Ogdensburg, Potsdam schools ‘susceptible to fiscal stress,’ state comptroller says
Ogdensburg and Potsdam schools are designated as susceptible to fiscal stress in a “stress monitoring” report on school solvency from state Comptroller Thomas DiNapoli’s office.
Using indicators that include year-end fund balance, cash position and patterns of operating deficits, the “stress monitoring system” creates a score that classifies districts in “significant fiscal stress,” in “moderate fiscal stress,” as “susceptible to fiscal stress,” or “no designation.”The comptroller’s monitoring system is designed to be an early warning of money problems in a district.
Canton Central, also among the districts evaluated for the report, was not designated as being in any stress, in spite of a recent audit by the comptroller’s office that was critical of Canton for putting district finances in jeopardy with a smaller than desired reserve fund that had been drained in recent years in trying to keep the school operating.
The report, which analyzed 674 school districts that operate under fiscal years running from July 1 to June 30, found 13 percent of them at some level of fiscal stress. The “susceptible” designation with which Ogdensburg and Potsdam schools find themselves is the lowest category of stress.
The news release from the comptroller’s office says they analyzed separate “environmental” indicators that they hoped would help to provide insight into the health of the local economy and other challenges that might affect a school district’s finances. These include such measures as student enrollment, property value, budget vote results and poverty rates.
The analysis is based on regular standard reports from schools filed with the state Education Department as of Dec. 13.
School districts found to be in fiscal stress share a number of common characteristics, the report said. Most are operating with low fund balance, operating deficits and limited cash on hand. These districts were also found to have a much higher likelihood of using short-term borrowing to bridge cash flow gaps.
Fiscally stressed school districts also share a number of what the report calls environmental themes. For example, fiscally stressed school districts were more likely to experience declining property values, high poverty rates and low school budget support. Although many factors are outside a district’s control, they can drive additional costs or hurt the district’s ability to raise revenues.
The other St. Lawrence County school districts in the report but which are not declared to be under stress are Brasher Falls, Canton, Clifton-Fine, Colton-Pierrepont, Edwards-Knox, Gouverneur, Hammond, Heuvelton, Lisbon, Madrid-Waddington, Massena, Morristown, Norwood-Norfolk, and Parishville-Hopkinton.
This report gave each district numerical scores called “fiscal score” and “environmental score,” which are explained in more detail here.