OBSERVER Photo by Braden Carmen Forestville Superintendent Dr. John O’Connor said he does not think it is “reasonable” to raise taxes with a substantial fund balance maintained by the district.

FORESTVILLE — The first look at the proposed budget for the Forestville Central School District shows good reason for taxpayers to celebrate. The district expects no tax levy increase for the second straight year due to its healthy fund balance figures.

The initial 2024-25 budget is proposed at $14,072,596, which is a 3.1% increase from 2023-24. The increase, amounting to $428,749, is driven by a 6.5% increase in wages of $370,473. Benefits also increased by 3% from the current budget, amounting to an increased cost of $75,749. The district also has a 23.4% increase in debt service payments of $337,536.

In order to not increase the tax levy, the district will rely on its fund balance to account for the increases in the total budget. As of June 30, 2023, the district maintained a total fund balance of $6,917,906, with 28% of that balance – amounting to over $1.9 million – as unassigned fund balance.

Real property tax laws in New York state allow for districts to hold 4% of the following year’s budget in unappropriated fund balance. Districts are often cited for surpassing the 4% limit, while auditors often suggest 4% as the minimum a district should maintain.

At Forestville, with a proposed budget of over $14 million, an unassigned fund balance of nearly $2 million was more than enough for the district to cover its increased costs from the previous year’s budget.

“Because we still have a fund balance concern, we don’t think it’s reasonable for us to tax the taxpayers more,” Forestville Superintendent Dr. John O’Connor said.

O’Connor, who returned as the district’s superintendent a year ago, called the situation at Forestville “a bit unique” because of such a substantial unassigned fund balance figure.

“It can’t be justified raising taxes when we have such a fund balance,” Business Administrator

Kerrie Pelletter said.

A year ago, the district passed a budget with no tax increase, despite an allowable hike to the tax levy of 2.22%. The total 2023-24 Forestville school budget showed a 1% increase from the previous year’s budget.

The district does not anticipate the trend of no increases to continue, as the unassigned fund balance has supported no increase in back-to-back years, while additional state and federal aid figures due to the COVID-19 pandemic are set to expire at the end of the current year. Slightly more than $500,000 has been appropriated to offset increases to the budget to avoid increasing taxes, amounting to 7% of the overall fund balance maintained by the district. The district still holds $4,360,997 in reserves as of June 30.

The proposed 2024-25 budget also accounts for a $100,000 capital outlay project, but the district has goals for a much more substantial project in the coming years.

With debt set to drop off after the 2026 school year, combined with a capital reserve account of approximately $2.2 million, the district is eyeing a major capital project. According to its building aid ratio, Forestville believes a project of $11,875,000 would create no additional tax impact to the community. The district is also evaluating the creation of another capital reserve fund with some of its unassigned fund balance to support a substantial project.

The district will hold additional discussions regarding the budget on Feb. 8 and on March 24 before the Board of Education will vote on the budget April 16. The budget will be officially presented to the public at a hearing on May 9, with a budget vote set for May 21. If necessary, a re-vote would be held June 18. The district is also targeting May 2024 for a capital project vote from the school community, in addition to the annual school budget vote.