The Middleburgh Central School District is spending its reserves faster than the money can accumulate, putting the chance of being able to afford flood repairs at risk, according to state auditors.
According to findings in an audit released by the state Comptroller’s Office, the district used about $2.4 million in reserves to balance its budget in the 2011-12 and 2012-13 fiscal years.
That left the fund balance at about $2.5 million before the district appropriated another $1.2 million for the 2013-14 year, leaving roughly $1.3 million available through the end of the 2014 year, according to the audit.
Up until May 2013, the district had received $1.9 million in federal and state disaster assistance, and the lack of fund balance could lead to the inability to complete repairs, according to the audit.
“Additional resources may be required in advance of, or without the benefit of, federal or state funds,” the audit states.
Rural school districts have been fearing a “fiscal cliff” for several years now and it’s not a surprise the district is running out of money, Superintendent Michele Weaver said.
The district had to enact additional cost cuts after residents shot down its proposed $20.2 million budget for 2013-2014 in the spring.
“Taxpayers literally sustained so many losses,” said Weaver, who said the need to not raise taxes made using the fund balance the district’s only option.
“Is it the best way to balance a budget, absolutely not. Is it the only thing we can do right now, absolutely,” she said.
She said dwindling state aid isn’t helping the situation. “You can’t lose $1 million in state aid every year and think that you’re going to get that money from taxpayers.”
The state Comptroller’s Office is recommending the district delve deeper into long-range planning.
Weaver said a committee is currently exploring facilities and staffing.
The committee, filled with members of the community and school representatives, is reviewing what’s needed in the district’s schools and what’s not.
The committee is expected to issue some recommendations early next year, Weaver said.
In terms of flood repairs, Weaver said many have been completed, but the district is still waiting to hear back from FEMA on helping to repair damage sustained by the District Office building.
Flash flooding that hit the Schoharie Valley this past summer “demolished” the district garage’s parking lot and driveway, less than two years after Tropical Storm Irene damaged it, Weaver said. The damage was never repaired after Irene because voters rejected the district’s budget plan at the polls.
Weaver said she believes the district can hold its own through next two budget years but, without changes, could run into financial difficulties afterward.