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Auditor warns Canton school may run out of funds

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CANTON - The Canton Central School District is on course to run out of money next school year, according to the district’s auditor.

The district’s financial outlook is similar to several across the region and state, said Douglas S. Wood, a certified public accountant who prepared the district’s 2011-12 audit report.

A statewide survey indicated that within one year 5 percent of districts will run out of funds, another 22 percent in two years and 39 percent within three years, Mr. Wood said.

Unless more state aid comes in or property taxes increase beyond the state’s tax cap, many school districts will deplete their bank accounts, he said, noting that Canton faces that possibility in the 2013-14 school year.

“The school district’s finances are being managed well, but it’s getting harder and harder for all school districts,” Mr. Wood said.

The district’s audit report for the fiscal year that ended June 30, shows a $1.77 million decrease in the district’s general fund balance from the previous year.

At the end of the 2010-11 school year, the district had $4,944,740 in its fund balance, which decreased to $3,170,685 at the end of last school year.

Mr. Wood said the $1,774,055 decrease in fund balance included transferring $500,000 for the capital improvement project that’s under way.

Greater employee contributions toward the rising cost of health insurance benefits would also help, Mr. Wood told Canton school board members at their Oct. 18 meeting.

At Canton Central, four separate employee unions do not contribute toward their health insurance premiums: the Canton Central Teachers Association, Secretarial Association, Custodial Association, and the Canton Teamsters unit which represents bus drivers and mechanics.

Several other district employees contribute 10 percent including building principals, the superintendent, business manager, district clerk, human resource coordinator, treasurer, operations director, network coordinator, head custodian, food supervisor and transportation supervisor.

Teacher aides contribute 5 percent and food service workers contribute 10 to 50 percent depending on whether they take individual, two-person or family plans.

The district is in the process of negotiating a new contract with its teachers union.

“Without any changes in state aid or give backs by the teachers on health insurance, in a few years they’re (the district) not going to make it,” Mr. Wood said. “Health insurance will be a big item in negotiations. It has to be addressed sooner or later.”

Kristen J. Ames, co-president of the Canton teacher’s union, declined to discuss the union’s position on health insurance in regards to the contract talks.

“We feel it is improper to discuss negotiations in public when they are ongoing,” Mrs. Ames said in an email. “The negotiation process involves all items being on the table for discussion and/or consideration. We will comment after a settlement has been reached with the district.”

Mr. Wood’s report noted that the district’s kindergarten through grade 12 enrollment has decreased from 1,860 students in 1995 to 1,250 last school year, a drop of 610 students. The numbers reflect a 33 percent decrease over a 16-year time period.

School Superintendent William A. Gregory said the district faces tough choices ahead if its state aid does not increase.

“As we look ahead to the 2013-14 budget, if the state aid equation does not change dramatically, we will likely exhaust our undesignated fund balance this coming year and still be faced with having to make difficult decisions that will result in crippling cuts to program and staff,” he said in an email.

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