Riverhead Central School District 2021-2022 Budget Presentation No. 1

All
figures are subject to adjustment. February 9, 2021
Riverhead CSD
2021-2022 Proposed Budget
Presentation #1
Presented by Christine Tona, Interim Superintendent of Schools
and
Sam M. Schneider, Deputy Superintendent
Riverhead Central School District
Board of Education Meeting
February 9, 2021
All figures are subject to adjustment. 1
All figures are subject to adjustment. February 9, 2021
Agenda
• Board of Education
Budget Goals
• Budget Formation Process
and Budget Basics
• Tax Levy Cap
• Impact of the
Contingency Budget
• General Support
• Benefits
• Debt Service
BOE Goals
• On January 12, 2021, the
Board of Education
adopted budget goals:
– To design and adopt a budget that
stays within the Tax Cap limitations
– To develop a budget that maintains
district programs, adequate
resources, and the support of the
community
– To design and adopt a budget that
recognizes the current fiscal reality
for Riverhead residents
– To develop a budget that seeks to
identify and implement cost
efficiencies in all areas
Budget Formation Process

• District administration consults
with staff to determine
programmatic wishes and goals
for the 2021-2022 school year.
• District administration examines
the value and necessity of existing
programs to determine if changes
are needed in the 2021-2022
school year.
• District administration gathers
pricing, contractual obligations
and best estimates in compiling
the spending plan.
• The Board of Education reviews
these decisions to determine if
they represent the proper direction
for the District and its taxpayers.
Budgeting Basics
• There are two sides to the budget:
– Expenditure plan - This is what is voted on by the
community in May.
– Revenue plan - This is determined by the Board of
Education.
• Both the expenditure and revenue budgets represent the
best estimates as to what the District’s financial needs
will be in 2021-2022. The budget is an aspirational
document and one that evolves throughout the year as
plans are achieved or contingencies become realities.
What About Contingency?

• The voters declined to approve the 2020-2021
budget and the District had to remove
$2,310,764 from the spending plan.
• The challenge of the 2021-2022 budget will be
to fund all programs using a tax levy that did
not increase in the prior year.
Tax Cap – What Does the Law Say?

• Revenues raised by the District through
property tax – “the levy” – can increase no
more than approximately 2%, or CPI,
whichever is less, plus several exemptions.
• Exempt from the tax calculation:
– Capital costs
– Some pension costs*
Pension cost exclusions are not applicable in 2020-2021 due to expected

contribution rates.
What Is The Capital Tax Levy?

• The Capital Tax Levy is
the amount of money to Debt Service $7,544,891
be raised in taxes to ES BOCES Capital $155,834
Subtotal $7,700,725
cover debt payments Building Aid $2,949,980
after the application of Bus Purchase Aid $354,078
ES BOCES Capital Aid $54,322
State Aid. Total $4,342,345
What Are PILOT Payments and

How Are They Determined?
• PILOT – Payments In Lieu of Taxes are made
by property owners who are granted certain
exemptions from full property tax assessments.
• The RCSD receives PILOTs granted by:
– Riverhead Town Industrial Development Agency
– Suffolk County Industrial Development Agency
– Local and State solar farm permitting authorities
• The RCSD does not have the power to grant
PILOT agreements.
Riverhead IDA Pilots

2017-2018 2018-2019 2019-2020 2020-2021
1998 Peconic, L.L.C. $11,318 $13,841 $16,477 $19,188
20 West Main LLC $3,943 $3,947 $3,977 $4,015
30 West Main $11,380 $11,392 $11,479 $11,589
400 Burman Blvd LLC $22,535 $25,525 $3,568 $3,602
ADPC Raynor -- -- $2,319 $3,604
Atlantis Holding Co., LLC $74,189 $74,267 $74,837 $75,551
Browning Hotel Properties, LLC $265,105 $398,218 $428,942 $452,857
Cal 81 Realty, LLC $98,852 -- -- --
Calverton Addiction and Treatment -- -- $133,022 $134,291
CAV 896, LLC (Formerly Theriac) $68,947 $83,347 -- --
Country Limousine Service, Inc. $14,656 $14,672 $14,784 $14,925
Eastern Property Investor Consultants, LLC $10,058 $10,069 $10,146 $10,243
Hampton Jitney, Inc. $66,007 $70,568 $75,636 $80,927
J. King Realty, Inc. $51,365 $52,636 $54,266 $56,022
John Wesley Village LLP -- $47,596 -- --
Lenape Associates $23,329 $22,846 $23,084 $22,666
Main Road Holdings, LLC $55,400 $57,848 -- --
Mirah Max LLC $8,092 $8,101 $8,163 $8,241
Peconic Crossing LLC $17,243 $8,055 $8,117 $8,194
Peconic Management Group LLC $27,962 $41,509 $42,884 $45,427
Peconic Management Group Phase 3 -- $4,350 $3,815 --
Pike Realty Company, LLC $6,035 $6,041 $6,088 $6,146
Preston House LLC $4,196 $4,200 $4,232 $4,273
Riveredge LLC $129,369 $137,695 $138,751 $140,074
Riveredge LLC-Building 2 $18,429 $27,673 $37,179 $46,918
Riverhead Apartments LLC -- $20,069 $20,222 $36,517
Solutions Riverhead LLC $816 $817 $823 $831
Wolf Properties Associates, L.P. $2,299 $2,301 $2,319 $2,341
Woolworth Revitalization, LLC $7,046 $5,848 $7,108 $7,176
Total $998,569 $1,153,431 $1,132,239 $1,195,617
Growth (Decrease) From Prior Year $154,862 -$21,192 $63,378
Other PILOTS
2017-2018 2018-2019 2019-2020 2020-2021
Culinary Arts Riverhead, LLC -- $24,410 $24,410 $24,410
Solar at County Center $16,250 $16,250 $16,250 $16,250
S Power Solar Farm $99,522 $101,022 $101,527 $102,035
STR/GES Megafour Solar Farm $58,415 $63,230 $63,230 $64,494
Riverhead Solar Farm LLC $301,388 $316,335 $320,669
Southampton/LIPA $16,500 $16,500 $16,500 $16,500
Total $190,686 $522,800 $538,251 $544,358
Growth (Decrease) From Prior Year $332,113 $15,451 $6,107
In three years, total PILOTs to the RCSD have increased by 46%.

PILOTs are deducted in the final calculation of the property tax cap limit.
Total PILOTS
2017-2018 2018-2019 2019-2020 2020-2021
Riverhead IDA PILOTS $998,569 $1,153,431 $1,132,239 $1,195,617
Other PILOTS $190,686 $522,800 $538,251 $544,358
Total $1,189,255 $1,676,231 $1,670,490 $1,739,975
Since 2017-2018, total PILOTs to the RCSD have increased by 46%.

PILOTs are deducted in the final calculation of the property tax cap limit.
Why is the Tax Cap 1.47% for RCSD?

Prior school year tax levy $104,541,412
Tax base growth factor 1.0049
Product $105,053,647
These two figures PILOTS in Prior Year $1,670,490
are provided to the Sum $106,724,137
District by NYS.
Capital Tax Levy in Prior Year $4,501,190
Difference $102,222.947
Allowable Levy Growth Factor 1.0123
Product $103,480,289
PILOTS in Coming Year $1,739,975
The maximum tax levy Difference $101,740,314
increase is 1.47%. Tax Levy Limit $101,740,314
Capital Tax Levy in Coming Year $4,342,345
Tax Levy Limit Plus Exclusions $106,082,658
The Board of Education will be asked to approve a resolution related to
these calculations at this evening’s Board meeting to allow the District
to file a report with NYSED and the New York State Comptroller.
How Did Contingency Affect the

RCSD?
Had The Budget Passed in 2020 What Actually Happened
2019-2020 $104,541,394 $104,541,394
2020-2021 $106,852,158 $104,541,394
2021-2022 $108,433,306 $106,082,658
Difference $2,350,648
The difficulty in restoring all programs to the 2021-2022 budget

is that the revenue is $2.3 million less than what was needed to
fund the operations at the level they were. The contingent
budget will have effects on the District’s ability to fund programs
years into the future.
How Will Contingency Affect the

RCSD Into The Future?
Had The Budget Passed What Actually
in 2020 Happened Difference
2019-2020 $104,541,394 $104,541,394
2020-2021 $106,852,158 $104,541,394 $2,310,764
2021-2022 $108,433,306 $106,082,658 $2,350,648
2022-2023 $110,037,851 $107,646,645 $2,391,206
2023-2024 $111,666,139 $109,233,690 $2,432,449
2024-2025 $113,318,523 $110,844,133 $2,474,390
2025-2026 $114,995,357 $112,478,319 $2,517,038
Italics represent what would occur in the Tax Cap calculations assuming all factors
in place for the 2021-2022 budget remain constant in future years. The chart is
designed to illustrate how the contingent budget’s impact will continue into future
budget years. The chart is not intended to guarantee future tax levy amounts.
General Support
• Board Of Education – Unpaid volunteers
• Central Administration – Superintendent’s
Office, Business Office, Personnel Office
• Auditing – Three unfunded, mandated audits
• District Insurance – Real property and liability
• BOCES Administration – Mandated
Board of Education, District Clerk,

Annual Meeting
• The Board of Education members serve as unpaid
volunteers.
• The Board has primary responsibility to:
– Adopt District policies
– Approve the hiring and dismissal of District
employees
– Oversee the public’s tax dollars and assets
• The District Clerk serves as the Board’s secretary
and records official actions of the Board.
• The Annual meeting is held each May.
Central Administration and Support

• The Central Administration is the Superintendent of
Schools and the operations of that office.
• The Business Office oversees purchasing, payroll,
benefits, debt service, revenue receipt, central treasury,
auditing compliance and real property insurance.
• These two offices are assisted in their work by outside
entities, including:
– Three mandated types of audits
– Legal experts who advise the District on all matters
involving the law.
– Bond market experts who sell the District’s debt at
competitive rates
Auditing
• External Audit: Cullen
and Danowski, LLP
– Annual review of the
financial standing of the
District
– Review of internal
control of financial
reporting
– The Board of Education
receives a written report
from the auditor each fall
Auditing
• Internal Audit: Questar III
BOCES
– Annual risk assessment of 25
main areas of District
operation
– Review of internal controls
that are in place to prevent
errors, detect fraud and ensure
that financial reporting is
accurate and that the District
assets are safeguarded
receives a written risk
assessment report each winter
and several written reports
each spring on a rotating
series of topics examined by
the auditor
Auditing
• Claims Audit: Macdonald &
Rand LLP
– Weekly review of all bills and
invoices paid by the District
– Biweekly review of all payroll
disbursements
– The audit is designed to
ensure that purchases and
payments constitute legal and
permissible expenses of the
District
receives a monthly written
report detailing the payment
of each check written by the
District along with any
discrepancies in the process
Auditing
• In addition to these costs,
the District is required to
pay for component reports
that are used as part of the
audit materials:
External Audit $57,000 – Property appraisal
Internal Audit $24,000 – Workers’ Compensation
Claims Audit $40,000 actuarial study
Component Reports $8,150 • The District now prepares
its own financial
statement, saving
approximately $14,000
per year.
Property and Liability Insurance

2020-2021 2021-2022 Percent
• The RCSD carries a wide General Liability
Increase
$186,684 $201,619 8.00%
variety of insurance to Commerical Property $250,671 $270,725 8.00%
Boiler & Machinery $11,569 $12,495 8.00%
protect the District against Inland Marine $2,486 $2,685 8.00%
loss from accidents, Commercial Auto $168,944 $182,460 8.00%
intentional harm, and School Board Legal
Excess Catastrophic
$54,803
$66,361
$59,187 8.00%
$71,670 8.00%
unintentional damage. Student Accident $145,242 $151,052 4.00%
Crime $5,095 $5,299 4.00%
• Much of the District’s Tanks $24,938 $25,936 4.00%
insurance is through the
New York Schools Totals:
Unallocated $747,849 $800,666 7.06%
Insurance Reciprocal Insurance
Vehicle Insurance $168,944 $182,460 8.00%
(NYSIR), a cooperative
owned by its customers.
General Support
2019-2020 2020-2021 2020-2021 2021-2022 Percent

Actual Adopted Revised Proposed Change
Expenditure Budget Budget Budget
BOE, Clerk, Associations $105,141 $115,383 $149,978 $136,505 18.31%
Central Administration, $2,287,137 $2,340,547 $2,288,625 $2,399,353 2.51%
Auditing, Legal
Insurance & Assessments $894,265 $943,247 $943,247 $1,003,445 6.38%
BOCES Administration $551,725 $568,284 $568,284 $575,637 1.29%
Total $3,838,269 $3,967,461 $3,950,134 $4,114,939 3.72%
Nearly 71% of this increase, or $15,446, is due to a recoding of

expenses from the Computer Technology code (A2630) to the District
Meeting code (A1060) for BOLD, the election database management
system used to run the annual election.
How Are Salary Costs Calculated?

• Most District employees are employed through
a union contract. The annual raises are
determined through a negotiation process and
cannot be unilaterally changed.
• Some union contracts have provisions for
raises based on years of experience,
supplementary education or other negotiated
methods.
How Are Pension Costs

Calculated?
• All employees of the District are required to
participate in either the New York State Teachers
Retirement System (teachers and administrators)
or the New York State Employees Retirement
System (clerical, custodial and other support
staff).
• The systems set contribution rates and the District
is required to pay the product of an employee’s
salary multiplied by the relevant contribution rate.
Benefits
RCSD Paid Contribution Rates • Employees’ Retirement
of Gross Salary System (ERS) and
2018- 2019- 2020- Teachers’ Retirement
2019 2020 2021 System (TRS) are state
ERS 15.90% 16.20% 18.3% mandated programs
(estimated)
TRS 8.86% 9.53% 9.80% • RCSD also must provide
health insurance,
The TRS contribution rate increase will cost the unemployment benefits,
District more than $148,500 in next year’s budget.
Each .1% increase to the contribution rate costs about and workers’
$55,000. Increases to salaries will also increase
retirement costs. Determination of the total compensation coverage
retirement appropriations will be calculated when
staffing is finalized.
TRS Contribution Rates

Mandatory Employer Contribution Rate 23.49%
25.00%
21.40% 21.40% 17.75%

20.00%
18.80%
15.00% 14.79%
11.84%
10.00% 9.80%
8.41%
5.00% 5.63%
6.87%
6.19%
0.43% 2.52%
0.00%
1978-79
1980-81
1982-83
1984-85
1986-87
1988-89
1990-91
1992-93
1994-95
1996-97
1998-99
2000-01
2002-03
2004-05
2006-07
2008-09
2010-11
2012-13
2014-15
2016-17
2018-19
2020-21
Years
Workers’ Compensation
• When an employee is injured at work, the
employee’s health insurance does not cover the
costs; all costs are carried by the Workers’
Compensation program.
• The RCSD is self-insured and uses an outside
consultant to administer the program.
• All decisions on coverage and benefits are made
by the New York State Workers’ Compensation
Board, an independent State agency.
Warrant of Warrant of Warrant of

December 1, 2020 December 15, 2020 January 26, 2021
Lost Time Wages - Permanent $4,352 $4,352 $4,352
Lost Time Wages - Temporary $2,932 $3,692 $5,096
Medical Costs $9,541 $7,429 $3,864
Legal Fees $1,440 $13,265 $1,090
Pharmacutical Costs $402 $2,649 $353
Total $18,667 $31,387 $14,754
Percent Change From
Fiscal Year Total Cost Prior Year
2008 – 2009 $500,588
2009 – 2010 $668,750 34%
2010 – 2011 $857,590 28%
2011 – 2012 $1,115,531 30%
2012 – 2013 $807,042 - 28%
2013 – 2014 $461,960 - 43%
2014 – 2015 $536,865 16%
2015 – 2016 $775,572 44%
2016 – 2017 $1,049,596 35%
2017 – 2018 $856,160 - 18%
2018 – 2019 $775,449 - 9%
2019 – 2020 $722,254 - 7%
2020 – 2021 to date $516,855

2020 – 2021 projected $886,037 23%
2021 – 2022 proposed $886,037
Health Insurance
• The District participates in the Empire
NYSHIP program.
• Rates are set by the program each December
for the period January 1 – December 31.
• The budget reflects a projection on the
increase to the rates effective January 1, 2022.
• Employees and eligible retirees pay a portion
of the cost of the insurance; the rate is set by
negotiated contract.
Health Insurance
Number of Yearly Full Share Cost Annual Full Share Cost
Enrollees
Single 207 $12,898 $2,669,977
Family 454 $29,434 $13,363,072
Subtotal - Active Employees $16,033,049
Single Under 65 16 $12,898 $206,375
Family Under 65 23 $29,427 $676,818
Single Above 65 206 $4,677 $963,511
Family 1 Above 65 16 $16,722 $267,546
Family 2 Above 65 87 $13,289 $1,156,126
Subtotal - Retired Employees $3,270,377
Total - Whole Share Cost $19,303,426
Total - Enrollee Contributions $4,102,404
Subtotal - District Cost $15,201,022
July – December $7,600,511
January – June (110% increase) $8,360,562
Total Recommended Appropriation $15,961,073
Debt Service
• The District has certain
existing debt obligations,
including capital work
approved by the voters in
2011, the Turf Field and bus
purchases that are made
annually.
• The District is also repaying
money borrowed under the
Energy Performance
Contract.
• All debt service costs except
for the TAN are excludable
items under the tax cap.
Tax Anticipation Note (TAN)

• The District’s fiscal year runs
from July 1 to June 30; there is
no tax remittance until at least Interest Costs
six months into the fiscal year.
• A Tax Anticipation Note One Series Two Series Savings
(TAN) is issued to cover $64,050 $14,467 $49,583
operating expenses until taxes $215,320 $97,320 $118,000
are received.
Total in the last two years $167,583
• TANs are traditionally due in
June
• As a way to cut interest costs,
the District began issuing two
series of TANs, with part of
the principal due in February
and the balance due in June.
Debt Service
2019-2020 2020-2021 2020-2021 2021-2022 Percent
Actual Adopted Revised Proposed Change
Expenditure Budget Budget Budget
Construction Bonds $5,947,635 $5,943,198 $5,943,198 $5,848,481 -1.59%
Buses & Turf Field $1,126,840 $1,122,920 $1,122,920 $1,113,324 -0.85%
Tax Anticipation Note $322,222 $687,500 $687,500 $675,000 -1.82%
Energy Performance $583,086 $583,086 $583,086 $583,086 0.00%

Contract
Total $7,979,783 $8,336,704 $8,336,704 $8,219,891 -1.40%
Future Presentations
• March 9 – Regular Day School
Budget, Transportation,
Facilities
• March 23 – Special Education,
PPS, Guidance and Other
Instructional Items, Revenues
and Projected Tax Levy
• April 20 – BOE Adoption of
Proposed Budget
• May 11 – Public Hearing on
Proposed Budget
• May 18 – Budget Vote (6 am –
9 pm at local polling locations)
Questions?
• Call or write to:
Christine Tona
Interim Superintendent
(631) 369-6717
christine.tona@riverhead.net
Sam M. Schneider
Deputy Superintendent
(631) 369-6711
sam.schneider@riverhead.net

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Budget Formation Process

What About Contingency?

Tax Cap – What Does the Law Say?

Pension cost exclusions are not applicable in 2020-2021 due to expected

What Is The Capital Tax Levy?

What Are PILOT Payments and

Riverhead IDA Pilots

In three years, total PILOTs to the RCSD have increased by 46%.

2017-2018 2018-2019 2019-2020 2020-2021

Riverhead IDA PILOTS $998,569 $1,153,431 $1,132,239 $1,195,617

Other PILOTS $190,686 $522,800 $538,251 $544,358

Total $1,189,255 $1,676,231 $1,670,490 $1,739,975

Since 2017-2018, total PILOTs to the RCSD have increased by 46%.

Why is the Tax Cap 1.47% for RCSD?

How Did Contingency Affect the

The difficulty in restoring all programs to the 2021-2022 budget

How Will Contingency Affect the

Board of Education, District Clerk,

Central Administration and Support

Property and Liability Insurance

2019-2020 2020-2021 2020-2021 2021-2022 Percent

Nearly 71% of this increase, or $15,446, is due to a recoding of

How Are Salary Costs Calculated?

How Are Pension Costs

TRS Contribution Rates

21.40% 21.40% 17.75%

Warrant of Warrant of Warrant of

2010 – 2011 $857,590 28%

2011 – 2012 $1,115,531 30%

2012 – 2013 $807,042 - 28%

2013 – 2014 $461,960 - 43%

2014 – 2015 $536,865 16%

2015 – 2016 $775,572 44%

2016 – 2017 $1,049,596 35%

2017 – 2018 $856,160 - 18%

2018 – 2019 $775,449 - 9%

2019 – 2020 $722,254 - 7%

2020 – 2021 to date $516,855

Tax Anticipation Note (TAN)

Buses & Turf Field $1,126,840 $1,122,920 $1,122,920 $1,113,324 -0.85%

Tax Anticipation Note $322,222 $687,500 $687,500 $675,000 -1.82%

Energy Performance $583,086 $583,086 $583,086 $583,086 0.00%

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