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Elwood School District's cash reserves nearly depleted, officials say

An exterior view of Elwood Middle School on

An exterior view of Elwood Middle School on Sunday, Sept. 7, 2014. Credit: Steven Sunshine

Elwood school officials say the district has nearly depleted its cash reserves, and the community will need to choose whether to cut services by $3 million or pursue voter approval to bust the estimated 1.6 percent tax cap.

"We are spending more than we are bringing in," said Peter Scordo, Elwood's superintendent. "We are going to our savings account to backfill the difference and our savings account is running out of money."

The district, which has a budget of $58.6 million, would need 60 percent of voters' approval to bust the tax cap. Information from the district presented Thursday night shows the reserve is about $685,000.

Elwood has dipped into its reserves in recent years to avoid going back to the taxpayers to ask for funding beyond the tax cap, but now it can't afford to deplete the remaining funds, Scordo said. The biggest expenses for the school year include employee benefits, staff salaries, transportation and other contracts, which together present a $1.4 million increase over current funding.

The programs potentially facing cuts include: extracurricular athletics and clubs, non-mandated music programs and transportation limits. Scordo said the board must also consider increasing class sizes and reducing other non-mandated programs.

Officials estimate that they would need to increase funding by as much as 6.75 percent to meet their financial responsibilities. Officials said they couldn't provide a projection for how that would translate into cost for taxpayers.

The school district recently signed a three-year contract with teachers that will slow overall salary growth. Step increases will be set at 0.5 percent in each year of the new agreement, but a step freeze is in place for next year, and half-step increases will be allowed in years two and three of the new contract.

It's unusual for a budget meeting for the following year to be held the first week of school; most schools start those talks in January or February.

"They must be very concerned," said Mike Cohen, an adjunct associate math professor at Hofstra University when he learned Elwood was already discussing its 2015-16 budget. "And there's an old saying about, 'You want to get the bad news out early.' "

The budget vote is May 19, 2015.

Elwood, which serves East Northport and other Town of Huntington communities, is one of Long Island's largely residential school districts, meaning it doesn't benefit from the added revenue of commercial businesses paying taxes.

"That district is what you call a high-tax, low-wealth district," Cohen said. "The taxes are pretty high relative to what they spend per pupil, because there's no industry over there, there's no shopping malls, there's no factories."

Since 2011, the district has cut more than 18 teaching positions, increased class sizes, reduced kindergarten from full-day to half, and eliminated some high school elective courses, among other cost-saving efforts.

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