Dear North Shore Parents, Community Members, and Faculty,
Q. Dr. G., what is Fund Balance?
A. In simple terms, fund balance is just the difference between assets and liabilities in a governmental fund as of the close of the fiscal year. State Education Law permits the school district to keep up to 4% of the subsequent year’s budget in unassigned fund balance. Any additional amount remaining may either be returned to the public or assigned to an approved reserve fund. We do both. Having sufficient fund balance can prevent districts from facing borrowing costs when they need to cover cash flow deficits. It results in higher bond ratings that reduce interest costs. It also allows the district to respond to unforeseen costs without interruption in service.
Q. Is it true, Dr. G., that remaining excess fund balance is routinely returned to our taxpayers at the end of each year in the form of an offset to the future year’s tax levy?
A. Yes. The North Shore Schools Board of Education and Administration is committed to ensuring that North Shore’s students have access to a world-class education while preserving the fiscal integrity of our schools. Remaining excess fund balance at the end of each year is routinely returned to our taxpayers in the form of an offset to the future year’s tax levy. In each of the past several years, over a million dollars of fund balance has been returned to our resident taxpayers.
Q. Dr. G., have our auditors reported that North Shore’s Fund Balance exceeded the 4%?
A. As most residents know, North Shore is facing a unique and long-standing challenge: the decommissioning of the Glenwood Landing Power Plant. Between the years of 2013-2014 and 2014-2015, the District received special grants of $5.4M from New York State resulting from the strong advocacy by Senator Carl Marcellino and Assemblyman Charles Lavine. This assisted the District in funding gaps related to the decommissioning of the Glenwood Landing Power Plant as well as the conversion of about $7M in LIPA properties that were removed from the tax rolls and converted to PILOTS (Payments in Lieu of Taxes). In 2015, despite the District’s intensive efforts and testimony before the NYS legislature, a special reserve was not approved by New York State to hold these funds, and our auditors advised us to place these special grant monies in the unrestricted reserve (fund balance).
To be clear, these funds were not raised in taxes, and since the 2014-2015 budget, we have utilized $4,243,035 to reduce the tax levy. We have an established plan to use the remaining $1,156,965 and will continue doing so to reduce future levies until they are exhausted in the 2027-2028 fiscal year. Our auditors have consistently highlighted this in our annual reports to ensure that we have a plan for their eventual usage. See chart below:
This information was included in my 2021-22 Budget Presentation and can be found on our website at http://www.northshoreschools.org/boe/Budget/2021/Final-3-11-21-Budget-Presentation.pdf
We will continue to evaluate our use and funding of reserves openly and transparently each year at our publicly held Audit Committee and Regular Meetings of the Board of Education. As noted by our External Auditor at the April 15, 2021 Audit Committee meeting, North Shore’s reserve levels are in line with the overwhelming majority of our peer districts. We are proud of our Aa1 Credit Rating from Moody’s as well as a Fiscal Stress Designation of zero (No Designation) from the Office of the New York State Comptroller.
If you have any questions about the 2021-22 Budget, LIPA, Fund Balance, or our Reserves, please join us at the upcoming TENTTalk with the Superintendent and members of the Board of Education on Thursday, May 13, 2021 at 6:30 pm at the Central Office, 112 Franklin Avenue, Sea Cliff. Budget information can be found on our website at http://www.northshoreschools.org/boe/Budget.html If you would like to host a virtual budget coffee, contact Shelly N. at newmans@northshoreschools.org. In addition, if you would like to be added to our district email list, please visit the “Update Contact Information” section at the top of the school website at http://www.northshoreschools.org/subscribe/email_landing.html
Have a good day!
All the best,
Dr. Peter Giarrizzo
Superintendent of Schools