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Heard Through the Grapevine

Have you heard something through the grapevine and want the official South Country School District response?
Do you want clarification based on actual facts?

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We will review each question and respond on the South Country School District website or you will receive an e-mail response.
Issues dealing with personnel and privacy will not be posted publicly.


  1. If NYS has already given us $126,398,095 in repayment money to date, and we have only spent $105,778,746, where is the $20,619,349 that we have been paid by NYS in excess of what we spent?

a. The monies received from NYS are booked and recorded as revenue in the year received and budgeted/spent as operating expenditures. The decision to take out bonds for 20 years when NYS said they would partner with the district for 15 year bonds has created the misalignment of debt payments (principal & interest) to the receipt of NYS building aid payments.  NYS paid the building aid to the district over 15 years.  The district was in an operational deficit in 2006 through 2010 when the decision to take out bonds for 20 years (vs. 15 years) occurred.  Although this decision may have been intentional to help the district build out of its operational deficit, it ultimately added $8 million in additional interest that is now the responsibility of the local South Country taxpayers.   The decision to take out 20-year bonds means that the district continues to be responsible for debt payments for five years after NYS has completed their aid payments to the district. 


  1. Where is the $1.591 million dollars the district received in EXCEL monies that was supposed to be used to pay the district share for Phase IIA & IIB?

a. The EXCEL monies were received and booked as revenue and used to pay for Phase 2 projects. Per the audited financial statements for the year ending June 30, 2015, the EXCEL monies totaled  $1,495,586.  


  1. Where is the $1.72 million dollars the district received via the LIPA rebates for Phase III that was supposed to not only cover the district share of the project, but also leave $900,000 extra for future maintenance?

a. The LIPA rebates were not realized because the district received building aid on the project and considered receiving both building aid and rebates as double dipping. Per the audited financial statements for the year ending June 30, 2015, the General Fund transferred monies to pay for Phase III projects for a total of  $1,500,000. 


  1. What happened to all the interest made on the Bond from Phase I (approximately $600,000) the NYS said could only be used to pay off the bonds?

a. Interest earned on bond proceeds is accounted for in the debt service fund and were used to pay down debt.


  1. An audit of the district bond projects shows that the district spent less money then in borrowed by $3,485,820. Did we really use borrowed money to reduce the budget between 2013-2017, instead of using it to pay down the bond?  If so is that even legal?

a. Unspent bond proceeds are accounted for in the debt service fund and were used to pay down outstanding debt.


  1. Is it true that even with 20-year bonds the district still saved a minimum of $5,336,625 by taking advantage of the 95% aid from 2005-2009?

a. The district incurred additional interest costs of $15.5M by securing 20-year bonds versus 15-year bonds.  The 95% aid rate could only have been realized if the district took out 15-year bonds. The effective aid rate was only 84.32% due to the additional $15.5M of interest costs incurred by the district with 20-year, not 15-year, bonds.  After the refinancing in 2015 and 2016 the effective aid rate became 89.42%.  While the 20-year bonds added additional costs, undisclosed, to the residents of South Country, the more significant impact to that decision was the misalignment it created.  The district will have to deal with the impact of the misalignment for the next 10 years. 


  1. The district says there was a mismatch in the term that the bonds were taken out (20 years) vs. the number of years the state paid us the aid. Isn’t it true that Mrs. Costa on March 30, 2022 said that 4 neighboring districts did exactly the same thing?

a. Costa indicated that one neighboring district, Middle Country schools, secured 20-year bonds when NYS was to pay building aid over 15 years. Information shared with the district by a third party indicate that two other districts may have secured 20-year bonds when aid was to be paid out over 20 years.  However, good business practices, especially when districts have 95% building aid rates, require the alignment of building aid and debt payments to ensure stable and predictable budgets.  Ms. Costa also shared that while other districts may have secured 20-year bonds when aid is to be paid out over 15 years that decision is dependent on the aid rate the district will receive.  Districts like South Country, receiving a 95% 15-year aid rate by NYS must ensure that bonds are aligned to aid payments to not create a misalignment and fiscal stress in the future.  Districts receiving a 15% 15-year aid rate from NYS do not have the same financial impact or risks due to misalignment.


  1. Is there any NYS requirement that bond terms and NYS aid be aligned?

a. There is no legal requirement that bond terms and building aid be aligned. Bonds must be compliant with NYS Local Finance Laws and building aid is paid out in accordance with NYS Education Law. Decisions to align debt payments to building aid payments ensure stable and predictable implications to budgets and to local taxpayers. 


  1. At the March 30, 2022 meeting the district presentation (slide #2) a public notice was shown that said the district was told it was getting 15-year bonds but instead got 20-year bonds. Yet the date on the notice was February 12, 2008, and the district’s presentation (slide #4) clearly shows that by then over $63,000,000 in bonds had been taken out for 20 years between 2006-2007, so what was the district trying to show?  That it owns a time machine maybe?

a. The public notice from 2008 demonstrated that the district was aware that NYS would pay aid over 15 years, and  actually stated to the public that the district intended to take out 15-year bonds.  Unfortunately, the district did not take out 15-year bonds.  What is interesting about this public notice is that it was created after three bonds were already secured for 20-year terms while aid was to be paid for 15 years.  This notice was an opportunity to disclose to the taxpayers that the three prior bonds were taken for 20-year terms and the effective aid rate of 95% would not be realized by the taxpayers, and also an opportunity to be transparent that the district intended to continue taking out 20-year bonds.  This public notice was also an opportunity to describe the mismatch that was created by taking out 20-year bonds vs. 15-year bonds and how that would affect the district finances in the future.  This public notice was inaccurate and lacked transparency with the taxpayer. 


  1. If student enrollment is down, how come the cost for instruction jumped from $131,973,115 in June 2020 to 145,809,347 in June of 2021? That’s a jump of $13,836,232 in one year, for less students, why was that?

a. The $131M is actual expenditures and the $145M is a budgeted amount. Actual expenditures must be compared to actual expenditures from one year to the next, not budgeted amounts.  The actual expenditures for June 2019 were $126.2M and for June 2020 were $127.7M – an increase, during the pandemic, of just 1.19%.


  1. How much money does the district receive from Caithness in the form of PILOTS and when does that run out? If it runs out by 2028, why is it included in the Long Range Financial Outlook?

a. The district currently receives $6,334,945 annually from Caithness in the form of a PILOT payment. The current PILOT schedule has the current PILOT payment continuing through 2028/29. Per TOB IDA, after such date, the Caithness property will either be subject to a new PILOT schedule or will be subject to 100% of their full taxes and assessments.  The PILOT continues on the Long Range Financial Plan because the revenue, from a new PILOT agreement or full taxes and assessments, is not scheduled to end after 2028/29.


  1. The district spent over $4.5million at Frank P. Long on a capital project? How was this paid for and what kind of aid did we get on the project?

a. The project was paid for by the capital reserve. The Frank P. Long capital project was for windows, doors, and the Courtyard Learning Lab.  The district is receiving building aid of $199,356 a year  for 15 years with no associated debt.     


  1. Since 3 of the current board members (Chris Picini, Cheryl Felice and Anne Hayes) have been the BOE presidents during the last 10 years, how did all of this happen and nobody notice?

a. The problem was created with the decisions made in 2006 through 2010. Those problems included undisclosed costs to the taxpayers of $15.5M in additional interest as well as the undisclosed misalignment of building aid to debt payments that have created the fiscal challenges we now have in the district.  Those decisions created the proverbial “Kick The Can Down The Road” scenario, which has landed, 15 years later, on the current Board of Education.  Board presidents are responsible for governance decisions, not management/administrative functions.  The decision to incur an additional $15,501,744 in interest costs and create the misalignment occurred four times between 2006 and 2010 with the decision to secure 20-year bonds instead of 15-year bonds.  In 2015 and 2016, the Board of Education did make the decision to refinance the four original bond issues saving the taxpayers $7,399,155. 


  1. During the same time frame the district budget has gone from $118 to $145 million, why?

a. The budgeted expenditures have increased, on average, only 2.41% per year over the last 10 years, from $115.1M in 2012/13 to $142.8M in 2022/23.


  1. Is it true that the path we are on now could return us to structurally imbalanced budget because you are now using general fund reserves to support operations and relying on on-time revenues, like Caithness, that are set to run out?

a. The district now has a responsibility to create an educational program supported by stable and predictable revenues. Although the district is faced with financial challenges ahead, the Board of Education and administration are committed to making programmatic and budget decisions that ensure long-range fiscal health and positive student outcomes. 


  1. Is it true that the district went from a 4.6 million dollar deficit in 2005-2006 to a credit rating upgrade and $16.1 million dollar surplus by the end of 2009-2010 school year? That’s a swing of $20.7 million dollars in 4 years.

a. The 2005-2006 deficit was ($3,567,595) and in 2009-2010 the fund balance was $16,110,324.


SCCSD Mascot