001Heat. Heat. N. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. N. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. N. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Hey, heat. Hey. Heat. Heat. I'm Okay. Uh, good evening everyone. I'd like to welcome you to the February 25th, 2026 planning session of the Lovetown Board of Education. May I have a motion to convene the meeting? Peggy. Do I have a second? >> James. All in favor? >> Four. Uh, may I have a motion to move into exact session for the purpose of discussing contract negotiations and personnel? Jen, do I have a second? Peggy. All in favor? Four? Against? None. We will return at 7:30 and
002recite the pledge of allegiance at that time when we open the planning session. Heat. Heat. I'm Heat. Heat. Heat. Hey. Hey. Hey. Heat. Heat. I'm back. Heat. Heat. Heat. Heat. Heat. Heat up here. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. N. Heat. Hey, Heat. Heat. Heat. N. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. N. Heat. Heat. Hey. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. N. Heat. Hey, heat. Hey, heat. Heat. Hey. Hey. Heat. Heat. Heat. Hey, Heat. Heat. Heat. Hey. Heat. He feels Heat. Heat. Heat. Heat. Heat. Heat. Heat. Hey, heat. Hey, heat. Heat. Heat. N. Heat. Heat. Heat. Heat. Hey. Hey. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Hey, heat. Hey, heat. Heat. Heat. Heat. Heat. Heat. N. Heat. Heat. Heat. Heat. Heat. N. Heat. Heat. Heat. Heat.
003Heat. Heat. Heat. Heat. Heat. Hey, heat. Hey, heat. Heat. Heat. Heat. Heat. N. Heat. Heat. Heat. Heat. Heat. Hey. Heat. Heat. Heat. Thank you. >> Good evening everyone. I would like to welcome you to the February 25th planning session of the Levittown Board of Education. May I have a motion to reconvene the meeting? Jimmy, do I have a second? Jen, all in favor? Four. Um, please rise for the pledge of allegiance. >> I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. >> May we please have a moment of silence to remember all those serving our country at home and overseas. Thank you. Please note Mary and Adrian, Phyllis Dalton, and Michael Papus are
004excused from this meeting. >> Okay. It's a big night. One of them. >> It is. It is. So, uh, for those listening at home and in our audience here, uh, tonight is a planning session, uh, only for the board of education. So, no business will be dealt with. But, um, we do have several budget presentations that Mr. and Fabiano have merged into one. Uh so far in our budget presentations which were all available on our website. Um we've had presentations related to transportation to curriculum instruction and facilities uh multiple versions of the budget so far. Um those are all really related to the expense side of the budget what we're spending money on. Uh tonight Mr. Fabiano will talk to the board a little bit about revenues, reserves, and fund balance. Um, some of it's
005a little bit, you know, it's a little little deep, little little tough, but uh, it will be, I think, enlightening uh, to the board as well as to everybody else listening about where the money comes from and how we manage it. Uh, so without further ado, Mr. Fabiana. >> Thank you, Superintendent Winch. Yes. And uh what I will add is that um uh on February 11th uh the district had met with um uh the office of the state controller uh as part of our exit conference. Um as the board knows uh they've been auditing us. Uh we first received notice back in April of 2024. Um so the audit's been going on for uh close to two years now. Um and the um so uh much of what we're going to be discussing tonight is
006against the backdrop of some of the preliminary comments that they've made in the exit interview. And um the district in in attempting to uh I guess get out in front and correct these things in advance of uh you know any written report to you know to say that we've been addressing these things uh has begun to incorporate uh some of these addition uh um initial recommendations made by the uh by the state controller. So uh >> I am just going to mention just for people that are not familiar with it uh the state controllers's office audits all districts on a 5-year cycle. Is that correct Mr. F? That that is correct. >> This is not wasn't we weren't audited for any particular reason other than it was our time. Uh but they were actually here
007for two years because uh they are kind of down uh staff up in Albany and usually they're only here for about a year but they were here for two years. Uh and so they decided to then add on more years uh to the audit for them to look at. So lucky us. So they looked at uh from 2019 to 2025. So just wanted everybody to know it wasn't some issue that occurred. It's just part of our normal operations as a school district. >> All right. So, just to put it in perspective of where we are in the in the overall process, uh here's February 25th. They're about halfway through. Uh tonight, we're going to be talking about um uh uh revenues, state aid, um tax cap calculations, uh the use of reserves, and fund balance.
008Um, so here's a here here's kind of a uh an overview of what the uh agenda looks like. Uh, again, we're going to look at revenues, fund balance, reserves, and appropriated fund balance in that order. Um, this is kind of just a a a brief synopsis of the uh exit conference. Um it was uh may happy to report uh it was a clean audit in in in um in the perspective that they didn't find uh they didn't find any control deficiencies. Um they didn't find any uh fraud uh any material weaknesses in our reporting. Uh and uh there were no non-compliance issues. uh what they what they did focus on uh was the district's use of uh fund balance um and its reserves whether they were they were properly funded or not. Um so and
009we're going to go through that through throughout this uh presentation. Again, as the superintendent mentioned, the audit period was for for six years. Uh and the timeline uh we're not even really sure when the report will be uh uh first published. uh we we would we were told that it could be anywhere between one and six months. The district then has 30 days in which to write uh submit a written response and then the final publication could be 3 to 6 months after that. Uh so we might not even get it in in this calendar year the final uh the final publication but that remains to be seen. >> Mr. over here >> I I have a quick question just for the people listening at home or in the audience. Can you just explain two
010seconds what's the difference between the fund balance and the reserves? >> Yeah. Uh >> just like give us the definition of it. >> Yeah, sure. So, um there there actually there's a lot of commonality there. Uh the fund balance is the is the is the money that is set aside uh as as a safety net. So, um for things that may uh come up during the year, we don't have to make mid-year cuts or midyear adjustments. uh the fund balance would allow us to continue operations as is and then have to plan for those changes in the subsequent year. So it's a it's basically a safety net for things that uh might be unplanned dur during the year. The reserves are actual monies that are set aside that help to dampen um increases that may
011be uh extraordinary in that year. So, a great example of that would be the uh retirement system reserves. Those monies are dedicated to help us offset the cost of our retirement system contributions. Um, and as you may have seen um and we've seen in some of the in the original um iterations of our budget. Um ERS is up substantially this year. Uh and so we may draw down on that ERS reserve. it's being offset uh by the t by a decline in TRS, but we can get, you know, f into the into the weeds on that uh down the road uh if need be. So I I don't know if that really answered your question between what approp fund balance and and reserves are. >> Okay. You're welcome. Um so um so uh while they
012didn't find any control deficiencies um uh any any any um uh operations in the business office that they commented on or bidding practices, any purchasing practices, uh they they were uh they did focus uh on the budgetary surpluses that were generated over this six-year period. uh and so um we have been uh you know we've been working with them uh to try to explain uh you know how these things were occurred. So again without going into a great amount of detail uh there are there are some there are some reasons uh you know other than the fact that we are conservative in nature and we have been u so one of the reasons that the the these surpluses exist is that um some of the pandemic related grants which came in between 2020 and 2023
013these were non-recurring grants and for districts districts were told not to rely on this and increase operating expenses because these grants would go away. So surpluses were generated because we were again being trying to be conservative with these grants. Um uh the other thing that you know would would like to mention and you'll see this throughout is that the reserves that would that were generated by these surpluses uh were then put to good use. We had the voters approved the use of these through the use of capital reserves and we embarked in over the past two years on $140 million capital program. Um and so uh that's where uh while while we primarily agree with the controllers's findings that these these were actual surpluses that were generated uh what we point to is that there
014was an intended use for them and that we we fund our capital projects on a pay as you go basis. uh which ultimately uh result in the third uh part of our uh conservative fiscal nature is that we come January of this year, we make our final debt payment, we will have no general outstanding obligation debt. for a district that's $300 million in size to have no bonds outstanding is something that I think uh we could all be proud of and that I think the taxpayers can relate to the savings there because had we had to borrow that $140 million to do these projects. Um we would have had to have paid back out to the bond holders a total of $170 million the 140 in principal to do the work and $30 million in
015interest. So, I'm gonna continue on if unless there are any questions >> because yeah, there's a lot here tonight and so Okay. Um, and >> and that's it. Okay. >> Just Okay. Okay. So, um All right. Um, let me just get down here. I think we have a slide that may be out of order. So, the revenues again, we're going to look at the tax cap calculation. Uh, the the proposed levy um uh the and uh I I am going to recap the state aid uh package. We had talked about it at the last meeting, but not everybody was here. and then that will lead into a discussion on the increase in prek funding um and and any discussion you may want to have uh with regard to that. I'm sorry that slide got out
016of order. And here is the here's the tax cap calculation. So, as of the moment uh we stand at uh 2.56%. That may move ever so slightly. We're still waiting on a number or two. Um, uh, >> uh, it it it could go either way. I mean, it could be like 255, 257. Um, uh, we're just we're just trying to finalize a number or two there, but basically, this is uh this is where we're at. Um, we do have uh one of the one of the changes in the um in the exclusions uh which adds a little bit to that. Um, primarily the reason it's over 2% is the taxbased growth factor. So our district the assessed value grew by 4/10en of 1%. So the state recognizes the growth in the district and allows you
017to increase the the levy commensurate with the growth in in the in the assessment. So that's that's primarily that's most of the uh increase above the 2%. The other thing in there, we had taken a pause last year on purchase of any new uh transportation equipment, bus equipment, but we do have $275,000 in there uh for a uh for a coach type school bus. Uh and that is also adding to reason why we're a little bit above the 2.5. Um uh and um I'm sorry, I think some of these things got a little bit out of order. Uh and okay, so next next up is the um uh next up is the uh proposed levy. So in light of the controllers's recommendation, uh the superintendent has asked if we can make a concerted effort to
018bring that levy, not go to the levy, but bring it down under 2%. And uh Superintendent Winch, if uh >> Yeah, I was gonna say that um you know, each of the last so many years, the board has directed central administration to do whatever it's in its power to keep the levy as low as it can be, even if it means the levy could be higher. And you may remember that that was the directive from the board last year as well as in the previous year. Um so while this is the calculation of what it can be um for this upcoming year we're working to bring down some costs based on some of the recommendations from the controllers audit uh to bring it under 2%. We would like to be able to go out with
019something you know like in the ones would be nice. We do know that obviously families are struggling. Um, you know, so we are always trying to do our best to be uh responsible to our community and responsive to our community. And so um while it shows you a 2.56, it is likely that we'll be able to get that down to be somewhere in the ones. Um unless the board disagrees. >> No. >> Does anybody have any questions at this point? >> No. Um can I ask what um minus the capital exclusions is that from the capital reserves is that why is that red in the >> right? >> Um so uh the the the uh what what what what you what you need to do in order to go through the through the calculation is
020you back out the prior year capital exclusions and then you add in the current year capital exclusions. Okay. >> Okay. You do the same thing with the pilot payments. we back out of the number last year's pilot payments and then we put in uh this year's pilot payments. Uh as you can see that number is the same here and that's what may drive this uh slightly different. We did not have all the information yet uh for that uh but we will uh hopefully uh before the end of the day tomorrow and then we'll be submitting this uh uh by March 1st to the state controllers's office. Now uh it will it will a it just asks a simple question. Do you plan on overwriting the cap or not? We already know the answer to that.
021The answer is no. Uh as we try to significantly come in below uh this figure. Um so okay did that answer your question why that's >> and not so we're not planning on piercing the cap. Um we're planning on making this less. And are there any impacts to programs staffing? because I don't know if anybody's heard, but a lot of districts on Long Island are having major layoffs. They're they don't have money in reserves, all of these things. So, um I'm happy, but I I'm with this is great, but what's what's the impact on our >> Let me I'll I can answer some of that, Mr. Fabiano. The the um we don't foresee to be any changes, any cuts to the budget. The only thing we do plan on doing is uh cutting the board
022salaries uh by 100%. And so um in all seriousness uh no because of what Mr. Fabiano started talking in the beginning is about the board's conservative budgeting practices which predate this team um they it really goes back quite a long time here in in Levittown of this uh conservative approach of not borrowing um but also making sure that there's enough funding to maintain programs. I know back around 2011 uh we had some tough times because we received tremendous cuts in state aid. Uh so we're not in that situation. We are not in a situation like many other districts. We are adding some some things to uh to our budget for next year. An eighth grade um elective opportunity for students. Um some electives at the high school. We're not making any changes to class sizes
023at the elementary level. Um so things are are moving forward. They're they're in they're you know enhanced. We talked about armed security. All these things are in the current budget right now. There are no changes, no cuts. Realize that the board did authorize a retirement incentive um with the teachers this year because we do not have that in the contract. And we will be able to absorb some positions because of that incentive, right? So that once again is fiscally prudent, right? So our earlier grade levels are slightly lower in number and in size than our older grade levels. Um, so we'll be able to absorb some positions that don't affect class sizes, um, but that we simply don't, you know, need those positions anymore without accessing people. Uh, so we do that and and once
024again, it's it's good budgeting practices. So, uh, nothing's being cut, um, from this budget. Uh, and we do expect to be able to get that that increase to be one of the lower on the very low end of Nessa County. So, we're we're happy about that. >> Uh, Jen has a followup. >> So, I I know last year we had a very low percentage, I think, for the tax levy. Sorry, I'm not being specific. So, I guess long-term like how do you sustain that? I know we've talked briefly about looking at like things like threeyear or 5year. So, I just want to make sure that we don't find ourselves in a position where we were like in let's say in 2011, right? Where because we're unsure of how much um we're going to get from
025the state. So, how do like how do we as a board make sure that that gets sustained along with your office and everyone that's in central? >> So, I'll I'll start with that and then you can fill in any gaps. So, um, we do usually as part of the budget process, uh, talk about a five-year plan. And part of the issue with the five-year plan is that, um, we always assume kind of the worst case scenario in the five-year plan. And, uh, so like let's say for instance, we'll assume a 2% increase in state aid because that's pretty much the the minimum that schools would get. Um, and then our state age our state aid packages have been better than that. uh which again leads to kind of these surpluses that this controllers's office doesn't
026like. Um but again it is part of the reason as to why um we are in a good because you may remember when we had the external auditors here earlier uh in the school year where they told you that like the district is in a great financial situation like we are doing things well. It is because of the fact that we when we do our budgeting and our forecasting for five years out, we do use those numbers that are worst case scenario and for us they have turned out not to be but we are prepared for them to be. Uh they just haven't gotten to that point yet. So um I don't know if you wanted to kind of dovetail on that with with >> Yeah. No, I I I I I really think you
027you you hit the highlights and uh you know, I think in in putting those, you know, five-year plans together, um to you know, to to assume that you're going to get increases above that uh in in state aid, um it's it it's it's a bit risky because you really you really can't rely on it. And uh you know, we we talked a little bit about the governor's proposed budget uh at the last meeting. So across the state um at at at at at at the state level foundation aid which is the main source of school district aid uh increased by 3%. Uh across the state which is is is not a bad number but 2thirds of the districts across New York State got the minimum 1% increase. Um we on the other hand uh will
028be receiving um uh over 9.6% 6% increase in foundation aid. Um and um I I don't I don't have uh the two previous years before me uh right in front of me now, but uh I would say between uh the two previous years, those would they we had similar type increases. So while we were concerned that we could not sustain 10% increases year after year in health costs, we also didn't realize we were going to be getting eight, nine, and 10% increases in state aid. So um how far that will continue into the future, you know, again, it's we we we we don't we don't have a crystal ball, >> but we're but we try to Yeah. As as >> just to go back again when Mr. Fabiano was talking about fund balance versus reserves
029like like Mr. Fabiano mentioned the fund balance money is there if you have a crisis in the middle of the year like midyear state aid cuts which have happened before so that you don't all of a sudden have to cut positions in the middle of a school year. Um the reserves are done really for more of like oneoff increases that may occur that you can plan for like let's say the percentage of money that the district has to give for teacher retirement or or the employee retirement system. If that's like a a one-year blip, the reserve can carry that money, right, and make up for that. It can't make up for it forever. So, if like the health care costs are different because the health care costs don't just go up once and then go
030back down like like let's say TRS does, the health care costs go up 10, 13, 15% and stay at that or go up more that you can't really use reserves or fund balance. You have to actually increase the budget to cover those costs. And so, you know, that that's why you kind of need multiple layers of of funding to be able to continue that we don't have situations where you're either accessing a lot of folks, having budget gaps, trying to pierce the cap, or whatever it may be. And we haven't had to do that because of the conservative practices that we have. Um, it just does. It's why the budget process we do takes such a long time. We do most of it in public because we want people to realize we are being transparent.
031Um but you know with without you know kind of even the board's um you know kind of forethought about like well where are we going in the future like what goes what's happening five years down the road you know we you you have to plan like that you know many of us at this table will not be here in 10 11 years and some of Mike's projections go go that far out so like you know this is this is the responsibility that the community has invested in us so >> yeah um the other um Uh the other big news in in the governor's proposal was the uh standardization of uh UPK funding across the state. Um districts were receiving different amounts and the uh per pupil funding uh will now go to uh $10,000 a
032minimum of $10,000 per year per student. Now to put that in perspective, we were getting about $5,800 uh per student uh in the prior year. So this represents a uh um a 70% increase uh in the per pupil uh funding and and and um you know we can see it on the chart. So um I I think it may help alleviate the pressure this year. It will certainly give us options in 2627 how we u uh how we educate the full complement of approximately 340 students. uh but looking down the road um it's never too early to start planning. So there are with with with this level of funding it gives us different options and we've already started conversations with uh the teachers union about um about starting a a preguide so that we could
033hire our own prek teachers. Uh but again then that will require space and so how will that affect our five-year capital program? Uh and we will be presenting options for you um at the at the March meeting when we adopt the uh the five-year plan and the capital plan uh that uh we begin to at least think about allocating money towards some building expansions or conversions of existing buildings uh from what we own. But conversations a little bit, you know, it goes beyond this budget season and and doesn't have to be addressed now. Uh but I it's certainly something that um you know we should we should be thinking about and planning for especially in in the capital plan. Any questions on on that? >> Okay. >> Yeah. I was going to say this is
034just a wonderful thing. I just will caution you that this is a proposal. This is not the final budget, right? I don't it will likely remain because usually they don't take away things in there. But um anything's possible and until the actual like you know Albany adopts a budget sometime between April 1st and May May something right because they're always late. Uh our process is already nearing completion at that point which is why like Mr. Fabiano said it is a multi-year process. It isn't something that we can all of a sudden shift for next year but it does obviously present just a host of of uh possibilities. >> Okay. >> Mike, can I ask a question about UPK? the money that's given. So, does that have to be used directly to the students that are
035being educated with the UPK classes? Like you couldn't take some of that money and build something, right? Because you said they don't get they don't get aid for it. So, you have to use it for the education specifically of those children. >> That That's correct. >> Okay. at this time. >> I know the superintendent's organization was saying that there has been push uh an ad advocacy in Albany to allow for use of money for for building and construction. Um but that has not come to fruition yet. Christina, >> um the $10,000 that possibly will be allocated, is that the same for every pupil in New in New York State or is it just for the Ireland kids get 10,000? The city kids get a lot more. And how's this work? >> Well, this the city
036was car the city was carved out and and they're under a different plan. So, they have like a three three year old uh >> they're going to educate three years old. uh and the rest of the state it's it's $10,000 or a factor if your if your foundation aid is a is is a certain number. So some of the really um uh uh some of the poorer districts do get a little bit more, but I I would say the the overall majority are getting 10. um that there's several districts on the on the island that are getting getting slightly more, >> but for all intents and purposes, yes, it's $10,000 across the state. >> Thank you. >> New York City aside, >> uh I just I I just I brought I brought this up. Uh
037you know, I I I I I find it interesting again. I just mentioned the 9.6% increase in foundation aid. Uh here you can see the uh uh universal prek. a lot of people uh you know this these are the numbers that will be p published in News Day and just you know just as a nuance here the universal prek it's not really considered state aid per se it's still a grant you still have to spend the money and and apply for this so it's it's a little deceiving because it can't fund other pieces of the operation it generally needs to be carved out when you're balancing your budget I will not be able to use any of that $3.4 $4 million to balance our budget because we're currently we're not subsidizing the program anyway. Uh
038but just some of the highlights here I just like to point out, you know, as we continue to seek out shared services, we continue to do more and more work through Boseies. You can see that's a significant increase in our Boseies aid. This is always on a one-year lag. You spend the money, you receive it back in aid the following year. Uh that's a healthy increase. um 800 thou 800 almost 900,000 or 15%. And the other you know we we talked about all the increases in our um in in our in our outsourcing of transportation contracts and while those costs are you know going up much faster than the rate of inflation. One of the nice offsets is that uh we are generating additional uh transportation aid on those numbers and we would be over
039$8 million next year uh to fund uh uh transportation. Now that's not all for contractual. That's for our own buses. That's for our own operations. Uh but still uh a 22% increase in transportation aid is certainly welcome. So overall we're at about 10%. Uh and you know this should alleviate any concerns about bringing the levy down in the ones without having to cut into existing program uh fund balance. Um so uh the nice thing is that um you know we've always we've always adhere to the 4% rule. Uh we have just under 11 million in there as of the end of the last fiscal year, June 30th, 2025. We're within the legal limits. Uh and this year uh we're projecting an operating surplus of between six and $8 million. Um that is down from uh
040what it's been in prior years. uh and we're going to talk a little bit about what we would do with that because obviously that can't go into unassigned fund balance as it would drive us over the limit. So then that would either have to replenish reserves that we used this year or the recommendation and as this unfolds and you will see we will be recommending that we add that to our existing capital reserve so that we could do another capital reserve expenditure proposition on the May uh ballot and hopefully we can target a number that's in the 10 to 15 million range uh to really make it worthwhile and to fund the next round of projects. Um, and we're going to be talking a little bit more about uh what the next five-year capital plan
041will look like and whether that includes anything for uh building expansions. >> And just to make sure I'm fully understanding, so if we do that and we put this money in capital reserves, it's we don't have to take out a bond. We don't have to take for whatever >> that will continue to offset our need to borrow money to do um these these uh uh programs. >> Okay. But just one one just one technical that won't flow into the capital reserve because then that'll consume our capital reserve. We're just going to appropriate it and put it in the capital reserve expenditure proposition. Okay. >> So, >> and then everybody has to vote on it, right? >> And then everyone gets to vote on it and they will know exactly what we intend on using the
042money for because we will have to >> put that in the proposition. I think you just answered my question was that um the money that's being appropriated with the uh the vote, you can't use that for anything else. It has to be used for those capital projects that you >> Yes. Yes. When when when the voters approve uh uh a certain amount of of funding, we tell them what it's for. Um and uh then you you you do that work. So, um, you know, specifically, one of the things that we added in the last one, uh, our architect said, you know, SED's been rejecting, um, if you do lighting on a field because you can't just use a general athletic uh, uh, field improvements. You have to specifically mention that. So, in the last proposition,
043we added that that there would be field lighting at at at Wisdom Lane. And then so you have to then do that uh because the voters approved it, >> which is great in in my opinion in that it gives the community another like a second opportunity to vote on things, right? Like because really this is the most um democratic form of of government in our country, right? Is school boards and school like what residents don't vote on any other um budget, right, for for government. They vote for, you know, representatives, but that's really about it. Uh so it's great to be able to provide another opportunity to say okay listen like you know this is not additional money this is this is surplus from the previous 10 years whatever it is we'd like to use
044it on these things we give presentations on them and then the voters can decide whether they want to do them or not and then once they approve that then we have to do it regardless of who sits at this table which is also good because it once again um ensures that things aren't occurring because of you know like I'm my you know my daughter was on the dance team And so we're going to do something special for dance or my other daughter was, you know, did uh uh no, she didn't do pickle ball. She did uh field hockey and we don't have field hockey, right? Like so all of a sudden you did, right? I appreciate that that we all of a sudden we're going to have a turf field hockey field like because Todd's
045the superintendent. Um you know what I mean? So, it's it's it's better, I think, um, as a community for it to work this way because then whether I'm the superintendent or not, then it's, you know, there's um, a legitimacy to it that keeps it out of like, you know, kind of nefarious hands. Um, we're not nefarious, but like at some point in the future, you never know, right? I mean, like things happen. You read in the paper all the time. >> I was just going to say just turn on the news. >> Yeah, just turn on the news. And so, we're, you know, we're doing we're doing right because we there's always work to be done. like the buildings are, you know, 60 70 years old. Um, and we are really trying to not ever
046really go out for bonds like a lot of other districts have done. Um, and so we're trying to kind of like we have a list of, as you know, from our from our capital reserve plan of items that we're looking to change. We're still in the midst of our last one, right, which led to the wisdom project, but it also led to uh the re the renovation of uh the Wisdom locker room. MacArthur locker room is on for this summer, right? Um the roofs, all the roofs in the district. You'll see if you drive past this place, the buckets are on the roof. But now that it's snowed, it obviously creates an issue. So they're not working on it. But um so many of our projects have been because of the capital reserve and then
047we'll move on to the next batch because there's always always work that needs to be done just as you're a homeowner, right? Soon as you done one project, the next another project needs to be done. >> So sorry, Mr. Fabiano, you can >> so myself. Uh so uh appropriated fund balance so I the the the uh I think the simplest way to um explain appropriated fund balance it's it's another layer of um it's another layer of reserves. It's another safety net. So we have our uh undesated fund balance. That's the 4% fund. And I said that's there to protect us if there were any midyear state aid cuts. if any any unforeseen circumstances that we couldn't afford to pay for. The appropriated fund balance is money that's is is money that's baked into the budget
048and then if it remains unused it becomes a revenue in the subsequent year and so it just it just keeps going round and round. It's it's not really ever new money. Uh but we do the district has recognized that it is proportionately high uh for our budget and we have taken measures to bring it down. The controller has reviewed this and um their recommendations will be that you need to take it down even further. And so we're uh we're going to take a look at what the historically appropriated fund balance has been. Uh a recommendation of where to take it down to and then what happens to that money. And uh again uh that will be part of the money that we'll have in the capital reserve expenditure proposition uh that will get us to
049that $105 million range. So here's what our appropriated fund balance um has looked like. uh and and this is we we we picked 201920 because this is the period of over which the state controller came in and audited. And so that first year we can see that um uh appropriated fund balance was about $12.3 million. Um it was it was the following year it was reduced to 11 where it remained for three years. Uh and at that point um uh new administrative team had come in. Uh we recognized the need to move it down a little bit more. We moved it to 9.9 and then again to 9.6. This year uh we are proposing uh to at least consider bringing it down to six. Okay. We wouldn't be bringing the full 9.6 6 this year's
050appropriation in his revenues in 2627. So we have to deal with that difference that $3.6 million. And again, that's the money that we will send to the capital reserve proposition. Anybody have any questions on that? Okay, good. Um, other reserves, uh, we have a workers comp reserve, uh, that's made up of really two components. That's just an an uh, it's it's an operating amount of money. Um, uh, that, um, we can offset if there's any particular claims that are high that year. Uh, we don't have to cut anything or or transfer money. Uh but we also can fund our tail claims and these are the long-term claims that if we stop doing business today this this is that future liability uh and that and that remains covered. So our workers comp which we are self-insured
051is actually in is in very good shape. Uh again you you know when when when when finances begin you know if if they go south things begin to unravel. you know, it happens in a in a variety of areas. We're financially sound and stable and so our workers comp reserve is is is as as well. So are our retirement contribution reserves. So in your I'm not going to go through the the full report. I want to thank um our our district treasurer uh Linda Doich who's here with us tonight uh for helping us put together uh a separate report on on uh on uh fund balance uh and reserves. Uh it it it it was part of the uh it was part of the audit uh process uh that uh we should demonstrate better that
052the board was aware of the planning and the adoption of the numbers that are going into balancing the budget. Okay. Uh I have two that are highlighted there. One is the unemployment insurance reserve. Uh we have about $650,000 in there. uh claims against uh unemployment insurance claims have dropped off significantly uh since the pandemic since COVID uh but our our reserve continue to earn interest and and continue to slightly grow. Now with a recognition that we're that we might have close to 20 or 30 years of operating money in that reserve, we do have to acknowledge that that needs to be taken down. Uh, and the recommendation this year would be to take it down by about 350,000 to about 250. >> Um, that's a significant change because I don't know if you remember a
053few years ago, our own auditors criticized us when we had a million dollars in there and I we took it down to a half a million. State controller criticized us for having a half a million. So, we'll have it again uh and and leave it at about 250. Uh, again, that's just a recommendation. we we're going to have more of an adoption process by the board recognizing that this is part of the budgetary plan uh and that you were aware of uh how these reserves were being used. Uh capital reserves slightly different from A through D in that they don't really offset increases. They're there. It's kind of a holding uh bin for monies prior to uh the voters, the taxpayers approving their use for something else. So, slightly different. Uh, and then the tax
054stabilization reserve, that's new. Um, that was created. It actually didn't even exist as of June 30th, 2025. Um, it came into existence when we got the the proceeds of the sale of Seaman's Neck. So, right now, there's $7.2 million uh in the tax stabilization reserve. Uh, and we have 10 years in which to draw that down. Two important points about a tax stabilization reserve. It's not a tax reduction reserve. It stabilizes the taxes. So, it's really there to offset the loss of the lease revenue that we were getting on Seaman's neck so that it doesn't shock the budget. And there are ways to kind of feather that out to use it over the 10 years. So, um that you're trying to absorb just a little bit at a time. Um, but the other thing that
055I would point out, um, with regard to Seaman's Neck, uh, you know, we were on the verge of having to invest a considerable amount of money in that building in order to maintain a tenant that would pay us a million dollars a year. Um, and so with the absence of of any additional borrowing necessary there or using our own capital reserves to do that, uh, the district is saving considerable amount of money on the appropriations. It's kind of a a forego. >> Yeah. I just I just wanted to mention a couple things on that that because Mr. Fabiano was talking before about adding on building additions and it's like but you just sold a building so why'd you sell the building? Like Mr. Fabiano mentioned um because our buildings are the A's they are. The
056buildings require a certain amount of work and as you could tell by some of these capital reserve numbers um not all of it is on like refurbishing locker rooms and things like that. Some of it is roof work and masonary work, asbestous abatement, things that people don't see, but those projects cost millions of dollars. um that is the case of at Seaman's neck. And so we were getting to a point where we were either going to have to put a substantial amount of our capital reserve towards repairs in that building um or sell it. So while yes, we were getting between $900,000 a year and a million from from Boseies in rent, you would have to offset that by 10 to $50 million in repairs. And so you really wouldn't be making that kind of
057money. And so, you know, that's that's the first reason was that it's it was time to move that building on because we don't need it. Um, we we never would use that as a pre-K center anyway. It's like it's being used as a middle school right now by Boseis. Um, and so from a financial standpoint, it made more sense at this point to to move it. in regards to a UPK like program. Um, you know, like we we obviously have another building that we currently own, which is Laurel Lane building that would be more conducive to a UPK center. You would still have to add on some space to it, but it it was originally when it was built in Levittown was a K to2 building. Uh, so if we were going to look for
058a center, it would probably be that building. Um or we would add on some classrooms to each building uh is another option. But once again, cart before the horse. We don't even have the money yet. Um and so we need to get the money and then we can have lots of conversations about what UPK is going to look like in years to come. >> Mike, I just have a question. And the back last slide, I think it was under the unemployment uh the letter D. >> Yeah. I think that's where you said that, you know, there was $500,000 in there and they recommended, the auditors recommend that we take it down to 250. What happens if we don't? >> Um I you know, we're we're um >> they're not going to come giving us money
059if we >> wind up running short somewhere. I I I mean they're they're really um when it when it comes to reserves beyond the undesated fund balance, there's statute for that. Okay, there's there's that 4% rule. They're really all these other reserves that they do a a reasonability test >> reasonleness >> a reasonleness test uh on that. And so, um, like for example, the retirement system that has that has, um, that has close to $10 million in it in in the ERS, but that represents four years worth. And the auditors seem to be okay with that. with the unemployment if you've now averaging only $20,000 a year which is new for us like I said since the pandemic um that what they're what they're arguing is that back when it was a million you've got
06050 years worth of reserves in there it's too much it's not reasonable anymore um and so I don't I don't think you know I I you know I I I don't know I don't know what the stick would be um you know I I I don't think they would threaten to withhold state aid on having a couple hundred,000 more in the unemployment insurance reserve. Um but um you know >> I think what it is that when even when we met with the controller there were certain things that we agreed upon because we felt that it made sense. So like this would be one of those things. Um and then there were certain things we didn't agree with them. Mr. Fabiano was professional yet firm. Yeah. um especially in regards to uh you know some of
061some of the concerns about surpluses that you know that we we don't philosophically agree. So like on those areas that we don't philosophically agree with the controller, they're going to issue their report and we're just going to disagree with them because these are not legal findings. They're just like best practice on other ones where it's like well you know I think part of the reason if I remember correctly was the what was the issue like was it the state has taken over some of the payments on was it workers comp or unemployment? What what was the thing we were talking about where or the reason why our costs have been lowered over time? >> Oh, yes. Uh so dur during COVID when the state was flushed with cash from the uh from the grants that
062they were receiving, we were no longer getting build for unemployment. Uh they were picking up the tab and we we have never, you know, we've never gone back to those original uh expenditures on unemployment insurance. Um, I mean, I know the economy is doing well and unemployment's only running at about 4% right now. Uh, but still 20,000 $25,000 a year, which we've averaged, uh, is is not a significant amount of money. >> And so, when we have those recommendations from the controllers audit, we then met with our auditors to be like, okay, like these are some of the things they're suggesting. Some of them we disagree with, so we're not going to bring it up. Uh but then these other ones we don't we we see the logic that they're sharing and what's your recommendation
063being that you're the ones that are auditing our books on a yearly basis. And so there isn't anything that we're going to recommend to the board that we haven't vetted through our own personal not personal but our district auditors. Um because I agree there isn't there isn't really a a penalty per se. I think from the state, it's more about, I think, being able to show our community members that we are diligent about the use of their tax funds and that while there might be areas we disagree with on the controller, if the controller comes up with recommendations that we say, okay, you know, we hadn't kind of seen it like that, but maybe there's there's some reasonleness to their suggestion, we will then recommend it to the board. Um, but I understand what you're
064saying. It's just really more about being able to say to our taxpayers, you know, with a straight face. They're like, listen, like we're doing everything we should be. And when anybody brings up a recommendation, we'll look at it and if we feel that that recommendation is is valid and valuable, we will then recommend that to the board. Whereas in other instances uh with things that they talk about, we will not because we just disagree. >> Yeah, thanks. That really clarified. I wasn't referring to the unemployment in specifically. It was just in general what happens if we don't comply. I didn't know if there was a p penalty. Thank you. Okay, >> Mike, one second. >> Yeah, sure. >> On the uh I had a question. Beth is going to love this. I was reading an
065article over the weekend and I happened to come across an article about the TRS and the ERS. uh mostly to TRS um statewide they were saying that the contribution was 9.59% and it's being dropped down to like 8 and a4% what is our percentage that we paid this last year in percentage how much did we contribute to the TRS and what is the dollar amount and with the decrease in the percentage this uh coming year how is that going to benefit us in the district. >> Yeah. So, uh I I the the um the contribution rate was um 9 76% uh and we paid um just under 13 uh I'm sorry for for for TRS uh we paid just under $10.7 million. Uh they TRS has uh has submitted guidelines as as as you mentioned
066it's really like 8.25 25 to 8.75. TRS is very good at coming in right in the middle of their of their uh guided range. So, I fully expect it to be 8.5% next year because they're really good at that. Uh that will mean about a $300,000 reduction in our uh TRS contribution. Uh and that is currently reflected um in this iteration of the budget. So, we've already taken that down. um uh by um uh by the 300,000. >> So that $300,000 deduction that goes into the the general fund. >> Yeah. So that's just that that's part of the appropriation. So u you know it's one less thing that went up. Okay. >> Uh but I will say that uh it's being more than offset by the uh increase in the ERS contribution. Uh and that
067is um uh you know we're projecting uh we're projecting probably somewhere around a uh close to a $500,000 increase there. So net overall uh our retirement system contributions will be up next year although slightly because of the offset from TRS. Well, the offset from the TRS health benefits are going to go up. So, you can offset some of that. >> Yes, that's another Yeah, that's another that's a that's a 10% increase. So, yeah, >> for those that are listening at home, Mr. Fabiano, the TRS covers teachers, retirement system, and ERS covers everybody else. >> That's correct. Yes. >> Clarify that, Mr. Winch. I'm sorry. >> No, no, I just, you know, I just want to make sure that, you know, if anybody has questions, we talk in a lot of acronyms and so sometimes it
068does benefit us to just let >> I wanted to clarify and get the information for Mr. Papis. I know he's out there listening. >> I bet he is listening. And he would have he would have admonished me for not clarifying the acronyms and stuff. >> Oh, he's definitely listening. >> Yeah. Yeah. Okay. Okay. So, um, this is really just a summary of our own board policy 5512. This is our, uh, reserve funds. And so, uh, again, this is something that was, uh, brought up in the, uh, in the exit conference. So, rather than go through the slides that we had done, uh, for the past several years, uh, like I mentioned earlier, uh, Miss Dolich put together a uh a standalone report. It's in your budget binder. It's right after uh this presentation. Uh really
069not much has changed. The the really the gist of um of the policy is for us collectively to come up with an optimum funding level for each reserve. So Miss Morangi, just as your to your point, you know, how do you get to these numbers? uh and it really should be a collective discussion and we should demonstrate that we that we talked about it and then what should be used during the year to help keep the levy um as as as stable as possible. Okay, so uh this these are all the uh data fields that are in that report. Uh the only thing that we were not able to get in there today and it will be for the next iteration is the total amount and date of each withdrawal. um we just um we
070did we weren't able to uh pull all that information together. Uh so F F is missing. Uh and then obviously G uh we will be asking the board when they when they adopt the budget the appropriation side to also reflect that um what reserves are being used. I made the argument that the board knows what's re being uh being used because we present that but when you adopt it you're only adopting the expenditure side little bit of splitting hairs I think but we will correct that I don't think it's a major flaw uh but then they won't be able to say that we're not meeting our own policy uh that we already went through uh the reserves again just just just some highlights uh all our reserve balance balances are within legal authorizations. Although we
071were criticized about the unemployment being a little high, um the um as you can see, we the the um the application of reserves did increase slightly from 2425 to 2526. Uh we added a uh was um 26 uh $260,000 to the use of reserves uh in that year. We haven't finalized where they're at right now. the current budget is is utilizing the same 3.2. Uh we'll see about uh you know how we how we balance that out uh when we get to the end. Um uh but based on based on our current usage uh and the fact that we have these surpluses sitting on our balance sheet is one of the reasons why we have an a double A2 rating uh which is about as high as the district can get. And that's our bond
072rating because of our financial position and it's due in large part to our healthy uh reserves and balance sheet. Um and we talked about the the capital reserve expenditure already. This is an interesting graph. Um this is the use of the tax stabilization reserve. This is a concept. Um, so, uh, as I said, one of the differences in the tax stabilization reserve to many of the other reserves is that this has a, uh, a definite lifespan. It cannot exceed 10 years. It has to be drawn down to help stabilize uh, uh, taxes. Uh the blue line is pretty much using it um using it at its current levels to start. Okay. So in year 1, which is 2526, I have 500,000. The reason I have 500,000 is because our lease payments were $1 million. That's
073what's budgeted this year. We leased the building for a half a year. I can draw down 500,000 from the reserve and make us whole there. I don't have to draw down anything. I do I could draw down even more than that if I like. Next year, we can go up to a million. That's where we've been. And what this one and there's no right answer here with what this blue line demonstrates is a reduction of $50,000 a year. So that each year we're only having to make up $50,000 a year, not a million all in one fell through. That it could be 75,000 a year, could be a h 100red,000 a year. Uh I just drew it up like this to demonstrate a point. This is really nice. So in in in in uh 26
07427 budget, there would be no net effect. We'd still get our million dollars. Then we'd have to deal with 50,000 when we get to the end. And I guess it's a good problem to have. You'd still have 500. you you you'd be appropriating $550,000 from that reserve, but then next year you'd fall to zero. So somebody in 207 I'm sorry 3738 will have to deal with that and that's probably not something we want to leave uh behind. So, uh there are other options. Uh but one of them would be uh to um to take a take a piece of that and appropriate it for for capital improvements now. Okay. Put some of that $7.2 million to work in our own buildings and then have the balance feather that out so next year and the budget
075right now has this 900,000 in it right now. And then we'd have to we'd have to cut that to eight. So you'd have to make have to make up $100,000 each year over those years. And then when you get to the end, you'd be you'd have $100,000 available for you to spend and then it would go away. But in that year, 3738, somebody would just have to make up $100,000, which they've been doing for the past 10 years. So, um, don't need an answer tonight, but this is just something that we're looking at. And this is the type of thing that, um, we just want to demonstrate, um, I guess more, uh, more board input, uh, into the decision making and how this is is being, uh, used. >> Yeah. Just >> does anybody does
076anybody have any questions on the concept before we get into >> just once again this is really talking about the money that we were getting in the lease from Bose's which is about a million dollars a year and about utilizing the money from the sale to offset that loss in revenue the ongoing revenue but doing it in a way such that when that tax stabilization fund is completely gone in 10 years we don't want it to be that all of a sudden at that point they have to make up half a million dollars. It's really about drawing it down, you know, over time so that when 20 38 exists, um that they don't have to make up a giant hole. Uh because I think that would be very bad for us to leave to future
077future generation. Are you still working at that point, Miss Gadis? 27. You are 237. >> Uh I like the way it was represented and thank you for explaining it. I have one question about going for the second scenario. So we would take the money let's say in next school year or next whatever calendar year I don't know how to explain it and we'd use it for capital that would be a possibility you said Mike. >> Yes. So uh for next year we would use 900,000 as a revenue to offset the loss of the lease payment and then the following year we do 800,000. But in that scenario, it would allow us in in this particular case to pull about $3 million out, appropriate that this year so that um so that um uh the voters
078can authorize that as part of the capital reserve expenditure proposition. The nice thing is it doesn't run through the capital reserve and it doesn't use up that cap because remember when the voters approve a capital reserve it's an up to amount. The last one they did they did it up to $30 million. If I ran it through the capital reserve if I let it fall fund balance and then it's got to be deposited in a capital reserve and then it's got to be voter approved. I'm using capital reserve cap so to speak. Okay. By appropriating it now in the budget process, I kind of I I I don't I don't run it through the capital reserve and I preserve that $30 million cap for future use. >> Okay. So that money could be used for
079capital on a project we're already doing or like something >> these would be these would the voters would approve new projects. >> It wouldn't because the projects that we're doing have already been funded. We c we can't start it. You can't get sedd approval without the funding being in place. Does that make Does that make sense? >> Okay. Uh I I I told you there was a lot. I'm even getting tired. >> Oh, wait. That's it. >> He started he started to think about my presentations back in the day, right? The 50 60 slide presentations. Um, but listen, I do think that it's valuable to um spend some time on the the other half of the of the budget process, which is like revenues and what's funding the expenditures. We spend so much of our
080time talking about the expenditure side really 90% of this time not really talking about the revenue side. So, I think it's it's good for us to talk about it. And like I said, we did feel that even some of the controllers recommendations about doing this a little bit more often would be good. So, um, like I think your questions have been fantastic. Mr. Papis would be proud of all of you. Um, and I'm sure he's very upset that he's not here for this because he does love this. Uh, but it does once again from a transparency standpoint, uh, because this will go on our website as well that at any time people can look and see exactly what we're doing. Um, because one of our responsibilities to be good stewards of of the funds and
081so I believe that we all are doing that. So, does anybody have any other questions related to revenue side of the budget for Mr. Fabiana? >> I know it's not and I know that the controllers are not out, but like just for the fact that you've had the controllers in this bill in this building for two years and your department has had to work with them providing report after report after report for a six-year period adds um really tremendously to the responsibilities down there. Karen, you have you have a large great department, but it I'm sure has not been easy. So, many thanks to them for doing that while at the same time um building budgets and actually um spending the money during the school year. So, thank you. >> Thank you. >> U President
082Lang, I I turn the meeting back over to you. >> Um so, thank you all. Thank you to your office and all the hard work and all the people staring over you and thank you. Um, and I think we're in a really good financial position and I'm really really proud to be a part of the board and to have this amazing central um, office team because there are some districts out there that are struggling and I think that the way you're all leading is showing that you care about the staff and the students and the everybody that's here 10 years down the line and it's it's not about you, right? It's not about your daughter's field hockey. No. >> And um it's just refreshing. So I we all appreciate you. >> Um may I have
083a motion to adjourn the planning session, >> Jimmy? Thanks. Is there a second around Peggy? Okay. All in favor? Four against. Okay. The meeting is adjourned then, right? That's it. We're done. >> I got it. Okay.