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A Guide to Understanding

the BudgetProcess

A Guide to Understanding

the BudgetProcess

ACADEMICS, ATHLETICS ARTSPerfectly blending and the

Dear Community Members,

We are pleased to be able to provide you with this

budget handbook, which was designed to clarify

some of the questions you have asked either at

Board of Education meetings or in personal conversations. It is the

intention of the Board of Education and District administration to

continue our policy of openness and transparency with all

constituents. We hope you will find this handbook informative.

Sincerely,

Superintendent’s MessageSuperintendent’s Message

2

Inside this handbook...

About Half Hollow Hills ..... 4-5

What’s the purpose of the budget? ...................... 6

What are the budget goals? ....................... 6

What are the challenges for 2010/11? ......................... 6-7

What’s a contingency budget? ................................. 7

What will happen if the budget doesn’t pass? ........... 7

How is the proposed budget developed? ............... 8

What does the District do to safeguard taxpayers? .......... 9

Impact of State aid cuts ........................ 10-11

2010/11 voting information .......................... 12

District bond rating ............ 12

3

About Half Hollow Hills…The District maintains 14 buildings occupyingapproximately1.5 million square feet, covering over300 acres of property, including over 35 athletic fields.

Universal transportation for District students requiresover 85 buses. (We make approximately 510 tripsdaily – 255 twice a day.) Special needs routes requirean additional 38 mini buses, and transportation to

out-of-district, private and parochial schools necessitates the use of anadditional 48 buses. The District also transports students for technicalschools, cultural and educational events and athletics, and providesafter-school activity buses for all grade levels

The District employs 52 administrators (CentralOffice and all buildings), 850 full-time teachers,14 part-time teachers and 792 non-certificatedemployees – including clericals, custodians,

maintenance, monitors, paraprofessionals, food service,bus drivers, security guards and technology staff.

High School East and High School West have over 60 clubs, includingan Internet Club, Literary Magazine and Environmental Club.

Opportunities in art include a full range of electives,clubs and art service clubs. Music opportunitiesinclude marching band, jazz band, orchestra,chorus and theater performances for grades 5-12.

The high schools and middle schools each present fall and springproductions, and the fifth graders present a joint production under the title Hills on Stage.

A wide variety of interscholastic sports teams are fielded. There are 133different teams throughout the District, representing 28 different sportsat the high school level and 17 at the middle school level. Many teamsare recognized by New York State as Scholar-Athlete teams.

4

Triple-A District: Our students andour schools excel on every level – inAcademics, Athletics and the Arts.

• Standard & Poor’s Outperforming School District

• New York Excelsior Award

• Commissioner’s List of High-Achieving Gap-Closing Schools:

High School East, High School West, Candlewood, West Hollow

• Our high schools offer 25 AP courses with 130 available electives

• Model program for children with autism

• Rising Star Program: ensuring a high level of success for

socio-economically disadvantaged and minority students

• Highly regarded research program

• Triple-A District: perfectly blending academics, athletics

and the arts

• World-class theater programs for elementary, middle school

and high school students

• Multiple Award winners of the Prestigious Long Island Arts

Alliance Scholar-Artist Awards

• Suffolk County Championships in basketball, soccer, football,

swimming/diving, track and wrestling

• 2009 SCMEA All-County Concerts: highest number of

participants in grades 5-10

Half Hollow Hills studentachievement levels are among the highest on Long Island; Per-pupil spending is among the lowest on Long Island.

5

To meet the educational and fiscal goals of the District by supporting theeducational mission, planning for the operational needs of the Districtand maintaining financial integrity.

What is the purpose of the budget?

• To maximize the achievement of all students by strengthening ourdistrictwide professional learning community

• To develop, deliver and implement a budget that strengthens andmaximizes all of our resources while being fiscally responsible to our taxpayers

• To improve communication between and among all stakeholders• To ensure equitable opportunities and optimal outcomes for

ALL students• To continue to review our elementary, middle and high school

programs to ensure consonance with the latest research on educationalexcellence and 21st century learning

• To embrace technology as a tool to strengthen teaching and learning,and to effectively manage all District data

• To continue to address demographics and space needs to ensureexemplary learning environments for all students

• To support the physical and mental health and well-being of allDistrict students and staff

• To continue to upgrade the safety, appearance, functionality andenergy efficiency of all District buildings and grounds

What are the budget goals?

• To run an efficient system without negatively impacting programs forour students

• New York State’s economic crisis• The governor’s gap elimination adjustment, if approved, would reduce

our State aid by $2.7 million.• A proposed mandate to reduce

State funding for summer specialeducation services from 80 percent to 22.5 percent. This would cost Half Hollow Hills an additional $673,000. This proposal is not included in our current budget.

What are the challenges for 2010/11?

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Under State law, school districts can submit a budget to voters amaximum of two times. If theproposed budget is defeated twice,the Board must adopt a contingencybudget. The Board also has theoption of going directly to acontingency budget immediatelyafter a budget defeat.

Under a contingency budget, the District may not increase spending by more than 120 percent of the Consumer Price Index or 4.0 percentover last year’s budget, whichever is lower. As per the New York StateEducation Department, the contingency budget formula cap for 2010/11is 0 percent. This would require budget cuts totaling over $6 million.

What is a contingency budget?

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• A proposed mandate for districts to fund a portion of preschoolspecial education costs currently funded by NYS and Suffolk County. This proposal is not included in our current budget.

• A new mandate, added last year, to implement an employer payrolltax on businesses, municipalities, not-for-profits and school districts,to bail out MTA. This has cost Half Hollow Hills over $400,000 in2009/10. The District has been promised reimbursement but nonehas been received to date.

Required cuts from the proposed budget would include equipment,buses, capital project expenditures, student supplies and uniforms, andcommunity use of facilities.

The required cuts would not be enough to meet the contingency budgetcap. In order to meet this cap, the District would need to makeadditional reductions which would significantly impact theinstructional, extra-curricular, music, art, administrative,athletic, and community programs.

What will happen if the 2010/11 budget doesn’t pass?

Throughout the year, the Board of Education Budget Sub-Committee meets and performs a line-by-line analysis of the entire budget.

From July through September, the Business Office works diligently to close the financials from the previous fiscal year. The District’sexternal auditors independently review the financials from the previous fiscal year, and a review and analysis begins for the current year’s fiscal responsibilities.

On a monthly basis beginning in September, the PTA BudgetCommittee reviews the current year’s budget. The committeeincludes community members representing the various schoolsthroughout the District, Board of Education members and CentralAdministration. This is a line-by-line analysis of every budgeteddollar in the District.

In October, preparations for the following year’s budget begins. TheBoard of Education adopts a budget calendar providing a timeline forCentral Administration and the Board to meet. The Business Office also disseminates budget development packets to all pertinent staff. InNovember, proposals for equipment purchases and plant and capitalproject requests are provided to the Business Office. In December,equipment, plant and capital project requests are reviewed withbuilding principals. In January, projections for the next school year’sstaffing are analyzed, along with enrollment projections. In February,Central Office reviews a first draft of the budget. Detailed analysesof all projections take place and necessary revisions are made.

The budget is then presented to the Board of Educationby March 1.

Budget work sessions with the Board of Education and community are held beginning in March. The Board of Education and CentralAdministration continue an in-depth analysis of the proposed budget. The PTA Budget Committee provides input at the monthly meeting.

The Board of Education officially adopts a budget in April.Details of the projected budget are presented during April and May.Information regarding the proposed budget is disseminated to theentire community during the weeks preceding the budget vote in May.

How is the proposed budget developed?

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The Half Hollow Hills School District recognizes and understandsthat we have a responsibility to ensure that tax money is spentefficiently and effectively. Our primary objective is to provide thebest education for our children in keeping with our commitment tohonesty, integrity and transparency. These are some of the internalcontrols that are in place to safeguard taxpayer and State aid dollars:

What does the District do to safeguard taxpayer dollars?

• Positive audit from NYS Comptroller. In 2009, Half Hollow Hillswas the only district on Long Island and one of only six in the state toreceive a positive NYS Comptroller's audit.

• The Board of Education exercises careful oversight concerning all ofthe District’s financial transactions.

• The Board of Education, as well as the administrative staff, hasattended numerous workshops that focused on internal controls.

• The Board of Education has adopted additional policies governing thefinancial management and operation of the District.

• The District maintains strict segregation of duties. This is to ensurethat the assets of the District are safeguarded.

• Three individuals (minimum) are required to process checks.• Two individuals (minimum) are required to authorize wire transfers.• Bank reconciliations are performed monthly by an individual outside

of the cash receipts and cash disbursements functions.• Payroll audits are performed for every biweekly payroll.• Two approvals (minimum) are required to process all purchase

order requests.• The District follows all NYS regulations, which include the hiring of

an independent claims auditor, internal auditor and external auditor.

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Over the past months, the District hastaken an active role in opposing bothcuts to State aid for our schools andthe implementation of any newunfunded mandates, which place a financial burden on taxpayers.

Governor's Proposal Could CostHHH Over $4 Million

“A good educationmay be okay in somedistricts, but ourstandards are muchhigher. How can wemaintain the resourcesto hire the best andbrightest teachers,to provide universitylevel professionaldevelopment, affordstudents and staff with the opportunity to work with state-of-the-art technologies and maintain qualityfacilities and fieldswhen annual cutscontinually jeopardizeour budget?”

- Superintendent Dr. Sheldon Karnilow

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• Governor’s proposed gap

elimination adjustment

to Half Hollow Hills:

$2.7 million

• Governor’s proposed shift of

preschool and summer special

education costs from the

State/County to Half Hollow

Hills: $1.0 million

• Governor’s imposition of an

employer tax on all businesses

including school districts to fill

MTA payroll tax: $400,000

• Total cost of governor’s

proposal to Half Hollow Hills:

Over $4 million

A recent letter to Governor Paterson from Superintendent Dr. Sheldon Karnilow

Every budget report issued acknowledges that mandates are a significantfactor in the growth of school district expenses and the reports call for nounfunded mandates. Your proposal has indicated a reduction in unfundedmandates. Yet, also in your budget is a proposal to shift summer schoolspecial education expenses (currently funded through the State at 80percent) to school districts. This contradictory proposal would costtaxpayers in the Half Hollow Hills Central School District an additional$673,000. This proposal would allow the State to lower their costs, whilesignificantly increasing school district expenses.

Although school districts were told that the MTA Tax would bereimbursed, we have yet to receive one dime while being forced to make continued payments. We request that this employer tax beimmediately repealed.

All school districts are entitled to have the State support a fair share oftheir expenses. Long Island pays the highest property tax in the UnitedStates. Long Island educates 17 percent of all public school childrenresiding in New York State, but only receives 12 percent of the Stateaid pie. We cannot continue to impose new tax burdens on our residentswho are already making a great local effort on behalf of their schools.

Thank you for your consideration.

Sincerely,

Dr. Sheldon KarnilowSuperintendent of Schools

March 17, 2010

Governor David A. PatersonState CapitolAlbany, NY 12224

Dear Governor Paterson:

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Bond rating is an independent evaluation of a bond issuer. It is based onan analysis of the issuer's financial condition and asset base. Bond ratingservices are provided by, among others, Standard & Poor's and Moody'sInvestors Service.

Moody's Investors Service has assigned an Aa2 rating to the HalfHollow Hills Central School District. This rating is given to bondsthat are judged to be of high quality by all standards. The Aa2 ratingreflects the District's substantial Suffolk County tax base, solid financialposition and below average debt burden. Moody's believes the District'ssubstantial $13.6 billion tax base will remain stable, and expects that the District's financial position will remain strong, given our prudentbudgeting practices and effective management of our reserve.

Our District Bond Rating

Tuesday, May 18 High School East 7 a.m.-10 p.m.

If you are not registered to vote, you may do so on any school day at the District Clerk’s office.

Special Voter RegistrationSaturday, May 1, 10 a.m.-1 p.m.

Wednesday, May 12, 9 a.m.-8 p.m.

Last Day to RegisterWednesday, May 12

District Clerk’s office

Absentee BallotsApplications must be received by May 11 if the ballot is

to be mailed to the voter, or by May 17 if ballot is to be picked up in person. Absentee ballots must

be cast by 5 p.m. on Tuesday, May 18.

Half Hollow Hills 2010/11 Budget Vote