Tonawanda News — An outside audit report released Wednesday determined the North Tonawanda School District is financially stable, but warned that a reliance on reserve funds could lead to future problems.
Thomas P. Malecki, a certified public accountant with Drescher & Malecki, who conducts audits with 18 Western New York school districts, said that North Tonawanda held an equitable tax rate during the 2012-2013 fiscal year, which ended on June 30, and stands on firm fiscal footing, notwithstanding recent cuts to state and federal aid.
“There’s a very small change from the previous year,” said Matthew Montalbo, a manager at the accounting firm, who spoke in front of the Board of Education. “We look at this as pretty impressive.”
In May, voters approved a $65,740,756 budget for the current fiscal year, with a 2.56 percent tax increase leading to a $26,830,000 tax levy. That generated a $21.48 tax rate for every $1,000 of assessed property value.
The district holds $17.5 million in its fund balance, with $4.7 million of that designated for the 2013-2014 budget and another $1.8 million considered unrestricted. The remaining portion of the fund balance of $10.8 million has been set aside for pension, retirement and health insurance costs.
Montalbo called the fund balance “reasonable” and said the district and the Board of Education is “not overtaxing your citizens,” but noted “there’s a little bit of uncertainty” with health insurance and retirement costs, as well as state aid.
“There needs to be some caution in using that fund balance,” he said.
Malecki added the $4.7 million used to balance the current year’s budget is sensible but could lead to problems in coming years.
“It’s OK to do that,” he said. “But all your costs are increasing and state and federal aid is unpredictable.”
Assistant Superintendent Alan Getter said to keep tax rates in line with state mandates the district has made painful cuts to staff and programs in the face of slumping enrollment and through the precariousness of state and federal aid projections, with financial assistance from the goverment generally released late in the budget-planning process.
He also acknowledged that the district’s fund balance, projected to run out by roughly 2017, wouldn’t be able to help balance the budget forever but noted the district is still holding out hope that increased aid could assuage the threat.
“This year we were able to keep our expenses down,” Getter said. “But if we take a major hit that could change.”
Contact reporter Michael Regan at 693-1000, ext. 4115.