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The tax rate will increase 2.9 percent or an average of $1.07 per $1,000 of assessed valuation under a $13,271,205 contingency budget unanimously adopted Tuesday night by the School Board.

The board decided to hold a special meeting at 7:30 p.m. July 17 to discuss propositions that will be put before voters from 2 to 8 p.m. Aug. 1.

Residents who attended Tuesday's meeting and board members expressed concern that as of Tuesday night the district does not have a varsity sports program.

The possibility was raised that district athletes might transfer to another district if a sports program is not provided.

The board will decide before Oct. 15 about how it will make its payment to the state Teachers Retirement Fund. Business Manager Carter Town recommended using a six-year payment option.

The cost would be $164,000 in 1990, $85,000 from 1991 through 1994, and $63,000 in 1995. Interest payments would be $413,000 less than the 15-year option offered by the state, he explained.

The board also approved a contract with Erie 2-Chautauqua-Cattaraugus Board of Cooperative Educational Services for $848,516, an unspecified increase over this year.

In other financial matters, the board awarded contracts for cleaning, equipment for the physical education program, gasoline, diesel fuel and trash removal.

Also approved was an additional kindergarten class and an additional teaching position. Elementary enrollment is now 157, according to Peggy Sauer, primary school principal.

In labor relations, the board officially recognized Local 1000, American Federation of State, County and Municipal Employees, as the bargaining agent for hourly non-teaching employees.

The job titles to be included in the local will be agreed on by the superintendent, representatives of the Civil Service Employees Association and the Fredonia Central School Salaried Support Staff Association. The board's action resolves two cases before the state Public Employment Relations Board.

In construction matters, the board will form a committee including community members, faculty and administrators.

The panel will review reports of various facilities planning committees to advise the board on capital projects. Each board member will nominate a community representative to serve on the committee. The nominations will be finished by July 31.

Finally, the board authorized the Fredonia Credit Union to build and maintain a 20-by-30-foot addition at the end of the technology wing.

Leonard Vento of the credit union explained the organization keeps change for the cafeteria, for events that require admission, and functions as an after-hours depository for money.

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