Bond Construction Projects; Plans for Certiorari Reserve Fund Discussed
A variety of topics were discussed at the board of education’s final meeting of the year on Dec. 14. Much of the first half of the meeting focused on the progress of current and upcoming bond projects. The board also discussed the status of the district’s Energy Performance Contract and plans for the district to explore creating a Certiorari Reserve Fund.
Gary Sheedy and project managers from BBS Architects attended the meeting to update the board on several initiatives funded by the $3.6 million bond passed by residents last year. Sheedy announced that the bus garage modular office building has been approved by the state and the project will be put out to bid after Jan. 1, 2011. In addition, the high school roof project is almost complete. “There are still some work that has to be done, some punch list items. That work will be done over the next two weeks. Once that’s complete, then we will be able to close out that project,” Sheedy said.
Project managers from BBS presented the board with three-dimensional renderings and plans for additions at Garden City Middle School and High School. Homestead Primary School will be receiving a new classroom, as well as a multi-purpose room. “The larger structure with the pitched roof is a multi-purpose classroom because it acts as a library; an art classroom and a music room, so it takes on multiple functions. There are two portions of that room so the staff can split and use that room when you have multi-functions going on at the same time,” Sheedy stated.
The upgrades also include a new window replacement for all three primary buildings. Sheedy said that after a four- or five-month review period, construction will start this summer with a tentative end date in the spring of 2012.
The high school will also be receiving an addition consisting of three new music classrooms and their associated support spaces. It will accommodate new rooms for the chorus, band and orchestra. According to the architects, the music rooms will not be soundproof, but will be acoustically treated to reduce outside noise.
Fred Seeba of BBS Architects offered an update on the Energy Performance Contract with Con Ed Solutions. “The last time I came to see you regarding the Energy Performance Contract was about four months ago and, based on our recommendations, we decided to move ahead with Con Ed Solutions as part of the energy performance contract. Over the last four-month period, Con Ed has been preparing their portion of the designs and we are preparing our portion of the designs,” he said.
According to Seeba, the projects are on schedule and will be submitted to the state education department by the end of this year. He also informed the board that Con Ed Solutions, through the help of National Grid, will be able to bring natural gas for dual fuel firing into every primary building, except Locust School. Due to infrastructure problems on the surrounding streets, Locust will not have the dual fuel firing.
Regarding window replacement projects, Seeba told the board that Con Ed originally planned to replace windows at Hemlock and Homestead primary schools but did not anticipate or allot the cost of lower and upper panels at Homestead. “If you recall, they [window replacements] were all in the bond to begin with and the money is still in the bond, so what we’re going to do is pull Homestead back out of the Energy Performance Contract,” Seeba said, adding that the project will be paid for by monies that were allocated originally for window replacement in the bond.
Seeba further explained that Con Ed Solutions will still be replacing windows at Hemlock with the Energy Performance Contract and are working out the final details with Con Ed to make sure those windows are going to match the windows at the remaining buildings.
In other news, many a Garden City taxpayer guffawed when the Garden City Superintendent of Schools Dr. Robert Feirsen announced last month that Nassau County had mistakenly put its own property, the County Legislature building, on the 2010 tax rolls, leaving the district with the $650,000 bill.
At the November board of education meeting, the county had yet to contact the district or pay the outstanding tax bill. During the December meeting, Dr. Feirsen announced the county sent a check for $650,000 bill that was due to Garden City and its taxpayers. “They said the check was in the mail and in fact, it was…They didn’t apologize, but they did send us the money and promised to pay the other half when it is due, so we’re very happy about that,” Feirsen remarked.
In line with other county tax issues, Feirsen reminded the audience that the Nassau County Legislature passed the Commonsense Act of 2010, which purports to end the ‘county guarantee’ for tax certiorari refunds. Feirsen said he was uncertain of the extent of the district’s liability at this point, noting that it could conceivably cost anywhere from $10,000 to $1 million. “We have no indication from the county as to what the tax liability will be beginning in the year 2012,” he said.
Feirsen further stated that the district should begin to think about accumulating funds in a tax certiorari reserve, which is one of the few reserves that districts are allowed to establish. He said rather than wait, it would make sense to put some of the district’s funds into a reserve account and guard against major tax hikes or depleting resources. “It turns out it, that’s not such an easy thing to do. Although, legally, the board can establish that, it turns out there are a number of hoops, and this is all kind of uncharted territory,” Feirsen explained.
School Board Counsel Bonnie Gorham updated the board on what the rules are for setting up a certiorari reserve fund for this purpose. “As Dr. Feirsen has said, by virtue of the legislation passed by the county recently, the obligation for making good on refunds due to overpayment of taxes by residents who have successfully challenged their assessments through tax certiorari proceedings will now become the obligation of the school district,” she said.
Gorham went on to explain that traditionally, for the last 70 or so years, certiorari suits were the obligation of the county and now the county guarantee has been repealed. “As Dr. Feirsen said, that potentially brings great exposure to the school district and the issue becomes how to best account for that…We have been exploring with the district and with the district’s independent auditor the creation of a tax certiorari reserve fund, which is permitted. It’s one of the reserve funds to establish pursuant to the education law. However, there are number of rules and regulations that go along with establishing it and one of the important ones is that you cannot just establish the fund at any time. It has to be established for the year in which you believe you believe you are going to have the liability,” she said.
Gorham anticipated that this will not be an issue for the next tax year. “We are waiting for some clarification on that, but certainly that’s something we’re going to be looking into. The other issue is it has to be funded in a way that makes sense. In other words, school districts cannot overfund it and it has to be reasonably related to what the district believes will be the liability,” she said.
Since the district has never had that liability in the past, Gorham said the question becomes how does the district make that determination of how much to put into the fund. She said the answer will most likely require finding out more information from the county assessor’s office as to historically how much has been paid out every year in successful tax certiorari suits or settlements. “So we will be working closely with the auditor. This is an issue that is affecting all of Nassau County school districts for the first time, so we expect that we will get some clarification in the months to come,” she said.
Feirsen said that it doesn’t appear that the district can designate funds in the immediate future. “I think there may be some court challenges to this. We don’t know how long that will take to work out,” he said.
Gorham clarified that you cannot create a fund this year for costs the district may be paying out in three years. “It’s a year by year fund. In terms of accounting principles, the monies can only be used for the year in which the monies were actually deposited into the fund for that year’s certiorari’s judgments. They can only be retained by the school district for four years and then they have to be returned to the general fund unless there is still litigation out there and hasn’t been settled,” adding, “It’s very much regulated and it’s not as simple as just deciding as we know that this is going to be an issue down the road, let’s start putting away money now,” she said.
Feirsen maintained that another issue of concern is that the budget is decided a year in advance. “So we are going to be presenting the 2011/2012 budget and we won’t be able to dedicate any funds necessarily this year and 2011/2012 leads you to 2012/2013, which is already inching very much close to that deadline,” he explained.
“At this point we need more information as to when exactly it’s going to affect the school district and to what extent it’s going to affect the school district before you can start putting away money,” Gorham said.
School Board Trustee Angela Heinemann asked how long it will take to receive clarifications from the county or other parties. Gorham said she hoped to receive additional information on the matter by February of 2011.
