Budget 2009-2010 Questions and Answers

Updated March 25, 2009

Timeframe for Board of Education Budget Decisions

Q. The Board of Education must adopt the district's budget on April 21. The Board has said that the budget process is still fluid due to fluctuating expense and revenue projections for next year. How will the next few board meetings address these issues?

The Board of Education has two remaining budget meetings before the April vacation, March 24 and March 31. By March 31, the administration will give the Board final proposed expense and revenue projections for the 2009-10 school year.

Q. Is it possible that some staff positions that were eliminated in the proposed budget could be restored?

The Board of Education has made no final decisions on the staffing levels for next year. Over the next couple of weeks, the Board will continue its public discussion regarding the proposed staff reductions and their impact on the quality of our educational program. The Board may ask the administration to consider alternate staffing levels as part of its discussion. Final decisions will likely be made by the April 14 board meeting.

Salaries and Benefits

Q. What are the average salaries of the different employee groups in the district?

Here is relevant salary information for several employee groups in the Chappaqua School District:

CCT: Teachers

Number of members

400

Salary range

$58,745 - $126,492
(does not include stipends for coaching, extra-curricular duties, department chair, summer work)

Average salary 2008-09

$98,206

Work year

10 mos

CCT: Teaching Assts.

Number of members

80

Salary range

$18,556 - $36,989

Average salary 2008-09

$21,350

Work year

10 mos

COSA: Clerical

Number of members

67

Salary range

$22,588 - $80,508

Average salary 2008-09

$45,525

Work year

10 or 12 mos

CSEA: Cust./maint.

Number of members

55

Salary range

$40,116 - $82,490

Average salary 2008-09

$55,482

Work year

12 mos

ADMIN: Prin./asst. prin.

Number of members

14

Salary range

$124,000 - $179,650

Average salary 2008-09

$149,314

Work year

12 mos

ADMIN: Other admins.

Number of members

10

Salary range

$124,200 - $199,714

Average salary 2008-09

$158,248

Work year

12 mos

Q. What are the yearly salary increases for the different employee groups?

Annual salary increases are determined contractually with each employee group:

Teachers - The District's contract with the Chappaqua Congress of Teachers (CCT) runs through 2011-2012. Over the next three years, the teachers will receive a 3.5% salary increase each year plus an incremental salary increase (called a "step") for years of experience. As a result, 75% of the teachers will receive a minimum increase of 7% and the remaining 25% or 100 teachers will receive the 3.5% increase. The most experienced teachers do not receive the step increase.

Clerical - The District's contract with the Chappaqua Office Staff Association (COSA) runs through 2010-2011. Next year, the contract calls for a 3.45% salary increase plus an average step increase of 2.6%. Sixty employees will receive the 6.05% increase and seven employees will receive the 3.45% increase.

Custodians/maintenance - The District's contract with the Civil Service Employees Association (CSEA) runs through the end of the current school year. This contract is currently being negotiated.

Administrators - The District's contract with the Chappaqua Administrator's Association (CAA) runs through the end of the current school year. The administrator contract is currently being negotiated.

Q. How much do the employees contribute to health insurance and how much does the district contribute?

The employee groups in Chappaqua pay different health insurance contributions based on their contracts as health insurance is a subject of collective bargaining. Below is a chart that summarizes what each employee group contributes to the cost of their health insurance. For example, CCT members opting for family coverage pay 6.5% of the premium costs for the current school year, amounting to $981.24 annually. The District contribution is $14,114.76.

Employee contribution rates are increasing each year. CCT members will pay 7.75% in 2009-10 (an increase of $135.90 for individual coverage and $341.22 for family coverage). They will pay 9% in 2010-11 and 10% effective 1/1/2012. The dollar amount increases for these years are not yet known.

COSA members currently pay 6.5%. They will pay 7.75% in 2009-10 and 9% in 2010-11. CSEA members currently pay 7.5%. Future amounts will be determined through contract negotiations.

Administrators currently pay 10%. Future amounts will be determined through contract negotiations.

Health Insurance Contributions: CCT

Year

Type

Emp. %

Employee $ per year

District $ per year

2007-08

Indiv.

5%

$279.60

$5,312.40

Fam.

5%

$699.00

$13,281.00

2008-09

Indiv.

6.5%

$392.34

$5,643.66

Fam.

6.5%

$981.24

$14,114.76

2009-10

Indiv.

7.75%

$528.24

$6,287.76

Fam.

7.75%

$1,322.46

$15,741.54

2010-11

Indiv.

9%

Unknown

Fam.

9%

Unknown

2011-12

Indiv.

10% effective 1/1/12

Fam.

10% effective 1/1/12

Health Insurance Contributions: COSA

Year

Type

Emp. %

Employee $ per year

District $ per year

2007-08

Indiv.

5%

$279.60

$5,312.40

Fam.

5%

$699.00

$13,281.00

2008-09

Indiv.

6.5%

$392.34

$5,643.66

Fam.

6.5%

$981.36

$14,114.76

2009-10

Indiv.

7.75%

$528.24

$6,287.76

Fam.

7.75%

$1,322.46

$15,741.54

2010-11

Indiv.

9%

Unknown

Fam.

9%

Unknown

2011-12

Indiv.

 

Fam.

 

Health Insurance Contributions: CSEA

Year

Type

Emp. %

Employee $ per year

District $ per year

2007-08

Indiv.

6%

$335.52

$5,256.48

Fam.

6%

$838.80

$13,141.20

2008-09

Indiv.

7.5%

$452.70

$5,583.30

Fam.

7.5%

$1,132.20

$13,963.80

2009-10

Indiv.

In Negotiations

Fam.

2010-11

Indiv.

 

Fam.

 

2011-12

Indiv.

 

Fam.

 

Health Insurance Contributions: Admin.

Year

Type

Emp. %

Employee $ per year

District $ per year

2007-08

Indiv.

8%

$448.56

$5,158.44

Fam.

8%

$1,118.40

$12,861.60

2008-09

Indiv.

10%

$603.60

$5,432.40

Fam.

10%

$1,509.60

$13,586.40

2009-10

Indiv.

In Negotiations

Fam.

2010-11

Indiv.

 

Fam.

 

2011-12

Indiv.

 

Fam.

 

Q. How does the employee pension system work? How much does the district contribute?

Employees of the Chappaqua School District are in one of two defined benefit pension systems, as are all employees in public school districts in New York State. It is important to note that the retirement system's rules and regulations are governed by the State of New York. The Chappaqua School District has no bargaining authority when it comes to employee contributions. Contribution rates are dictated by the New York State Legislature.

The teachers and administrators are members of the Teachers Retirement System (TRS). The clerical and custodial staff are members of the Employees Retirement System (ERS). During the current 2008-09 school year, eighty-four percent (84%) of our $57,211,587 payroll is subject to TRS and the remaining sixteen percent (16% or $9,279,904) to ERS. During their first ten years of employment in New York State, all employees contribute 3% of their annual salary towards their pension. After ten years, the employees do not make any contributions.

Teachers Retirement System:

For the 2008-09 school year, the district pays 7.63% of each employee's salary towards their pension. In other words, if an employee makes $100,000 annually, the district contributes $7,630 towards their pension. Next year, the district's contribution drops to 6.19%. However, we expect that the district rate of contribution will increase significantly for the 2010-11 school year because the district's rate of contribution is based on a five-year stock market average.

Employees Retirement System:

For the 2008-09 school year, the district pays 8% of each employee's salary towards their pension. Thus, if an employee makes $50,000 annually, the district contributes $4,000 towards their pension. Next year, the district's contribution drops to 7% for these employees. We expect that the district rate of contribution will increase significantly for the 2010-11 school year because the district's rate of contribution is based on a five-year stock market average.

Q. Does the Board of Education have the authority to freeze salaries and benefits for its employees?

The Board of Education does not have the authority to arbitrarily freeze salaries and benefits. All contracts must be collectively bargained and adhered to while they are in existence. Contracts can only be reopened if the bargaining unit volunteers to do so. The Board may not request a contract renegotiation.

Tax Rates

Q. If there is a zero percent budget increase, does that guarantee a zero percent tax rate increase?

Usually there is a direct correlation between the two and they usually rise or fall in the same direction, meaning if the budget-to-budget goes up, the tax rate goes up. But there are a few variables at play - state aid, property assessment, other sources of revenue, etc. The district can still have a tax increase if there is no budget increase due to a decline in revenue. For example, we could have reductions in both state aid and property tax assessments.

The question of the tax rate increase is further complicated by the fact that households in the school district may belong to either New Castle or Mount Pleasant. Each year the district tax burden is divided between the towns based on total property valuation. New York State determines an equalization rate which is meant to equalize the different valuation formulas used by each town. This situation results in one tax rate for New Castle and a different rate for Mount Pleasant. It is possible for one rate to increase while the other decreases.

Q. How does the contingency budget work if the budget is voted down?

Based on NYS Education Law, the contingency budget adopted by the Board of Education is always less than the proposed budget because certain non-contingency appropriations must be removed from the proposed budget. Some of the non-contingency appropriations are: student supplies, certain equipment purchases, community use of buildings and grounds and certain salary increases.

Future Financial Obligations

Q. What are the estimated future tax rates for residents of the Chappaqua School District?

We have not predicted future tax rates due to many unknowns and variables (e.g. State aid, assessment, equalization rate, other sources of revenue, and fund balances). We have projected future budget increases based on our analysis that a 6% increase for 2009-10 would be required to maintain our existing staffing levels, educational program and non-personal expenses while meeting contractual obligations.

Although the Board of Education has asked the administration to propose a zero percent budget-to-budget increase for 2009-10, the chart below demonstrates what the budget-to-budget increase would be if we carried our existing program and services forward over the next several years. Under this scenario, the projected 2011-12 budget would be 21% greater than this year.

School Year

% Budget-to-Budget Increase

Budget

2008-09 (current)

5.25%

$107,347,134

2009-10

6%

$113,787,962

2010-11

7%

$121,753,119

2011-12

7%

$130,275,838

Increase over 2008-09

21%

$22,928,704

Q. What is the amount of debt service that the district owes and can the terms of our bond issues be renegotiated?

As of July 1, 2008, the District has $53,395,000 in outstanding principal. The debt service schedule runs through 2030-31. Bond principal and interest payments for 2009-10 total $5,167,815.

Every year our financial advisor prepares a refunding analysis based on current market rates. In order to refinance, the district must achieve a positive net present value savings. Currently, we have a negative net present value savings; and therefore, we cannot refinance these bonds. The terms of our bond issues cannot be renegotiated.

Q. All municipalities and school districts are now required to report the estimated future health care costs for retirees. What is the cost of this obligation, and does the district have the authority to address this projected expense?

All school districts are required to provide estimated costs for post employment benefits under Government Accounting Standards Board (GASB) No. 43 & 45. Public entities are not required to set aside funds for these estimated future costs. Health insurance in retirement is a matter subject to collective bargaining. For the Chappaqua School District, the unfunded accrued liability, which is the accrued liability less assets, is approximately $92.9 million as of July 1, 2008.

Q. What are the major expenditures in the current Chappaqua School District Budget?

For the current budget year (2008-09), a majority of the expenditures (over 74%) are for salaries and benefits for employees. Approximately 53.6% of this year's budget is for salaries and 20.4% is for benefits. Other major budget components include transportation (5.5%), debt service (5.1%), operations and maintenance/capital projects (5%). Below is a chart highlighting the major budget components. The remaining budget items that are not included in the chart include funds for supplies, equipment, materials, and legal services.

Categories

Amount

% of 2008-09 Budget $107,347,134

Salaries

$57,589,588

53.6%

Employee Benefits

$22,128,982

20.6%

Special Education Services

$3,007,400

2.8%

Buildings & Grounds

$5,385,775

5.0%

Transportation

$5,908,424

5.5%

Debt Service

$5,464,534

5.1%

Technology

$1,973,070

1.8%

Per pupil allocation
(Supplies, textbooks, materials)

$1,857,596

1.7%

Total:

$103,315,369

96.2%

Q. What have been the budget increases in recent years?

Over the last seven years, the budget increases have ranged from 5.1% to 12.9%. The higher budget increases were largely due to taking on new debt for the construction of Seven Bridges and hiring new staff due to enrollment increases. Over the past two years the budget increases have been 5.1% and 5.25% respectively. These increases largely reflected salary and operating expense increases as the district has seen a flat enrollment and minimal new program expansion over the past two years.

Q. What are the driving costs in the area of employee benefits?

The district is mandated to make contributions to the two major New York State employee pension systems that cover the district's employees. For 2008-09, the district contributes approximately 7.6% of salary to the teachers' retirement system and 8% to the employee's retirement system. Contribution percentages are determined by the state. These percentages are expected to go down slightly next year, but are likely to increase in future years.

The district currently contributes between 90 and 93.5% of the cost of employee and retiree health insurance. The contribution rates are established through collective bargaining with each of our four bargaining units.

Q. How do our year-to-year budget increases over the past several years compare to our peer districts?

Our year-to-year budget increases are very comparable to our peer districts.

District

2008

2007

2006

2005

2004

Bedford

4.0
(contingency
budget)

6.0

8.6

7.4

6.9

Briarcliff

4.2

6.7

6.8

9.2

9.0

Bronxville

6.7

3.6

6.8

15.1

11.0

Byram Hills

5.9

6.9

8.7

8.0

11.8

Chappaqua

5.3

5.1

8.1

8.7

10.6

Edgemont

4.8

8.0

7.8

11.3

11.0

Katonah

3.9

4.0

7.5

9.0

9.0

Mamaroneck

5.9

7.8

7.9

7.6

9.5

Rye

5.1

8.5

7.2

6.8

8.0

Scarsdale

4.3

6.3

6.9

9.3

9.4

Source: WPSBA 2008/tm

Q. How are the schools in Chappaqua funded?

The majority of our funding, almost 90%, comes from local property taxes. Approximately 6.3% of our budget comes from state aid. The largest remaining sources include county sales tax and investment income.

Q. How do the proposed cuts in state aid for next year impact the district?

Since there are so many variables regarding the state budget, it is hard to project what the figure will be following negotiations into the legislature. We do expect a decrease.

Q. What is the relationship between the budget-to-budget increase and the tax increase?

This is a very difficult question to answer. Usually there is a direct correlation between the two and they usually rise or fall in the same direction, meaning if the budget-to-budget goes up, the tax rate goes up. But there are variables at play state aid, property valuation assessments, other sources of revenue, etc. that can alter this correlation. The district can still have a tax increase if there is no budget increase due to a decline in revenue from sources other than property taxes. For example, we could have reductions in both state aid and property tax assessments.

Q. What would be the impact to the district if we had no budget increase next year?

Given that the district's budget would have to increase by approximately 6% to carry forward its current staffing levels, programs, and services, the budget would need to be reduced by over five million dollars. Since a majority of the budget is devoted to salary and benefits, the district would need to have fewer employees on its payroll than it does now. We would also need to reduce in other areas where we have some discretion.

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