BERNE — The Berne-Knox-Westerlo Board of Education adopted a proposed $23 million budget for the 2019-20 school year, with a half-of-1-percent tax-levy increase, using a windfall of funding from reserve accounts to cover the recently announced increase of $400,000 for prescription-drug coverage.

Four of the five board members voted in favor of the budget. Board member Randy Bashwinger abstained, saying that he had little time to review the budget,  having only receiving the final copy Friday and being unable to print it. He said that there needs to be more effort to involve people in the budget process.

After much deliberation, board member Helen Lounsbury voted in favor of the budget with reservations, saying that she was wary of voting for a tax-levy increase but said that a good argument was made to not have a zero-percent increase. She echoed Bashwinger’s sentiment that more people should be involved in the process such as by hosting a forum or having the shared decision-making committee weigh in.

The budget will be put to public vote on May 21, along with a $465,655 bus proposition to replace three 66-passenger buses and two smaller buses. Voters will also elect two school board members. So far, three people have entered the race: board President Matthew Tedeschi, and newcomers Mackenzie Hempstead and Robin Becker.

Lounsbury, whose term is up this year, is not seeking re-election. Petitions are due at the district office on April 22 with at least 25 signatures. The terms are for three years and the posts are unpaid.

Two weeks before the vote, on May 7, a budget hearing will be held at the school.

Tax levy

Richard Umholtz, who co-chairs BKW’s Budget Advisory Committee, said at the meeting that his biggest concern about the budget is: “Who’s going to pay for it?”

About half of the budget is to be covered by state aid and about half is to be raised by property taxes. The superintendent and district business manager did not return calls inquiring about what the estimated tax rates would be in each town served by the district.

Umholtz said that he and co-chairman Ed Ackroyd were the only two committee members who are not in favor of the proposed budget, mainly because they are concerned about the increase in taxes. In the proposed budget, the tax levy would increase by half of 1 percent, to cover an approximately $55,000 gap in revenue.

Ackroyd told The Enterprise on Tuesday that he saw increasing the tax levy a small amount over several years as leading to a large tax increase, and said that the residents need to be considered in the budget.

At the meeting, Umholtz asked if, instead of raising taxes, increases to administrative or management positions could be frozen to save money.

Tedeschi said that the salaries and benefits of district employees are all contractually agreed upon ahead of time, including the superintendent’s, which he said is not set to increase due to an extended contract.

However, last year, when the board agreed to retain Superintendent Timothy Mundell until he retires, renewing a contract annually provided his yearly review is satisfactory, board member Nathan Elble said that Mundell’s wage increases would be “locked in” at 1-percent. The contract stated that his salary would be $141,804 for the 2018-19 school year.

This year, the budget was funded by a tax levy with a 1-percent increase. The previous year, the tax levy decreased by half-of-1-percent. The two budgets prior to this each had an increase to the tax levy of half-of-1-percent.

Tedeschi said that the tax levy increase for 2019-20 had originally been proposed as a 1-percent increase but that it was cut in half.

“This budget is bare bones,” said Tedeschi. With any additional expenses, he said, “This budget could blow up on us.”

Board member and committee member Kimberly Lovell agreed with Tedeschi that the committee had spent plenty of time reviewing the budget, and said that the only cuts that could be made to lower the levy would have to be to students’ programs.

“If you want to cut, you have to cut programs … ,” Tedeschi said. “It’s time we have to stop nickel-and-diming these poor kids.”

Committee member Amie Burnside said from the gallery that, while she thought it would be helpful to receive the final budget earlier, the only item that had changed when reviewing it Thursday was increased prescription-drug costs. Another committee member said from the gallery that Umholtz was not representing the committee’s majority opinion.

Umholtz also said that he and Ackroyd were concerned that there was not enough time to review the final budget and said that it should have been submitted 10 days prior to their meeting last week. He added that the same should be done for the school board.

Mundell cautioned against not increasing the tax levy, saying that it will prevent growth in the district because there will not be funding for new programs.

The budget appropriates $23,882,634 — this year $23,255,186 was appropriated, a $627,448 difference. According to Mundell, the levy would increase from $11,055,383 this year to $11,110,660 next year, a difference of $55,227.

Revenues from state aid increased from $10,113,803 last year to $10,303,993 this year, a difference of $190,190. Of this year’s aid, Mundell said that there was little growth in Foundation Aid, which increased by about $170,000.

“We can’t count on state aid … ,” said Mundell,

“This budget is a little uncomfortably tight for me … ,” said the district business manager, Stacy King-McElhiney. “There’s no cushion in this budget.”

Prescription-drug plan

Mundell said that the district was only recently informed that an additional $400,000 in its prescription drug plan would have to be added to the budget. He said that King-McElhiney immediately began contacting auditors. King-McElhiney later said that she had previously identified this type of prescription-drug plan as vulnerable.

Mundell said that he waited to discuss the matter in order to come up with a plan on dealing with the costs and to come up with accurate numbers.

The issue is happening across the state, said Mundell. With a hike for specialty maintenance drugs without generic counterparts becoming widespread, nearby Voorheesville saw an increase of $480,000 to its budget because of the change in its prescription-drug plan, The Enterprise reported.

Mundell said that BKW would be moving $980,981 out of its reserves, an increase from last year of almost $450,000. Part of this is funded by a TIA, or trust in agency.

The superintendent said that money left over from fees paid by the district are reserved at the end of the year “in trust” by the insurance companies and can be used the following year. Last year, $150,000 was used to offset costs in health-insurance premiums, said Mundell.

In the future, more money should be saved in the account from insurance rebates, Mundell said, and the district may also look at other options for a prescription drug plan.

King-McElhiney said that there is currently less than $750,000 in the trust. Mundell said that it is expected that next year $322,000 in rebates will be deposited into the fund.

Tedeschi said that BKW is in a consortium with other school districts and that the plan is adjusted depending on how it is used by employees. In certain years, districts are able to receive some money back, which happened last year, to offset health insurance increases. But Tedeschi said that the main concern is that the drug fund is increasing while only being funded with a one-time revenue.

“In order to be smart budgeting, it probably should be higher than half-a-percent to prepare for the future,” he said, referring to the tax levy.

Tedeschi said that the district asked its health-insurance provider for a quote on including prescription drug insurance with BKW’s plan last year, but the costs were not worthwhile then. Now would be the right time to possibly switch but there is not enough time to look into that for this upcoming year, Tedeschi said.

Students’ views

Students Trevor Burnside, a senior, and Elizabeth Lendrum, a junior, ex-officio members of the Budget Advisory Committee, spoke earlier in the meeting about a proposal to spend $10,000 to update the speaker system in the high school auditorium and gym in the 2020-21 school year.

The two were tasked with finding a project to spend the money on and said that they spoke with other students to find out what was needed. The board asked Mundell to look into this item for the 2020-21 budget.

“It’s not as easy as you think it is to come up with a school budget,” remarked Burnside.

Other business

In addition, the board also:

— Heard from Mundell that BKW has applied to be a part of a Harvard University study of rural schools and that the application is now being processed;

— Heard from Mundell that six of BKW’s eight winter sports teams have been named “scholar-athletes” by the New York State Public High School Athletics Association, in which at least three-quarters of a team’s members have a grade-point-average of 90 or above. BKW athletic director Tom Galvin said on Tuesday that the district has participated in the program for some time but that this has likely been one of BKW’s best years yet. Both ex-officio student members of the Budget Advisory Committee were part of the scholar-athlete teams;

— Heard from Mundell that last week bids were opened for the $20 million capital project. The bids were higher than expected but he hopes to negotiate lower prices or find savings elsewhere, Mundell said;

— Heard from Mundell that employees through the Board of Cooperative Educational Services are taking an inventory of the district’s technology to apply for funding through the Smart School Bond Act; and

— Heard from Tedeschi that Todd Slingerland, an alumnus of BKW and of The College of Saint Rose and founder of Capital Financial Planning, has created a scholarship fund of $5,000 a year for a BKW student to attend Saint Rose, but is seeking more applicants as only one student has used the scholarship in decades.