Subscribe Feed (RSS)Webinar Questions
October 11th, 2008 by Blog Administrator | Filed under Webinar Questions.
Participants in NYSASBO’s October 7th webinar on the economic crisis had a number of questions for the panelists. Unfortunately, time did not permit every question to be answered. The following are the unanswered questions submitted using the webinar chat feature. If you have any insight into any of these questions, please add a comment. Working together, we can help school districts weather this “perfect storm.”
- What are the market conditions for lease purchases (such as Energy Performance Contracts) as distinct from Bonds/BANS/TANS?
- How often would you recommend that a school district get an updated collateral statement? Is monthly good enough?
- Is the Office of the State Comptroller (or the legislature) considering updating the list of permitted collateral? Some policies and bank custodial agreements point to the law and some “shaky” items are permitted by law (e.g. mortgage backed securities) and banks are using them. Our district has “FNMA Pass-Thrus.”
- How can a school district determine if banks have pledged the same collateral to many school districts?
- Any comments about purchasing short term treasuries as a way to ensure liquidity?
- Is “Bankrate.com Safe & Sound Ratings” a reliable source of information?
- What is the status of the EXCEL Funds? Are cuts possible?
- Any comments on the consolidation of small school districts?
- Any comments on the pending property tax cap legislation in relation to the double whammy of higher borrowing costs along with possible state aid cuts?
- When will school districts realistically have an idea if there will be mid-year cuts?
- Will there be any 2008-2009 current year reductions or reimbursement slowdowns in awarded grants?
- Recent audits of Employee Liability Reserve Funds have limited to accrued sick time. If a district is over, can it be used directly to buy down the levy now? Transfer to other reserves?
Comment to Question #1: Currently we are experiencing a stable market for EPC Leases. While it is true we are experiencing a decrease in the number of bidders and rates in general have risen over the last month, we have not run into a situation where we have had to cancel or postpone any sales nor reject any bids. Generally, the nature of the projects that are being funded are viewed by the market as normal and necessary items in a school districts capital program and thus are a relatively safe investment in these volatile times.
Comment to Question #7: Although it is the State’s perogative to change the funding at any time, we don’t feel that EXCEL aid will be cut. Since EXCEL funding is not an item that is directly paid out of the current State budget, but rather delegated to the Dormitory of the State of New York, it could be argued that to cut EXCEL funding would have little if any effect on the current State financial woes.
#8 The recommendation for school consolidations was included in the report of the Commission on Local Government Efficiency and Effectiveness (LGEC) and endorsed by the Commission on Property Tax Relief. There were no specifics on the criteria for considering consolidations and the concept has taken a backseat to proposals for sharing services to achieve cost savings. The likely reason? – the State’s reticence to force it’s will on controversial and highly charged local political issues. The LGEC did propose expanding the powers of the Commissioner to force consolidations. This, however, would also require action by the State Legislature.
#10 The $64,000 question. State politicians in both parties have acknowledged that nothing is off the table in the next round of State budge cuts on November 18th. Given that school aid was not touched in the August cuts, the speculation for a mid-year aid cut is increasing. But leaders in both the Senate (Skelos) and Assembly (Silver) have stated that a mid-year school aid cut should be avoided if possible and noted the negative impact such a cut would have on districts and local taxes. Coincidentally, both leaders were State Legislators the last time there was a mid-year cut. Those of their ilk don’t want to repeat it. We won’t know for sure until the Legislature returns on November 18th. But keep in touch with your local Legislator – if there are serious, they’ll likely reach out to school districts between election day and the 18th to gauge the local impact.
Thought I would try out the blog to see how it works. Has anyone provided a newsletter or public notice to inform your taxpayers of the measures your District has in place to safeguard the taxpayers funds (other than restating what OSC said)? And are you willing to share with us lazy, why reinvent the wheel people?
Thank you.
Tom Gustainis