The Port Jervis School District plans to change several financial practices under new superintendent John Bell since a state audit concluded ineffective fiscal management last fall.
A key move is to drive the fund balance down to within the statutory limit, which is 4 percent of the school budget, or around $3.6 million.
The fund balance is a savings account in which unspent revenue from past years accumulates.
The state recommends that surpluses above 4 percent be used toward reducing the tax levy, paying off debts, or filling up reserves, instead of piling up as savings year after year.
However, over the past four fiscal years, the Port Jervis District consistently maintained a fund balance three to five times the statutory limit, according to an audit report released by the State Comptroller’s Office last year.
To fix that, the district administration has proposed to use the surpluses in several capital projects, including upgrades to the high school auditorium and the old middle school building.
It also plans to use it to purchase a district office building on Pike Street valued at $1.7 million.
“We are working very hard to use the accumulated fund balance in a way that improves the facilities and programs for our students,” Bell told The Epoch Times.
The above proposals, along with the budget and school board candidates, are up for a vote by district taxpayers on May 16.
According to the state audit, the overflowing fund balance was primarily caused by overestimates of spending, a practice that the district has worked to fix.
During the 2023–2024 budgeting season, the district administration tried to arrive at more accurate estimates in five major categories: teacher salaries, Board of Cooperative Educational Services (BOCES) tuition, transportation costs, health insurance, and retirement benefits.
The district also discontinued the practice of making worker’s compensation payments out of the general fund, according to a corrective plan obtained by The Epoch Times.
Between 2017 and 2021, the district paid about $900,000 in worker’s compensation claims with money from the general fund, despite having enough balance in the worker’s compensation reserve.
The practice, in essence, uses property tax money to cover expenses that could have been paid for otherwise, according to the audit report.
Budget Adoption
On April 20, the Port Jervis District school board adopted a budget of $90 million, up from $82 million in the past year, with the tax levy remaining flat at $29 million.
It’s the largest year-over-year budget increase for the district in the past decade.
The budget bump is mainly due to a historic influx of federal and state aid projected to hit more than $58 million in the next school year.
In the nearby Middletown School District, the school board approved a budget of around $253 million at a special meeting on April 21.
The district’s tax levy remained the same as last year, at $72 million.
