The Weedsport Central School District had already implemented a plan to increase its fund balance even before a recent audit by the office of New York State Comptroller Thomas P. DiNapoli designated the district as having “moderate fiscal stress.” Weedsport had a “susceptible to fiscal stress,” status last year, and no designation the previous two years.

Under the “fiscal stress monitoring system,” the New York State Comptroller assesses the financial health of school districts by using a variety of factors, including year-end fund balance, cash position and patterns of operating deficits. It then assigns them a score between 1-100 percent. A score of between 65-100 percent signifies “significant fiscal stress,” anywhere between 45-64.9 percent qualifies as “moderate,” and 25-44.9 percent earns a district a “susceptible” designation. Districts below 25 percent do not make the list.

For the fiscal year ending in 2020, the state gave the district a score of 45.

District leaders attribute the classification to a decrease in fund balance and a lack of cash on hand. In October 2019, Weedsport made $234,000 in technology purchases which were to be covered by the Smart Schools Bond Act (SSBA). The SSBA, approved by the state in 2014, was issued to finance enhanced educational technology and infrastructure.

The district paid for the initial technology costs out of its fund balance, but when the SSBA funding is released, district leaders expect the fund balance to return back to an acceptable level.

Superintendent Shaun O’Connor said over the past two years, the district has seen its foundation aid frozen and is currently dealing with the ramifications of the COVID-19 pandemic aid reductions. He said the district is also limited in the amount of revenue it can generate because of the property tax levy cap.

“Nevertheless, as we enter uncertain economic times due to the pandemic, we are gradually trying to reduce our deficit and our reliance on reserves to balance our budget,” he said.

“The goal is to continue to monitor expenses while looking for cost saving opportunities, and begin preparing for potential aid restrictions in future budgets. With the possibility of federal funding levels falling short in upcoming years, we are preparing to bring this to current budget discussions, to reduce the future dependency the District could have on reserves to offset the loss of money.”

The New York State Comptroller says local governments (including schools) may use some fund balance in order to keep tax rates low and/or maintain services in the face of short-term economic fluctuations, or just to reduce an unnecessarily large fund balance. Even though this results in lower fund balances, spending down of fund balance can be an acceptable practice as long as it is done in conjunction with long-term financial planning and does not reduce fund balance below the critical point.