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Derry school board considers putting extra revenues in a rainy day fund

Union Leader Correspondent

July 11. 2018 11:26PM

DERRY — The School Board discussed some of the unplanned revenues coming into the district and how to use them at Tuesday night’s meeting. The board also agreed to present the options to the Town Council next week.

District business administrator Jane Simard made a presentation to the board explaining the unplanned revenues and how they could be utilize.

Simard said the district had received $54,431.67 in owed adequacy funding from the state in May. The money wasn’t disbursed because of an error in the Smarter Balanced Assessment scores, so lawmakers passed legislation that made sure districts who were owed money received it.

The district is also expecting to receive $158,400 in so-called Kenogarten aid from the state. That will ensure students enrolled in full-day kindergarten will receive $1,100 per student, ostensibly raised by the newly legalized Keno gaming program. The district expects to receive that money next year.

Simard said the approved budget already calculated a reduced tuition rate paid by parents from $3,600 to $2,500 in anticipation of the legislation, but did not budget for the state revenues given the uncertainty around whether the bill would pass last year.

There were also savings of $270,000 in unspent salaries and benefits because of unfilled positions, about $1.5 million in unspent Pinkerton Academy tuition because of a reduction in enrollment compared to projections made in late 2016, and $660,000 in unspent healthcare costs because the actual rates were 9.4 percent lower than the guaranteed maximum rate used in the budget.

Some of the unspent Pinkerton Academy tuition is offset by higher special education tuition.

Additionally, the district didn’t have updated property assessments when it approved the last budget. The latest assessments show a significant increase in value.

So even, if the district didn’t receive the unplanned revenues, it would likely see its property taxes go up by 31 cents per $1,000 valuation, as opposed to the projected 53 cents. Simard said they would have a clearer picture of the numbers when the town completes an audit in August.

Usually, the district puts surplus funds back into the general budget to offset taxes, according to board member Dan McKenna. But, since 2013, the board has been empowered to hold all or some of those funds (up to a maximum of 2.5 percent of net assessment) to place into a contingency fund.

McKenna said the district wouldn’t have the $158,400 of Kenogarten money available for a contingency fund because it will receive it next year, but it would help to offset any tax increases.

Simard presented how the tax rate would be affected if the district saved all the additional revenue (about $860,000), 50 percent of it, or none of it.

The tax rate would not rise if all excess revenue was put back into the budget. It would go up by 15 cents per $1,000 valuation if 50 percent were set aside, and 31 cents if all excess revenue was retained.

McKenna supported the idea of setting some money aside because he thinks it would provide the stability and slower tax rate growth the town council has been seeking.

“So, when you have a year where you have a large increase in healthcare cost or some other increase we didn’t see or anticipate coming, we could have used that to offset the tax rate so you don’t have a large increase like we did a couple years ago,” McKenna said.

Other board members expressed support for the idea of saving a portion of the money, which could be at least $430,000 to be carried over for future budgets, and they agreed to discuss these options with the town council.

Board chair Lynn Perkins, board member Michelle McKinnon and McKenna will present the options to the council at the School Board’s next meeting on July 17.

Education Politics Derry East Derry

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