KLSD has options to address its largest liability

Residents deserve to know what they are

By SASHA D. BURDETT

What does it mean when the Katonah-Lewisboro School District says it cannot reserve for its largest liability while simultaneously approving eight other reserves on the same consent agenda? That is what happened at the June 18 Board of Ed meeting.

Residents who spoke at public comment sessions, took the district's survey and participated in focus groups have articulated substantive concerns about financial transparency — concerns that should be satisfactorily addressed within the board's presentations and discussion on July 30.

The largest liability is Other Post Employment Benefits, or OPEB — retiree healthcare and welfare benefits promised to employees over decades of service. Governmental Accounting Standards Board Statement 75, which took effect in 2018, required school districts to disclose the full obligation on their financial statements. Before then, districts could keep it off the balance sheet. Now it is visible, and the number is significant at nearly double the annual operating budget and rising year over year. The district's June 30, 2025 Bond Official Statement reports the total OPEB obligation at $222,781,737. This is documented on the district's own audited financial statements. The obligation is not New York State's; it is KLSD's own, owed to former and future retirees.

OPEB is not an abstraction. It is a direct promise made in exchange for years of dedicated service. When teachers accept employment with KLSD, part of their compensation is the assurance that healthcare will continue after they retire. That commitment reflects work performed and years of service completed. It is the district's obligation to honor, not to deflect.

The eight reserve-related resolutions approved on the June 18 consent agenda were established or funded under six different sections of state law: a debt service reserve under General Municipal Law Section 6-L (debt service reserves), a tax certiorari reserve under Education Law Section 3651(1b) (tax certiorari judgment reserves), an employee benefit accrued liability reserve under GML Section 6-p (employee accrued leave reserves), retirement contributions reserves — including a Teachers' Retirement System sub-fund — under GML Section 6-r (retirement contribution reserves), an unemployment insurance reserve under GML Section 6-m (unemployment insurance reserves), a liability claims reserve under Education Law Section 1709(8-c) (liability claims reserves), and a capital reserve under Education Law Section 3651 (capital reserves). Nothing on the June 18 consent agenda addressed any OPEB obligation.

The funding pattern is documented. The district can and does establish employment and retiree benefit reserves. It has selected six statutory authorities for eight purposes on a single agenda. What it has not selected is the mechanism for addressing its largest documented liability.

New York law offers at least six mechanisms that could substantively address the OPEB obligation.

First, the board could designate a portion of unassigned general fund balance as committed to future OPEB response — a formal resolution that does not require new statutory authority but signals institutional intent to address the obligation.

Second, the Employee Benefit Accrued Liability Reserve under GML Section 6-p (employee accrued leave reserves) — the same mechanism the board used on June 18 for a related purpose — could be structured to address post-employment obligations directly.

Third, the Retirement Contributions Reserve under GML Section 6-r (retirement contribution reserves) — also used on June 18 — could be expanded within existing statutory authority.

Fourth, the Board could pursue Section 115 trust authorization through targeted state legislation, an option available under federal tax law but requiring a corresponding New York framework.

Fifth, the Board could advocate through the New York State School Boards Association for enabling legislation.

Sixth, the Board could adopt and publish a multi-year OPEB funding plan through the annual budget document.

None of these mechanisms has been publicly proposed by the district as a response to the $222.78 million obligation.

The board has demonstrated institutional capacity across the reserve management landscape — eight separate reserves under six different sections of state law appear on the June 18 consent agenda alone — as well as through NYSSBA advocacy for expanded reserve authority in a political lobbying policy domain. The community similarly deserves substantive engagement on its financial policy and the largest liability the district carries which is its own and not New York State's responsibility.

The achievements of our school district are valuable assets that individually yield excellence, and the available mechanisms tell you what is possible. What is not addressed publicly is a choice — and choices can be reconsidered.

Sasha D. Burdett is a South Salem resident and Contract Action Team member for IATSE Local 600, the International Cinematographers Guild.