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Dunkirk School Board disagrees with audit on appropriations

OBSERVER photo by Jimmy McCarthy The Dunkirk Board of Education will examine the New York State Comptroller’s audit report, which criticized officials for overestimating appropriations, next month. Board President Dave Damico said he disagrees with the report.

The Dunkirk City School District’s Board of Education president isn’t liking the New York State Comptroller’s recent audit report, which criticized the board and school officials for consistently overestimating appropriations.

Dave Damico briefly touched on the audit during last week’s board of education meeting. The state audit released last month examined financials from 2013-16. The report stated that appropriations were overestimated by an average of $3.7 million. Three of the district’s reserves, totaling $14.8 million, appeared to be overfunded as well, according to the comptroller.

In his remarks, Damico called the audit appalling. Six years ago, he said the board was in a position where they had no idea how they would make up $4 million in PILOT payments lost with the mothballing of NRG.

“I don’t like his findings one bit,” he said. “My first three years on the board, we cut a number of positions — upwards of 20 positions for three years. “Through retirement incentives and attrition, we looked at anyway we could save a buck and become efficient.”

The comptroller said the most significant budget appropriations consistently overestimated included employee benefits, instructional salaries, special education, tuition and utilities. The report said budgetary practices that overestimate appropriations each year result in higher than necessary tax levies.

The report said the district also realized operating surpluses and did not need to use any appropriated fund balance to finance operations.

Damico said the board will talk “in great deal” about the report next month. Damico thanked fellow board members who have served over the last six years, made the tough decisions and didn’t sit back and wait for the state.

“I think it needs to be noted that there were a lot of people through the last six years that made some very tough decisions,” Damico said. “If I had to do it again today, I’d do the same thing.”

Damico also thanked state Sen. Cathy Young, R-Olean, and Assemblyman Andy Goodell, R-Jamestown, for their help in securing mitigation aid in lieu of the PILOT payment loss. Chautauqua County, the City of Dunkirk and the school district had estimated an $8 million loss of revenues in 2017 without the state aid available through the mitigation fund.

In March, the Chautauqua County Industrial Development Agency board approved a renegotiated PILOT agreement with NRG detailing a disbursement of $420,000 annually between the Dunkirk City School District, city of Dunkirk and Chautauqua County. Payments commence during the school district’s 2017-18 fiscal year and the city and county’s 2018 fiscal year.

The annual $420,000 payment would go until the plant’s conversion from coal to natural gas or the school district’s 2022-23 fiscal year and the city and county’s 2023 fiscal year. Payments will ramp up as power generation units come back online.

William Thiel, school business administrator, told board members that a 4-to-5 year plan will be unveiled next month. Highlights will include impacts of NRG and state aid.

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