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Massena Central Finance Committee member shares fund balance concerns

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MASSENA — Maintaining a healthy fund balance is on the minds of the school Finance Committee members as they begin talking about the district’s 2014-15 spending plan.

Finance Committee member Loren J. Fountaine told Board of Education members this week that they need to begin thinking about how to use less of the fund balance while still providing a quality education for Massena’s students.

“I think our goal is to start to wiggle ourselves off the reserves while providing the best education we can to students,” Mr. Fountaine said.

He said the Finance Committee recently held a short meeting to start looking at the district’s financial picture.

“We had less expenditures than we budgeted and a little bit more revenue than we budgeted, but we were still in the red. Although we did better by a little bit, when you’re talking about a $45 million budget ... we still spent down our reserves,” Mr. Fountaine said.

He had some words of caution for board members as they look at future budgeting.

“Obviously for the long-term forecast we cannot continually spend in the red all the time,” he said.

Finance Committee Chairman Michael J. LeBire had shared the same words of caution with board members during the most recent budget season, saying the well would be dry by 2016-17 if the district keeps using fund balance at its current pace.

“At the current rates, the Massena Central School District’s unrestricted reserves will be exhausted by 2016-17,” Mr. LeBire said in his presentations.

Board President John R. Boyce had echoed those sentiments.

“While maintaining programming is important, we also realize the well is only so deep,” he said.

The district had $23.5 million in reserve funds in 2012-13. It allocated $4.1 million of that to balance the 2012-13 budget, leaving $19.4 million for the 2013-14 school year. Of that, $13.5 million was in restricted reserves, meaning it was money designated for specific purposes and unavailable for general fund expenditures.

That left $5.9 million in unappropriated reserves that were available for general fund expenditures, and the 2013-14 budget used $3.1 million, leaving $2.8 million for future use.

But Massena wasn’t alone, Michael J. Borges, executive director of the New York State Association of School Business Officials, said earlier this year.

According to association officials, unrestricted fund balances at school districts throughout the state — used to plug holes in budgets to prevent layoffs and loss of programs — declined on average by approximately 13.8 percent last year and were expected to decline an additional 8 percent this year.

“Massena is not unique. School districts around the state have been drawing down their fund balances steadily since 2008. The last two or three years, they have steadily been drawing it down in bug chunks. Once school districts exhaust these fund balances, there will be nothing standing between them and fiscal or educational insolvency,“ Mr. Borges said, suggesting that schools hang on to as much of their fund balance as possible in anticipation of future year expenses.

New York state law sets a limit of up to 4 percent of the budget that can be retained in a rainy day account and spent as needed.

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