This year’s school budget could include as much as $2.8 million from the General Fund balance, which currently stands at $11,224,467.
By Sarah Varney
This year’s school budget could include as much as $2.8 million from the General Fund balance, which currently stands at $11,224,467. That balance is 29 percent, or $4,630,367 down from the 2010-2011 budget season, when it stood at $15,854, 834.
The fund is comprised of three main pools: There is money set aside for Undesignated expenses, restricted funds for the Employee Retirement System (ERS) and Tax Certiorari expenses, and one for Undesignated expenses. The ERS fund is generally kept at about 1,000,000. In addition, there is a restricted capital reserve.
State education law prohibits reserve funds from exceeding 4 percent of an annual school budget. According to one school community observer, the reserve funds are demarcated so that each segment can be set up to reach that 4 percent figure.
But whichever way you slice it, keeping the fund balance healthy is vital for the school district’s bond rating, commented Assistant Superintendent for Business Gabriella O’Connor. “Anybody who is fiscally responsible wants to keep these reserves intact,” she said. And the Board of Education generally concurs with the District’s stance on this issue.
“Reserves are a finite resource that we cannot continue to reduce and still remain fiscally prudent,” concurred board member Karen Belanger.
“The real issue is that the spending of fund balance at the current rate leads to an ugly future – one in which either dramatic cuts or a budget cap override will be needed,” said fiscal watchdog Bob Zahm.