Financial advisor Dr. Rick Timbs offered his annual report to the Dunkirk Board of Education recently.

The Dunkirk school district’s financial adviser was reassuring about the money situation, but warned there will be challenges ahead.

Dr. Rick Timbs made his annual presentation to the Dunkirk Board of Education last month. He said the district’s foundation aid from the state is expected to go up $3,188,970 this school year, to $26,901,928.

Foundation aid is “the bedrock of aid supporting your district. This helps to offset a lot of tax increases and costs to your district,” Timbs said.

He called the more than $3 million hike a “significant increase in that aid. Matter of fact, it’s probably one of the largest you’ve seen as a school district in the history of this foundation aid since 2007. But I believe you’re in for a larger increase starting in 2023-24. This will be a huge, significant increase for the district, a great boost for its finances.”

However, the boost “is not going to last long.” Timbs expects the state to decide that it has paid up all the money it owes to school districts over the years. The boost is rooted in a 2022 court ruling that the state has underfunded school districts for years.

He envisioned a “significant decrease in any increase in that revenue.” With escalating costs, Timbs said the money could get used up very quickly.

For total Dunkirk school district aid, Timbs cited a 2022-23 number of $39,009,682, up about $3.3 million from the last school year, and $45,936,306 in 2023-24. After that, the hikes “drop like a rock.”

He said the district’s fund reserves are “robust.” There is about $5 million in the capital project reserve — but he expects that to get used up quickly.

Right now, Timbs said the district’s finances present “a bright picture.” In a repeat of his presentation in January 2022, Timbs advocated yearly 2% property tax increases, to help keep that financial picture sunny.

There are potential dark clouds: Timbs expects instructional salaries to go up 37.8% between 2022 and 2027, but district revenue will only go up about 23%. Transportation costs, salaries for non-instructional employees, and retirement benefits will each be up more than 23% as well.

Overall, district expenses are expected to rise by 24.9% from 2022 to 2027.

“What we’ve got to do is keep an eye on these expenses,” Timbs said. “We’ve got to make sure we decrease the cost of the escalation in these estimates, because what’s going to happen is, you’re going to start to tap these reserves. So the cautionary tale is: Great situation right now, great planning. But I see some threats to the money situation going forward, as expenses start to greatly outstrip your revenues.”