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S-GI school board audit lays out tough questions

SPRINGVILLE — The Springville-Griffith Institute Board of Education bookended its Dec. 17 meeting with a pair of executive sessions. The first, which opened the meeting, focused on what the board’s agenda called “pending litigation.”

District Superintendent Paul Connelly did not return a call for comment regarding those sessions, by press time.

Budget issues were also high on the list of concerns for the board, including the looming threat of insolvency, unless the district changes course.

Louann Laurito-Bahgat, an auditor for the district, gave a brief report to the board, regarding this district’s latest external audit committee findings.

Laurito-Bahgat said the district received “a very good audit opinion, meaning that the accounting records are in compliance with generally accepted accounting principles, in all material respects.” The auditor pointed out that, for the most part, S-GI “did not have any real significant changes in [its] financial position” since last year, and that the district is “in a favorable position” with a year-end surplus of $322,340.

Despite the positive opinion, board Vice President Joan Kelly voiced concerns about the possibility of financial shortfalls. “When you look at [reports like] these, and with other school districts that you’ve done, a scary word and a big word that’s been used the last few years is ‘insolvency.’”

Laurito-Bahgat responded: “The only way you’re going to be insolvent is if your tax base goes away. I think you have a rather strong tax base, in this community. Now, the problem for you, as a board, is whether you will have to propose to override the tax cap to continue with the same programs that you want to continue with. And I think more and more districts are going to be faced with that.

“If you don’t want to override the tax cap,” she added, “you’re probably looking at some very substantial cuts, to be able to maintain the district’s 2 percent property tax cap.”

Connelly noted that, at the current rate, the district’s financial health may be in jeopardy as early as next year.

“If we were to maintain the kind of levy that we’ve had for the last couple of years, Louann [Laurito-Bahgat], [Business Administrator] Ted [Welch] and I talked about this, and we could be upside-down by December” 2014, which the auditor confirmed.

According to the committee’s findings, school lunch revenues dropped 16 percent, while expenses dropped only 10 percent, leaving the lunch program with a $62,000 deficit to be absorbed by the program’s fund balance. Laurito-Bahgat said that if the program were to continue in the red, “you’ve got three years left in your lunch fund before the general fund is going to have to support it. And the general fund doesn’t have a lot of excess to support it with.”

The district is allowed to retain up to 4 percent of its budget in a general fund to offset tax rates – around $1.5 million – though some of that money had already been applied to this year’s budget. According to the auditor’s report, S-GI retained 3.53 percent of its budget in undesignated funds, or about $1.2 million.

“As you go into this next budget season,” said Laurito-Bahgat, “it’s going to be very important to monitor where the finances are for the district, because if we end up using the whole $1.5 million that we set aside for this fiscal year to be used to offset taxes, that means you’ve only got 3.53 percent of an annual budget left, in total.”

The auditor noted that S-GI is not unique among schools districts, and that “It’s really tough, everywhere. I don’t have a district that’s not struggling.”

Some New York state districts were able to build up their reserves to avoid similar threats to financial health, but, according to Laurito-Bahgat, they did so in direct defiance to state government.

“There are a handful of districts that had built up their reserves, over the last 10 years,” she explained, “and when the state came and slapped them for building up those reserves, they said, ‘I don’t care,’ and they kept them. Those are the [districts] that are kind of laughing right now at everybody else.”

The district’s business administrator’s report echoed the auditor’s outlook.

Addressing the board, Welch said the bad news “shouldn’t be a surprise to anybody. Again, it’s not doom and gloom, but we have to look at the real numbers; we have to look at the future.”

The administrator cited a 1.6 percent tax cap and the state’s Gap Elimination Adjustment as major sources of concern for the district.

The GEA is a measure put in place by New York state during the 2009-10 school year to help ease budget shortfalls by reduce aid to districts. Welch pegs S-GI’s losses to GEA, since the program’s inception, at $12 million.

“Obviously, looking back, that $12 million would have gone a long way to preserving programs and ensuring stability for the future,” said Welch.

Welch also noted a 72 percent reduction in the district’s fund balance, over the past three years, from $4.35 million to the $1.2 million figure cited by the auditor, and a 3.2 percent reduction in district revenues since 2009. Welch explained that retirement and contractual obligations also weigh heavy on the district’s balance sheets.

Both Welch and Connelly said that retirement incentives may be a way to relieve some pressure for the district.

“Dr. Connelly and I have been talking about some strategies,” explained Welch. “One, I think, we need to get moving on is to offer a sweet retirement incentive, because we have several employees that are at that bracket where they would probably go with an enhanced retirement incentive, and give it to them sooner, and require them to make a commitment.”

“We have to be aggressive on that,” added Connelly. “As far as putting it together sooner and offering it sooner – it’s one of the few valves we have.”

In other board news:

– Joseph Giroux, on behalf of Springville Youth Inc., addressed the board regarding fees for use of the middle and elementary school gyms. by SYI’s youth basketball program. Giroux said SYI was notified that the fee would be $200 for each 2-hour Saturday session. “We like to run our programs at the most inexpensive cost to the participants that we can,” said Giroux, and asked that the district explore options to reduce those costs.

– The board heard “Bright Spots” presentations from Jennifer Shearer, a special education teacher at S-GI high school, and seventh-grade English teacher Denise Broffman. The teachers focused on reading comprehension lessons in their classrooms that incorporated elements of the Common Core.

Kelly expressed concern over some of the literature recommended by the Common Core she said may be inappropriate for young readers, specifically, “Black Swan Green,” “The Librarian of Basra” and “Nasreen’s Secret School: A True Story from Afghanistan.”

In regard to “Black Swan Green,” Kelly said, “if half the people knew what was in that book, the filth and the lack of literature and the lack of proper English, I mean, I’ve never seen such garbage in all my life, and yet, it’s required. It has questions that are required in the Common Core. Are you kidding me? That’s the type of thing – we don’t need your ideas, we have our own.”

Kelly also called Black Swan Green “one of the most disgusting pieces of language I have ever read. Poor grammar; sexual, explicit things for ninth-graders; it’s [an] absolute disgrace. And the fact that our state [education] department recommends that as part of the Common Core is what scares me about the Common Core. What encourages me is the intelligence and the professionalism and the strength, within our own teaching confines, to come up with what is decent reading for our students with [English and language arts].

“The other thing is that there are two books – and these are not quite as critical – but it’s ‘The Librarian of Basra’ and ‘Nasreen’s Secret School.’ They’re third-grade books and modules, and they’re true stories.

“But the concern that I have as a citizen,” she continued, “is that I believe in, that we should teach about different cultures, but the way that these books – and the message is good, about the importance of books and the importance of education for girls – but how wonderful it would be if we used the importance of books in our own country, to be able to supply all our schools in our inner cities and in Appalachia and our rural areas, that they have libraries and that they have books. And that, in ‘Nasreen’s Secret School,’ which depicts soldiers in a very negative way, even though it’s, again, in Afghanistan, can we not use the talents of our own students to write books and use our own local printers to write books about how soldiers helped the people in the Philippines and how our soldiers helped build schools in Afghanistan?

“There’s a negative connotation in these books. And, again, I believe in cultural enrichment, but I also believe, at a very young age, that students should not have it imposed on them, adult concerns, at that early age.”

Shearer and Broffman do not use the books Kelly named in their lessons.

The next board meeting will be Jan. 14 at 7 p.m. in the S-GI high school library. A Budget Preparation Community Conversation is scheduled for Jan. 7 from 7-9 p.m. in the S-GI middle school cafeteria.
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