I appreciate people reaching out to inquire about the Districts’ fund balance and state audit.
First let me say the “messaging” that is being used is cherry picking language from an audit. The full audit report includes a lot of information including the districts response. Many are conveniently omitting our views and actions taken.
The core of the criticism is that we held too much in UNALLOCATED reserves and we overestimated expenses.
With regards to the reserves we had less than 4% in allocated reserves (specifically identified) and greater than 4% in unallocated. The audit only criticized the unallocated. As a district we left the money in unallocated because it allowed us the greatest flexibility to deal with what ever issues may arise. The audit did not comment on how we were UNDERFUNDED in our specific reserves. This past August in a public meeting we discussed the audit and moved a large percentage of reserves to specific funds. At present we are below the state limit of 4% in unallocated and we have more money specifically earmarked for other reserves. This list has been shared in our public meetings and is as follows:
RESERVE FOR STATE & LOCAL RETIREMENT SYSTEM CONTRIBUTIONS 520,000.00
RESERVE FOR TEACHERS' RETIREMENT SYSTEM CONTRIBUTIONS 677,000.00
LIABILITY RESERVE 1,500,000.00
RESERVE FOR TAX CERTIORARI 516,766.28
RESERVE EMPLOYEE BENEFITS & A/L 215,428.49
RESERVE FOR REPAIRS 1,202,352.00
RESERVE FOR BONDED DEBT 1,241,765.94
TOTAL 5,873,312.71
I should note that each of these reserves are funded below what the law would allow. I believe we are doing our best to balance protecting the district while limiting the tax burden.
With regards to the criticisms than we overestimated expenses. I would say that the large gaps occurred over the years of the pandemic where we shut down for a period of time while the following year we purposely slowed spending as the governor had threatened to pull back funds if the states poor fiscal outlook didn’t improve.
Any reserves that we do have are there for the taxpayers and will be used for their benefit. Twice over my years of service we have used reserves to reduce or eliminate the local taxpayer share of needed capital projects. This approach is better for the district than reducing the tax levy in a specific year because that decision would compound. If we were to reduce the levy by $500,000 this year (as an example) we could use fund balance. That is correct. But what is not considered by some is that we would then need to use $500,000 of fund balance every year into the future forever which we simply do not have funds for. If we do not have fund balance in future years we would either need to go over the tax cap to raise taxes or we would need to cut programs. Neither of these options is acceptable in my opinion.
Proposition 3 DOES NOT RAISE TAXES. It simply allows the district to move money into a specific capital reserve to do what we have done in past years. That is, give reserves back to the taxpayers in a way that is sustainable, ensures we fund existing programs and reduces the need to raise taxes in the future.
I hope reading the above helps fill in the holes of some of the “headline grabbing” messages that so easily are shared on signs and social media.
Criminal activity in Clarence School Board - Tax Fraud?
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