I think it's wise for the BOE to try to restore the district's reserve funds to a reasonable level. Just as it's prudent for people to have a bank account in order to handle unexpected expenses, it's also wise for a school district to have reserves. In the recent past, the district unwisely spent down the reserves in order to pay ongoing expenses. Now that the district has a chance to begin to restore those reserves without burdening the taxpayers beyond what was expected, it seems like an opportune time to do so. The district has traditionally had reasonable reserves and never spent them unwisely with the exception of the recent fiscal aberrations. The actions of the current BOE and administration over the past year indicate that they will most likely be used responsibly again.

Last spring, interim business administrator Dave Klem explained another reason that reserves are important. He mentioned that the recent reduction in reserves could affect our bond rating. As bond ratings go down, the interest charged on bonds goes up, which is ultimately paid for by the taxpayers. He estimated it will take three to five years to get the reserves back to an appropriate level.

Dave also told us about budget problems looming on the horizon that could adversely affect next year's budget situation. For one, this year the district received a special high tax aid from the state which is generally very difficult to qualify for and probably won't be repeated next year. Another concern is the relationship of state aid to the success of the stock market and the economy in general. With the economy currently on the downswing, it's possible that we will receive less state aid next year. He advised us to prepare for such potential eventualities.

In addition, interest on reserves represents one of the income flows for the district. As the reserves increase, so does the interest that the district receives. Without adequate reserves, the taxpayers must make up for the interest income that the reserves no longer provide. It may very well save us money in the future.

So it appears that there are several reasons why the BOE was wise to increase the reserves when they had the chance to do so without increasing the tax burden they promised the district residents.

Undoubtedly local taxes are a serious expense and school taxes are a large part of them. But I think we need to keep in mind that the school's financial woes started several years ago, and it's only with new leadership in the past year that the situation has started to improve. The improvements won't happen overnight, but the current board and administration have made many serious efforts to bring spending under control. For example, the past year was the first time that I can remember a BOE actually having to eliminate some teacher and staff positions.

In some ways, we are in good shape. For the first time in several years, we have an administration and BOE that is taking our fiscal concerns seriously. During his stay with us, Dave Klem did a remarkable job in correcting many of the problems he inherited and in getting the district back on the track to fiscal responsibility. Superintendent Steve Grimm demonstrated in the last budget cycle that he is willing to take serious actions to get spending under control. Though she has been here only a brief time, new business administrator Mary June King obviously understands the situation and is already keeping a close eye on the budget.

We currently have a BOE that is actively monitoring the budget, unlike some previous boards that ignored the public concerns and warning signs that the district was in trouble. We need to keep in mind that the majority of the BOE was elected in the past two years. Three of them ran for the board primarily because of their concerns about the budget. Two of them have been on the board for only a few weeks, and already they're demonstrating their determination to control spending.

Taxes can certainly be a substantial expense. It's very important that Lansing residents pay close attention to how their money is being spent and hold their elected officials accountable. While we always need to be vigilant, I don't think the current administration and BOE have given the community cause for concern. Let's keep watching them carefully, but let's also give them the benefit of the doubt as long as their actions demonstrate their continuing concern for the taxpayers and our students.

From: Ted Laux
Ithaca NY 14850

----
v4i32