Millions of dollars in unanticipated revenue helped the Buffalo Public Schools end the fiscal year in June with a $12 million surplus.
That’s a big change from the shortfall it had originally anticipated and some encouraging news for administrators trying to navigate budget deficits on the horizon.
The surplus was among the highlights of the district’s annual audit performed by independent auditors Freed Maxick and released to the Board of Education last week.
“It’s basically another really good audit,” said Superintendent Kriner Cash. “This year, financially, has been one of the more extraordinary years, on a positive scale, that I’ve been associated with.”
Conservative budgeting and spending played a part in turning a potential deficit into a surplus, said Geoffrey Pritchard, the district’s chief financial officer. Health insurance didn’t increase as much as anticipated, for example, and costs for occupational and physical therapy came in under budget, as did projected payouts for teacher retirements, he said.
The big difference, though, was the windfall that came in at the end of the school year. That included $10.2 million from the state for building aid and career education; $2.4 million in federal Medicaid revenues; and $2.8 million from the state to cover costs of students enrolling in the district after being displaced by hurricanes in Florida, Texas and Puerto Rico.
All, however, were one-time payments, and the surplus doesn’t change future revenue and expenditure projections or the fact that the school district is still facing an anticipated deficit this school year – as well as the following year.
But it does provide the district with a little more breathing room, by increasing its total fund balance to $194.7 million.
“By doing well this year, we didn’t use up any fund balance,” Pritchard said. “So instead of using $22 million in fund balance, we actually increased it by $12 million. That’s a pretty substantial amount now in fund balance. Now, we have future flexibility.”
That is important, because the school district – which has a budget of more than $1 billion – has been facing criticism that it couldn’t afford the teachers' contract it approved in 2016 and was going to dry up reserves paying for it.
Cash and Pritchard, though, pointed to the financial report and said the district is not only paying for and managing the cost of the teacher’s contract – now in its third and final year – but also has since settled other contracts with administrators, substitute teachers, food service employees and bus aides.
The district also continues to fund the lion’s share of ongoing reform efforts and rising payments to charter schools, Pritchard noted.
Park District Board Member Lou Petrucci raised some questions but, overall, was encouraged by the financial report.
“It’s going in a positive direction,” Petrucci said of the district's finances last year, “but it was still predicated on a number of one-time funding sources, and those funding sources will burn off, so that is my concern going forward.”