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NRG woes still trouble Dunkirk school budget

OBSERVER Photo by Greg Fox Dunkirk Schools Business Administrator William Thiel discusses some of the challenges facing the district, including a reduced NRG PILOT payment.

It’s shaping up to be another difficult budget year for the Dunkirk City School District.

Business Administrator William Thiel presented a preliminary draft of the 2017-18 budget during Thursday’s board of education meeting. He noted the district anticipates additional revenue loss due to the restructured payment in lieu of taxes agreement with NRG Energy Inc.

The PILOT revenue is expected to come in at $200,000 or less, down from $613,000. In addition, New York state transition aid to help fill in the revenue loss from the mothballed power plant will step down to 65 percent of loss incurred, down from 80 percent.

All in all, figures for NRG-related revenues currently stand at $2.67 million, down from $3.33 million for the current school year (when transition aid began being applied) and $4.01 million for the previous year.

“That’s a huge financial loss,” Thiel remarked.

The current projection for the district’s state-imposed tax cap is 8.31 percent, meaning the tax levy cannot increase by more than that percentage without a supermajority of voters signing off on it. In order to keep the local share flat and offset the falling NRG PILOT contribution, an estimated 4.33 percent increase in the tax levy would be carried.

That increase is included in the latest budget draft, bringing the total levy to $9.96 million.

“We’re still underneath the levy limit, but higher than we’ve historically gone,” Thiel said.

Thiel described Gov. Andrew Cuomo’s state aid runs as disappointing. Dunkirk is slated to receive a $354,000 (1.8 percent) increase in its foundation aid, which constitutes funds to be used at the district’s discretion.

“(That) really doesn’t get the job done for us,” Thiel pointed out. “We’ve let the appropriate people know that that’s not really a good number for us.”

To balance the budget, the district may have to tap into rainy-day funding; as of now, the district is planning on using $2.3 million in its reserves.

“That is the way the future will look until the revenue side sorts itself out, and by saying that, I mean NRG or state aid or some combination thereof,” Thiel said.

As for the expense side of the budget, initial requests include the addition of 11 teaching positions and 11 support positions. Thiel mentioned most of these additions support major subgroups — such as English as a second language and special education students — while some are required by regulations.

Employer contributions to the Teachers’ Retirement System and the Employees’ Retirement System are projected to decrease, but healthcare benefits are up.

The budget currently stands at $42,479,379, an increase of $1,865,318 (4.59 percent). After subtracting debt service and transfers, the budget comes in at $38,341,140, an increase of $1,364,963 (3.69 percent).

Email: gfox@observertoday.com. Twitter: @gfoxnews

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