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Introduction 1

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6 New York State Association of School Business Officials

UNDERSTAND AND MANAGE RESERVE FUNDS

Patricia Service, [email protected] (Last Updated: 5/6/15, Last Reviewed: 5/6/15)

The Issue

The New York State Comptroller’s guidance on the Reserve Fund describes the importance of Reserve Funds for good financial management.

“Saving for future projects, acquisitions, and other allowable purposes is an important planning consideration for local governments and school districts. Reserve funds provide a mechanism for legally saving money to finance all or part of future infrastructure, equipment, and other requirements. Reserve funds can also provide a degree of financial stability by reducing reliance on indebtedness to finance capital projects and acquisitions. In uncertain economic times, reserve funds can also provide officials with a welcomed budgetary option that can help mitigate the need to cut services or to raise taxes. In good times, money not needed for current purposes can often be set aside in reserves for future use. “

Legal Reference

 Repair Reserve Fund (GML Section 6-d)

 Workers’ Compensation Reserve Fund (GML Section 6-j)  Mandatory Reserve Fund (GML Section 6-l)

 Unemployment Insurance Payment Reserve Fund (GML Section 6-m)  Insurance Reserve Fund (GML Section 6-n)

 Employee Benefit Accrued Liability Reserve Fund (GML Section 6-p)  Retirement Contribution Reserve Fund (GML Section 6-r)

 Property Loss Reserve and Liability Reserve Fund (Education Law Sections 1709[8-c], 1950[4][cc])

 School District Capital Reserve Funds (Education Law Section 3651)  Tax Certiorari Reserve Funds (Education Law Section 3651)

 Tax Reduction Reserve Funds for School Districts (Education Law Sections 1604[36], 1709[37])  Career Education Instructional Equipment Reserve Fund (Education Law Section 1950[4][ee])  Uncollected Taxes in a City School District (Education Law Section 3651(1-b)

Best Practices

1. Familiarize yourself, the administrative team and the Board of Education as to the purpose and rules of Reserve Funds. Listed above are Reserve Funds available to school districts and BOCES.1_{But not all school districts or BOCES can establish each of the listed funds. For}

example, the big five school districts, school districts with more than 125,000 inhabitants, cannot use the Insurance Reserve Fund, Employee Benefit Accrued Liability Reserve Fund or the Retirement Contribution Reserve Fund. Only a BOCES can use the Career Education Instructional Equipment Reserve Fund.

1_{Each reserve should be examined for applicability to school districts or BOCES as they are not all}

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MAXIMIZE AID WITH CONTRACT TRANSPORTATION

RESULTING FROM RFPS

Gregg Diefenbach,[email protected] (Last Updated: 5/6/15, Last Reviewed: 5/6/15)

The Issue

What are the most common mistakes districts make with pupil transportation contracts, that result from requests for proposals, and that will affect Transportation Aid?

Legal Reference

 Education Law section 305 (14)  General Municipal Law section 103

 NYSED Commissioner’s Regulations – 8NYCRR Section 156.1

Best Practices

1. Develop a quality bid document and scoring system:

a. Develop specifications for the services to be delivered. It is recommend that the bid use an add /delete clause for all areas of major expense: bus, route, child, and attendants b. Determine how cost will be bid. For example: per bus, per child, per four hour bus run,

per attendant, etc.

c. Establish clear quantities of service. For example: number of routes, number of students. d. Determine the number of points available for each of the 10 criteria used for scoring. e. Set a minimum score which must be met in order to win an award.

2. Advertise the RFP in the district’s official newspaper. The advertisement should contain at least the 10 criteria and possible points for each, the minimum score necessary to award a contract, the bid opening date and location.

3. Form a committee to score every application that is received, even if only one is submitted. It must meet at least the minimum score to receive an award. It is recommended that Transportation Director not be on the scoring committee.

4. Submit a copy of all RFP materials including advertisement, specifications and quantity information, applications received, scoring sheets, resulting contract(s) to NYSED in a timely fashion.

5. Not following the requirement of Ed. Law section 305 (14) regarding bid advertisement and bid opening dates. The law provides that there must be at least 5 full days between the first day of advertisement (competitive bid or RFP) and the actual date of bid opening.

6. School districts may enter into transportation contracts for a period not exceeding five years (see Education Law §1709[27]), so the cooperative bid or RFP should clearly state the term of the resulting contract.

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7. N ne $2 ag th de 8. If it ba co 9. R im re N Resources  N  N Not meeting th ew contracts 20,000 thresh ggregate total hen all other

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SUBMIT CONTRACTS AND CONTRACT EXTENSIONS THAT ARE

TIMELY AND ACCURATE

The Issue

Once a pupil transportation contract has been accepted by the Board of Education it must be submitted to NYSED. Initial contracts or contract extensions must be submitted to NYSED within certain standards in order to generate aid.

Legal Reference

 Education Law section 305 (14)  General Municipal Law section 103

 NYSED Commissioner’s Regulations – 8NYCRR Section 156.1

Best Practices

1. Pupil transportation contracts and extensions must be filed with NYSED within 120 days of the first day of service. The Office of Educational Management Services can still approve the contract however the Office of State Aid will deduct aid for each day late.

2. Executing a contract in the correct manner and date order for required signatures is important. If done incorrectly the contract may be disapproved. Leaving signatures blank or not calculating total cost are two typical mistakes. The following are basic signatory requirements:

a. Agreement Date must be before the first day of service

b. The Board President and the Contractor sign with the Agreement Date c. Superintendent must sign the contract on or after the Agreement Date

3. Submit the contracts or contract extension by the required dates. Missing the June first and July first deadline dates for bidding regular home-to-school and special education contracts may lead to a contract not being approved. If a district supplies a reason for the late filing the program office may accept it.

4. Watch the start and stop dates of the contract such as beginning a Summer Contract or Extension before July first or running it after August 31st or beginning a School Year Contract or Extension before September first or running it after June 30th.

5. Using the correct form and completing all the information will speed up approval. A link to the forms and instructions is listed below.

6. Responding to faxes sent or phone calls from NYSED staff to the contract contact person is important. Not responding may delay the approval of the contract. If the district changes the responsible staff member for the contract, the new contact information should be shared with NYSED.

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Resources  N  N  C S s NYSED, Pupil o Phone o http://w NYSED, State o Phone o https:/ Contract exten o http://w Submit Contr l Transportati : 518-474-654 www.p12.nys e Aid : 518-474-29 /stateaid.nyse nsion forms an www.p12.nys

racts and Con ion 41 sed.gov/schoo 77 ed.gov/ nd informatio sed.gov/schoo ntract Extensio olbus/ on olbus/contrac

ons That are T

cts.html

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UNDERSTAND MILEAGE REQUIREMENTS FOR PUPIL

TRANSPORTATION

The Issue

Non-city school districts are required to provide transportation to and from school for all students. The law does not differentiate if the student is in a public or private school. The statutory mileage limits are different than the mileage limit set in the state aid calculation. Districts that consider changing the mileage limits for transportation should review the last voter authorized mileage standards.

Legal References

 Education Law sections 2023 and 3635

 NYSED Commissioners decisions: 46 Ed Dept. Rep 565 (2007), 22 Ed Dept. Rep 381(1983), 1 Ed Dept. Rep 381 (1959)

Best Practices

1. Know the miles limitation when the district must transport students and compare those state minimums to the district’s policy. For districts other than city districts transportation must be provided to elementary (K-8) pupils who live more than two miles and up to fifteen miles from the school they legally attend. For pupils in grades nine through twelve, transportation must be provided if they live more than three and up to fifteen miles from the school they legally attend. 2. Pupils living more than 1.5 miles from school are considered allowable students in the calculation

of the non-allowable pupil decimal used in the calculation of Transportation Aid. The district must report all bus runs with the number of students outside 1.5 miles (allowable students) and students within 1.5 miles (non-allowable students) every three years. If the district has computerized routing, work with the transportation department to assure that the data is correct so that maximum aid can be generated.

3. Work with the Committee on Special Education (CSE) and the transportation department to coordinate transportation for students with disabilities. There is no mileage limitation for pupils with disabilities transported pursuant to a determination by your district's committee on special education that such transportation is required as a related service.

4. When considering changing the transportation policy of the district NYSED advises that school districts shall continue to transport students to and from the regular school program in accordance with the mileage limitations previously adopted by the qualified voters of the school district. Such mileage limits shall change only when amended by a special proposition passed by a majority of the qualified voters of the school district., In the event a school district does not have documentation of voter approval of mileage limitations that go beyond those in statute, NYSED recommends that a current proposition be put to the voters. The district’s policy manual should reflect voter authorization.

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Resources  N  N s NYSED, Pupil o Phone o http://w NYSED, State o Phone o https:/ l Transportati : 518-474-654 www.p12.nys e Aid : 518-474-29 /stateaid.nyse Understand M ion 41 sed.gov/schoo 77 ed.gov/ Mileage Requ olbus/

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MANAGE BUS REPLACEMENT AND MAINTENANCE RECORDS

FOR EACH VEHICLE

The Issue

Bus maintenance and bus replacement are important for the safety for the students that ride the buses and the taxpayers that authorize the purchases.

 Education Law (sections 101, 207, 305[14] [d],1604[23], 1709, 3602[7][a]-[b], [d], 3624, 3625, 3635[4], 3637)

 Vehicle and Traffic Law (sections 509-g, 1229-d; L. 1990, ch. 661; L. 1993, ch. 700, § 2; L. 1995, ch. 439; L. 1996, ch. 698; L. 1997, ch. 436, § 1, part A, § 58; L. 2002, chs. 472, 529, 600; L. 2003, ch. 159; L. 2003, ch. 270; L. 2007, ch. 670)

 8NYCRR 156.4

Best Practices

1. In considering a bus replacement schedule it would be beneficial for the district to use a cost evaluation methodology to weigh and evaluate the fleet’s condition. NYSED states the average life of a bus is 10 to 12 years or 150,000 to 175,000 miles.

2. Maintenance records should be kept for individual buses and reviewed by the transportation department and business office to determine when a bus will need to be replaced.

3. State aid for buses is paid over five years, the district may consider financing buses to match state aid payments. A replacement schedule should be developed that keeps the annual budgeted cost stable.

4. The only buses that should be kept for a longer period of time would be spares. But it needs to be noted that spares are costly to keep as they still require DOT inspection and proper maintenance.

5. Use of specialized vehicles like wheelchair lifts should be evaluated. The district should consider the length of time the vehicle will be needed. Would it be cheaper to lease a specialized vehicle than to purchase it?

6. Keep a spreadsheet with the following information for each vehicle:

a. Month/Year of purchase, number of passengers, purchase price, annual mileage, date sold or traded.

7. Submit a SA-16 to the NYSED’s state aid unit as soon as a bus is delivered and starts service. The SA-16 is the trigger for state aid. Both the transportation department and business office need to work together to assure all the correct paperwork is submitted. A copy of the SA-16 should be retained in the business office.

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Resources  N  N  N  A s NYS Departm NYSED, Pupil o Phone o http://w NYSED, State o Phone o https:/ A copy of the Manage Bu ent of Transp l Transportati : 518-474-654 www.p12.nys e Aid : 518-474-29 /stateaid.nyse SA-16 can be us Replaceme portation ion 41 sed.gov/schoo 77 ed.gov/ e found at http

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MANAGE GRANTS FOR CASH FLOW AND INTENT

The Issue

Grants can be awarded from a variety of state, federal or private agencies. Each grant has its own requirements. The business office should be aware of all grant funds awarded to the district, minimally the business office should assist in the development of the budget and submit the claims for reimbursement. At best the business office may be involved in the administration of the grant and should be aware of all the requirement of each grant.

Legal Reference

Varies by grant

Best Practices

1. Most grants are accounted for in the Special Aid Fund, the district needs to establish the budget for each fiscal year in its accounting system.

2. Review the rules for each grant. Some grants will allow for cash advances, others will not. In order to assist in managing the district’s cash flow submit a reimbursement claim. For federal grants such as Title 1 and IDEA an FS-25 is used to claim spent funds.

3. Employees paid with federal money must complete payroll certifications, which the business office should keep on file.

4. Grants may cross fiscal years. For example, Title 1 grants run September 1 to August 31. Districts should establish the budgets in the accounting system and should be reviewed at the end of the fiscal year, to determine what the level of funds remain be expended in the following fiscal year.

5. Traditionally only 90 percent of funds are released until the final cost report is submitted and the final cost report must be filed within a limited number of days after the closing of the grant. Timely submission of the final cost report will assist with cash flow and avoid unnecessary additional paperwork.

6. Some grants allow for carryover of funds from one fiscal year to another fiscal year. Each grant has different rules for carry over. For example, only 15 percent of Title 1 funds can be carried over, while the whole allocation of IDEA grant can be carried over.

7. Office of Management and Budget Circular A-133 states that entities that expend $500,000 or more in a year in Federal funds are required to have an A-133 audit. An A-133 audit examines compliance with the regulations governing the use of the funds submitted (FS10-F) 8. The business office annually must register on-line with the federal System for Award

Management (SAM), which is a Web-enabled government-wide application that collects, validates, stores and disseminates business information about the federal government's trading partners in support of the contract award, grants and the electronic payment processes. Keep a file of the password and information submitted, this will be helpful during the renewal process.

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Resources  N  S  B s NYSED Grant o Phone o http://w ample letter f o www.p ple.do Budget forms a o http://w ts Finance Un : 518-474-48 www.oms.ny

for payroll cer

p12.nysed.go c and claims fo www.oms.ny nit 15 sed.gov/cafe/ rtifications v/accountabil or reimbursem sed.gov/cafe/ Manage / lity/consolida ment /forms/ e Grants for C atedappupdate Cash Flow an e/documents/ nd Intent 17 /FulltimeEPCCSam

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MAXIMIZE STATE AID FOR SPECIAL EDUCATION

PLACEMENTS

Patricia Service [email protected] (Last Updated: 5/6/15, Last Reviewed: 5/6/15)

The Issue

State aid for students with disabilities is paid to school district after districts complete the necessary paperwork. Students in public placements either at BOCES, your school district or another public school, receive Foundation Aid and Excess Cost Aid. Students with disabilities must have an Individual Education Plan (IEP) provided by the Committee on Special Education (CSE). All public placements students generate Foundation Aid, students that have an IEP with a minimum minutes of service per week drive additional Foundation aid. In addition students that are in a public placement whose tuition cost more than three times the average cost of educating a student in the district can generate high cost public excess cost aid. Students that are placed by the CSE in a private institution drive private excess cost aid.

 Section 3602 of NY State Education Law, the CSE responsible district may file a Request for Reimbursement Approval for school-age special education students who attend district or BOCES programs and who have an annualized special education cost that meets or exceeds their district threshold dollar amount

 Section 4405 of NY State Education Law, the CSE responsible district may file a Request for Reimbursement Approval for school-age special education students placed in day or residential programs at SED-approved private schools. Private excess cost aid is generated to the CSE district for the costs of education only

Best Practices

1. The business office must work with the Committee on Special Education Office in order to maximize state support. The two offices should develop a plan on which office will submit the necessary paperwork.

2. Annually make sure the appropriate staff has access to the online system.

3. The Business Office and CSE staff needs to review who has access to the state’s electronic claim system, STAC on-line or EFRT. Information for individual students must be submitted and verified on-line.

4. The offices should meet at least once a month to review new student placements.

5. Students that are placed in private institutions must have state approval of the placement. The approval is secured by submitting on-line a D-Cert within six days of the CSE meeting making the placement.

6. Maintenance cost for residential placements are paid by the County. The county then bills the district 38.424 percent of the maintenance costs. Budget the cost appropriately and accrue the cost at the end of fiscal year if the county has not billed.

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Resources  N  R  T s NYSED STAC o Phone o http://w Request for on o http://w Training Mater o http://w C Unit : 518-474-71 www.oms.ny n-line access www.oms.ny rials on STAC www.oms.ny Maximi 116 sed.gov/stac/ sed.gov/stac/ C unit sed.gov/stac/

ize State Aid

forms/stac_ac training_mate for Special E ccess_form.p erials/ Education Plac pdf cements 19

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CLAIMING AID FOR SPECIAL EDUCATION SERVICES DURING

THE SUMMER

Patricia Service [email protected] (Last Updated: 5/6/15, Last Reviewed: 5/6/15)

The Issue

Students with a disability may require services during the summer months of July and August. State support for summer services is claimed and calculated differently than during the school year, September to June.

Legal Reference

 Section 4408 of Education Law

Best Practices

1. Business office and Committee on Special Education (CSE) must coordinate who will submit the assurance of required certifications for all school age private school reimbursement (the DCERT) online within six days of the CSE meeting. State approval of the placement (DCERT) is required annually and covers the school year from July 1 to June 30. This means that any student in a private placement that attends a summer program must have the DCERT filed within six days of the start of the summer program. The DCERT will cover the whole year including the school year if there has been no change in the placement.

2. The business office needs to develop a budget in the Special Aid Fund for the all the student attending special education programs. Tuition, maintenance cost and transportation cost are recorded in the Special Aid Fund.

3. Maintenance cost for residential private institutions is paid by the district and reimbursed 80 percent by the state.

4. Reimbursement for one on one aides is separate, therefore the CSE and business office must determine which students have additional services and who will submit the STAC to generate the aid.

5. The business office must work with the transportation department to calculate the cost of transporting special education student to their programs. Cost for transportation is reimbursed through the STAC (EFRT) on-line system at 80 percent.

6. The district may receive partial current year aid for summer placement, However, all state aid will not be received in the current fiscal year. Therefore, the district must calculate and create a state aid receivable in the Special Aid Fund.

7. Education and transportation cost must be verified separately on-line before the state generates payments. The district needs to determine who is responsible for verifying placements and the transportation cost, it maybe two different people.

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Resources  N  R  T s NYSED STAC o http://w Request for on o http://w Training Mater o http://w Claim C unit www.oms.ny n-line access www.oms.ny rials on STAC www.oms.ny

ming Aid for S

sed.gov/stac/ sed.gov/stac/ C unit sed.gov/stac/ Special Educa forms/stac_ac training_mate ation Services ccess_form.p erials/ s During the S pdf Summer 21

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TIMELY SUBMISSION OF FINAL COST REPORT FOR CAPITAL

PROJECTS

The Issue

Building aid for capital construction projects with NYSED approval after July 1, 2011 are aided by the state after the Final Cost Report is submitted to NYSED. Accurate accounting will lead to a timely submission of the Final Cost Report. The process starts at the beginning of the construction discussion.

Legal Reference

 Section 4 of Chapter 97 of the Laws of 2011 altered the Building Aid start date by amending NYSEL 3602 6.e.(3)(b). The earliest Building Aid can begin for projects approved by Facilities Planning on or after July 1, 2011 is 18 months after the Commissioner’s Approval Date (CAD) or the date on which both the final Certificate of Substantial Completion (CSC) and a completed Final Cost Report (FCR) are on file at the State Education Department, whichever is later.

Best Practices

1. Get involved or track the scope of the project from the beginning; As soon as the Board of Education starts discussing the possibilities of a project. The scope of the project will change throughout the discussion. The Board of Education and administration may want a $40 million project but have determined that the public may only support $11 million. Be proactive and understand what is included in a $11 Million project is very different than a $40 million project. Once the project scope has been defined and a budget has been set obtain the basic information from the architect.

a. How many separate projects will be submitted to NYSED. The voters may authorize $11 million of construction; however there maybe work in three different buildings. Each building will have its own building project number.

b. Anticipated budget for each project. The architect should be able to provide a preliminary budget for each project, the more specific the information you get the better you will be able to understand the project and financial needs.

c. If there are multiple projects, get a schedule of value for each project. For example, the $11 million will be used for 3 projects, one in the high school, elementary and middle school. It is anticipated that $6 million will be spent in the high school, $3 million in the middle school and $2 million in the elementary. Costs that are shared by all three projects, such as architect and legal fees should be split between the projects: 54 percent to the high school, 27 percent to the middle school and 19 percent to the elementary. 2. Set up your district’s accounting system from the start to mirror the reporting on NYSED’s

Final Cost Report. A FCR will be submitted for each project. Therefore, separate account codes for each project should be established. Use the established project number to separate the codes. Each accounting system is different but most allow for identifiers. Here is an example of project expenditure codes and revenue codes.

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Timely Submission of Final Cost Report for Capital Projects 23

Expenditures

Fund Proj # Function Object Description

H 413 2110 0.201 Clerk of Works / CM H 413 1620 0.293 General Construction

H 413 1620 0.294 HVAC

H 413 1620 0.295 Plumbing

H 413 1620 0.296 Electrical

H 413 2110 0.246 Incidental - Survey and Engineering H 413 2110 0.24 Incidental - Administrative/ Contractual H 413 2110 0.243 Incidental - Insurance

H 413 2110 0.297 Incidental - Site Improvement H 413 2110 0.2 Incidental - Furniture & Equipment H 413 2110 0.245 Incidental - Architect Fees

H 413 2110 0.244 Incidental - Legal Fees

Revenue

Fund Proj # Function Description

H 413 2680 Insurance Recoveries H 413 2705 Gift and Donations

H 413 2770 Other Miscellaneous

H 413 3297 State Sources, Excel Aid H 413 3297 State Sources, OTHER

H 413 4297 Federal Sources

H 413 5031 Interfund Transfer from General Fund

H 413 5700 Term Bonds

H 413 5710 Serial Bonds

H 413 5720 Statutory Installment Bond H 413 5730 Bond Anticipation Notes

H 413 5740 Capital Notes

H 413 5785 Installment Purchase Debt H 413 5789 Other Debit

HR 413 2401 Capital Reserve - Interest and Earning HR 413 5031 Capital Reserve Interfund Transfer

H= Capital fund

3. After submitting the Final Cost Report any excess funds must be moved to the Debt Service Fund in order to pay the debt.

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24 Resources  N  F pr ge  F New York S s NYSED Facili o Phone acilities Plan roject number eneral inform o http://w

inal Cost Rep o http://w State Associat ities Planning : 518-474-39 nning website rs, dates of N mation. www.p12.nys ports www.p12.nys tion of Schoo g Unit 06 e has informa NYSED appro sed.gov/facpl sed.gov/facpl ol Business O ation on proje val of Final P an/ an/document fficials ect status inc Plans and Spe

s/FinalCostR cluding listing ecs, approved Report.xls g of open bu d change order uilding rs and

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ENGAGE IN LONG-RANGE FINANCIAL PLANNING

Kurt Jaeger, [email protected]

Kathryn M. Barrett, [email protected]

Deborah H. Cunningham, [email protected] (Last Updated: 5/6/15, Last Reviewed: 5/6/15)

The Issue

In the turbulent economic and policy environment of the past six years, involving freezing and deficit reduction of state education aid, a quest to slow the growth of local education taxes through a statewide Tax Cap and policy changes affecting teacher evaluation, assessment, data privacy and learning standards, school districts need to use every resource and tool to ensure effective and efficient management of school resources. Many districts are establishing long-range financial plans. These plans are critical to maintaining sound fiscal health while maintaining educational programs for students. A long-range financial plan can link multi-year budgets to show what decisions are necessary to maintain programs and fiscal stability over the long term. They can assist administrators and school boards in understanding the long-term impact of decisions made today. They take into consideration community priorities, anticipated student enrollment, curriculum mandates, technology needs of students, facility needs, contractual provisions, rapidly increasing cost items, anticipated state resources, property tax caps and use of reserve funds.

Legal Reference

 None.

Best Practices

1. Include all of the key stakeholders in the development of the long-range financial plan,

making the general public, including parents and students aware of the work: board of education members, superintendent, curriculum director, business official, and facilities director.

2. Basic components. Long-range financial plans should include five basic components:

expenditures, revenues, fund balance, the five-year capital plan and a plan to accomplish the district’s instructional goals.

3. Uncertainties. Do not avoid long-range financial planning because of uncertainties about

state aid, the allowable growth factor for the Tax Cap, contractual increases in times of contract negotiations and increases in health insurance and pension costs. Instead carefully document and articulate the assumptions that are in the financial forecast.

4. Estimating Expenditures. Most district expenditures such as salaries, retirement system

contributions, and debt service requirements are fixed costs that are fairly simple to estimate over the next five years based on current contracts, projections of full-time equivalent staff, information provided by retirement systems and debt service schedules maintained by districts. Estimates for utilities and transportation may be based on historical increases over the past three to five years. School officials can document facility maintenance costs with the assistance of qualified professionals (engineers and architects) by updating and utilizing the building condition survey. This document is required to be updated every five years but doing annual updates will give the district a tool that provides current information and costs.

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Engage in Long-Range Financial Planning 27

5. School officials can document facility maintenance costs with the assistance of qualified engineers.

6. Consider the potential for savings by using the following approaches:

 Review collective bargaining agreements and seniority lists and understand the terms and conditions for layoffs and recall provisions.

 Work with union leadership. Reductions by attrition are more cost effective than layoffs. Layoffs affect the least senior people, result in less savings due to the lower salaries of less senior staff, and have significant additional unemployment cost associated with them.

 Concerning possible labor concessions, share with your bargaining unit leadership what can be accomplished with concessions compared to layoffs.

7. Estimating revenues. Revenues and more specifically state aid are likely to be the most

challenging component of a long-range plan to develop. Generally, revenues other than property taxes and state aid are a very small component of total revenue and tend to follow historical trends. With three years of experience with the Tax Cap, Business Officials will be able to estimate future property tax revenue with some degree of reasonableness. State aid is less predictable. How long will it take the State to phase out the Gap Elimination Adjustment? The optimistic estimate is two years. Most districts are taking a conservative approach assuming flat state aid over the near term or slight increases factoring in some recovery of aid from phase out of the Gap Elimination Adjustment.

8. Use of Reserves. The new reality of district budgeting is the inevitable use of fund balance

and reserves. Boards and community members must remember that use of fund balance and reserves to balance the budget is a reliance on “one shot” revenues. Once used, they are not available for future years and the budget may be unsustainable. Some important points to consider include:

 Use of fund balance affects cash flow for districts especially during the summer months when they are receiving little or no other revenue.

 Given flat or decreasing state aid, use of designated fund balance to subsidize the tax levy must be monitored very carefully. Reduced state aid and a reduced ability to designate fund balance quickly becomes a “double hit”.

 Be mindful of the multi-year impact of using reserves. Acceptable minimum reserve balances, and related reductions, should be established early in the process.

 The plan will highlight the pitfalls of indiscriminately using one-time revenues without any follow up strategies. The long-range financial plan will help school officials take timely actions that avoid long-term problems.

 Consider the timing of the use of reserves. For example, consider use of the unemployment reserve when your unemployment costs are expected to be higher. Otherwise, the district may be faced with holding reserve funds that they cannot use when needed.

 Districts may find it wise to budget more conservatively when using reserves. This may provide some opportunity to replace these reserves, at least in part.

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9. Five-year capital plan. Any long-range financial plan should include districts’ five-year

capital plans, which have been required since 2001 and updated annually pursuant to Commissioner’s Regulations Part 155. The capital plan can involve significant expenditures and may be critical to achieving the district’s education mission such as providing facilities appropriate for students with disabilities, prekindergarten students or science, technology and engineering programs that are part of a district’s efforts to prepare students to be college and career ready. The goal of the five-year plan is to preserve school district capital assets and meet expectations with regard to the use of facilities to meet the district’s education and community goals.

10. Supporting long-range instructional goals. The plan should describe revenue expectations

and expenditure projections that support the implementation of a plan to achieve the school district’s instructional goals. The district may decide to focus on a variety of strategies including for example: improving access and opportunity to advanced coursework for historically under-performing students, strengthening English language arts and mathematics instruction by implementing programs aimed at achieving Common Core Learning Standards, developing educational programs for prekindergarten students that are aligned with instructional initiatives targeted for early grades, developing science, technology and engineering programs, or strengthening linkages between educational programs and career opportunities for students. Whatever the priority or priorities, the board, district staff and general public will benefit from understanding the district’s long-term goals and how its finances are aligned to accomplish them.

11. For a long-range financial plan to be a useful tool for administrators and boards, it must be based on accurate data and rational assumptions to provide users with a realistic picture of the financial challenges that lie ahead. The plan should allow users to change and analyze varying scenarios or assumptions such as, allowing users to compare the financial impact of a negotiated 3 versus 2.5 percent increase in teacher contracts, consolidation of bus runs, or use of a retirement incentive.

12. The plan should provide districts with a road map of the steps to be taken financially in order to meet goals and objectives of providing students with a high quality education that will enable students to become college and career ready. Consider sharing with the community the short and long-term financial challenges of the district and the plans the district has developed to overcome them. Continued open and honest communication with will help the district manage its financial operations and achieve educational objectives.

13. Experience has shown that by the last years of a five-year forecast many districts may see shockingly large numbers. This can send administrations and boards of education into a tailspin (resulting in dysfunction) that the "sky is falling in." In practice, corrective action (cost containment and restructuring) is done each year so that this doesn't happen five years out. The five-year forecast will be more credible and understandable if this type of thinking is built into the process. The practical problem is owning, adjusting and documenting these "corrective action" assumptions.

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Engage in Long-Range Financial Planning 29 Resources

 New York State Rural Schools Center’s budget sandbox

o http://www.nyruralschools.org/w/data-tools/budget-playground/#.VLQdHGTF84I

 New York State Comptroller’s long range planning tool o http://osc.state.ny.us/localgov/myfp/index.htm

 Forecast5 Data Analytics system

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