LaFayette Central School District is no longer deemed “susceptible to fiscal stress,” according to a report recently released by the New York State Comptroller’s office.
On January 20, New York State Comptroller Thomas P. DiNapoli’s office released its Fiscal Stress Monitoring Report for 2016 which, based on financial and environmental indicators, purports to identify local governments and school districts that are moving towards – or are already in – fiscal stress.
The system creates an overall stress score by measuring a variety of factors including year-end fund balance, short-term debt issuances, cash position and patterns of operating deficits. The score is based on the fiscal year ending on June 30, and reflects financial information taken from each district's annual financial statements.
The district was classified as being in “moderate” fiscal stress for the 2012-2013 year when the statewide evaluation system was implemented. For the past two years, the Comptroller’s annual report classified LaFayette CSD with an upgraded “susceptible” designation, which is the mildest label included in DiNapoli’s Fiscal Stress Monitoring System.
According to the recently released 2016 report, LaFayette CSD’s fiscal health continued to improve to the point that it is no longer designated as a fiscally-stressed or even susceptible to fiscal stress.
Why was LaFayette CSD on the list?
In June 2011, LaFayette CSD’s year-end financials reflected a deficit of $2 million dollars due to outstanding receivables, which negatively impacted the district’s cash position. The monitoring system uses a cash ratio as a way to determine whether a district has enough money to pay its obligations on time.
Throughout the following two years, the district eliminated its deficit – an improvement, said Laura Lavine who became superintendent in July, 2014, but far from the district’s goal of funding a 4 percent fund balance, which is the maximum retainable amount permitted by law.
Complicating the situation is that SED gives revenue to LaFayette CSD to operate its Onondaga Nation School, but – even though it is also a state entity - refuses to provide the funds prior to each operating year. Instead, SED requires the district to borrow the money in advance then reimburses the district, including interest, the following school year, according to Superintendent Lavine. In turn, she avers that Comptroller DiNapoli’s office essentially punishes the district for complying with SED.
“Comptroller DiNapoli knows that SED requires us to borrow money upfront to operate ONS, yet he will not make an accommodation for it,” she said. “I won’t say that ‘one hand doesn’t know what the other is doing’ because the Comptroller’s office is aware of this situation. Instead, it appears that his office doesn’t care as evidenced by his continuing to assign six points against us for doing what we are forced to do.” She also finds it inexplicable that the state would rather pay the interest on the amount borrowed than provide the money in advance to run the school. “That seems like a waste of state funding,” she said.
Despite these challenges, Superintendent Lavine said she and Assistant Superintendent Tiffany Turner continued to focus on improving the district’s cash flow. In 2014, the district’s fiscal outlook improved through the Comptroller’s report and the district was downgraded from “moderate” to “susceptible.” In 2015, the district’s year-end fund balance increased from 1.55 to 2.4 percent and its cash position improved.
Their continued efforts resulted in LaFayette CSD’s 2016 year-end fund balance reaching four percent.
“We accomplished these improvements through contract negotiations, by deploying staff more judiciously, finding cost efficiencies and avoidances, generating additional revenue and properly seeking transportation aid and Medicaid reimbursements,” said Lavine.
Superintendent Lavine is pleased that the financial improvements were made within a relatively short period of time – all while literacy rates increased, more learning opportunities have been provided to students, and safety and security have been improved.
“The district has not been in fiscal difficulty these past few years but we are happy to have our financial acumen and efforts recognized in the form of being removed from the list,” Superintendent Lavine said.