Frequently Asked Questions

Table of Contents (click questions to view responses)

1. Did the school district save $17 million from the closures of three school buildings? (uploaded June 4, 2026)
2. Did the City of Mount Vernon complete its payment of the back taxes agreement for the 2018-2019 and 2019-2020 school years? (uploaded June 4, 2026)
3. Was the Board given advance notice of the April 7, 2026, agenda item to suspend the work session rules and of the $26 million transfer package? (uploaded June 10, 2026)
4. Does the District have a $14.8 million net positive position? (uploaded June 10, 2026)
5. Will the District exceed the 4% fund balance cap at the end of the school year? (uploaded June 10, 2026)
6. Why is there a 2nd vote on the budget? (uploaded June 10, 2026)
7. What happens when the 2nd budget vote results in a “No” vote? (uploaded June 10, 2026)
8. How does the contingency budget impact the Mount Vernon community? (uploaded June 10, 2026)
9. Does the City of Mount Vernon still owe back taxes to the Mount Vernon City School District? (uploaded June 16, 2026)
10. Is the District in a stronger cash position? (uploaded June 16, 2026)
11. What are the outstanding costs that could affect the District’s end-of-year Fund Balance? (uploaded June 16, 2026)
12. Why must the District maintain a significant cash balance? (uploaded June 16, 2026)
13. Does a better cash position mean the District is in great financial condition? (uploaded June 16, 2026)
14. What is the District’s current bond rating? (uploaded June 16, 2026)
15. Why did the District propose a 1.99% tax levy increase for the budget vote? (uploaded June 16, 2026)
16. Why did the District propose a 1.5% tax levy increase for the budget re-vote? (uploaded June 16, 2026)
17. Why was a tax levy increase necessary if the District is in a better cash position? (uploaded June 16, 2026)
18. Can the School District realize more savings or revenue from the sale or land lease of the closed buildings? (uploaded June 16, 2026)

Q1: Did the school district save $17 million from the closures of three school buildings?

No, the District did not realize $17 million in actual, recurring savings from closing the three school buildings. 

The $17 million figure reflected the total cost of operating those schools prior to closure, including all staffing and operating expenses. However, when a school closes, those costs do not simply disappear. Students are reassigned to other buildings, and most instructional staff move with them. As a result, a large portion of those costs remains in the system. 

Using 2024–2025 budget data, the District completed a detailed analysis to estimate what costs could realistically be reduced. This analysis shows that approximately $6.8 million in annual savings is a reasonable and supportable estimate, not $17 million. 

These savings come from three primary areas: 

• Building operations (such as utilities, custodial, and maintenance services) were reduced, though some ongoing costs remain for security, insurance, and upkeep. This results in approximately $295,000 in savings. 
• Building-specific personnel (such as administrators and clerical staff assigned directly to those buildings) represent costs that are largely eliminated when a building closes. This results in approximately $3.9 million in savings. 
• Enrollment-based personnel (such as teachers and instructional staff) are largely retained because students still need to be educated. Some limited efficiencies are achieved through scheduling and attrition, resulting in approximately $2.6 million in savings. 

Together, these categories total an estimated $6.8 million in recurring annual savings, which reflects how school systems actually operate and avoids overstating financial impact. The $6.8 million offsets the $5.7 million deficit in 2024-2025, when the District had recorded actual expenditures of $276,981,222 against an adopted budget of $271,266,317. 

There has also been no open discussion about whether additional savings would materialize over a three-year period or through the potential sale or lease of the closed buildings. While some incremental efficiencies may occur over time, the majority of achievable savings are already reflected in the current estimate and are not expected to approach $17 million.  

The District also recognizes there has been confusion in the community regarding how the original $17 million estimate was communicated. That estimate was developed under prior leadership, and members of the current administration were not part of that process. 

That said, the current administration accepts responsibility for providing accurate, transparent, and data-driven information. We understand that differences between earlier projections and current findings may have contributed to frustration or confusion. Our approach is to rely on verifiable budget data, apply realistic assumptions, and clearly distinguish between total costs and actual savings. 

In summary: 

• The District did not save $17 million 

• That figure reflected total prior costs, not actual savings 

• Realistic annual savings are approximately $6.8 million 

• Most costs remain because students and staff continue in other schools 

• The current administration is committed to clear, honest financial reporting  

Click to return to Table of Contents

Q2: Did the City of Mount Vernon complete its payment of the back taxes agreement for the 2018-2019 and 2019-2020 school years?

Yes. The City of Mount Vernon fully paid its obligations for the 2018–2019 and 2019–2020 school years. 

The repayment was governed by two legally binding agreements that together resolved the full amount owed. A Stipulation of Partial Settlement dated September 26, 2023 established a base tax liability of $11,734,627, and a Stipulation of Settlement as to Interest dated April 30, 2024 established interest of $2,112,233. 

To make this easy to understand: 

• The City owed $11,734,627 in back taxes 

• The City owed $2,112,233 in interest 

• The total obligation of $13,846,860 was paid in full 

The agreements set up a structured repayment plan: 

• The City made $3,500,000 in initial payments toward the initial total balance 

• The remaining base amount was paid in monthly installments of at least $350,000 

• Beginning in May 2024, the City added $100,000 per month in interest payments, bringing most monthly payments to $450,000 

• The agreements required full repayment by September 30, 2025, after which the matter would be fully settled and discontinued for those years and would require a new agreement 

Payments were made from June 2023 through October 2025. After the final payment was received, the District Treasurer performed a full reconciliation of all deposits to confirm that every required dollar of both principal and interest was paid in accordance with the agreements. 

The reconciliation confirms that total payments exactly match the full amount required under the agreements. 

For the community, this means: 

• There is no remaining balance owed 
• All payments were verified through detailed financial reconciliation 
• The agreements have been fully satisfied and the matter resolved 

Bottom line, the City has paid the obligation in full, and the matter has been fully resolved in accordance with the settlement agreements. 

Click to return to Table of Contents

Q3: Was the Board given advance notice of the April 7, 2026, agenda item to suspend the work session rules and of the $26 million transfer package?

Yes. The April 7, 2026, Work Session included Agenda Item 10.5, which addressed the approval of general fund transfers. The full budget transfer package was sent to Board members on April 6, 2026, the day before the meeting, so they had time to review it in advance.  

The package contained detailed financial information about how funds would be adjusted. While the public agenda included a short description, the full details were provided in the attached document, not in the brief agenda summary. 

The package included the following: 

It is important to clarify that these were budget transfers (reallocations of existing funds), not new spending and not hidden funds. The $26.18 million does not represent extra money available to the District. Instead, it reflects planned adjustments moving funds from accounts with available balances to accounts that were overspent or projected to be overspent. 

In other words, the transfers were necessary to correct imbalances within the budget, not to create or conceal surplus funds. Without these adjustments, some accounts would continue to show negative balances, which would give an incomplete or misleading view of the District’s true financial position. 

The transfers did not increase or change the total overall budget. They simply ensured that spending aligned with how the budget was actually being used, producing a more accurate and transparent picture of the District’s finances. 

The Board voted to temporarily suspend its Work Session rules, which normally limit meetings to discussion only and do not allow formal action or voting. By doing so, the Board was able to act immediately and take formal votes to address negative account balances, make necessary budget adjustments, and bring the District’s financial records into alignment, ensuring a clear and accurate picture of its financial position.

This action did not violate policy or bypass proper procedures. It is an allowable, limited step used when timely decisions are necessary to maintain accurate financial reporting and responsible oversight.

The Board approved the transfer package unanimously at the April 7, 2026, Work Session. 

For additional transparency, the Treasurer later reviewed the results of these budget transfers at the April 28, 2026, Business Meeting (Agenda Item 3.3). This follow-up presentation included: 

• The line-by-line movement of funds from the District’s financial system 

• The updated appropriations report reflecting the final adjusted budget 

The final executed transfers totaled $25,640,623.76, which differs from the April 7 planned total. This difference reflects normal timing changes, as account balances can shift between planning, Board review and approval, and the actual execution of transfers.

Click to return to Table of Contents

Q4: Does the District have a $14.8 million net positive position?

No, the District does not have a $14.8 million net positive position. 

As of April 30, 2026, the appropriations report shows a Current Budget of $273.25 million, with $191.74 million in Paid Invoices, $66.70 million in Planned Spend, and $13.56 million in Available Budget. The $14.8 million figure is incorrect because the report does not include Requested Spend, which represents funds already committed through purchase requests but not yet reflected in Planned Spend. These commitments reduce what is truly available. To improve clarity, the District will include Requested Spend in future appropriations reports.  

The April appropriations report is a point in time snapshot, not a measure of year end results. The $13.56 million Available Budget will continue to decline as remaining payroll, benefits, and other costs are incurred in May and June. When considering Planned Spend, Requested Spend, and remaining obligations, the District’s financial position is largely committed. For example, the recent Mount Vernon City School District Federation of Teachers contract agreement will have an impact on this year’s budget. This is why neither $14.8 million nor $13.56 million represents a true net positive position for the year. 

Click to return to Table of Contents

Q5: Will the District exceed the 4% fund balance cap at the end of the school year?

New York State limits how much unrestricted savings (called unassigned fund balance) a school district can carry into the next year to 4% of the upcoming year’s budget. This allows districts to maintain a modest financial cushion but prevents holding excess funds beyond that level. 

The District began the year with an unassigned fund balance of $2,743,828, which is approximately 1.01% of the current year’s adopted budget of $272,206,615. 

As of the end of May, the District has an available budget balance of $10,398,985; however, significant remaining expenditures are still expected before year-end. After accounting for these costs, the District projects ending the year with an unassigned fund balance below $6 million. 

Under the proposed budget of $275,542,563, the 4% cap is: 

• $275,542,563×4%=$11,021,703

Under a contingent budget of $273,436,063, the 4% cap is: 

• $273,436,063×4%=$10,937,443

A projected fund balance below $6 million remains significantly under both limits, meaning the District is not expected to exceed the 4% cap under either scenario. 

In summary, the District began the year with relatively low reserves and is projected to remain safely within the State’s fund balance limits regardless of the budget outcome. 

Click to return to Table of Contents

 Q6: Why is there a 2nd vote on the budget? 

A second vote is required when the proposed school budget is not approved by voters on the first vote. 

By law, the Board of Education has two options after a failed vote: 

• Present the same budget again, or 

• Revise the budget and present an updated proposal 

The district chose to hold a second vote to give the community another opportunity to consider a budget that reflects feedback and adjustments made after the first vote. 

If the budget is not approved on the second vote, the district must adopt a contingency budget, and the budget cannot go back to voters again.

Click to return to Table of Contents

Q7: What happens if the 2nd budget vote results in a “No” vote?

If the budget is voted down a second time, the Board of Education must adopt a contingency budget for the next school year. 

Under a contingency budget: 

• The district’s tax levy is very limited, typically staying at or below last year’s level, with no increase allowed for things like inflation or other adjustments. 

• The district must make additional cuts to balance the budget. 

• Some non-essential spending is restricted, such as certain equipment purchases. 

The Board cannot present the budget to voters again. The contingency budget stays in place for the entire school year. 

Click to return to Table of Contents

Q8: How does the contingency budget impact the Mount Vernon community?

A contingency budget would have a significant impact on students, families, and the broader community because it requires the district to reduce spending and limit services. 

Under a contingency budget: 

• The district must reduce spending by approximately $2.8 million, resulting in program and service cuts 

• All athletic programs are proposed to be eliminated, even though they are allowed under the law  

• This includes modified, junior varsity, and varsity teams 

• Athletics are not legally required like classroom instruction, special education, or safety services 

• School facilities would no longer be free to the public, meaning programs like Saturday open swim at Mount Vernon High School would require full-cost payment or may not be available 

• Student programs would be reduced or eliminated, including:  

• After-school programs 

• Summer programs 

• Gifted & Talented program 

• Career & Technical Education (CTE) expansion would be paused 

• The district would implement a 5% reduction in staffing, affecting student support and services 

The proposed contingency plan focuses on protecting classroom instruction, required student services, safety, and legal obligations. Because there are limited areas where reductions can be made, programs like athletics may be reduced to help close the budget gap. 

Final decisions would be made by the Board of Education based on legal requirements, current cost structures, and district priorities. 

Click to return to Table of Contents

Q9. Does the City of Mount Vernon still owe back taxes to the Mount Vernon City School District?

The City of Mount Vernon has fully satisfied its back-tax obligations to the Mount Vernon City School District for the 2018-2019 and 2019-2020 school years. 

Following those completed settlements, the City and District have been actively reconciling tax collections for the 2020-2021 and 2021-2022 school years. That reconciliation is now complete, and both parties are finalizing an agreement under which the City will resume back-tax payments beginning July 1, 2026. 

The reconciliation of those school years resulted in the mutually agreed upon outstanding tax and fees due from the City to the District: 

The final agreement will also include additional interest charges on these balances and monthly penalties for non-payment. The District expects the agreement to be finalized in the coming days. 

The status of recent school years is as follows: 

When the current administration joined the District, there were no clearly documented processes for tax collection. As part of recent negotiations, the District has worked with the City to establish defined, transparent procedures governing the tax collection relationship. 

• The District collects current-year school taxes from property owners. 

• The Board of Education certifies unpaid taxes (outstanding warrants) immediately after the school year. 

• The City of Mount Vernon assumes responsibility for collecting those unpaid taxes for two years, as required by law. 

• At the end of the two-year collection period, the City and the District reconcile the outstanding unpaid taxes. 

• Following reconciliation, the City makes the District whole for the agreed upon collected and unpaid balances. 

During this two-year period, the City functions as a collections agent with enforcement authority that the District does not have. Only the taxes that are collected (or later guaranteed through settlement) become owed to the District by the City. Prior to that transfer, the legal obligation rests with the individual property owner, not the City. 

Under the current process, the District continued to receive payments during the two-year collection period. As a result, outstanding unpaid balances can change over time, requiring ongoing reconciliation between the City and the District.

Click to return to Table of Contents

Q10: Is the District in a stronger cash position?

Yes, the District is in a stronger cash position, but it is still recovering from the depletion of its fund balance and reserves and remains at the top of the NYSED fiscal stress list. 

Recent financial reports show cash balances are significantly higher than last year (e.g., $66.4 million as of April 30, 2026 vs. $45.6 million last year), and the District has maintained sufficient liquidity to meet payroll, debt service, and vendor obligations. 

This improvement reflects enhanced financial oversight and management practices implemented by the new Superintendent and State Monitor since July 2025, including stronger cash flow monitoring and expenditure controls.

This improvement does not mean the District is financially secure. 

• The District still needs to rebuild its fund balance and reserves, which were previously depleted following years of 0% tax levy increases and structurally unbalanced budgets. 
• Fund balance and reserves are critical because they: 
  • Provide a financial cushion for unexpected costs 

  • Stabilize cash flow throughout the year

  • Reduce reliance on short-term borrowing 

  • Support long-term financial sustainability and creditworthiness 

• The District continues to face significant financial obligations, including: 

  • Repayment of the Tax Anticipation Note (TAN) 

  • Staff compensation costs, including new collective bargaining obligations 

  • Outstanding and unexpected prior-year expenses still being identified and addressed 

While cash flow has improved and the District can meet its immediate obligations, rebuilding fund balance and reserves, and managing ongoing liabilities, remains essential to achieving long-term fiscal health.

Click to return to Table of Contents

Q11: What are the outstanding costs that could affect the District’s end-of-year Fund Balance?

The District faces several major costs that could reduce its end of year fund balance: 

• The District must repay a $17 million Tax Anticipation Note by June 30, 2026. This will require a significant use of current year funds. 
• The new agreement with the Mount Vernon Federation of Teachers will increase compensation, including salaries and related expenses. 
• A large June payroll obligation, often called a balloon payment, is due for 11 month employees and creates a spike in spending at the end of the year. 
• Summer programs still need to be funded, adding to overall expenditures. 
• The District continues to receive unpaid invoices from prior years, which must now be paid with current funds. 

In addition, several District’s reserves have been completely depleted over the past ten years due to seven years of no tax levy increase and multiple years of operating over budget. Without reserves, the District has little flexibility to absorb unexpected costs. Moving forward, the District will need to rebuild reserves, including those needed for self-insurance claims, since the District is self-insured. 

These combined factors place significant pressure on the end of year fund balance and require careful financial management. 

Click to return to Table of Contents

Q12: Why must the District maintain a significant cash balance? 

The District must maintain a significant cash balance because its expenses do not align evenly with when revenues are received, creating periods where available cash is not sufficient to cover costs. A clear example is seen in the most recent cash flow report. In November, the District had only about $10.5 million in operating cash, but monthly expenses reached approximately $26.7 million in December. This shortfall required the District to issue a $17 million Tax Anticipation Note (TAN) to ensure that payroll, vendors, and other obligations could be paid on time. 

The TAN provided a temporary boost to the District’s cash position, which is why cash balances appeared stronger from January through May as property tax collections and State Aid were received. However, this improvement is temporary because the TAN must be repaid in full plus interest by June 30, 2026, using current cash resources. 

Cash flow pressures will continue into the next fiscal year. Based on current projections, the District is expected to end June with about $18.4 million in operating cash, while July expenses in 2025 were $20.6 million. This indicates that even at the start of the new fiscal year, expected costs may exceed available cash, creating ongoing liquidity pressure.  

Maintaining a strong cash balance is essential to avoid these shortfalls, reduce reliance on short term borrowing, and ensure that payroll, debt service, and vendor payments can be made without disruption. It also provides the flexibility needed to manage seasonal revenue patterns, unexpected expenses, and large year end obligations, all of which are critical to maintaining the District’s financial stability.

Click to return to Table of Contents

Q13: Does a better cash position mean the District is in great financial condition?

A stronger cash position is a positive sign, but it does not by itself mean the District is in great financial condition. 

Cash reflects how much money is on hand at a specific point in time and is often influenced by the timing of when revenues are received and when expenses are paid. For example, cash may appear high shortly after tax collections or state aid payments, but that does not mean those funds are available to support ongoing operations throughout the year. 

In addition, higher cash levels can result from delayed spending, one time revenues, or borrowing, none of which necessarily improve the District’s long term financial outlook. Some cash balances may also be restricted and cannot be used for general purposes. 

A full evaluation of financial condition requires looking beyond cash to factors such as fund balance, recurring revenues versus expenditures, and long term obligations. 

In summary, a better cash position improves short term liquidity, but it does not on its own indicate that the District is in strong overall financial health. 

Click to return to Table of Contents

Q14: What is the District’s current bond rating?

The Mount Vernon City School District does not currently have an active bond rating. 

In recent years, the District’s credit ratings were downgraded and ultimately withdrawn by the major rating agencies. In April 2023, S&P lowered the District’s general obligation bond rating to BBB+ with a negative outlook, and Moody’s downgraded the District to Baa2.  

In 2024, both S&P and Moody’s withdrew their ratings after the District did not provide required financial information in a timely manner. 

The current administration is actively engaging with major rating agencies and working to provide updated financial information, strengthen financial management practices, and position the District to restore its bond rating. 

Until a rating is reinstated, the District may face higher borrowing costs and more limited access to the capital markets. 

Click to return to Table of Contents

Q15:  Why did the District propose a 1.99% tax levy increase for the budget vote? 

The proposed 1.99% tax levy increase reflects the District’s effort to balance maintaining educational programs and services while remaining mindful of the impact on taxpayers. 

The levy was set below the New York State property tax cap, helping to limit the burden on residents while still generating needed revenue to support District operations. A modest increase allows the District to keep pace with rising costs such as salaries, benefits, transportation, and contractual obligations. 

In addition, the District must begin rebuilding its fund balance and reserves after several years of financial strain. The tax levy increase remained at 0% in 7 of the last 10 years, and budgets were often not structurally balanced. For example, in the 2024-2025 fiscal year, spending exceeded the adopted budget by approximately $5.7 million, while some invoices remained unpaid at year end. 

The District also needs to strengthen financial safeguards in key areas. For example, as a self-insured entity, it is standard practice to maintain reserves to cover unexpected claims. Rebuilding these reserves is critical to ensuring the District can manage risk and avoid unplanned financial pressures. 

The District is also working to reduce reliance on one-time revenues and establish a more stable base of recurring funding to support ongoing expenses. 

The 1.99% tax levy increase represents a measured and responsible approach to stabilizing the District’s finances, rebuilding reserves, and supporting students while limiting the impact on taxpayers.

Click to return to Table of Contents

Q16: Why did the District propose a 1.5% tax levy increase for the budget re-vote?

The proposed 1.5% tax levy increase for the budget re-vote reflects updated revenue information, revised cost assumptions, and a commitment to maintaining educational programs while reducing the impact on taxpayers. 

After the first budget vote, the State budget was finalized and the District received higher State Aid than expected. This additional funding allowed the District to lower its reliance on the tax levy. The District also identified additional savings through a more aggressive approach to certain costs, including anticipated reductions in Charter School tuition related to bussing changes and process improvements, as well as reduced overtime. 

While this approach introduces a higher level of risk because some savings depend on future conditions, the District plans to mitigate that risk through stronger financial oversight and tighter spending controls throughout the year. 

Importantly, the revised budget safeguards planned instructional improvements and protects the quality of education for students. It also provides more flexibility than a contingency budget, allowing the Superintendent to make strategic decisions, respond to rising costs, and improve services as needed. 

Click to return to Table of Contents

Q17: Why was a tax levy increase necessary if the District is in a better cash position?

A stronger cash position does not eliminate the need for a tax levy increase because cash reflects timing, while the tax levy supports long term financial stability. 

The District’s improved cash position is largely the result of operational and financial management improvements implemented by the Superintendent and State Monitor since July 2025. These actions have strengthened cash flow and oversight, even though the District began the year more than $1 million over the adopted budget due to costs that were not properly allocated in the prior year, before their arrival. 

However, cash on hand at a given point in time does not mean the District has sufficient recurring revenue to support ongoing expenses. The District continues to face rising costs and must address underlying structural imbalances that developed over several years of limited tax levy growth and the use of one-time solutions, such as drawing from the fund balance (equivalent of savings). 

In addition, the District needs to rebuild fund balance and reserves, including setting aside appropriate funding for areas such as self-insurance, where reserves are necessary to manage unexpected claims and reduce financial risk. 

A modest tax levy increase is essential to provide stable, recurring revenue that supports ongoing operations, restores financial health, and reduces the risk of future deficits.

Click to return to Table of Contents

Q18: Can the School District realize more savings or revenue from the sale or land lease of the closed buildings? 

Possibly, but only after the District completes the required steps that protect taxpayers and follow State rules. 

The buildings were closed quickly in 2025 to deal with a major financial shortfall. Because of the speed of those decisions, the previous administration did not leave a long‑term plan for what to do with the buildings. The current Board and Administration are now reviewing all options. This work must follow the State Education Department’s rules for selling or transferring school buildings. These rules are explained here: https://stateaid.nysed.gov/build/html_docs/aid_on_sale_of_building_memo.htm 

Before the District can sell or lease any building, several important questions must be answered: 

• Who owns the buildings and who receives the money from a sale. City School Districts have unique rules about property ownership, so this must be confirmed. 
• What the buildings are worth. Appraisals, zoning checks, and market studies are needed to understand the true value. 
• How a sale or lease would affect existing debt. 
  • The District still has capital bonds tied to these buildings. Selling a building may affect how those bonds are paid back. 
  • The District also has an 18‑year Energy Performance Contract with Honeywell. Changing how a building is used may require changes to that contract. 
• Whether the buildings are still needed for students. For example, if Lincoln cannot be repaired or used for a long time, Holmes may need to reopen or serve as swing space. Lincoln also has major repair needs, limited parking, and safety concerns inside and outside the building. 
• Whether there is real market interest. In the past, BOCES, a charter school, and a film studio all showed interest, but none of these moved forward due to timing or other issues. 

The District wants to get the best value for taxpayers, but it must move carefully. Selling or leasing a school building is a major financial and legal decision. Once appraisals, debt reviews, and other required steps are finished, the community will be updated at every stage.

Click to return to Table of Contents