North Rockland School District Starts to Cope With NRG Settlement Fallout

Tax certiorari will bring in less income during already tight budget season


North Rockland Central School District will take another hit in the budget department as a result of the recent tax certiorari settlement between NRG Energy and the local taxing jurisdictions associated with the two Bowline Power Plants. According to the settlement, the power plant assessment will come off the tax rolls and NRG will make a “payment in lieu of taxes (PILOT)” of $1.653 million to the district for the next seven years. In return, North Rockland must pay roughly half of NRG’s total refund, a sum of $4,642,010, in two lump sum payments.

North Rockland is already carrying a 30-year bond for the payment of the 2007 tax certiorari refund, a debt service between $11 and 15 million a year on the $195 million principal. Now, according to Superintendent Ileana Eckert, the district will have to go further into debt to make the two new payments, due in August of 2014 and 2015. Whether the district decides to bond the entire amount at once, or band it into smaller, shorter term payments, the fact remains that North Rockland’s debt has just increased significantly, while its revenue continues to diminish.

Making matters worse, the failure by New York State, since the 2009-10 school year, to make the court ordered annual 3 percent increases in aid, coupled with the “gap elimination adjustment” the state has imposed since 2009 to make up shortfalls in its overall budget, has actually resulted in school aid reduction. Districts must then make up the difference in their budgets either by raising taxes, dipping into reserves or making cuts.

North Rockland has overall made up the shortfall by dipping into its reserves in order to keep taxes down, especially since the state has imposed the 2 percent tax cap. However, at this point the district’s designated fund balance is dangerously low; Eckert states that by 2015-2016 there will only be about $5 million left, far less than the $16 million the district needs to fill its revenue gap.

The district has also compensated for the budget crunch by looking to cut costs wherever it can. It has reduced and consolidated transportation, for instance, implementing a 4 tier bus scheme and eliminating the 5 o’clock after school bus service. Vacancies created by retirements and other types of attrition are examined to see if any can remain unfilled or positions consolidated rather than cutting staff.

Eckert is quick to point out that every single bargaining group has come to the table willing to make concessions in order to support the district. The teacher’s union has twice agreed to a change in health insurance plan that saved the district 4 million dollars. “Our employees are mostly from within the community.” Eckert says, “They know the situation and they are willing to work with us.”

The district has also had to deal with mandated increases in salaries and benefits, including increases in payments to the teachers’ pension fund as a result of a “smoothing out” of recession related losses. Unfunded and underfunded mandates, such as the implementation of Common Core and other Race to the Top initiatives, have also taken their toll.

However, the real issue in coming up with a workable budget, Eckert states, is not a matter of rising costs; it is a matter of diminishing revenue, directly traceable to the decrease in state aid and the wallop the district sustained from the two tax certiorari levies. The only good news to come out of the tax cert settlement is that at least for the next seven years the district knows what it is working with.

North Rockland School Board and District’s projected 2014-2015 budget is $208,323,157, a very modest increase of $340,000 over last year.

Also at the meeting, the North Rockland High School Tech Honor Society demonstrated its first place Rube Goldberg Competition entry, a machine designed to use 23 transfers of energy to simply zip a zipper. The team intends to compete at the National competition in April, and is seeking about $3500 in financial support from the community to do so. The high school Theater Troupe also treated the audience to an impressive preview from its upcoming staging of “Cats.” The full production will be presented the weekends of March 14—15 and 20—22.

“We are so proud of these students,” Eckert said, “and we will continue to do everything we can to give them the opportunities they deserve.”

The next meeting date with public input is April 1. The Board will adopt the budget on April 22, and the public hearing will be on May 6. The budget vote will take place on May 20.

One Response to "North Rockland School District Starts to Cope With NRG Settlement Fallout"

  1. Pingback: » Energy in the News – Monday, March 17 New York AREA

You must be logged in to post a comment Login