School board makes fiscal decisions

PINE PLAINS — Michael Goldbeck, the assistant superintendent of business and finance for the Pine Plains Central School District, gave a presentation during the Board of Education meeting on Wednesday, Aug. 3, regarding the school district’s financial standings and plans for the future.In the presentation, Goldbeck explained the more than $500,000 of anticipated savings the board was able to secure for the taxpayers by voting to use some of the district’s fund balance to pay down the district’s debt this year instead of stretching the payback period over 15 years. The debt was incurred as a result of the Seymour Smith masonry project.“Paying interest is a waste of money,” said the Board of Education (BOE) President Bruce Kimball, who said the board chose to use the fund balance to pay down the debt because the board owes it to the taxpayers to use the money in a “fiscally responsible way.”“It was basically a no-brainer,” said Kimball.In preparation for the Wednesday, Aug. 24, Board of Education meeting in which the board will decide how much of the district’s fund balance should be appropriated to reduce the tax levy, Goldbeck also explained what a fund balance is, detailed the history of the district’s fund balance over the last five years and noted the factors that affected the 2010-11 fund balance.A fund balance is the accumulation over time of a difference — positive or negative — between the budgeted revenue and the expenses. A positive fund balance occurs when the revenue is greater than expenditures. A negative fund balance occurs when the expenditures are greater than the revenue.“Budgeting is an estimate, conservatively developed in order to be best prepared for emergencies and numerous unknowns,” said Goldbeck during the presentation.There are several costs that the district must predict for the coming year when developing the budget. These costs can impact the fund balance either positively or negatively. They include cost and usage of fuel and utilities, retirements and leaves of faculty, transportation expenses, special education costs and new unfunded mandates from the state and federal governments.Goldbeck presented three examples of what the finances could look like during the 2012-13 school year (when a state-mandated cap on the tax levy will go into effect) depending on how much the board decides to appropriate from the fund balance to reducing the tax levy. He explained that there is an infinite number of permutations on how much the board can decide to appropriate, and each will draw a different picture of the district’s future finances.Kimball noted that the board will need to find a balance between using the fund balance to reduce the tax burden on the local community and preserving some money in case of future emergencies or unexpected costs to the district.The board will decide how much of the fund balance to appropriate to reducing the tax levy during the next board meeting on Wednesday, Aug. 24. The meeting will be held at 7 p.m. at the Stissing Mountain High School.

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