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Brushton-Moira debates how to fund 2014-15 budget: More taxes vs. fund balance

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BRUSHTON - Brushton-Moira Central School District taxpayers could see a 0 percent increase to the district tax levy if school board members choose to pull more moeny from their reserve funds.

But some board members fear doing so may cause the school financial harm.

At the regular board of education meeting this week, board members reviewed the proposed changes for the 2014-2015 school budget with Business Manager Susan Perkins.

The proposed budget for the general fund is $17,336,719, a $429,844 increase from the 2013-2014 adopted budget.

The revenue estimated for the entire 2013-2014 fiscal year is $16,906,875, which matches the expense side of the ledger –– as it should, according to Ms. Perkins.

“In order to do that, for this year’s budget, you had estimated taking from the fund balance $636,878,” Ms. Perkins said. “Once you start to push in money from your savings, usually year after year, you need to push in that same amount.”

Ms. Perkins pointed out that the appropriated fund balance proposed for the 2014-2015 proposed spending plan is also $636,878.

However, she said an additional $548,632 would need to be used “to offset our increase in the budget.” The school anticipates its state aid increase for the coming fiscal year won’t match the hike in its expenses.

Ms. Perkins said to balance the budget the board would have to use $1.2 million from the reserve funds, an amount she said the board has in its unreserved fund balance.

The district had $1.6 million in its unappropriated fund balance after using the $600,000 in the current year’s budget, board member Angela DeBeer said. If the district opted not to use the same amount of reserve funds in the coming fiscal year, the reserve would grow to $2.2 million, she said.

A recent report by the state Comptroller’s Office found no significant problems with the district’s financial situation. The report looked at a variety of factors in arriving at that assessment, including the use of fund balances to cover operating expenses and the amount of cash a district has on hand.

“Currently there is one district in our area, Tupper Lake, that is in fiscal distress,” Ms. Perkins noted.

“Brushton-Moira is considered not in distress,” Ms. Perkins said, adding that while 2011 and 2012 district revenues were less than the school’s expenditures all other areas of the budget were fine.

“Tupper Lake has used all of their money, including reserved and unreserved fund balance,” she said.

“The thing is though, if we use $1.2 [million] we’ve only got one more year, and then we’re in it [like Tupper Lake],” board member George Martin said.

“Not even,” countered board member Robert Nimz. “You can’t spend all of that reserved fund balance, so you get half a year.”

Government fund balances are divided into two categories –– reserved and unreserved. Reserved fund balances can legally only be used for limited purposes; unreserved fund balances can be spent any way officials like.

Ms. Perkins said if the school decided to use the $1.2 million, the tax levy would show no increase.

“The question becomes do we go over the cliff sooner or later,” she said. “Do we provide a quality educational program while we’re here with the dollars that we need to teach our students or do we break it down so we’re down to bare bones and without providing a quality educational program?”

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