The Rockville Centre school district is one of 21 districts in the state deemed to be susceptible to fiscal stress, according to a report released last week by New York State Comptroller Thomas P. DiNapoli. Five other districts in the state were categorized as having significant fiscal stress.
“Despite the ongoing financial pressures facing school districts, our fiscal stress monitoring system has revealed encouraging results in several communities,” DiNapoli said in a news release. “However, school boards and superintendents must remain cautious. Today’s budget decisions can have long-lasting implications and can quickly move a district into fiscal stress.”
Using financial indicators that include year-end fund balance, cash position, short-term borrowing and patterns of operating deficits, DiNapoli’s monitoring system creates an overall fiscal stress score, which drives the classification.
“While reading news such as this may be unsettling, we would like to…provide some insight as to the actual state of our financial affairs,” the Rockville Centre school district wrote in a statement, which was posted on its website on Thursday. “While there are criteria used to create such designations, the decisions made by the district have actually ensured our financial stability, while being able to continue to run our programs and services at an optimal level.”
The district noted that Rockville Centre’s fiscal designation resulted from the state’s perception of its finances in regards to undesignated reserves, fund balance and short-termed borrowing.
District officials noted that its undesignated reserves amount to 2.3 percent of its budget, which is below the 4 percent allowed by the state. The district could have placed unspent money in that reserve, according to the statement, but instead placed it into a designated reserve, which covers retirement expenses. “The decision not to create large undesignated reserves has been widely supported by the state comptroller,” the district said.
In terms of total fund balance as a percent of total expenditures, despite the district’s flat fund balance over the last eight years, it has dropped below 10 percent due to rising expenses, the statement noted.
Finally, the district’s borrowing increased to $11 million for the 2017-18 school year, which came after a period during which bond money lessened the need to borrow. “The state considers an increase in borrowing as susceptible,” the statement reads. Their focus is not on the amount borrowed, but on the increase in a single year.”
The comptroller’s fiscal scores are based on financial information submitted as part of each district’s ST-3 financial report filed with the State Education Department as of Dec. 28, 2018. A total of 672 school districts were evaluated; the monitoring system does not score New York City. Four other districts from Nassau County, including North Bellmore, Roosevelt, Hempstead and Long Beach, joined Rockville Centre as being susceptible to fiscal stress.
“…We felt it was important to assure our school district community that the Rockville Centre schools are thriving and will continue to do so,” the district’s statement said. “We expect that there will be more questions raised and we are happy to answer them.”
The state of the district’s finances will be discussed in greater detail at the next Board of Education meeting on Feb. 6, at 7:30 p.m.