Without a $500,000 influx from the Cooperstown Central School district's unappropriated fund balance, the tax levy for the 2006-2007 budget would be almost six percent higher than the current proposal requires, a school official said Tuesday.

CCS business manager Jim Collison said the district started the fiscal year with $1.288 million in the fund balance and had applied $500,000 of that to the 2005-2006 budget to reduce the tax levy. An equal amount will be used to reduce this year's tax levy increase by 5.7 percent and similar amounts are taken from the fund balance each year to stabilize the tax levy, he said.

"Every year we use a piece of it to reduce taxes," Collison said. "We're trying to use it to take some of the spikes and valleys out of the tax levy."

Final figures on the 2006-2007 budget were unavailable as of press time, but superintendent Mary Jo McPhail said she anticipated a tax levy increase between two to three percent. The current spending plan was unanimously approved by the school board April 5 and proposes a $15,083,809 budget, which is a 4.9 percent increase over the current spending plan, McPhail said.

Fund balance reserves come from unspent money remaining at the end of the fiscal year. Collison said it comes from both sides of the budget in the form of unanticipated revenue and unencumbered expenses.

He said under real property tax law, the district is allowed to hold in reserve an amount equal to two percent of their overall budget, or about $300,000 based on this year's proposed budget.

McPhail said a proposal has been before the state legislature for the last few years that would increase the limit - probably to five percent of the total budget - but it has continually been pushed to the backburner.

She said there's no standard policy for what is done with money leftover after the year's end and that the board discusses how to use it or set it aside in reserve on an annual basis.

"Our intent is to try and fiscally plan for unanticipated increases as well as guard against double-digit tax increases that would come from expenses beyond our control," she said.

Collison said the issue was brought to their attention in the district's annual audit conducted in the summer of 2005. He said they are following the auditor's advice and have been working to reduce the fund balance.

"We don't just keep building up a war chest," he said. "A year from now, it won't be an issue because it will be gone."

The fund balance issue was raised at a school board meeting April 5 by district resident Paul Clark. Clark questioned the board about how much money was currently in the fund balance and whether or not the school was breaking the law by having too much in reserve.

"Are we breaking the law?" Clark asked after Collison explained how much was in the fund balance.

"We are carrying more than state law presently allows," said superintendent Mary Jo McPhail.

"So we are breaking the law," Clark said.

"I would have to double-check whether it's a law or a regulation," McPhail said.

"So weFre not sure if we're breaking the law?" Clark asked. He questioned whether the violation could result in the school board's dismissal or other penalties for the district.

Board president Anthony Scalici said he appreciated Clark's comments and didn't want to dismiss the issue, but said the board couldn't get into a speculative dialogue during the public comment portion of the meeting. He said the board would respond in writing to Clark's questions if desired.

Clark said that would be fine.

"I just wanted to clarify it," he said. "That's a lot of money. That's why I'm asking that question. I just wondered about the legality of it."

Clark was not the only resident to question the district during the meeting. Michael Powers blasted the school board and administration at the meeting last Wednesday for what he called "unprofessional and unethical behavior" in general and specifically regarding a situation with one of his children who attends the school.

He said the board's response to his concerns failed to address the situation and contained erroneous information.

"We were offended and embarrassed by the way we were treated," Powers said. He asked the board for a written response to a series of questions he had, including what the school's mission statement was and how their response to his son's situation met the goals of the statement.

He said the capital project vote in December was more a vote of no-confidence than it was a vote on a project; that the school administration had an arrogant and condescending attitude and wasn't serving the community as it should and that the school's Greatness in Our Sights initiative was misguided.

"You need to get from being an average school to a good school first," Powers said.

Clark agreed with the general comments Powers made about the district.

"What was just said is really, really out there in the community," he said.

The board did not address their issues at the meeting, but board member Jean Schifano reminded the audience that there are three open seats on the school board.

Scalici said after the meeting that it would be inappropriate for the board to respond publicly to personal issues.

"We don't really want to argue with people in a public forum," he said. He said they would be responding to Powers with a letter addressing his concerns and encouraged anyone who has a problem or concerns to contact a member of the school board.

McPhail said Tuesday she didn't think the capital project was a vote of no-confidence and that it was more an issue of people voting it down because it cost too much.

"My interpretation is that there were very strong feelings regarding specific aspects of the project and its overall cost was too great," she said.

The project would have cost more than $20 million. It was rejected by voters by a vote of 1,365 to 331.

McPhail also said communication between the community and school has been an issue and that the board and district are working to improve in that regard.

"We're very enthused by the response and participation with our Greatness in Our Sights initiative and are confident we will be implementing through this process further ways to improve communication," she said.