Letter To The Editor – Concerns With The Finances Of The Berlin Central School District

To the Editor:
As a banker with over 20 years of experience, I’ve spent my career analyzing financial statements and business plans of companies and non-profit organizations. My professional experience tells me savvy, financially stable organizations tend to plan for their long term financial futures, while less sophisticated and less disciplined organizations tend to focus their efforts on annual budgets and current problems. As a local taxpayer, I became interested in analyzing the financial condition of the Berlin School District during the capital project referendum late last year. Since the referendum, I have analyzed the historical annual financial audits going back to 2001 and have closely followed budget workshops and Board of Education meetings this year. In my informed opinion, taxpayers should be very concerned over the financial condition of the Berlin School District.
A few facts are worth comparing between fiscal 2001 and fiscal 2009 for the Berlin School District. Revenue increased from $14.1 million to $19.2 million, which included local property taxes and related reimbursements increasing from $5.4 million to $8.3 million, New York State aid increasing from $7.5 million to $9.7 million and federal aid increasing from $700 thousand to $900 thousand. Total expenditures increased from $14.3 million to $18.6 million, which included general administration increasing from $1.7 million to $2.1 million, instructional salaries and expenses increasing from $8.4 million to $10.5 million, student transportation increasing from $1.1 million to $1.6 million and employee benefits increasing from $1.6 million to $3.3 million. In short, taxes and expenditures were increasing by more than 30% during this period, while total student population declined markedly; I estimate around 15% over the last 9 years to 911 students currently.
These financial trends are not good and could be much worse going forward. Governor Paterson has proposed cutting local education funding by 5% in this year’s budget. President Obama has proposed changing federal aid formulas away from student counts and towards student performance targets. The District’s infrastructure (buildings and facilities) still require a major costly upgrade. Employee benefit expenses are expected to continue increasing at a rate of 2x the cost of inflation. Academic standards will need to be materially improved. Finally, according to the Board of Education, total student population is expected to continue declining another 7% to 9% over the next five years.
The Board of Education’s own Policy Manual states, “The Board recognizes the need to maintain public confidence in… the management of taxpayer resources in a manner consistent with the resources available to the community.” I urge the community to take a keen interest in the preparation of this year’s annual School District budget to insure future financial expenditures can be supported by the community’s taxpayer resources.
Heinz Noeding
Petersburgh