State Comptroller's Office identifies three north country school districts in fiscal stress report

Jan. 28—HARRISVILLE — Three north country schools have been designated at or susceptible to fiscal stress by the state Comptroller's Office.

The Harrisville Central School District has been designated as being in moderate stress, while the Colton-Pierrepont and Lisbon central school districts have been designated as being susceptible to stress in the report from Comptroller Thomas P. DiNapoli.

The Fiscal Stress Monitoring System was designed to identify issues that school districts, counties, cities, towns and villages are having with budgetary solvency, or the ability to generate enough revenues to meet expenses.

All together, 14 school districts statewide were designated in some level of fiscal stress under Mr. DiNapoli's Fiscal Stress Monitoring System for the school year ending on June 30, 2022. That's down from 23 districts the prior year.

School districts are given a fiscal stress score based on several factors: 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.

The highest fiscal score of the 14 impacted districts was the Mount Vernon School District in Westchester County with a 66.7% out of 100% score, designating it as in significant stress, the highest category. Harrisville received a fiscal score of 55%, an increase of 35% from the previous year, while Lisbon had a fiscal score 38.3% and Colton-Pierrepont had a fiscal score of 33.3%.

"Despite this designation, we would like the community to know that our school district is in good standing with the state and our financial accountability," Harrisville Central School District Superintendent Robert N. Finster said in an email. "We take the information outlined in this report seriously and would like to explain to community members the reasons behind this designation."

He said the district's score was based on financial information that is submitted as part of each district's annual financial report, which was filed with the state Education Department, as of Dec. 31, 2022.

Mr. Finster said Harrisville was designated in moderate stress for three reasons. Among them, during the past two years, residents approved two capital outlay projects. Both projects saw major delays as a result of ongoing global supply chain issues, meaning any reimbursements were also delayed. He said the district expects to receive any outstanding aid related to these capital outlays by next school year, which will solve the accounting issue.

In addition, Mr. Finster said the district discovered a filing deadline for the School Tax Relief (STAR) program had been overlooked in December. As a result, the district has not yet received its expected 2022-23 school year funding from this state program. The Business Office has applied for the funding retroactively to rectify the problem.

He said the district is also waiting to receive funding through the Smart Schools Bond Act (SSBA) for recent security upgrades to the school building. Now that the project is complete, the district is waiting for its approved reimbursement from the state.

"We fully expect Harrisville will not appear in this report again next year," he said. "Our district is committed to being fiscally responsible to our taxpayers and being a good steward of our financial resources."

Colton-Pierrepont had previously been listed as a district susceptible to fiscal stress.

"When assigning these designations, the state Comptroller's office has a formula that considers various factors. While their formula did not determine that the district is under significant fiscal stress, it did determine that the district was susceptible to fiscal stress. The state looked at the district's 'liquidity,' or the amount of cash it has on hand, and the district's 'unassigned fund balance,' or cash without an assigned purpose," Superintendent James Nee said in an email.

He said the district has developed a long-term fiscal plan that includes funding a building project to replace an aging heating system, maintaining/improving educational programs, and "hiring the best possible workforce for our students, all without taking on increased debt."

"To meet these goals, the district invested many of its unassigned funds in a district capital reserve at the end of the fiscal year," Mr. Nee said.

Lisbon Central School District Superintendent Patrick J. Farrand said the district's designation didn't fall into the significant stress category.

"The district has been identified as a district that is susceptible to fiscal stress based on a review that all New York state schools undergo annually. This is not a designation of significant stress and is the lowest designation aside from no designation, based on the tool that is used to make this determination," he said in an email.

Mr. Farrand said Lisbon "received scoring related to our fund balance and spending as a result of our fiscal plan for acquiring school buses."

"The district has purchased buses in the most cost effective manner, always looking to minimize debt obligations. This naturally increases the consideration to use funds within our fund balance when possible. This designation is related to a one time event establishing a new school bus fleet," he said.

He added, "The Comptroller's Office has just completed reviewing the fiscal position and practices within the district and was released in January 2023. The comprehensive audit showed no concern regarding the current value of the unassigned fund balance and any potential operating deficit."

Mr. DiNapoli said the number of districts designated as being in fiscal stress had declined, partially in response to federal grants targeted to low-income districts during the COVID-19 pandemic. He said many school districts also saw a substantial increase in state aid.

"The number of districts designated in a fiscal stress category has fallen considerably over the past three years. This year there was a particularly steep drop because of significant increases in both federal and state aid," Mr. DiNapoli said in a statement. "High need districts in urban and suburban areas, which typically have the highest incidence of fiscal stress, received some of the largest increases in aid. However, the federal aid is temporary so school district officials may face difficult operational and staffing decisions in determining how to best provide services to their students in the future."