by Susan Mikula Campbell
The Niagara-Wheatfield Board of Education, reeling from an audit report received at last week's regular meeting, is looking at extra workshop meetings in upcoming off-meeting weeks to deal with some hard decisions on future school district spending.
On Nov. 2, Wayne Drescher of Drescher & Malecki presented a report on the district's external audit, which showed the district could end up having a deficit as high as nearly $8 million for the 2012-13 school year.
Drescher said part of the problem was including a $4.2 million fund balance from the previous year's budget, which included funds which only could be used for specific purposes and bond anticipation notes. The figure should have been $2.2 million, he said. State and federal funding declines are expected to compound the problem for the future.
"You cannot constantly take away from fund balances without having those good years to replenish those funds," Drescher said.
Superintendent Carl Militello said the district hasn't had a tax increase in five years. Extra funds have been spent to keep programs such as music and athletics and pay for personnel and benefits.
Figures show costs for items such as the New York State Teachers Retirement System are increasing significantly, even with fewer employees.
In a message to voters on the district's website, Militello said there were some misconceptions about the finances of the school district:
"Make no mistake that there is work to be done and that some hard decisions lie ahead. Our first hurdle is to under-spend the current year budget by approximately $3 million. Having under-spent last year's budget by almost $5 million, I'm confident that we can accomplish this task. If we are successful, that will leave our fund balance at approximately $250 to $500 thousand. In years past we have had the luxury of budgeting $4 to $5 million in fund balance. However, this will not be the case in the immediate future," he said.
"The impact on our budget will be that we will need to eliminate the $4.4 million of fund balance from next year's budget and, whether through tax levy increase or reduction in expenditures, will have to account for that. There are additional budgetary constraints, such as fluctuations in state aid, increases in health care and retirement, and that property tax cap, that will add to the pressures of an already difficult budget season.
"The point that I would like all of the district's constituents to take away from this is that, nowhere in the dialogue, has there been any indication of a financial 'deficit' or implication of over-spending the budget. I want to also be clear that we do have a plan for the current year objectives, and that we are in the process of formulating a plan for next year's budget," Militello said.
In 2008, N-W's revenues exceeded expenses; in 2009, they were about even, by 2010 and 2011 expenses were getting much larger, Drescher said, emphasizing, "You appropriated money you did not have."
"A few years ago, the state comptroller said you had too much fund balance," he said. "You don't any more."
Drescher advised beginning planning for 2012-13 as soon as possible, or money won't be available to balance the budget. "You need to do it early, because there are some tough decisions to be made."
Former board member Michele Hoerner noted that N-W had the highest aid cuts in the county last year and that the district was penalized for not raising taxes and just a few years back, having too much in its fund balance.
When she mentioned a pay freeze might have helped, staff and teachers in the audience could be heard saying, "Nobody asked us."
Resident RoseMary Warren chided the board for "suddenly acting like the new kids on the block." "None of this should come as a surprise to anybody," she said.
Resident Danny Maerten noted other school districts also had problems due to the sudden cut in state aid. He suggested school districts get together and march on Albany. "We're tired of paying more and getting less," he said.
The issue on whether to extend Militello's contract beyond 2012 apparently continues to be a hot point between the incumbent female members of the board and the incumbent and new members who make up the male majority.
At one point, board President Steven Sabo and board member Kathy Fleming were nearly shouting after Fleming and Kristin MacKenzie said they weren't given information the others had apparently discussed.
"I thought it was all members of the board of education, not the boys of education," Fleming said.