Kiryas Joel/Town of Palm Tree Annexation Analysis – Impact on M-W

Executive Summary

The Questar III BOCES State Aid and Financial Planning Service was engaged to help determine the impact of allowing the Kiryas Joel Union Free School (KJUFSD) to annex 220 acres of territory currently located in the Monroe Woodbury Central School (MWCSD) via a school district boundary adjustment.

Questar III BOCES and district officials have determined that allowing the Kiryas Joel Union Free School District (KJUFSD) to annex the 220 acres would have an immediate but manageable negative impact on the district’s finances. However, over the long term, it appears MWCSD would be better off relinquishing rather than retaining the 220 acres.

Questar III has prepared an “Annexation Scorecard” appended to this summary that outlines both the short and long-term impact of approving the 220 acre KJUFSD annexation of MWCSD territory.

The study focused on two distinct time periods:

Short Term – Defined as just after annexation.

Long Term – Defined as years into the future when the sparsely populated 220 acres are developed with up to 15 housing units per acre and as many as 13,409 residents. Much of the 220 acres are expected to house families who will ultimately have school age children.

Short Term

• The study projects how MWCSD State Aid and school taxes can be expected to be impacted in the short term, just after annexation occurs and identifies new immediate revenues likely to be associated with the loss of 220 acres.

• It also identifies savings MWCSD should realize after the annexation is completed.

Long Term

• The study estimates that 6,757 new students from the 220 acres may ultimately attend nonpublic religious schools or yeshivas, 63 may be enrolled in KJUFSD special class programs for students with disabilities (SWD) and 4 may be sent to Private Chapter 853 Schools for SWD, for a total of 6,824 students.

• In addition to projecting the anticipated number of school age students who might live on the 220 acres, the study also projected the cost of education and other services these future students may require once the 220 acres are developed. These projected future costs are costs that MWCSD would avoid by allowing the annexation to occur.

• The study also projects future revenues MWCSD might generate to offset future costs.


Revenues Attributable to Annexation

• We estimate that upon annexation, MWCSD would lose $880,376 in school tax revenue, offset by a minor net increase in State Aid of $54,648. Modest losses of taxable property make school districts look less wealthy, resulting in small positive increases in wealth adjusted aid ratios. This leads to modest increases in State Aid payable.

• We further estimate MWCSD will receive nonresident tuition paid by KJUFSD in the amount of $239,380 for 20 general education students living on the 220 acres who attend the Monroe Woodbury Schools. Upon annexation, these students would become residents of KJUFSD. They need to continue to attend school in Monroe Woodbury as KJUFSD only offers in-district programs for students with disabilities. Virtually all nondisabled KJ students attend nonpublic religious schools (yeshivas).

• The net loss of revenue, attributable to annexation would be ($586,348).

Savings Attributable to Annexation

• MWCSD is expected to realize savings of $67,367 from no longer having to transport 107 students living on the 220 acres who would become residents of the KJUFSD.

• Three students living on the 220 acres are currently attending special education programs at KJUFSD with nonresident tuition paid by MWCSD. Upon annexation, these students would become residents of KJUFSD, saving MWCSD $163,821.

• Two students who reside on the 220 acres attend nonpublic school in KJUFSD and receive special education services provided by KJ. KJUFSD is charging MWCSD $11,300 for these services. MWCSD will save the $11,300 when these students become KJUFSD residents upon annexation.

• The savings attributable to annexation total $242,488.


The short-term impact of annexation would be net loss or revenue shortfall of ($343,860). This shortfall would need to be made up through a tax increase, increases in other sources of revenue and/or reductions to MWCSD budgeted expenditures.


Future Revenue Lost – Revenue MWCSD Will Not Receive

• Once the 220 acres are fully developed/populated MWCSD would receive an estimated increase in revenue of $5,832,174 from school taxes on the 220 acres, if the KJUFSD annexation were not approved.

• Primarily as result of increases in taxable real property value, State Aid for MWCSD would decrease by a modest ($151,827).

• This decrease would be offset by increases in expense-based aids including Textbook Aid and Transportation Aid. The additional Textbook Aid would total $397,498 for 6,824 new resident students expected to live on the 220 acres in the future. Transportation Aid would increase by an estimated $6,841,674 to transport as many as 6,824 additional students. Overall, State Aid is estimated to increase by $7,087,345.

• The net additional revenue attributable to serving 6,824 additional students is estimated to be $12,919,519.

Future Costs Avoided by MWCSD

• We estimate MWCSD would incur a total cost of $11,117,115 to transport as many as 6,824 additional students ultimately expected to live on the 220 acres, if the KJUFSD annexation were not approved.

• MWCSD would also incur a net estimated cost of $3,331,251 to send an estimated 63 students with disabilities to KJUFSD special education programs. This cost is net of offsetting State and Federal Aid.

• It would cost MWCSD $89,642 to send four students to special education programs at private Chapter 853 schools for students with disabilities. This cost is net of Private Excess Cost Aid.

• We estimate conservatively that it might cost MWCSD $351,790 to provide limited special education services to as many as 227 new nonpublic school students ultimately living on the 220 acres. These students are called Parentally Placed Nonpublic School Students With Disabilities.

• Estimated future costs to be avoided by MWCSD attributable to approving the KJUFSD annexation of 220 acres total $14,889,798.


The estimated cost that the MWCSD would avoid, if it approves the KJ annexation, exceeds revenues that would be available to offset such costs by $1,970,279. Thus, it is in MWCSD’s long-term interest to approve the KJUFSD annexation.