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Richard Timbs, executive director of the Statewide School Finance Consortium, sent a message of worry and concern to Dunkirk school board members last month. With COVID-19, state funding will be a problem in the coming years.

Timbs, who was on a video call with the board, said one of his biggest worries is with New York state’s $3.8 billion COVID-19 stimulus money, which will be allotted in a lump sum — but expected to cover two years “So it’s kind of like giving you a birthday present for two years all at once,” Timbs said. “The problem is school districts, if they don’t recognize this will try to spend this money all at once and that leads us to our second problem, the state aid will be short by the $3.6 million because they will have given you all the money upfront because they won’t have any more money left to give you.”

The budget for 2020-21 school year in Dunkirk is approximately $43 million in revenues with expenses about $50 million. The district has nearly $11 million in reserves and also has about $2 million in cash. It is hoping to carry over at least $4.6 million to their 2022 budget.

Timbs biggest concern as the budget was discussed further is that for 2022 the district should be fine, but in 2023 there’s going to be a real problem.

“The expenses are running from about $49.7 million to about $59 million, that’s about a $10.1 million increase in expenses, but we got about $3.2 million in revenues, so this is a problem,” Timbs pointed out. “Your expenses far outstrip your revenues and the evidence of this is that while your revenues are $43 million and your expenses are $49 million and you’re pledging $6.7 million to balance that budget. Next year would appear that your revenues may be closer to $43 or $44 million, but your expenses are going to go up to about $52 million you’re going to need about $8.4 million to balance that budget.

“So now we need $8 million and the only place to get that is out of your reserves and because you’re only brining over $4.5 million. You are not bringing over enough money to make up the difference and as this budget grows to $54 million in expenses, you don’t have $10 million in cash or in reserves to help pay for it. So technically speaking the district becomes insolvent.”

According to Timbs the district in 2023 would have to diminish in a great way their expense curve and/ or increase revenues. “If this budget keeps growing at this rate and your revenues grow at this smaller rate you become increasingly insolvent,” Timbs added.

Timbs offered a few recommendations to help the district weather this expense increase. They include updating the state aid, if the state gets extra federal money than the school should get extra money as well, continue long range financial analysis, possibly not filling positions as people leave or retire, do projections monthly to drive down costs in future years, look at reducing or reorganizing staffing, examine labor contracts for negotiations and investing in an efficiency and effectiveness study of things being offered by the district as well as buildings.