BERNE — With uncertainty still in the air for Berne-Knox-Westerlo as Governor Kathy Hochul and state lawmakers have it out over the governor’s proposed Foundation Aid formula changes — which would cost the rural district large chunks of funding — the BKW Board of Education members considered various paths that Superintendent Timothy Mundell laid out for them in his first specific look at what the district’s next budget may look like. 

Fortunately for the district, since Mundell’s last presentation in February, both the State Senate and Assembly have roundly rejected Hochul’s proposal, with a one-house budget that commits to the same levels of Foundation Aid as this year, even for districts like BKW that have declining enrollment, plus a minimum 3-percent increase to account for inflation. 

Hochul wants to do away with the clause that protects the district from declining enrollment, while also moderating the way inflation is factored in, which for BKW would mean a loss of $1,248,000 in two years.

This year, BKW has a $25.6 million budget with about $12 million coming from state aid.

Mundell presented several revenue outlooks on Monday, March 25, based on the one-house budget, including the 3-percent increase; the previous year’s aid package, without the 3-percent increase; and the executive budget. 

Bus purchase

Another factor is whether the district does or doesn’t go ahead with its annual bus purchase, which would have the district use $150,000 of its transportation reserve.

Board member Matthew Tedeschi argued — with the other board members seemingly in agreement, or at least not vocally disagreeing — that the district should keep with its current bus-replacement schedule, so that it has as many diesel buses that are as new as possible, so BKW can move more slowly toward electric buses under the state’s emissions-free mandate, which requires the electrification of all bus fleets between 2027 and 2035. 

Beginning in 2027, all new buses purchased must be electric, and 2035 is the deadline to have a fully emissions-free fleet. 

There is currently state aid available for electric buses, with Guilderland Central School District, for instance, in the middle of deciding whether to capitalize on that funding, while Voorheesville is waiting a year.

Guilderland Board of Education Vice President Kelly Person said earlier this month, “It’s challenging to decide when’s the right time to jump in, given the funding we have now, which is favorable to waiting and maybe not having that funding available later.” 

Part of what makes the decision challenging is the uncertainty surrounding electric buses, along with ensuring districts have the necessary infrastructure, according to Guilderland’s assistant business superintendent, Andrew Van Alstyne.

He also pointed out that future models may be better than current ones, with some early adopters, like Bethlehem, running into problems. 

“It comes down to being able to store them, charge them, and run them …,” Van Alstyne said. “While free buses would be good … districts have seen them break down.”

Mundell could not immediately be reached to flesh out BKW’s theory behind sticking with traditional fuels for now. 

It became clear during the board meeting that the BKW transportation department would need to figure out a specific proposal to bring to the board, which would then put the proposal to voters alongside the budget in May. 

“The investment we make now benefits us down the road because we can phase in electric buses over a longer period of time rather than needing three buses that are going to cost us a million dollars,” Tedeschi said. 

While a bus proposal would lower the cap, constraining what the board can fund without voting to exceed the tax cap, which requires a 60-percent supermajority approval from district voters, Tedeschi argued that, with the potential aid cuts that are on the line, the district will either have to drastically increase taxes or drastically reduce funding. 

Mundell said that the district’s priority this budget cycle is to preserve programming.

“Tax cap isn’t going to matter, in my opinion,” Tedeschi said. 

BKW raised its levy by 3.2 percent for the current school year, which was lower than its then-cap of 4.1 percent. Mundell had contextualized that figure by pointing out that, after accounting for several tax cuts over the years, it was only a 1-percent increase over the 2015 rate — a point that he reiterated on Monday, breaking it down to a rate of 0.1 percent per year. 

Costs

Although Mundell said that, with the state budget still undecided, BKW has some wiggle room in calculating expenses, he did highlight some key areas for future discussion. 

“The health insurance we have booked at 10-percent growth,” Mundell said. “We haven’t gotten a final number yet from Empire. We’re working hard at negotiating that number down to zero because we’ve had an excellent claims year … But we have a scenario where we have a 10-percent increase built in, 5-percent increase could be what we land on, it could be zero.” 

Insurance was a primary driver behind the current budget’s increase, though the district had been successful in whittling it down from where it was when the budget was in its early stages. 

As for personnel, Mundell said that the proposed budget includes salaries for some upcoming retirees, giving the district room “to make some considerations about that, whether we have some reduction by attrition or whether we need those [positions] as we go along over the next few weeks.” 

He also acknowledged that, through the COVID-19 pandemic, the district had kept lines for things like heating oil, diesel fuel, and electricity at the same levels, and that the time has come to adjust those figures to meet real prices. 

On the high end, Mundell said expenses could be $28,511,000, with revenues around $25 million. He stressed, though, that the district has been “double booking” expenses covered by federal grants so that the district has reserves since those grants are running out. 

“There’s about $550,000 of federal grant money in [various titles] … and those monies are for salaries for services that employees, teachers, for [Achievement, Integrity and Maturity], counseling, etc.,” he said. 

Mundell said that the district is committed to maintaining that “sound fiscal practice,” but that it “leaves some wiggle room in terms of how we decide both the expense side and the revenue side because we have those grants double-booked in the $28,511,000 scenario.” 

“The math equation is to bring those two numbers together,” he said, “and we’ll do that over the next couple of weeks. But the first thing that needs to happen is the state needs to settle their budget.” 

Mundell said that although the state budget is due on April 1, what he’s hearing “on the street” is that it will arrive between April 15 and April 19, making “the timing very tight for us.”