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Riverhead BOE moves $4M into reserve funds — nothing for sports, music

For months, Riverhead Board of Education officials have been awaiting the results of an audit report that provides financial insight into any savings for the 2019-2020 fiscal year.

The report was delivered last week, but it won’t be a silver bullet for saving sports and arts programs which were cut after voters rejected the school budget twice over the summer.

In a split vote with members Chris Dorr and Therese Zuhoski dissenting, the board voted Tuesday to allocate nearly $4 million in unspent money into various reserve funds. Board members Laurie Downs, Brian Connelly, Susan Koukounas, Virginia Healy and Matthew Wallace voted yes.

According to the resolution, $2 million was set aside for the Employee Benefit Accrued Liability Reserve; $700,000 will be allocated into the Workers Compensation Reserve; and $447,803.48 was placed into the Retirement Contribution Reserve. An additional $800,000 was allocated to fund the New York State Teachers’ Retirement System contribution reserve sub-fund.

“We have all this extra money. Why can’t we find $900,000 to have our students play athletics, perform in music and in the arts?” Mr. Dorr asked. “That would still roughly leave $3 million to be put in these reserve funds.”

Mr. Wallace argued that the money isn’t “extra,” but rather unspent money that will be used as a revenue source this year. He noted that last year, $2.3 million was paid out in employee benefits, but the board only placed $2 million into that fund. Last year, over $700,000 was paid out in workers compensation, he added. “I really don’t see where you see there’s extra money,” Mr. Wallace said.

Mr. Dorr expressed disappointment that there was no additional money recouped from the school shutdown, which began in mid-March.

According to deputy superintendent Sam Schneider, auditors attributed this to COVID-19-related pay the district allocated to employees who came into work during the quarantine. “Whatever savings was picked up was then spent out on that salary,” he explained.

Mr. Dorr has been an outspoken advocate for saving sports, music and art programs he sees as invaluable to educating the whole child. After a plan to save high school level programs using unallocated reserve funds was rejected at a meeting Sept. 8, Mr. Dorr said he was fearful about the impact it could have on youth.

“I am scared of what’s going to happen if they don’t have these options, that we’re going to see crime increase in town. We might see teen pregnancy increase,” Mr. Dorr said Sept. 8. “We’re going to have kids that have no outlet.”

Ms. Healy said that during the audit committee meeting she learned that the leftover funds were barely enough to cover what was originally recommended.

Mr. Schneider estimates there was approximately $650,000 remaining in the workers compensation reserve, less than $150,000 in the employee retirement reserve and $300,000 in the teachers’ retirement reserve fund at the close of the fiscal year.

The board did not opt to fund other reserves, such as the repair reserve fund, that are not used as revenue sources. According to Mr. Schneider, the Board allocated approximately the same amount of money into these reserves last year.

“We rely on these reserves as funding sources. We need to make sure they stay replenished,” Mr. Schneider explained.

In June, the Board of Education adopted a resolution to allocate unused funds from the school year into reserves with the intention of offsetting mid-year cuts to state aid anticipated because of the economic fallout from the coronavirus pandemic. At the time, the amount of excess funding wasn’t specified due to the pending auditor’s report.

Ms. Healy said she asked auditors what the district should do if the forecasted 20% cuts in state funds come to fruition midyear. “Where do we get the $4.5 to $6 million? Because I thought that would be somewhere in here and it’s not,” she said, adding that the unallocated reserve fund would then be used to offset the cut. “We’re going to be faced with having to make up that shortfall,” Ms. Healy said.