're a member of the teacher retirement system or the employee retirement system. something we budget separately. This is just salaries. Here's how the budget is has historically been funded. That's 56 2526 in 2526 our overall budget is 46.9 million 10.1 million of that one is for stadium which is about 21 5% of the budget pilots which were stand for pay payments in L of um taxes which is a negotiated uh payment with to to encourage economic activity through the industrial development agency um for 25.6 6
005that was about 1.5% of our budget. Um the property tax levy is the majority as you'd expect of support the overall school budget 72.5% last year. And then the balance of the school budget is made up through local sources which generally is non resident tuition for students that are not residents of the East Rockway School District but our tuition in and take advantage of some of our special education or life skills programs. Um that's majority of our local source of revenue. And then the balances is mostly interest that we accumulate on our cash balances and our bank accounts. Um over the past couple years, federal fund rates being higher, interest has been something that the district has leaned on to support some some of the budget. Something that's going to start to to deteriorate over
006time as interest rates come down, which has been happening over the past year. Uh the last piece uh and I'd be remiss not to mention is the appropriate fund balance and reserves. This is effectively the district savings account. So appropriate fund balances uh money that is um in fund balance remaining from the previous school year applied to the next school year to reduce the burden on the taxpayer and keep the tax levy lower. Uh restricted reserves is money that was left over in previous school years that was put into a reserve [clears throat] for a specific purpose in the future. So the district has five or six restricted reserves capital. uh we have a reserve for both our ERS pension contributions and TRS contributions uh unemployment um uh what's what's considered to be acred liability
007benefits for our employees so things like uh when you're retired city retirement incentives um that is the type of revenue he needs to pay for that for 2627 uh the state aid run that came out from governor Hog's propos uh initial proposal uh was was better than last year. So, the initial run is projecting about a $700,000 increase in foundation aid. And you can see the year-over-year increases from 2122 during the current year. 2122 22 23 and 23 24 were the three years where they made they fully they fully funded the foundation aid and that's debatable whether depending on who you talk to whether it's the formula is fully funded. But in terms of what the the formula was originally created to do, that's the the first three years they fully funded it. When they
008originally created the formula, the great recession hit right after that and they effectively slashed a portion of it. Um so that's why you see the three big increases there. 24 25 a little bit um reduced from the previous year. 25 26 last year we only saw about 230 $240,000 foundation aid increase. 26 27 um the number is looking a lot better right now. This is the preliminary um number based on the governor's proposal and a lot of data that we provide up to SED and state aid unit uh for enrollment number special ed student numbers uh elelll student numbers to determine what that amount is. So hopeful governor hope will get her proposal on January 20th uh for fiscal year 27. Just a couple highlights. The overall statewide um budget for state aid is uh
009she's proposing to increase it by 4.3% or 1.6 billion. Uh of that 1.6 billion, 779 is a direct increase to foundation a funding which I was just talking about. 561 million or most of the balance is uh an increase in universal prek funding that's in her initial budget. I'll talk a little bit about that on the next slide. there were no changes she's proposing to how the foundation aid formula is designed. Um, and she's not proposing any cuts to the expense driven a categories which I'll talk about a little bit on the next couple slides as well. Uh, unfortunately she did not incorporate into her budget proposal any of the Rockefeller Institute recommendations in the study that they did last year um, which may have benefited us as a district. This year foundation aid um,
010inflation which is built into the formula as of today is 2.8% % that'll be updated again in February. So they take a 12 month weighted average basically. Um in her proposal was a minimum foundation aid increase of 1% for any school district. That's commonly called as the hold harmless provision. Last year it was 2%. She's proposing 1% this year. We are not a hold homeless school district. So it really doesn't benefit us in any way. uh the pre kindergarten grant allocation she proposed in her budget would increase our pupil allocation from what is currently 5800 5,400 per student to 10,000 per student. So almost double from what we were what we have historically gotten and um we've been subsidizing a portion of the UPK tuition because most of the providers can't run a program at
011what on the island at what the allocation was previously. So if this comes to fruition, this would be a huge win for our kids and our community. So we're hold prek grant is is uh by individual student um enrollment. So it can only be used for prek. Universal prek can't be used to subsidize any other portion of the budget. And if you have no students that go to university prek, you get no money. So that's kind of the way it works. It's more of a grant than it is a. Um and uh last but not least, there were a couple other small items in her budget proposal that there's not much details on but could be very beneficial. 9 million in new spending for high impact ting tutoring and math uh in high needs districts.
012How they're going to determine who's a high needs district versus a low needs district is to be determined. her initial proposal kind of delegate some of this uh the rules around this to the uh commissioner of education and u $2 million to the nice education and learning trust for professional development for educators for best practices and numeracy and evidence-based math math instruction devil's in the details on that not exactly short-term initial proposal how that money gets derived goes directly to nicot districts that'll be I guess flushed out by the commissioner of education this is the foundation aid number year-over-year. So last year we were our foundation aid number was 6.49 million. Um the estimated date for 25 26.7 based on the initial budget front 7.2 million. So about 10.9% increase which is which is very
013good much better than we were expecting. As six months ago where I thought foundation was going to go. I was very doom and gloom about it. Um but the stock market held up pretty strong. um which drives uh a lot of the income state income uh taxes that collected from those again Wall Street bonuses uh kept the the state's financial position in a good place. So with that we were able to get some additional safety back to school districts a uh driven a categories again these are these are categories of aid based upon prior year's expenditures. So things like transportation routes, certain routes qualify for aid back from the state. Um special ed services, some of the special ed services over a threshold qualify for aid back from the state. Um capital projects that go
014through SED facilities planning for approval. That's the type of work that qualifies for uh for aid back in the district. But if you don't spend any money, you don't get any aid back. So that's why it's an expense aid category. And as I mentioned before, the universal prek state grant, huge increase there. We're looking at an 82.34% increase if that came to fruition. So just looking ahead, a couple items that I wanted to highlight in the first meeting in the first presentation for 26.7. So first of all, debt service. So we completed a number of um capital projects with the 2019 2021 bond referendum. Uh voters authorized about $27 million worth of work. Those capital projects at this point have been complete. All paperwork has been filed with the state. The last residual projects um
015that were completed. We've gone out to the markets and we've been issued serial bonds um which now we have to start repaying. So what happens with capital project is you submit plans up to SEDD. SEDD approves them. Um you start the capital work. Usually you get short-term borrowing. It's usually known as a bond anticipary notes. Usually short-term mean less than a year just to start the work um as you complete work. Then you go out and you replace that bond anticipation note with the serial bond which is a long-term debt instrument. Um when it's a long-term debt instrument, you assume you assume the principle and the interest on your books. When it's note, it's just your interest. So, what you really want to do, and this is what part of part of my job, is
016to time when the building aid from a revenue perspective hits our um our financials lines up with when the debt service comes on. So, we've done that this past year. We've issued all we filed all our final cost reports, which allows building a to start running uh and and hitting our books. So the two new serial bonds that we issued that first one there serve bond 125 $195,000 in principle $171,000 in interest. Previously we had a bond anticipation note expense of $230,000 on our books that comes off gets replaced with this. So but building aid on the revenue side basically makes up the balance there. So we reduce our expenses but on the band side we increase the serial bond expenditure and we get revenue in from building it. It's kind of a wash. Um
017serial bond 2025A that is to support the energy performance contract. $135,000 in principal, $239,000 in interest. That's coming on our books this year. That'll be the first time that that's on our financials impacting our budget. Um that is partially offset through building a that will starting to hit [clears throat] our books next year. Plus in it should also see a reduction in our energy efficiency budget codes. So our heating codes, our electrical codes to be relatively cost control, but overall $519,000 will be on the books this year for debt service. Our building aid ratio, which is the amount we get back on capital project, is about 50% more. [clears throat] All right, my least favorite slide, health insurance premiums. Um so health insurance premiums increased their rate for family plan this past year for calendar
018year 2026 to by 8.8%. Um you can see the history here 2017 12.17 8.68 then we had a slight reduction around the beginning of the pandemic and they spiked 12.7 14.99. Last year we got a short reprieve and now we're back on the uh close double digit increases. Um why this is important from budget perspective is because it it's a big it's a big line item. So our our our health insurance line item is about close to $5 million. So 10% increase using math half a million dollars right there. Um last year I was happy to present that the increase was small and and what happens when the increase is small is in the previous year I budgeted for some of these higher numbers here didn't come to fruition. So that number is already that
019that extra 10% is already in the budget. So then when we get to this year and you and you budget a conservative number, the increase is not nearly as big. Fortunately, because of the increase this year, which is pretty close to what we budgeted around 10%. We're going to assume a lot of that expense in this year's budget. So um you know, we're projecting somewhere in the range of 8 to 12% increase in that budget code. About 380 to 585,000 increase. has to be watched out. We can look at all of our staff who's actually um who's actually taking advantage [clears throat] of health insurance in the district. They make changes year-over-year, but back in the envelope envelope mass about 38 525,000 uh retirement system contribution rates. So, there's some good news here and some
020unfortunate news here. of TRS. Uh we were just notified this past week that the contribution rate for employers for 2026 2027 will be decreasing significantly year-over-year. So last year 9.59% this year they're thinking it's going to be 8.24%. That's a huge huge cost savings to the district. Um I look back on 15 years of activity. This is the lowest it's been since I don't mean to believe the great recession 20089. Um, so 8.24% rate, if that's what the contribution rate was for this budget year, that would have been a reduction of about $250,000 in budget. Just give you a sense of what a 1.5% increase on a TRS contribution rate um equates there. So that's very positive news. On the flip side, you get some positive news, you get some bad news. Uh ERS contribution
021rate is going up again. So we had significant increases last year. uh a weighted average 16.5% that should be that's expected to go up to 17.6%. More heavily um weighted towards tier 4 uh employees. So any new employees it's it's smaller increase. It's uh about a 1% increase year-over-year from 12.6 to 13.6. But current year for employee in the RS the contribution ranges for the for employers n it goes from 19.3 to 21.1. It's a huge number. um just equated it to dollars. That's if this was the rate had for this year, that's about a $65,000 increase from where we are currently. So, this is the history for the past about 10 years of inflation and and where we've been in terms of going out with the property tax levy increase. And we try to
022be as fiscally responsible and conscious of the taxpayer as possible. we've seen over the past five years. Um we've proposed budget in uh tax levy increases of less than 2% even with inflation being pretty high. We were able to do that for a couple of those years because the foundation aid formula being fully funded and extra revenue coming in on the from the state. Um it's getting more and more challenging quite frankly to do that going forward. So it's something that we're monitoring closely. But I think this this chart kind of shows itself. This gives the history of how we funded our budget. You go back to fiscal year 2019. Uh it just if you just focus on the on the property tax levy and the state aid um charts line items rather you could
023see there's a trend. It's noticeable trend. Back in 2019 75.6% of our budget is funded through the property tax levy. Smaller percentage 18% is funed by state aid. And over time, we become more and more reliant on state aid uh and less reliant on the tax levy. That's allowed us to keep the tax levy percentage increase minimal moderate, you know, so it's modest increases over the past five years. Um now that the foundation formula has been fully funded, it's going to be harder and harder to do. So we have to take a hard look at our budget and make sure um it it is designed in a way that manages this risk here. So in terms of the property tax levy cap, so New York State is tax cap um in terms of how much
024we can we can rely on the property tax levy to increase year-over-year is something that Andrew Cuomo put in place when he was the governor. Um, for 2526, the tax levy increase that we put out and the voters approved was 1.95% or $651,000 increase. For 2627, the estimated tax levy cap based on all the information I have today is 2.88 or $981,000. Now the the tax levy cap calculation um there's a couple of factors that are just given to us by the OC uh namely the the tax base growth factor which is the OC's uh calculation of the ability of the tax base to be able to absorb an increase in um taxes. That number for this year was very low for East Rockaway. Um, which is is not that surprising to me because if
025I look at the foundation aid formula, if I look at the detail of how they calculated our foundation aid for this year, what's considered to be our combined wealth ratio, which is a measure that the state uses for how wealthy the district is, that number dropped uh year-over-year slightly. um which is an indicator that the property values in East Rockaway have not increased as quickly as property values have statewide. So that's kind of like a easy way of looking at it. Statewide property values increased by about 10%. If these rockway uh properties didn't increase by 10% your combined wealth ratio likely would drop a little bit lower. when your combined wealth ratio is lower, that's an indicator that your tax factor would be also be lower because those those movement should be um in sync
026with each other. Um the reason why we don't want a final tax levy cap number right now is a couple things has to provide us with um capital exclusion numbers. We haven't received that yet. That's that's factor number one. Any new building state aid is included in as part of the capital exclusion in the formula. Uh so that needs to be contemplated and we also have a restricted reserve for debt service. So we need any of that money to offset the cost of the budget that also has an impact on the tax levy cap of reducing it um because it's factored into into the overall formula. So sufface to say um 2.88 is what we believe it's going to be as of now, but that will be refined as we get further into March and
027into into finalizing the budget. All right. And so this is the budget calendar for the rest of the year. So, work session number two, March 17th. It'll also be here 6 p.m. Uh, then we have April 21st, budget work session number three, the budget adoption. And then the budget hearing is scheduled from May 5th, 2026, a little bit earlier this year than in previous years. And as I mentioned before, the school budget vote actually is occurring on May 19th, 2026 this year. Um, polls are open in our high school from 7:00 a.m. to 9:00 p.m. At that point, I'll pause for any questions. I have a question. Do you think that we'll be able to get more state aid to open up more um availability for the prek? I know you have mentioned that it's
028all to be determined. It seems to think it's going to feel that way. >> I think there's a vested interest at the state level in in investments in early education and early learning. Um, you never know how the legislature is going to uh contemplate the executive's proposal, but fact that the legislature and the executive are both in the same parties factor. I think that >> year after year so to me I thought that would be a positive thing. Did >> there have been steps in this direction that have happened? Usually the state when they provide additional funding they do they did it with universal free meals too. opened it up to the lower needs districts first provided some funding for that and then that was successful opened it up to everybody u so you're not
029spending everything in one shot but you're moving towards it that's what they've been doing with universal prek as well so I would be very surprised if that doesn't end up in the final budget >> okay >> they may tweak the number in terms of the allocation >> at $10,000 per student I mean that's a that's a >> that's a significant bump >> it it helps the community based organizations a lot too in this area. Like if you're in the tri-state, if you're in the the the burrows, sorry, the counties that are adjacent to the New York City, it's high. It's just more expensive to run businesses here. The the funding that we're that districts are receiving on Long Island and Westchester, it really not enough to pay for program. a lot of the community based
030organizations where um they're it's it's a reality that you know the work's going to go away if you don't bid on it. They're using it as an opportunity to also p to not push but um sell some of their other products like before and afterare >> okay >> services etc. So yeah, to answer your question, I would be very surprised if it doesn't end up in the final budget. >> Um even if the increase is 9,000, 8,000, still it's still a win for us, >> right? >> Okay. Thanks, Michael. >> You're welcome. >> Great presentation. >> Thanks, Mike. >> Thanks, [clears throat] >> All right. Um, at this time, can I have a uh motion to adjourn the work session and enter into executive session for contract negotiations? >> Motion. Uh, motion by Mr. Second.
031Second by Mr. Lures. All in favor? All right. Motion approved. Good night, everyone. >> Good night, guys. Good night. Wait.