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MONTROSE, N.Y. A group formed by Hendrick Hudson School District taxpayers is contending the district did not properly inform the public about key matters regarding its financial health. In a letter sent to district officials and members of the board of education, the taxpayers group said it believes the downgrades were the result of financial policies put in place by district officials.
The letter describes the districts most recent Moodys downgrade, in November 2011, from Aa3 to A1, and a downgrade they say the district did not properly publicize, from Aa2 to Aa3 in July 2010. The taxpayers group contends that the original downgrade, in July, was never addressed by the district.
Rick McCormack, district spokesperson, said it is not district policy to address third party announcements such as Moodys downgrades.
After the districts most recent downgrade, officials published a reaction to the November downgrade, saying it was the result of forces outside the districts control, citing a weak economy and poor housing market.
The committee does not agree with districts statement in its press release; rather, we believe that the districts current (and weakened) financial situation is the result of decisions made by the district and subject to the districts control, the letter from the taxpayers group says.
A Moodys release explaining the July 2010 downgrade said, Moodys expects the districts financial position will continue to narrow, given a history of structural imbalance related to the use of tax stabilization fund. The release names five consecutive years of operating deficits, and says, the district issued its first tax anticipation note since fiscal 2005 in fiscal 2010 to cover cash flow shortfalls and plans to issue another $3.6 million note in fiscal 2011.
Tax anticipation notes are used by local and state governments to borrow against anticipated tax revenue to the coming fiscal year. The loans are generally short term, less than one calendar year.
A meeting of the school board about the districts operating budget revealed the district will have to cut $2.7 million from the operating budget to come in under the 2 percent tax levy cap, at least partially in staff cuts.
These facts appear to be the principal drivers dictating your tactical solution to this years budget problems that the committee believes is the functional equivalent of cutting the bone and leaving the fat, the letter says.
At least one contributor to the letter, Robert Tinari, a financial services professional, balked when the school board authorized a 10-year bond to pay for $407,591 at a recent meeting. Bonds are generally reserved for capital improvements and Tinari asked the board if Moodys wouldnt look unfavorably upon issuing a bond to pay for a current expense.
At the same meeting, school district officials said they scheduled a meeting with Moodys in upcoming months, to discuss the districts financial health in terms of bond ratings. The latest downgrade in November increased the districts borrowing cost by 0.1 percent, according to McCormack.
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