District Provides Overview of State Comptroller's Designation of 'Moderate Fiscal Stress'
The Fiscal Stress Monitoring program is an initiative of the Office of the New York State Comptroller to identify issues of a school district’s budgetary solvency, i.e. its ability to generate sufficient revenue to meet its expenditures.
The Fiscal Stress Monitoring program analyzes both fiscal and environmental information submitted to New York State by the District over multiple years against a set of uniform financial and environmental indicators. Based upon an analysis of these conditions, the State Comptroller’s Office has designated the Rhinebeck Central School District as being under "moderate fiscal stress," and “environmental stress - no designation.”
The “fiscal indicators” include measurements of year-end fund balance; operating deficits/surpluses; cash position; and reliance on short-term cash-flow debt. The “environmental indicators” include percent of economically disadvantaged students; class size; teacher turnover rate; change in property value; budget vote approval rate; and percent of English Language Learners.
The Total Unassigned Fund Balance is the single most pressing fiscal issue that the Rhinebeck school district is addressing at this time. Unassigned Fund Balance is defined as available monies that don’t have any restrictions on their use, while Total Fund Balance is defined as monies available for specific purposes.
One of the reasons for the District seeking a voter override of the tax levy cap in May 2017 for the current school year was to help rebuild the Unassigned Fund Balance to a more appropriate level, in the judgment of the State Comptroller’s Office. It should be noted that the results of the 2017-18 voter-approved tax levy cap override won’t be known until the close of the 2017-18 fiscal year.
It also should be noted, however, that the 2017-18 Budget, which our community approved in May 2017, is not part of this year’s Fiscal Stress Monitoring calculus. The reason for the override vote this past May was to generate additional revenue to replenish the Unassigned Fund Balance that has taken a hit over the past several years, due largely to unanticipated and skyrocketing costs for required and necessary services for special education students.
The District has started to bring those costs under control, in part, by providing some high-cost special education services within our own school district to students with prior outside placements. However, the unpredictability and the cost of a number of these mandated and appropriate program expenditures often occur over the summer or during the school year, well after a budget for the coming school year has been developed and adopted by the Board of Education and then approved by the District’s registered voters.
In addition, increase in expenditures for other obligations, such as employee health insurance premiums, as well as for many unfunded mandates, along with shrinking State Aid for high wealth school districts like the Rhinebeck Central School District, when tax levies are capped by State law, make replenishing Unassigned Fund Balance a daunting, multi-year task, but a fiscally prudent reason to maintain a healthy Unassigned Fund Balance.
The Comptroller's Office monitors fund balances to ensure that they are neither too large, which would represent unnecessary excess taxation, nor too small, making the district vulnerable to unexpected costs. These fund balances are in the process of being replenished as the District budgets for 2018-19. In support of these efforts, the Board of Education has identified long range planning for the sustainability of our schools as one of its most important, multi-year goals, for this year and for the foreseeable future.