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What you need to know for 08/22/2017

Reserve fund dry, Fonda-Fultonville school district faces hard choices

Reserve fund dry, Fonda-Fultonville school district faces hard choices

The Fonda-Fultonville Central School District is yet again in financial hot water, just a few months

The Fonda-Fultonville Central School District is yet again in financial hot water, just a few months into this budget year.

A routine audit recently found that the district’s fund balance, previously thought to be roughly $500,000, is completely empty. In response to this news, Patrick Michel, interim Superintendent and HFM BOCES district superintendent, along with the school board plan a series of actions to make back the half-million-dollar reserve necessary to run the school.

“Unfortunately,” Michel said, “the district has some very difficult decisions ahead of them.”

The district is forming a “midyear budget adjustment committee” of school and community members. It’s a harmless-sounding name, but Michel said it is basically a committee to slash spending.

On the potential chopping block is everything that doesn’t directly impact academics. Employee health benefits, transportation, all spring sports and even recess for elementary school children face drastic reductions. A few positions may also be cut. “They’ve already cut everything at this point,” he said. “They did that three years ago. These cuts are going to be deeper.”

For the school district, what Michel called a $500,000 cushion is very important to day-to-day operations. He described the fund balance as a similar to a family’s bank account, dipped into during the week and replenished on payday. Without a reserve, cash flow for unforeseen expenses is restricted.

At this point, rebuilding that cushion is actually less of a challenge than the budget issues he sees coming down the road. A $1.4 million gap is projected in the 2013-14 budget, and with no fund balance, it will have to be closed with spending cuts and tax increases alone.

“It’s not insurmountable,” he said, pointing out the gap is a relatively small percentage of the district’s $24 million budget, “but it is going to be painful.”

Michel blamed the tax levy cap and cuts in state aid for Fonda-Fultonville’s money problems, saying the same issues are faced by rural school districts all over the state.

“I have three or four districts that will be going through exactly the same thing next year,” he said. “Rural schools have been decimated by the economy and cuts in state aid.”

Expenses are also on the rise, with the district slated to pay an extra $600,000 into the teacher retirement system next year.

The search for a permanent superintendent, which was very close to completion, is on hold for the time being.

Michel said asking a superintendent to make drastic cuts in sports and possibly lay off staff on his first day would be unfair.

At the same time, Michel is looking for a full-time interim superintendent to replace him as of Jan. 1. He will suggest a name to the board, which will make an appointment.

“With my duties at BOCES, I can’t devote enough time to this district,” he said. “The problems here need full-time attention.”

He also pointed out that the necessary cuts will likely cause a “fire storm” of local frustration, which would haunt the entire stay of a permanent superintendent.

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