NORFOLK - Norwood-Norfolk school officials are looking at their options for filling a nearly $2 million gap between estimated revenues and estimated expenses for the 2013-14 fiscal year.
According to Business Manager Lisa M. Mitras, the district is estimating approximately $18.6 million in total revenue in 2013-14 and total expenses of $20.7 million. Her figures were prepared before Gov. Cuomo released his annual budget, which includes a projected increase of $279,000 for the district. The increase in state aid is far from enough to cover the districts estimated expenses increase of more than $1 million.
This year the school utilized almost $1 million of its reserves and fund balance to fill in the gap between its revenue and its expenses. That gap is estimated to increase to almost $2 million next year due to increased costs in health care, retirement and special education services, according to Ms. Mitras.
Its very alarming. Back in 2004 the district had no fund balance, Ms. Mitras said. The district has done a very nice job of increasing its reserves. We have reserves that can carry us into 2015 (or) 2016, but it wont last.
Ms. Mitras has prepared three budget options for the upcoming fiscal year. The first would utilize almost $2 million in reserves and fund balance to fill in the gap. The second would utilize almost $1 million to cut the gap in half. The third would utilize approximately $780,000 of its reserves and fund balance to partially fill in the gap.
The first option would prevent budget cuts for the district, but would also more quickly deplete its reserves and fund balance. The third option would require greater cuts but would leave more money in the reserves and fund balance for future years.
Ms. Mitras recommended the second option. Its about striking a balance, she said.
Superintendent Elizabeth A. Kirnie is inviting concerned citizens to a set of community forums to discuss areas district officials should consider for budget cuts. The first will be from 6 p.m. to 8:30 p.m. Jan. 29 at the Norwood-Norfolk Central School, and the second will be held from 6 p.m. to 8:30 p.m. Feb. 27 at the school.
The board looks at all the opinions (expressed at the community forums), Ms. Kirnie said. It gives the board an idea of what some of the more important issues are.
Ms. Kirnie also plans to meet with state legislators to discuss what she calls a non-sustainable state aid model.
If expenses and revenue continue their current trends, Ms. Mitras foresees a gap of almost $4 million between the districts revenue and expenses by the 2016-17 school year. By her rough estimates, its also possible the district will have exhausted its reserves and fund balance by that same time.
Sometime before (our fund reserves run out), we could cease to be educationally viable, Ms. Kirnie said.
Ms. Kirnie added school board members will be reviewing future revenue and expenses to determine how many cuts the district can make before it has laid off too many teachers to provide an adequate education. We are working on that so when we meet with our legislators, I can say, We are X-number of staff-members away from no longer being educationally viable.
If the state does not significantly increase aid, expenses continue to rise and the 2 percent tax levy cap remains in place, Ms. Mitras believes the district could realistically face bankruptcy within a few years.
Ms. Kirnie said Norwood-Norfolk isnt alone in its grim budget projections. Just about every district in the county is looking at how soon (bankruptcy) may happen, she said.
She urged Gov. Cuomo to discontinue the shares aid formula and return to the foundation aid formula. She said the shares aid formula distributes state aid unfairly, providing a disproportionately high amount of aid to school districts that may not need it.
(Under the shares aid formula) the wealthier school districts that dont need the state aid are still getting it, Ms. Kirnie said.
According to the New York State School Boards Association, the foundation aid formula takes into account a communitys level of poverty and local taxation when allocating funds to school districts. The association also urged the state to use the foundation aid formula.