Insolvency at PCS?

I read with interest today's newspaper article describing the discussion at yesterday's community forum at Potsdam Central School.  Superintendent Brady is quoted as saying that "we’re about two years from insolvency."  What could be the motivation for that statement?  Could it be that the real budget strategy is to get the public's acquiescence to a tax levy increase higher than 4.78%?

As of the most recent audit of PCS's financial status ending June 30, 2012, the district had over $5 million dollars in fund balance and reserves.  In addition, for the 2011-2012 school year, the district spent almost $1 million dollars less than they asked the voters to approve.  It appears, from monthly budget documents, that this year's spending will be at least $1 million dollars lower than predicted.

Why are we talking about insolvency when there are two budget proposals before the board, either of which could save almost $800,000.  Administration doesn't like the proposals because it doesn't maintain the status quo, but it might offer the students in the district the best educational options under the circumstances.  I am glad that a couple of people quoted in the newspaper thought there was merit to discussing change.

Finally, I can't help wondering why, if we are so close to insolvency, the Board of Education and Superintendent thought it was a good idea to ask the public to approve an $18 million dollar capital project?  The money set aside for debt service and not needed in next year's budget could have been used to alleviate the pressure on the whole educational program. Just my opinion.