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Financial consultant: St. Lawrence Central School broke by 2017 at current pace

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BRASHER FALLS - A financial consultant says that, if they keep going at their current pace, the St. Lawrence Central School District will go broke in 2017.

But Dr. Richard G. “Rick” Timbs said during Wednesday night’s board of education meeting, don’t blame the district, but rather the inequity in state funding that’s short-changing school districts like St. Lawrence Central. He suggested the district had been underfunded by nearly $25 million over the last seven years.

“You have not been paid what you are due. Part of the big problem is you have been underfunded. They will not pass an appropriations bill to give you money,” Dr. Timbs, executive director of the Statewide School Finance Consortium and financial consultant with Bernard P. Donegan, Inc., told the district’s school board.

His analysis of the district’s future finances comes at a time when district officials are currently crafting their 2014-15 spending plan and, keeping the status quo, are looking at a gap of $1.7 million between revenues and expenditures, according to Superintendent Stephan J. Vigliotti Sr.

“That does not include any additional positions. That is the status quo,” Mr. Vigliotti said.

Because of that gap, he said, they have provided the St. Lawrence Central United Teachers union with a list of 23 positions that may be affected by reductions in the budget. He said, under the terms of the union’s contract, district officials are contractually obligated to notify them in March of any potential reductions.

“We have to name specific positions and name specific people,” Mr. Vigliotti said. “The union was provided with 23 positions that may be affected by the budget, depending on what the outcome is (with state aid).”

He said board of education members have not yet discussed any position reductions, but that the potential cuts on the list are “across the board.”

“Be advised no decisions have been made,” Mr. Vigliotti said.

Dr. Timbs said that, given the bleak financial outlook in future years, difficult decisions like that will need to be made in the future if the district is going to stay financially sound.

“Unless more money is put in by the Senate and Assembly, the school will be hard-pressed for revenue,” he said.

He said, based on his projections of anticipated revenues and expenditures, the district will have an assigned appropriate fund balance of $1.8 million in 2014 and nearly $2 million in 2015. But then it heads down to a projected $699,188 in 2016. The bottom falls out in 2017, he said, with a negative $1.4 million, dropping to a negative $4.5 million in 2018 and a negative $8.3 million in 2019.

“In 2017 this becomes a negative number. I can’t get the budget in the current targeting into 2017. You have run out of money,” Dr. Timbs said.

He said district officials “have to take a look at where the money is going” if they want to stave off going bankrupt. The tough part, he said, is that some of the expenses, such as the district’s contribution to the state pension system, is out of their hands. Those are not negotiated locally with unions, but are set by the state, he said.

“The amount the teacher’s retirement system has increased in the last 10 years exceeds 2,000 percent. They take the payment out of your state aid check,” Dr. Timbs said.

And while those expenses increase, state aid revenue falls short, according to the consultant. He said the district is slated to receive $8 million, but should be getting $13.8 million.

He said that St. Lawrence Central has been short-changed $24.9 million in state aid over the past seven years, and all school districts in the state are owed $5.4 billion.

The district has also suffered because of the Gap Elimination Adjustment, Dr. Timbs said. The Gap Elimination Adjustment was introduced in the 2009-10 school year and began to cut into school’s state aid allocations. The GEA helped reduce the state’s deficit at the expense of school districts, according to the New York State School Boards Association.

Dr. Timbs said that, because of the GEA, St. Lawrence Central has lost $3.6 million since 2010-11. They lost $520,075 alone in 2013-14.

If they want to survive, he recommended that they look at increasing their revenue.

‘“That’s the big thing, you have to get more money from the state,” he said.

They also need to see where they can decrease their expenditures, which could involve looking to share services with other districts.

“It’s going to be a rough road. You’re going to have to make difficult decisions. We all want to keep everything you like. But the truth is, you’re gong to have to make some tough decisions,” he said.

During the public comment portion of Wednesday’s meeting, two audience members suggested putting pressure on elected officials, a move that Dr. Timbs said would need to be made quickly since the state budget was due to be approved by April 1.

“We need the legislators to listen,” Virginia Burnett said, suggesting those in the audience go out and try to educate your friends and neighbors.

“It’s not the teachers that are the source of this budget crunch. It’s a statewide problem,” she said.

Roberta Taylor, a kindergarten teacher, suggested they use avenues such as email, phone calls and Facebook to share the urgency of the situation and invite their friends to repost and share on Facebook pages for elected officials.

“We will bombard them by email, phone calls and Facebook,” she said.

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