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B-P responds to comptroller’s ‘moderate fiscal stress’ designation

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In a report issued Thursday, State Comptroller Thomas DiNapoli’s office identified 82 school districts statewide that are in or are susceptible to fiscal stress, including Broadalbin-Perth, which was one of 24 districts identified as being in moderate fiscal stress.

The comptroller’s fiscal stress system uses financial indicators to evaluate budgetary solvency – that is, the ability of a school district to generate enough revenue to meet expenses. In the weighted indicator system, a school district’s year-end fund balance counts for half of its total score. Districts use year-end fund balance the following fiscal year as “rainy day” funds.

At the end of the 2014-15 school year, the district took $1.4 million in unassigned fund balance and assigned it to the 2015-16 school year as revenue to maintain programs. The district has also spent additional fund balance to complete short-term, urgently needed repairs to buildings and to maintain aging and failing infrastructure systems. In order to prevent this from happening in the future, district officials are planning to address building infrastructure in a capital project proposal to go before voters on May 17.

“I want to assure Broadalbin-Perth residents that this designation is not a result of fiscal mismanagement,” said Superintendent of Schools Stephen Tomlinson. “Year-in and year-out, we have continued to maintain and enhance student programs in a fiscally responsible manner, all while working to minimize the impact on taxpayers. I commend the business office for making this possible.”

Tomlinson pointed out that the district has received the highest possible rating on its independent audit of district finances in each of the past eight years. In addition, the district also received top ratings in two audits conducted by the comptroller’s office during that time. Tomlinson also noted that the fiscal stress indicator is misleading and that the district has other reserve funds it can use for specific purposes, so Broadalbin-Perth is not operating without a financial safety net.

“I can’t stress enough how important it is for the members of our business office to be recognized for their efforts, in difficult financial times, for keeping the district in the sound fiscal position it’s in,” said School Business Administrator Marco Zumbolo. “The district has an ‘A’ bond rating, so we’re borrowing at the best possible rates for buses and capital expenditures. I don’t think that being listed as having the potential for fiscal stress has any direct relation to our current fiscal condition.”

“In the end, this is not a spending problem; this is a revenue problem,” Tomlinson said. “Were it not for years of frozen state foundation aid and the continued existence of the Gap Elimination Adjustment, we would not be in the position of having to operate with such a depleted fund balance just to maintain our buildings and programs for students.”

Since 2010, the Gap Elimination Adjustment (GEA) has diverted billions of dollars in aid from schools so the state could eliminate its budget deficits. During that time, Broadalbin-Perth has lost $10.7 million to the GEA. In Gov. Andrew Cuomo’s state budget proposal, Broadalbin-Perth is slated to lose an additional $230,340 to the GEA in the 2016-17 school year.


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