KEN-TON SCHOOLS

Daniel Pye

Jun. 19, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- State Comptroller Thomas DiNapoli's office has released a critical audit of the Ken-Ton school district's $22 million in "excess" usable funds, but district officials say there are good reasons behind having such a nest egg.

The audit claims that the money "should be used to benefit taxpayers by paying one-time expenditures, funding necessary reserves, reducing debt and/or reducing the tax levy."

Superintendent Mark Mondanaro said that money has and will continue to benefit taxpayers, most recently by allowing the district to present a budget that doesn't increase the tax levy. And he contends that money is also helping to remedy a lack of planning by previous boards and administrations on how to handle the district's aging buildings.

"We have 13 buildings in our district, and the youngest was built in 1964," Mondanaro said. "We're trying to use multi-year budgeting to spread out the cost of necessary improvements."

To keep pace with repairs, the school board put a capital reserve fund on the ballot in 2008 and the voters approved. The superintendent said because of that reserve, a proposed $50 million capital project can be completed without going back to the taxpayers for the local share.

While the capital reserve fund didn't fall within the timeline of the study, DiNapoli's auditors pointed out a few other reserve funds that they deemed overfunded or unnecessary, including $7.8 million in "agency trust moneys" set aside for paid absences and retiree benefits. The findings state that those funds would be better used in an Employee Benefit Accrued Liability Reserve using half that amount.

In response, the superintendent pointed to another press release from DiNapoli's office warning of a possible sharp increase in the district's responsibility for teacher's benefits. With the state budget in constant limbo and federal stimulus money slated to run out in a matter of years, the superintendent contends that the district's reserves will cushion taxpayers and allow the district to restructure gradually without making deep program cuts.

"It's not an exact science," Mondanaro said. "But with the possibility of unfunded mandates out there, we've gone conservative. And that money is built up, not gone. We have a plan in place."

DiNapoli's audit also contends that the district has not produced reasonable budget estimates, routinely overestimating appropriations and underestimating revenues. But what the comptroller's office calls underestimating, Mondanaro calls conservative planning. With the lingering uncertainty over the Payment in Lieu of Taxes agreement with NRG Huntley and state budget crisis that pervaded this budget season, the superintendent said estimating revenue on the low side was the only way to avoid a sharp increase in the tax rates if things went sour.

"The reality is we've never spiked tax rates here," Mondanaro said. "Rates have been going up, yes, but at a reasonable rate."

A sudden hike in taxes isn't the only concern. A letter cosigned by the superintendent and School Board President Melissa Brinson states that disrupting educational programs due to budget shortfalls is unacceptable. With state aid numbers being finalized after the school budget must be completed, Mondanaro said the community's expectations demand that estimates be conservative to avoid program cuts.

"The community's been clear about it. They don't want anything cut. They want it all, and we appreciate that," Mondanaro said.

But he was quick to admit that some of the criticisms, specifically that the district could do a better job of using state contracts for purchasing items at better rates, are now under review by the district. Mondanaro said while errors are easier to catch in hindsight, his staff is looking seriously at improving its purchasing process and he's thankful to the auditors for that.

"We do need to work on following those policies and we might have to do a review of the policy itself," the superintendent said.

Contact reporter Daniel Pye at 693-1000, ext. 158.

Newstex ID: 35873228