Says money will be used to fund two major projects without adding to taxpayers’ debt levels
Criticized for having an excessive fund balance, Port Jervis School District Superintendent John Bell defended the practice saying it would save taxpayer money, according to a Dec. 5 public letter on the district website.
The letter came on the heels of a new audit by the New York State Comptroller’s Office, which found the district maintained a fund balance three to five times the statutory limit in the past four years.
Fund balance is an accumulation of unspent revenue.
According to the New York state’s Real Property Tax Law, a school district cannot maintain a fund balance of more than 4 percent of the next year’s budget, although surpluses above that limit can be used to lower property tax levies or fund reserves.
The district’s combined excessive fund balance reached $23 million, largely a result of the overestimate in spending, according to the audit.
Bell said in the letter that the excessive fund balance will cover expenses for two major capital projects without incurring more debt for the district.
One is the renovation of the century-old building of Port Jervis Middle School. In May, district voters approved applying $10 million from the fund balance to the project.
The other is Orange-Ulster Board of Cooperative Educational Services’s $158 million capital project, $8.2 million of which will be shouldered by the Port Jervis School District.
“If we were to finance the BOCES project over 20 years, it would cost the Port Jervis [Central School District] taxpayers approximately $13.8 million instead of $8.2 million,” Bell wrote in the letter.
“Thus, we are saving our taxpayers $5.6 million in interest by having this money available in our savings account,” Bell concluded.
In the letter, Bell refers to the fund balance as the district’s saving account.
Those two projects alone would bring the district’s fund balance down to $5.4 million, he said.
Contrary to the state audit’s conclusion, which says the district failed to manage the fund balance effectively, Bell commends the district staff for building up the savings.
“I applaud those who came before us and had the foresight to closely monitor the annual budgets and save whatever they could annually to avoid a big tax increase down the road to pay for these projects,” he said in the letter.
“We will continue to develop conservative budgets and hold the line on taxes to the best of our ability while still providing a quality education for our students,” he added.
The Epoch Times reached out to the New York State Comptroller’s Office for comments.
Follow
Cara is an Orange County, New York-based Epoch Times reporter. She can be reached at cara.ding@epochtimes.com
