BOCES official says administrative budget will rise as retiree costs move in; districts face ~7.5% assessment increase

A BOCES official and co-chair presented a detailed review of the BOCES administrative budget to the Saranac Lake Central School District Board on April 9, saying recent audit guidance and statutory requirements led the cooperative to move legacy costs — especially retiree health insurance — fully into the administrative budget.

The presenter said that move raises the BOCES administrative budget by about $1.2 million, a roughly 44% year-over-year increase in the administrative budget line, but that the organization has scheduled offsetting program-side revenues so the net assessment to component school districts is projected at about a 7.5% increase (approximately $231,600). The presenter emphasized that the increase reflects legally required allocations rather than discretionary spending.

“...we are now going to move everything in there — it creates a massive increase — but we also schedule a massive offsetting revenue to almost zero that increase out,” the presenter said.

Key drivers and measures described in the presentation:

- Retiree health and legacy costs: The presenter said retiree health insurance is a major component of the administrative budget and that BOCES currently covers roughly 145 active employees and about 160 retirees, an imbalance that increases legacy-cost pressure until demographics shift.

- Health insurance inflation: The presenter and board members discussed a projected health-insurance increase of about 12% going into next year, which significantly affects the administrative budget because health insurance is the largest single line.

- Offsetting revenues and cross-contract fee: To reduce the assessment impact, BOCES plans to schedule offsetting revenues from program budgets and to assess a 6% administrative assessment on noncomponent (cross-contract) subscribers. The presenter estimated that cross-contract fees will generate a conservative $113,000 in the first year.

- New services and revenue generation: BOCES described expanding statewide services (an "On the Bus" transportation training program with more than 60 subscribing districts and expanded HR/labor-relations offerings). Those services bring nonlocal revenue but raise questions about how future retiree costs for those employees will be allocated; the 6% cross-contract fee is intended to address that.

- Business office audit and cash flow: An external audit prompted staffing changes to improve the shared business office. The presenter said BOCES paid over $160,000 in interest in 2023–24 to manage cash-flow gaps caused by billing and late payments; BOCES now bills monthly on the 15th and is discussing a move to a 12-month billing cycle and possible late-payment penalties permitted by law to reduce borrowing costs.

- Capital fund concerns: The presenter noted a capital reserve currently funded at $400,000 per year was largely spent on a recent project and cautioned that estimates to replace roofs at two regional facilities are roughly $10 million over the next 10–15 years, creating long-term funding risk.

Board members asked questions about the calculation method for district shares (resident-weighted average daily attendance was discussed), the possibility of moving to different allocation models, and how insurance claims activity is affecting projections. The presenter said consultants recommended higher increases but that BOCES is trying to manage costs while complying with statutory requirements.

The presenter asked component districts to consider the administrative budget and reminded the board that the BOCES administrative budget and BOCES board member elections are on the April 29 ballot for component districts. No formal vote on the administrative budget occurred during this meeting.