I have owned a home in East Marion since 1990 and moved here full time when I retired in 1997. My background was in corporate financial research and investment management. After the January East Marion Community Association meeting, I looked at the financial and operating results of the Oysterponds School District for the last several years. The following is a brief summary of my findings:

• In addition to general inflation, the two primary factors driving the increase in School District operating costs were a Government Mandate, and School Board Governance:

• Government Mandate: The “No Child Left Behind Act of 2001” resulted in a significant increase in the cost of educating a special-ed child. Approximately 19% of Oysterponds students are currently classified special-ed; this number is expected to increase next year.

• School Board Governance: The current financial problem appears to have started during the halcyon days, 2005-2007, when the economic boom created a wealth effect and atmosphere that made spending and expansion irresistible to both the new Superintendent and the weak School Board.

• In the 4 years, 2004-2008, total School District operating expenses increased almost $2.0 million, or 53%; property taxes increased 49%. There appeared to be no urgency on the part of the School Board to control expenses.

• In the fiscal year ended June 30, 2008, School District revenues were up 6%; expenses increased 11%. This resulted in an operating loss of more than $300,000. Expense controls continued to be non existent.

• The School District issues short term tax anticipation notes to help fund its working capital requirements. The issuance of these notes has increased 350%, from $400,000 in 2005, to $1,800,000 in 2008, another consequence of rising budget expenditures and weak financial management.

• In the 2008 audited Financial Statements, the accountants referred to a number of deficiencies which generally dealt with poor financial governance and the lack of controls, some of which have existed since 2005.

• Oysterponds has a total of approximately 201 students in Orient and Greenport, 38, or approximately 19%, of whom have special-ed requirements. According to the Seneca Falls Report, the average annual cost for each of the 18 special-ed students in Orient is approximately $139,000 compared to $53,000 in Greenport. The average annual cost for all students in Orient is approximately $31,000, compared to $11,000 in Greenport.

• The Orient School has a total of 104 students on campus and 17 full time teachers. The staff including teachers totals 32, of whom 3 are teacher’s aids in Greenport. The full time teacher/student ratio in the Orient School is 1 teacher to each 6.1 students. In my opinion, the school facility and staff are underutilized.

• In my opinion, the School Board has done a very poor job in managing the financial affairs of the School District. Under a status quo scenario, the long term outlook for the Oysterponds School District is grim. If operating costs are not capped and a long term plan developed, and apparently one does not currently exist, we can only guess how high our school taxes will go from this already intolerable level.

The School Board can no longer take the course of least resistance and continue to pass cost increases along to the taxpayers. Positive action must be taken on both a short and long term basis.

• Short Term: Present the taxpayers with an austere 2009-2010 operating budget. The Advisory Budget Committee’s initial budget proposal calls for a 10% spending cut - an excellent start. It is a real opportunity to stave off total financial disaster and start rebuilding Oysterponds financial credibility. This is the most important Budget in recent School Board history. The 10% proposed reduction in the Budget must be made mandatory and approved.

• Long Term: Develop a long term strategic and financial plan. It will require the cooperation of School Board members and the Oysterponds community who pays the freight. The following issues, among others, must be addressed: financial management, the budget process, school board governance, special-ed, legacy costs, and the underutilization of a first class facility and staff. The School Board and community must come together to develop, approve and put into effect a long term strategic and financial plan.

To conclude, our country is in a deep recession and it’s getting worse. We’re no longer in a business as usual environment. The School Board must take positive action today on these two initiatives.