Niagara Gazette

January 17, 2014

State report lists Lewiston-Porter and Niagara-Wheatfield in 'significant fiscal stress'

By Timothy Chipp timothy.chipp@niagara-gazette.com
Niagara Gazette

Niagara Gazette — Lewiston-Porter and Niagara-Wheatfield school district residents who’ve seen their property tax bill increase over the past three or four years know the news Thursday couldn’t be great pertaining to their communities.

New data released by the New York State Comptroller’s Office Thursday, monitoring “fiscal stress” of the state’s 674 school districts through June 2013, shows just how troubling the financial situation is in these neighborhood education hubs.

Both of the districts, each coming off at least two years of major economic struggle, have landed on the list of districts facing “significant” fiscal stress. It means they’re categorized with the worst designation a district can receive in Comptroller Thomas DiNapoli’s report.

“When we went through the budgeting process, we knew we were in a world of trouble,” Lew-Port Superintendent Christopher Roser said. “We knew our backs would be up against the wall, that we’d have to weather the storm of Gap Elimination and some of the other challenges we faced. We were able to two years ago, but we weren’t able to last year and that’s when you saw all of the layoffs we had to make.”

The two districts join West Seneca as the only ones in the “significant” category in Western New York, a determination made using financial indicators that include year-end fund balance, cash position and patterns of operating deficits.

The comptroller’s office analyzed separate environmental indicators to help provide insight into the health of the local economy and other challenges that might affect a school district’s finances. These include student enrollment, property value, budget vote results and poverty.

The data is converted into a percentage and weighted to show how much a school district can struggle financially to meet the needs of its students in a four-level grading system. For instance, Lew-Port’s environmental score was 12 percent but fiscally measured 82 percent, exceeding the 65 percent score level marking the “significant” stress category.

Niagara-Wheatfield was similarly scored, receiving 5 percent environmentally but 80 percent fiscally.

Of the state’s 674 districts included in the study, which excludes New York City and the “Big Four” of Buffalo, Rochester, Syracuse and Yonkers, a total of 87 showed some form of financial risk. Niagara Falls City School District is included in this, though its administration revealed last week it is only categorized as “susceptible” to stress, second-lowest in the grading scale.

In his report, DiNapoli takes note of the existence of the gap elimination adjustment, or GEA, which originally used state aid to school districts to help New York close multibillion-dollar budget deficits following the housing market collapse and financial meltdown on Wall Street in 2007.

The loss of state income forced each district to use its cash reserves to offset tax levy increases instead of state money, which most districts only had limited resources to pull from. Lew-Port ran out of cash reserves this past June before finalizing its reductions, while Niagara-Wheatfield eliminated more than 70 positions two years ago as part of its fiscal crisis.

But while DiNapoli is calling for district officials to better manage their cash flows more carefully, Roser said he’s doing the best he can given the circumstances he’s had to endure.

“When your operating with a $40 million budget, taking away $2 million in revenues every year is monumental,” Roser said, adding the cuts the district made heading into 2013-14 could help the district end this current year in a better financial position than it began.

“We have to, because we have no reserves to fall back on,” he said.

Niagara-Wheatfield is in a similar place according to the report, but internally is coming at the problem from an entirely different one. The district’s financial struggles, which has seen the end of pre-kindergarten classes and much-buzzed-about discussions concerning eliminating both sports and kindergarten classes to reach budget neutral, resulted in administrator turnover the past two years.

Financially, the two most important positions in the district – the superintendent and business manager – both took office to start this school year. Neither were part of the district’s past indiscretions, though both are struggling mightily to keep it from continuing into their tenures.

“Part of the problem is we’re walking into it,” Superintendent Lynn Marie Fusco said. “Neither one of us has a deep understanding of the budget yet. We’re both walking in having to extract the deeper meaning from the budget because we didn’t create it. While we do have the opportunity to speak with those who did create it, it’s that intimate knowledge they have that we don’t. It’s a significant challenge.”

Together with business manager Allison Brady, they’re spending much of their time both figuring out how the budget works and how to put the district in a financially stable position heading into next school year. The district has instituted spending freezes much earlier than normal, part of an effort to keep expenditures at a minimum.

Though neither is sure yet how the current year will end, they’re hopeful this approach will provide the district its second consecutive positive fund balance come June.

“That’s the goal to work towards getting that,” Brady said. It’s hard for me to project how it’s all going to end up, but our goal is to minimize our expenditures and maximize our revenues.”

Contact reporter Timothy Chipp at 282-2311, ext. 2251 or follow on Twitter @timchipp.