Sachem budget draft shows $12.4 million shortfall on mandated costs; board weighs capital projects and potential offsets

District business officials told the board on Feb. 5 that a working draft of the 2025–26 general fund budget shows a material shortfall for required and mandated costs and that the board must decide which non‑mandated services to restore, fund with reserves, or remove.

The numbers at a glance

Michelle Sarakis (business official) presented a revenue summary showing proposed revenues of about $366,000,000 and budgeted appropriations of roughly $379,000,000, leaving an approximately $12,400,000 gap if the board limited the budget to required and mandated items only. That figure rose toward $16,000,000 when the presentation added optional programs such as athletics, clubs and field trips. The business office told the board it expects about $11,000,000 in unappropriated fund balance when the current fiscal year closes (the presentation noted that figure is subject to final accounting and a number of near‑term adjustments).

Major drivers and new items

Officials flagged several drivers of the increase: rising retirement costs (Teacher Retirement System and Employees’ Retirement System rates), sharply higher Medicare Part B reimbursements for retirees (presenters estimated roughly $5.7 million for the coming year), an increase in long‑term disability insurance after changes in how that plan is administered, and rising utility and contracted transportation costs. The presentation also noted that one‑time or variable revenues affected the district’s most recent surplus: a BOCES refund for the current year came in near $2.5 million, and interest revenue and other one‑time items helped close the current‑year gap but are not guaranteed.

E‑Rate and other revenue opportunities

The district said it is pursuing additional federal “E‑rate” reimbursements (category‑2 technology funding) and estimated those might provide about $1,000,000 for 2025–26 by reimbursing part of network and classroom hardware costs already budgeted.

Capital needs and tradeoffs

The business office and facilities staff presented a menu of proposed capital work that exceeded the $9,000,000 the district had scheduled to transfer to capital from the operating budget. The capital list includes roof replacements and parking‑lot/site repairs, electrical service work at district facilities (Tecumseh electrical service replacement was cited as urgent after repeated failures), pool HVAC work, and a possible purchase of two spare buses (presenters estimated about $140,000 each). Facilities staff emphasized that roofs with solar panels raise costs for replacement because panels must be removed, stored and reinstalled.

Mandates vs. discretionary programs

The presentation separated mandated and required expenditures (salaries, payroll‑related benefits, mandated special‑education costs, debt service) from discretionary costs (clubs, field trips, some athletics and nonessential supplies). Officials said the mandated line items already produce a baseline gap even before discretionary programs are considered. Board members repeatedly pressed administration to identify which discretionary items could be returned to the budget if the district used reserves or approved a levy increase, and which items could not be funded without a separate capital or bond vote.

Board concerns and next steps

Board members asked for clearer cost/impact estimates for changes that would require voter approval (for example, adjusting transportation mileage limits would require a public vote) and for granular, dollarized scenarios the board can review at the next budget meeting. Members also asked for a clearer exposition of the tradeoffs so the public can understand what would be lost if the board limits the tax levy to the cap and does not use reserves.

Michelle Sarakis summarized near‑term timing: the district will update BOCES figures after the BOCES portal opens, continue to refine salary and staff‑related lines as retirements and staffing changes are confirmed, and present a more complete budget package at an upcoming meeting (Feb. 26). The board directed administration to prepare scenarios showing: (a) required/must‑fund only, (b) required plus prioritized extra programs, and (c) impact of using specified reserves or a levy exclusion to smooth the near‑term levy impact.

Ending

District officials said the coming budget cycle will require explicit choices between preserving discretionary student programs (athletics, clubs and field trips) and limiting the tax levy or drawing on fund balance. The administration and board scheduled next budget work for Feb. 26 and said they will bring more granular options to the public in the next two weeks.