2010-2011 Budget
Land Purchase Budget
Questions & Answers
April 22, 2010
Are the 36 acres on the land proposition being taken through eminent domain?
No. The purchase price was mutually agreed upon by both Mohonasen officials and the landowners through a negotiation process.
Voters are being asked to decide on a proposition allowing the district to purchase 36 acres adjacent to the HS/MS campus. According to the agreement between the district and the landowners, the owners will gift $270,000 worth of the property to Mohonasen. The remainder will be purchased by the district for $1.425 million.
Will the land purchase affect the 2010-2011 budget?
No. If the land purchase proposition is approved, the funding for the 36 acres would come from the district’s capital reserve fund. Therefore, the purchase would have no impact on the 2010-2011 tax levy.
What is a capital reserve fund?
A reserve fund is like a special savings account that allows school district officials to budget for anticipated expenses over a period of years. There are 13 types of reserves offered under state law, such as tax certiorari reserves, unemployment insurance reserves, retirement contribution reserves and capital reserves. Voter approval is required to establish a reserve or to use the money in a reserve.
On May 15, 2001, Mohonasen voters approved a proposition for the creation of a capital reserve fund to strategically finance a capital project or land purchase without having to borrow money or raise school taxes. Mohonasen’s capital reserve fund currently contains $2,264,000.
Can Mohonasen officials use the capital reserve money to restore budget cuts?
No. By law, these funds must first be used to purchase land or fund capital projects. Any unused portion of the reserve must then be applied to any outstanding debt the district has. Only when a district has all of its debt paid off, can officials use the money to reduce the tax levy.
Mohonasen currently has $22 million in outstanding debt, which is fairly typical for a district in New York State. Therefore, officials could not use the remaining capital reserve money to close the budget gap.
Are district officials still planning a capital project? Will these plans affect the budget?
The Mohonasen Board of Education is currently making plans for a capital project to go before voters next fall. However, the project will only be put before voters if the district is still eligible to receive 95 percent state building aid. Funding for the capital project MUST be approved by district voters through a referendum. Therefore, these plans will have no affect on the 2010-2011 district budget.
