OBSERVER Photo by Braden Carmen Business administrator Lisa Rohloff explained to the Silver Creek Board of Education how the district owes more than $1 million because of significant rate reductions by New York state.

SILVER CREEK — Business administrator Lisa Rohloff was tasked with being a bearer of bad news at a recent Silver Creek Board of Education meeting.

Rohloff shared with the board that after unexpected, significant rate adjustments by New York state, the Silver Creek Central School District owes a total of $1,033,215 related to the Native American Tuition Reimbursement agreement. Silver Creek just recently received notice of the seven-figure obligation on Aug. 3.

“As you can imagine, it took a few minutes to catch my breath when I received that email,” said Rohloff.

Silver Creek is currently in a 10-year agreement with the state in which the district is provided with funding to reimburse tuition, transportation, and other costs for Native American students to be enrolled in the district. Every year, the non-resident tuition rates are established in January, then apply to the previous school year to be used for reimbursement. The school must file for reimbursement three times in the year, by Jan. 31, by June 30, and following the day the Basic Education Data System data is established in October. As it pertains to Silver Creek, the rates of reimbursement dramatically decreased from January 2021 to January 2022, then again from January to April.

In January 2021, Silver Creek was operating with rates of $13,741 per student in grades kindergarten to grade six; $12,892 per student in grades seven to 12; and $23,136 per student identified as a Student with Disabilities. One year later, in January 2022, those figured dropped to $9,622; $9,453; and $17,488; respectively. Then again in April of 2022, those figures dramatically decreased again, to $6,621; $6,470; and $13,049; respectively. The repeated dramatic decrease caught Silver Creek — and other schools in similar positions — off guard.

“The April change this year has never happened before, and that’s what shook our district — and districts across the state,” Rohloff told the Board of Education.

According to Silver Creek Superintendent Todd Crandall, the district had never seen a notable deficit throughout the state agreement prior to this point. To go from no notable deficit to a seven-figure hole came as a shock.

“We weren’t happy and we shared our displeasure,” said Crandall. “We weren’t aware it was coming.”

Rohloff reached out to other districts in similar positions — although they were all less dramatically impacted — in search of guidance on how to proceed.

“A few phone calls were made to neighboring districts who I knew had experienced something similar. Their amounts were just not as significant as ours. … What we were looking for is some direction, that we weren’t alone in this. What were they going to do to not just reduce revenue by $1 million?” Rohloff said.

For the 2022-23 school year, Silver Creek has budgeted for a reimbursement of $1,162,557, as per the 10-year state contract language. However, reimbursement will not be applicable until the $1,033,215 the district owes is repaid.

Other neighboring districts impacted will be deducting from budgeted revenue in 2022-23.