Northport Schools Notebook: Reserves and TANs

More on Reserves
The issue of reserves came up again at the May 9 Board of Ed meeting, with East Northport resident Al Prisco asking for clarification as to the total amount being held. Assistant Superintendent of Business Kathleen Molander broke it down as follows:

Reserved: The total is $12 million, split into various reserves which can only be used for specific purposes. The 2011-2012 proposed budget of $151 million taps into $2.25 million of those reserves to be used for worker’s comp, unemployment, and employee retirement benefits.  Proposition 2 calls for $900,000 to replace the boilers at the East Northport Middle School and the slate steps in front of the Brosnan building. That money would come from the $1.4 million currently being held in the capital reserve fund.

Unreserved:  The total is approximately $10 million.  Of that amount, $3.5 million is being returned to taxpayers to help reduce the tax levy. The remaining $6 million of unreserved funds is usually called the “rainy day fund” and can used to offset unanticipated expenditures.

Eliminating the Need for TANs
School districts throughout the state issue tax warrants and collect the tax levy to coincide with the start of the school year. Only Suffolk County is required to send such tax bills in December, which results in the need for extensive short-term borrowing by school districts in the form of tax anticipation notes (TANS). Although they are usually short-term notes, the interest can be substantial.

In response to this, Trustee JoeGannon is reaching out to county and state legislators for an amendment to Suffolk County Tax Bill A03911, regarding the schedule for the collection of school taxes within the county. Such an adjustment would allow the tax collection schedule to coincide with the cash flow requirements of school district funding, which would in turn save the district a substantial amount of money in interest costs.