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Potsdam Central seeing its savings erode

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POTSDAM - A few years ago the Potsdam Central School District had an unallocated fund balance that was equal to 5 percent of its budget and more than $4 million in available reserves.

Now, according to projections from the district’s business manager, those numbers have dropped significantly.

“We had been keeping it at 5 percent, but last year we were at 4 percent and now we’re ar 3.58 percent,” Superintendent Patrick H. Brady said.

According to a spreadsheet put together by Laura Hart, the district’s projected fund balance at the close of this fiscal year will be $1,000,165, $118,776 short of the 4 percent fund balance allowed by state law.

Mr. Brady said he realizes the district was in violation with a 5 percent balance, but he said the district was saving money for the future and now he’s glad they did.

“Now we’re eating into that fund balance,” he said. “We’re using that to offset cuts.”

Ms. Hart said the district had traditionally put fund balance into the budget. “In the past, we always appropriated fund balance, but we never used it until last year and again this year,” she said, noting she’s projecting $147,381 in fund balance to be used in support of the 2012-13 budget.

“When you start using fund balance, it’s a downward spiral,” she said. “It’s like your savings at home. If you start using your savings to pay your bills, it will eventually run out.”

At this point, Ms. Hart and Mr. Brady are recommending using $1 million in fund balance to support the 2013-2014 budget, leaving them with the another $1,000,165 in their fund balance.

The district’s reserves are also diminishing, according to a spreadsheet put together by Ms. Hart.

At the end of the 2012 fiscal year, the district had $4,014,126 in available reserves. Her projection for the end of the current fiscal year has that number down to $2,619,794.

That includes using $450,000, all of which will be spent to support the current year’s budget, and $885,000 in capital reserves that’s being used for the upcoming capital project.

At this point, Ms. Hart and Mr. Brady are again recommending $450,000 in reserves to be used for the 2013-2014 budget, a move that would leave them with $2,169,794 in reserves at the close of the 2013-2014 fiscal year.

“What this shows us is things are getting tighter,” Mr. Brady said.

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