Strong Fund Balance Forecast for District

An initial estimate indicates the Huntington School District will be in a strong financial position when the school year closes on June 30. While the fund balance forecast is quite bullish, officials said it is still tentative as various events can impact the projection. The district ended last year “fully funded” with an unassigned fund balance of $4,459,740. School districts are allowed to maintain four percent of their total budget in the unassigned fund balance. The balance in the district’s various reserve funds at the close of the last school year included: Capital Reserve: $5,016,277; Employee Benefit Accrued Liability Reserve: $901,610; Repair Reserve: $201,808; Employee Retirement System Reserve: $2,171,970; Unemployment Insurance Reserve: $316,977; and Workers Compensation Reserve: $3,342,605. By maintaining healthy levels of reserves, the district is able to minimize its need for tax increases and is also able to better maintain its programs in an era of fiscal pressures. Strong reserves are also partly responsible for the district’s fine credit rating. “During challenging economic times, fiscal conservatism is essential and that must include careful attention to and maintenance of fund balance and reserves if the needs of district students and district taxpayers are to be met most effectively,” Superintendent James W. Polansky said. Assistant Superintendent Sam Gergis said the district’s initial estimate indicates it should be able to continue to maintain the unassigned fund balance at the four percent level or $4,588,289 based upon the 2013/14 total budget. “In addition, as per the budget process, we will be able to increase our assigned appropriated fund balance by approximately $53,577 to $2,180,953 in order to control our 2013/14 tax levy increase while preserving programs,” Mr. Gergis said. The district has maintained a conservative budgeting position for many years. It has generally followed a “pay-as-you-go philosophy toward capital projects, avoiding bond issues and has tried to keep a lid on expenditures and overly optimistic assessed valuation and revenue estimates. “Several events, including insurance and FEMA reimbursements for Hurricane Sandy damages, favorable borrowing rates for our Tax Anticipation Note sale and lower than anticipated increases in benefit costs have contributed to the positive effect on this year’s fund balance,” Mr. Gergis said. “These events as well as our strong fiscal controls continue to position us to respond to pressures from limited increases in state aid and the tax levy limit legislation. The district estimates that its general fund restricted fund balance position will improve by $3.677 million when the books close on the fiscal year. Mr. Gergis said the business office will continue monitoring the fund balance forecast and will keep trustees informed of any further developments.