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Feb 14, 2018 12:15 PMPublication: The Southampton Press

Eastport South Manor School District Shortfall Jumps To $4.4 Million For Next Year

Feb 14, 2018 1:59 PM

The Eastport South Manor School District’s anticipated $3.2 million shortfall for the 2018-19 school year has ballooned to $4.4 million, according to district officials who announced the dire financial outlook at a Board of Education meeting on Tuesday.

At the same meeting, Board of Education President Karen Kesnig abruptly stepped down as president, “effective immediately,” but noted that she would remain on the board through the end of her current term in June 2019, completing her seventh three-year term. She said the stresses of being president often prevented her from spending quality time with her newborn granddaughter.

Board member and former president Kenneth Cooke was elected by the board to fill the president’s slot and was immediately sworn in during Tuesday’s meeting. Ms. Kesnig declined to answer questions following the meeting.

Prior to Ms. Kesnig’s unexpected resignation, Timothy Laube, the district’s superintendent of business, explained to nearly 150 community members, teachers and the seven-member board that, due to anticipated increases in retirement and health insurance costs, as well as an increase in interest rates on the district’s Tax Anticipation Notes, or TANs, the district could expect a $4.4 million shortfall next year on a budget projected to be around $96 million, before any cuts might be proposed to address it. District officials are expected to detail those proposed cuts in early March.

In December, when Mr. Laube first announced the district’s financial stress, the projected shortfall was closer to $3.2 million.

Mr. Laube, who joined the district this past summer to replace former Assistant Superintendent Richard Snyder, explained that the district’s contribution to the state teacher and employee retirement system, or TRS, is expected to increase by $349,317, to $5,197,140 next year. “We have more people retiring than previous years,” he said.

In addition, local retirement—the amount retired staff members are paid directly by the district—is expected to more than double, increasing by $844,013 to $1,523,013.

While Mr. Laube stressed that “that’s only if all the teachers who are eligible retire,” Superintendent Patrick Brimstein explained that the district is required to budget for that to happen. “We have to budget for those things in order to pay for them,” he said.

The district’s health insurance payments are also expected to significantly increase in the 2018-19 school year. For the current school year, under the New York State Health Insurance Program, the district allocated $8,538,073 for health benefits. Next year, that number is expected to balloon to $9,381,758, an increase of 9.9 percent.

Mr. Brimstein warned against the district dipping into its savings to cover the increases, stressing that the district’s unassigned reserve fund, which currently contains just shy of $2.08 million, is currently $1.62 million below where it should be. “We strongly, strongly recommend that the board does not consider going into reserves,” he said.

Eastport South Manor’s reserve fund should contain $3.7 million, or 4 percent of the district’s current operating budget, to meet state requirements.

Due to the diminishing fund balance, the district’s Standard and Poor's credit rating dropped last month from AA+ to AA-, according Mr. Laube.

He said the district can expect to see a higher interest rate on its TANs—money borrowed to finance school operations in anticipation of tax revenues—adding approximately $60,000 in cost for the 2018-19 school year due to the drop in credit rating. He added that the district borrows an average of $21 million per year in TANs.

Immediately prior to Ms. Kesnig’s resignation as president, she said she was “disappointed” in the district’s administration, explaining that officials had been less than transparent about possible staff and program cuts next year. She noted that district officials would announce those cuts at the next board meeting on March 7.

Mr. Brimstein confirmed on Tuesday that no one has been told yet that they are not coming back next year.

He pointed to a survey that was completed last week by 971 community members, which divided the district’s expenditures into 15 distinct areas, to determine which areas were most important to the community. The arts and music category was the most highly rated, whereas school aides were the least important.

However, Ms. Kesnig pointed out that there was no limitation on how many times one single person could have filled out the survey.

“I could have filled that out 971 times if I wanted,” Ms. Kesnig said, which was met with several shouts from the audience arguing that the survey was “invalid.” Her concern went unacknowledged by the administration.

“The ship we’re sailing [is heading] into a storm,” Mr. Brimstein said. “We’re in a storm. There’s no doubt about it."

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Sounds like it's time for the districts on the East End to have a joint meeting of Boards to discuss their current outlooks and possible plans. The students and the tax payers are the ones who really suffer here.
By Mouthampton (439), Southampton on Feb 14, 18 12:52 PM
1 member liked this comment
Canary in the coal mine for the entire East End. Time for school districts to either start negotiating tough terms with local health systems SUNY Southampton, Peconic Northwell or Brookhaven Long Island Healthcare. $500/month per employee contribution by school district for each employee. If the health systems back at that, then teachers pay. When they retire, zero replacements. I'm aware of the phrase Hell or High Water. It's time for us here in Eastern Suffolk County to realize that we have ...more
By dfree (818), hampton bays on Feb 15, 18 5:50 AM
This is what happens when the inmates run the asylum. Time to start merging school districts. Stop giving away money for 181 days of work with no accountability. And, when you retire, you retire. Off the taxpayers back. If you are smart enough to teach you should be smart enough to plan for retirement. The old adage that the benefits are needed because of decreased wages does not work anymore. The Teachers union is bankrupting the taxpayer. Things, however, will never change as long as the politicians ...more
By The Real World (368), southampton on Feb 15, 18 7:28 AM
1 member liked this comment
Those teachers would love to lock you in a room with 25 seven year olds for 8 hours at a time, 181 days a year and see if you still think they're compensation is too high.

Of course "cut everything" is the answer for those of us who have no kids in our local district and will die before we see the longterm effects of defunding public education.
By Fore1gnBornHBgrown (8265), HAMPTON BAYS on Feb 15, 18 7:34 AM
1 member liked this comment
First of all, not 8 hours. Only can work 6 hours or so by contract. Second, its the job, you have a choice. 3rd, comes down to benefits. Its not cut everything as you say. Its stop going to the taxpayers for everything. There are what? 60 or so School Districts in Suffolk. Mention merge to the teachers, then they get upset. Obviously you think the teachers are babysitters and not educators.
By The Real World (368), southampton on Feb 15, 18 7:38 AM
1 member liked this comment
7:30AM to 3:30PM is a pretty standard work day for teachers.

We already have a hard time drawing talented teachers out east. The NYC DOE offers robust compensation and benefits package a hundred miles up the road, and they're always looking for teachers. Cut health insurance or chop $5k off people's salaries and we'll see an actual death spiral.

You get what you pay for!
By Fore1gnBornHBgrown (8265), HAMPTON BAYS on Feb 15, 18 7:46 AM
The Town Board should really be commenting on this. This affects the Western portion of Southampton Town where the taxes are already the highest! Where are you when it comes to Eastport - Southampton Town Board???
By Mouthampton (439), Southampton on Feb 15, 18 2:30 PM
Most of Eastport is in Brookhaven.
By tenn tom (259), remsenburg on Feb 15, 18 3:02 PM
It is about 60-40. The school tax is absurd. Where is either Town Board then?
By Mouthampton (439), Southampton on Feb 16, 18 3:06 PM
Time to merge districts? ESM is a merged district.
Ms Kesnig "disappointed"?The BOE runs the district. Consider a new BOE.
The next step? Cover the shortfall w a10 year bond. The public needs to attend BOE meetings and make spending cuts everywhere.

By emos (4), brookhaven on Feb 15, 18 6:25 PM
Why pay all the superintendents, administrators, buying offices, clerical. Does IBM have 10 headquarters within a 10 mile radius? The BOE can only do so much. Contracts, unions, state mandates severely limit how much they can save. Have the teachers pay the increase in benefits. Have them plan for their own retirement. Why should taxpayer money fund their retirement. Figure it out on your own like most people. Time to start thinking out of the box. ESM merged two small districts in order to get ...more
By The Real World (368), southampton on Feb 16, 18 7:43 AM
1 member liked this comment
The benefits package is 25% of the teachers salaries, which is 75% of the budget. The health care costs are 75% of the benefits. For a $100 million budget, that's about $20 million./year in healthcare costs. That's Eastport. Put in the Westhampton, Remsenburg, Quogue, East Quogue, Hampton Bays school districts and that's another $30 million at least. $50 million per year in healthcare. Offer SUNY Southampton or Brookhaven or Peconic Northwell $25 million per year co tract t for health care, ...more
By dfree (818), hampton bays on Feb 16, 18 1:19 PM
1 member liked this comment
Which is a fine solution for those of us who don't have kids that need to be in school, or don't care about the downstream effects of making a teaching position on the east end highly unattractive.
By Fore1gnBornHBgrown (8265), HAMPTON BAYS on Feb 16, 18 1:22 PM
Fore 1 totally missing the point. A teacher should not rely on the taxpayer for life.
At some point they need to be responsible for their own healthcare and retirement.
By The Real World (368), southampton on Feb 16, 18 3:20 PM
1 member liked this comment
I don't understand, why wouldn't a teacher seek out a post that provides health and retirement benefits? That was a big factor when I was seeking employment, and it is for most people I'd imagine.
By Fore1gnBornHBgrown (8265), HAMPTON BAYS on Feb 16, 18 3:30 PM
This comment has been removed because it is a duplicate, off-topic or contains inappropriate content.
By fwright (1), manorville on Feb 26, 18 6:19 PM
The school is way too top heavy. Our tax bills should NOT be 92% for the school.Thats insane. Get rid of the multiple superintendants, assistant principals and hall monitors. Leave the school mascot as the shark. They are still actively having the students come up with a new one so more money can be wasted changing everything from the school sign, stationary, website,sporting and band uniforms. They are just haemorrhaging money that we don't have. Also why did the district pay Nociero to leave when ...more
By lifesaver (118), speonk on Feb 17, 18 10:58 AM
3 members liked this comment
Those items are all things in the chopping block but the fastest easiest way to cut 10% off the school budget is to limit the health insurance payments. In East Quogue the teachers worked fir 3 years without a contract, then accepted a 0% raise rather than be exposed to the nasty healh insurance rates we're all fighting. If we get all the teachers, janitors, admins, and other town employees for that matter into one healthcare pool, we can have serious negotiating power with local healthcare networks. ...more
By dfree (818), hampton bays on Feb 17, 18 1:30 PM
1 member liked this comment
Police and schools bankrupting Long Island
By chief1 (2800), southampton on Feb 19, 18 11:28 AM
Really? Seriously?? What do you do for a living???You try to teach or police....you have NO IDEA what these people do you!!! What do you do????
By fwright (1), manorville on Feb 26, 18 6:21 PM