Arkport school district claims 'moderate fiscal stress' won't impact 2023-24 budget
Arkport is one of five public school districts in New York classified as under moderate fiscal stress by the state comptroller’s office.
In a report released in January, the Steuben County school was designated after the district reported it had no available unrestricted fund balance at the conclusion of the 2021-22 fiscal year on June 30, 2022. The report also highlighted issues with the district's cash position.
“A low level of cash and short-term investments may lead to difficulty paying normal operating costs,” Mark Johnson, press secretary for the Office of the State Comptroller, said in an email response to questions from The Spectator.
According to the Comptroller’s office, school district fiscal stress scores are based on several factors, including year-end fund balance, operating deficits and surpluses, cash position and reliance on short-term debt for cash flow.
The higher the score the more severe the level of stress. Arkport had a fiscal stress score of 45, the cutoff line between “moderate fiscal stress” and “susceptible to fiscal stress.”
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Arkport points to COVID-19 impact on spending
In a February response to the state report, Arkport cited three factors that led to the moderate stress designation:
The district overspent the 2021-22 budget by approximately $550,000. This overspending was a combination of planned expenditures to support the COVID-19 recovery effort, as well as unplanned legacy costs of the pandemic.
In the 2020-21 school year, the district incorrectly projected the 2021-22 school year to have far lower COVID-19 expenses and moved $900,000 into reserves.
Following overspending, the district drew from the unrestricted emergency fund balance.
“We have been discussing the overspending openly at board meetings since September,” Arkport Superintendent Jesse Harper said in the statement posted by the district. “We’re committed to being fiscally responsible to our taxpayers and being a good steward of our financial resources.”
According to the statement, the district enacted a financial stability plan to help prevent overspending and the need to use the 4% unrestricted fund balance in the future. The district, officials said, has already identified cost savings in the current budget to replenish unrestricted reserves.
“We’re continuously monitoring our current budget to ensure it is available for next school year,” Harper said.
Jesse Harper: Fiscal stress designation will not impact 2023-24 budget
"We have already re-established the 4%," Harper said in an interview. "The money to re-fund that 4% has already been identified in the current budget and it is not being spent. Therefore, it is available for next year.
“The decisions we are making for next year’s budget would still be occurring whether or not we had that designation from last year.”
Harper noted that the school board and district are still in the process of developing the 2023-24 budget, but he said “we have already identified over $600,000 in savings for next year."
He said those savings are due to current "fiscal stressors" and not the result of the fiscal stress designation from the state.
Harper said, "Every district is going to be losing the federal (COVID-19) aid next year. Prices are rising, just like everybody knows. And we have a small dip in enrollment. So those are the factors that are going into next year's budget."
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This article originally appeared on The Evening Tribune: Arkport schools in 'moderate fiscal stress': What it means for budget
