The Springs School Board on Tuesday rescinded last month’s decision to transfer $342,000 in surplus funds from last year’s budget to a reserve account designated for repairs, following harsh criticism from a community member over the last few weeks.
The resident, David Buda, has insisted that the district needs voter approval to make such a transfer. State law does require thatschools wishing to divert extra money to reserve accounts in this way must hold a ballot referendum for each type of account. Other examples include capital reserves and those dedicated to teachers’ retirement costs and unused sick-day payouts.
A look through the archives of The Star, including prior years’ legal notices, reveals that Springs did seek, and receive, voter approval to establish a repair reserve in May 2007 in the amount of $100,000. Similar archives indicate that in May 2011, voters approved a new repair reserve in the amount of $150,000 — which the district still surpassed in more recent years. As of June 30 this year, Springs had $695,769 in its repair reserve account. In August, it spent $123,759 to replace deteriorated student lockers and take down several trees on campus that posed a safety risk, leaving about $572,000 in the account.
Typically, the benefit of having a robust repair reserve is that the district can use money already set aside for unanticipated expenses, rather than dipping into the new year’s tax revenue. Nancy Carney, the district superintendent, compared it to a homeowner’s own savings account. “Just like in your home, it’s better to repair and maintain than borrow money in future years because you didn’t maintain it,” she said.
In a Sept. 10 letter to the school board, Mr. Buda directly questioned the validity of the current repair reserve. Shortly after, Ms. Carney told The Star that “the laws were different then” — meaning in those earlier years — “and don’t seem to be as specific as they are today.”
“We feel like we’re doing everything that benefits the taxpayers and trying to be upfront about everything we’re doing,” she added. “All we want to do is the right thing by the taxpayers, the community, and obviously all our students, and make sure we keep the building in good repair.”
As it rescinded its Sept. 10 resolution this week, the school board also announced its intention to seek voter permission, on the May 2025 school budget ballot, to establish a new repair reserve. Erik Fredrickson, the board president, said this move was made “for the avoidance of doubt, so we have a record of this repair reserve.” The district also decided to leave the $342,000 in its general operating fund until May, at which point it hopes voters will authorize the new repair reserve.
Another issue, raised this week by an auditor charged with “closing the books” on the 2023-24 fiscal year, is that leaving this money in the general fund puts Springs above the threshold that state law says it can hold as a surplus. Whereas the legal limit is 4 percent of the new school year’s budget, Springs now stands at 4.9 percent, according to Jeffrey Jones of the EFPR Group. There are no formal penalties or sanctions, however, for districts that exceed this limit. This time last year, Springs was at 2.5 percent — a dangerously low number that put the district in an “at risk” financial standing with the state.
But Mr. Buda then asserted that for this reason, the money should instead be used to offset the tax-levy increase Springs is imposing on taxpayers following their approval, this past May, of an over-the-tax-cap increase of 10.8 percent.
Springs officials have said that doing so would represent an average savings of about $14 to each household. It “would not make a tremendous difference in the tax rate,” Mr. Buda acknowledged, “but it would be a sign of good faith and a token effort to respond to the fact that you have a lot of money left over. . . . Rather than sit on it illegally, unlawfully, why don’t you give it back to your taxpayers?” He suggested the district was attempting to further enrich an already well-funded reserve account.
Jonathan LePage, the Springs district treasurer, responded to Mr. Buda: “I don’t think the goal is to make the repair reserve more robust,” he said. Rather, he continued, it was to give the reserve “more definition. There was vagueness in what its intentions were. Going forward, with the buildings and grounds committee, we’ll develop a five-year capital plan and use those funds to make improvements that won’t have a direct impact on taxpayers.”
Apart from the surplus issue, Mr. Jones, the auditor, said Springs is now back in good financial standing with no “material weaknesses” and no “significant deficiencies or noncompliance findings.” The auditor had directed the district to address a handful of minor logistical issues in a “corrective action plan,” a process that Mr. LePage said this week is already under way.
Also on Tuesday, the board accepted the resignations of three teaching assistants, positions that the school has struggled to fill in recent years. It also accepted the resignation of its account clerk, and then signed a contract with the East Hampton School District allowing East Hampton’s account clerk to assist Springs with those tasks.
Dylan Cucci, a popular substitute teacher in Springs since 2015, was appointed to a full-time special-education teaching job and volleyball coaching position. There was applause as the board voted to hire him. “Dylan is very well loved throughout the Springs community,” Ms. Carney said. “We’re very excited that he’s part of our staff going forward.”
The board also formally thanked the East Hampton Town Highway Department for fixing potholes near the prekindergarten building “in such a timely manner,” and it thanked Martha Lee, a member of the Springs PTA, for volunteering her time to maintain the flower pots around campus.
Ms. Carney also reported that year-over-year enrollment has dipped slightly, by six students, in the elementary and junior high grades, while at the same time rising by six students at the high school level. Prekindergarten through eighth grade enrollment stands at 691, while high school enrollment — where Springs pays tuition for each student — stands at 360.
“Hopefully we’re going to stay really constant going forward,” Ms. Carney said.