AVCS now entering a period of fiscal challenge

CLINTONVILLE | Last week, district leaders, teachers, students, alumni, local officials, and taxpayers filed into the AuSable Valley Central School (AVCS) auditorium to learn more about the district's current financial crisis. "Our five-year projections show a significant gap between revenues and expenditures, and it's clear that multiple factors have brought us to this point," stated AVCS Superintendent Mike Francia, including inadequate state funding due to flaws in the Foundation Aid formula, the loss of temporary federal ARP (American Rescue Plan) funds, and rising contractual and operational costs. "We know we are facing some difficult decisions ahead, which may include exceeding the tax cap while also making careful reductions. Through thoughtful planning, community partnerships, and by keeping students at the center of every decision, we'll find a path to financial stability for AVCS." To accomplish this, the AVCS Board of Education (BOE) authorized a comprehensive financial study by R.G. Timbs, Inc., in which Dr. Rick Timbs outlined the district's current financial condition and possible scenarios going forward, from raising taxes, program cuts, and staff reductions to more extreme measures, such as consolidating the two elementary schools in Keeseville and Au Sable Forks or exploring even further merger options. "Last year, we recognized that we were having a difficult budget year," Francia said. Several local taxpayers wrote and sent letters to the local lawmakers in hopes of receiving additional funds. "We ultimately received only the baseline 2% increase, which doesn't even come close to matching inflation and the riding operating costs. [...] So, we agreed to take a deeper dive and do this financial study to chart a more responsible path moving forward." For the last five months, Timbs has been working with the district to examine the district's current financial state further and explore all possible outcomes. "[To do this], I went back five years and tore apart all the data in detail because what I wanted to know was how we got here so that we don't get here again," stated Timbs, who has worked with about 400 districts over the last 40 years. One of the contributing factors was the state's Foundation Aid formula, said Timbs. "It has not served you well." Used by the state since the 2007-08 school year, this formula determines how to distribute the majority of state education funding across more than 700 school districts each year based on the costs of educating the student and their specific needs, as well as the cost of living in the region and the district's ability to raise local funds. One factor that's hurting the district is its student enrollment, which has dropped significantly over the years, although its student population with special needs has been increasing. The state also rewards additional funds toward districts with English-language learners, but AVCS currently doesn't have any. Then there's the district's property wealth ratio, which has increased from about 60% to almost 80%, an occurrence that is partially due to a surge in second-home purchases and short-term rentals throughout the area because of COVID-19, said Timbs. "This is an indicator that you are deserving of less aid because the state believes that you ought to be able to sustain yourself on your own more. That's the way the formula works. I don't particularly like it, but that's the way the formula works." During the pandemic, K-12 schools received nearly $190 billion in federal relief, 90% of which went directly toward local districts. However, that federal funding through the United States Department of Education stopped being available in September 2024. At AVCS, 15 additional staff were hired as a result of the pandemic, and 14 of them are still on the payroll, leaving the district with about $800,000 in extra expenses with no way to pay for them. "The good thing is that the students got the benefit of having these people here, but the dilemma is that there is no resource to pay for this right now, and there hasn't been for two years," Timbs said. "Therefore, you've been eating up money." While the district's revenues are up by about $3 million, expenses are also up by a little over $9 million, he continued. "This is not going to work. The gap is too large, so your expense structure cannot be maintained." And this leads into the district's reserves, funds set aside in dedicated accounts for a specific future purpose, such as long-term projects, repairs, and rainy day funds. Typically, school districts generally have savings in several reserves. AVCS, on the other hand, only has funds in one. "In my 40 years, I have never seen a district that only had one reserve. You are the first," stressed Timbs during the presentation, where he showed a slide with all the reserves a school district can have. All 16 listed were empty, except for "Reserve for Employee Benefits and Accrued Liabilities." "Cash flow is really a problem here. Your expenses are accelerating rapidly compared to your revenue, so you're going to be using a fund balance that you don't have. "All I see are zeros and negative numbers after next year, and that's because you're going to run out of money. We have to fix this pretty quickly." To mitigate this issue, the study suggests a few options, such as establishing a long-range plan to save up for various future expenses, such as capital projects, technology updates, and bus purchases. For instance, once schools shut down due to the COVID-19 pandemic, all the students were sent home with their own personal Chromebook. The time will come for those to be replaced or fixed, if it hasn't already, and there's currently no available funds to do so, neither through the district nor the state. "We're in the 21st century. We want our kids to graduate out of this school district as tech-savvy as anybody else, but to do that, we need a plan," Timbs said. "We could simply borrow the money and buy them, or we could save the money ahead of time and buy them with cash and no interest. "Cash is king." The same goes for school buses, which are going up in price by about 5% each year, according to Timbs. "None of this stuff is getting less expensive — none of it. That's why we need to differentiate between what we would like to have and what we need to have." It's now up to the district to revisit all possible options to examine cost savings and implement financial triage. "Your ability to get out of this by just finding more money isn't going to happen. The truth of it is, whatever you do, [...] you've got to do it very quickly," Timbs urged, whether that be by raising taxes, program cuts, staffing reductions, consolidating the elementary schools, or all the above. "If you wait a couple of years, it will be too late." After the presentation ended, several attendees voiced their concerns, such as Tabatha Sullivan, an elementary teacher at Keeeville Elementary and co-president of the AuSable Valley Teachers' Association. "Eliminating teachers and programming is not the solution to closing the financial gap. If possible, we need to find ways to keep all necessary teachers, resources, and programs that make AuSable Valley an exemplar of excellence when it comes to the education of our students," she said, addressing the board. "As a community, we must work together. This is OUR legacy to preserve." While some attendees focused on the district's future, others chimed in about the district's current state, asking board members to keep lines of communication open during this delicate time. District leaders intend to do just that. "Dr. Timbs' presentation, while difficult to hear, provided a clear picture of our district's financial reality. The board remains focused on the future — guided by a commitment to thoughtful, long-term financial planning and an unwavering dedication to our students. [...] Our priority remains ensuring that every student has access to excellent instruction, meaningful programs, and the opportunities that prepare them for success beyond our schools," stated Aubrey Bresett, AVCS Board of Education president, in an email. "The strength of AVCS has always come from its people — our students, staff, families, and community — working together with pride and purpose. That shared commitment to our students is what defines us and what will carry us forward through these challenges." To view the presentation in its entirety, ask questions, or voice concerns, contact the AVCS Board of Education at avcsboard@avcsk12.org.

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AVCS now entering a period of fiscal challenge

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