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Explanation of GCSD's designation as a district "susceptible to fiscal stress"

Jan. 30, 2015—On Jan. 29, New York State Comptroller Thomas P. DiNapoli released the second report of the state’s Fiscal Stress Monitoring System. Using financial indicators that include year-end fund balance, short-term borrowing, and patterns of operating deficits, the system creates an overall fiscal stress score which classifies whether a district is in "significant fiscal stress," in "moderate fiscal stress," as "susceptible to fiscal stress," or "no designation."

DiNapoli's office evaluated 672 school districts with fiscal years ending on June 30, 2014. According to the report, Guilderland Central School District is classified as one of 53 districts “susceptible to fiscal stress,” having earned a fiscal stress score of 26.7 percent out of 100 percent. This is the second year that Guilderland has been designated as "susceptible to fiscal stress" by the Comptroller's Office.

The fiscal stress scores are based on financial information submitted as part of each district's ST-3 report filed with the State Education Department as of Dec. 31, 2014. 

“The Comptroller's monitoring system uses broad ranges that, when combined with a weighted evaluation system, may not accurately reflect the true differences among school districts of fiscal stress when designations are applied,” said Assistant Superintendent for Business Neil Sanders. “The system is intended to be an indicator of potential fiscal stress but not a determination that fiscal stress necessarily exists.”

Guilderland received a designation of “susceptible to fiscal stress” based in large part to a $4,000,000 short-term tax anticipation note issued in July 2013 and paid off in October 2013.

"Short-term borrowings are needed to cover bills and payroll during the summer before the receipt of state aid and tax revenue," explained Sanders. "One of the judgments school districts have to make is the timing of the receipt of state aid, which can vary from year to year."

Typically, the September aid payment was always received at the beginning of September. However, in the past few years payments have not been made until the middle or end of the month. Anticipating that a later aid payment was likely to happen again, the district, in consultation with its financial advisor, chose to issue a summer borrowing to ensure sufficient cash was on hand to make payments.

Under the Comptroller’s formula, any short-term debt issuance is viewed negatively and contributes to a district’s fiscal stress score. That one short term borrowing added 3.3% to Guilderland's score. Had the district not borrowed for the summer, the district’s score would have been 23.4%; below the 25% threshold designation for “susceptible to fiscal stress.”  In other words, had the district not borrowed for summer needs, Guilderland would have been classified as “no designation” along with the majority of school districts in the State.

Guilderland was also noted in the Comptroller's report for having a lower than recommended year-end fund balance.

In recent years, the district has routinely applied a portion of its fund balance to district revenues to preserve programs and help lower the annual tax impact on district residents in lieu of appropriate levels of state aid.

"The prolonged and devastating effects of the 2008 recession continue, marked by dramatic reductions in state and federal aid to support education and local governments," said Sanders. "Had we not used money from our fund balance, the district would have had to make additional reductions to its educational program in order to stay within the tax levy limit.”

"There is value in school boards and communities understanding the fiscal pressures school districts are under and the attempt to classify potential levels of fiscal stress. The last several years have been challenging to school districts," said Sanders. "However, Guilderland has and continues to carefully and strategically utilize and manage its financial resources through a long range financial plan and annual budgets which are shared and discussed with the Board of Education and the community."

For more information on the Fiscal Stress Monitoring System, please visit the Office of the State Comptroller’s website: