GASD business officer labels Compass fund balance article “misleading”


During a presentation at the September 16 meeting of the Greater Amsterdam School District board meeting, Business Officer Colleen DiCaprio said a recent Compass article titled “$10 million GASD fund balance far exceeds legal state limit” was both “misleading” and that it “didn’t portray the whole truth.” However, during her presentation, she provided no evidence that the article lead anyone to a wrong conclusion, or that the article left out any pertinent facts related to the central subject of the article which was that the district’s fund balance continues to violate state law four years after the comptroller’s office directed the district to reduce its fund balance.

As cuts to educational services are being considered, due to delays and potential permanent reductions in state aid, the idea of using at least some of the $10 million unrestricted fund balance seems to be a fairly practical idea to most people. That was the focus of the article. However it seems to have also hit a nerve, prompting the business officer to defend past financial decisions, even during years she was not responsible for. While it was not my intent to delve into past issues, the officer’s citing of my article leaves me with no choice but to refute many of the points she made in the context of calling the article “misleading” and implying that I was lying by omission with the statement that I “didn’t portray the whole truth.”

First I want to make it clear that DiCaprio and board of education members had plenty of time and opportunity to comment on the issue of the fund balance before the article was published. I had reached out to DiCaprio via email on September 4. I also emailed members of the board for comment on the same subject, and Board Member Nellie Bush replied that she had forwarded my question to DiCaprio. So there is no doubt that my request for comment was received. My article ran on September 16 after giving ample time for district officials to respond. I received no communication back from DiCaprio whatsoever.

During the presentation, DiCaprio never acknowledged the ongoing violation of the New York State law. Rather, she defended it as being fiscally responsible.

DiCaprio cited a tax settlement involving Beech Nut as one of the contributing factors to the fund balance which the district did not have any control over.

Although she did not hold her current position at the time, she failed to mention that according to the comptroller’s report, the district’s balance has been in violation of state law since the 2013-2014 fiscal year when it ballooned to approximately $5.2 million and was a result of consistently inaccurate budgeting.

…the  district’s  consistently  conservative  budgetary  estimates  resulted  in  the  district  accumulating  excess  fund  balance as of June 30, 2014 and June 30, 2015, and district officials did not establish  an  adequate  plan  to  use  the  fund  balance  to  reduce  taxes,  fund one-time expenditures, pay down existing debt or fund reserves.

NY State Comptroller’s 2016 audit report on GASD finances

An article by John Purcell published in the Recorder on October 22, 2018 titled “GASD to tap fund balance for Lynch field mixed-use building”, quoted Kim Brumley, who was the business manager at the time, as saying the reason for the large fund balance, which had ballooned again to over $12 million, had to do with “BOCES refunds”.

An independent audit recently determined GASD’s unassigned fund balance as of June 30, 2018, totaled approximately $12.95 million, which is equal to 17.76 percent of the 2018-19 operating budget, well above its legal limit. This percentage also increased from the prior year, which was at 15.74 percent.

Jill Thaisz, a partner at West & Company CPAs PC, had said unexpected revenues swelled the fund balance in 2016-17. Brumley had said a “good percentage” of these revenues stemmed from BOCES refunds for prior year expenditures.

John Purcell/Amsterdam Recorder, October 22, 2018

So we see that there were a variety of contributing factors to the large balance. DiCaprio did not portray the entire truth of the situation by citing only one factor out of many. Rather she gave the misleading impression that the situation has been beyond the district’s control, when it certainly was not. Even if revenues are unanticipated in one year, it doesn’t prevent the district from making appropriate adjustments the following year.

DiCaprio stated that a plan was submitted to the comptroller’s office in response to the 2016 audit. That’s great, but despite the plan, the fund balance continued to increase above the legal limit in the following years.

She pointed out that the fund balance had been used for some past capital projects, and would also be used for the current renovations underway at Lynch and other locations. That’s great too, but the fact remains that the fund balance continued to increase above the legal limit even after the problem was pointed out by the state.

She mentioned that the fund balance has been utilized to keep property taxes from increasing in previous years. In the current budget, which included a 3% tax levy increase, $2.5 million was appropriated to keep the increase below the tax cap. This point may be a big one for some voters in the district whose top concern is keeping taxes low. What she failed to mention, however, and which might not sit too well with those same voters, is that we’ve obviously been over-taxed for years and the fund balance could have been used to lower taxes, not just keep them level.

Finally, DiCaprio presented what can only be described as a classic “straw man” argument – that if the entire $10 million fund balance was used to offset state aid cuts, and with additional costs associated with COVID-19 preparations expected to exceed $1 million, that the district could end up with a deficit.

Except no one suggested using the entire fund balance. My article proposed simply spending the balance down by $7 million, keeping $3 million of the balance to bring the amount in line with the maximum allowed by state law. Simple as that.

To present an “all or nothing” scenario as the only scenario is an obvious fallacy and misrepresented my position completely. And yet the board and superintendent listened and said nothing in response. I emailed each of them last week requesting a retraction, or at least a statement that DiCaprio’s opinion is not shared by the rest of the district officials, but I’ve got nothing back. So I must conclude by now that they all agree with it.

To top it all off, at the same meeting, in what I am sure was just a coincidence, the board voted to transfer a total of $850,000 from the fund balance to two reserve funds: $350,000 to the unemployment insurance reserve fund, and $500,000 to the accrued employee benefits liability fund.  That is at least one move that the comptroller’s report suggested back in 2016 and may prove to be helpful in the current situation.

So there you have it – school district officials know they have a duty to comply with state laws, but have yet to voice any contradiction to Superintendent Richard Ruberti, who in a recent press release said the district “needs to maintain the majority of its savings to remain financially stable going forward” even though that policy is clearly at odds with state law.

Instead of dealing in a professional manner with the issue, the board and superintendent seem to have circled the wagons and allowed the business officer to falsely accuse the Compass of being misleading and incomplete, while also allowing her to present an argument that I have clearly demonstrated was actually misleading and incomplete.

It’s clear to me that there simply hasn’t been enough detailed analysis of the school district budget and financial decisions over the past years. Accountability to the public is key to making sure governments manage our tax dollars responsibly and for the maximum benefit of the students. I guess I’ve got my work cut out for me. More coverage to come…

Tim Becker

Tim Becker is the owner of Anthem Websites Inc. which publishes The Compass. He serves as both editor and a writer.