NIAGARA-WHEATFIELD Residents react to school audit

Amy Wallace

Mar. 19, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Taxpayers in the Niagara-Wheatfield School District didn't mince words Wednesday in expressing their outrage over a recent state comptroller's audit of the district that it had not prepared "reasonable budgets" and has close to $8 million in excess funds that should've been used to benefit taxpayers.

"I feel that the business manager should be fired and that any board members who knew about this should resign," resident Rosemary Warren said during a school board meeting. "You are a tainted group. Maybe school districts should be run by a hard control board."

Residents who spoke at the meeting cited the increase in their tax bills even though there has been a decrease in the tax rate in the district during this time period.

"This over budgeting is making seniors have to keep working to just pay their school taxes," Russell Brumby said. "I pay more in school tax today than I did five or six years ago. This to me is sloppy work. It shows no effort at all on your part."

Even with the surplus funds, the district's tax levy has increased from $23 million to more than $26 million since 2004, the report found.

District Business Manager Kerin Dumphrey explained that the STAR exemption and equalization rates contribute to this discrepancy.

"This school board just amazes me from what I read in the paper," Robert Schimschack said. "I really do believe there should be some resignations."

Schimschack suggested that the district cut salaries 15 percent across the board or have a freeze on pay increases.

"We're out of control," he said. "These are bad times and we're handing out raises. You're writing checks that the taxpayers can't pay anymore."

The audit found that district officials consistently overestimated expenditures and underestimated revenues that generated significant operating surpluses and exceeded the allowable fund balance limit, according to a report released Tuesday by State Comptroller Thomas P. DiNapoli's office.

According to DiNapoli, the district underestimated revenues by $6.2 million and overestimated expenditures by $17.8 million in its budgets from 2004-05 to 2007-08.

The district's $4.3 million in unreserved fund balance at the start of this fiscal year was $2.7 million more than the limit allowed under the Real Property Tax Law.

In addition, the district had six reserve accounts in the general fund as of last July with a cumulative balance of $3.7 million, including three for capital expenditures, debt service and workers' compensation.

For its part, the board stated that it would follow the recommendations of the comptroller's office.

"I want to thank the comptroller's office for giving us this information," Superintendent Carl Militello said. "The board obviously has made an effort to give tax relief to residents. The reserve carries us three to five years into the future. The board will be looking at the reserve accounts."

Board member Maureen Kaus said that money is being put back into the district.

"I'm quite proud of our district," she said. "We've put tens of millions of dollars of improvements into this district. We've used your money prudently."

Kaus said the money is a "buffer" keeps tax rates from spiking year to year.

"If that's the only thing they can find ... that we set money aside," she said. "Then I think that's a good report."

Newstex ID: KRTB-0348-33200845