District reports year-end surplus, replenishes reserves and proposes $4.5 million capital reserve

Kathy, a district finance staff member, told the Board of Education at its regular business meeting that the district closed the fiscal year with revenue above and expenditures below budget, allowing the district to replenish reserves and propose a $4.5 million contribution to a voter-approved capital reserve for upcoming capital work. "Our final expenditure percent was about 97.12%," she said, adding that revenue finished at about "102.88%."

The nut of the presentation: the district reported about $726,000 in excess revenue after accounting for expenditures and carryover encumbrances and recommends allocating much of that to reserves. Kathy outlined the calculation the board saw: an opening unreserved fund balance around $8,500,000, budgeted revenue roughly $219,000,000 and expenditures of about $209,000,000, leaving funds available for reserve replenishment. "We're proposing to use any excess for that, which is about 4,500,000," she said of the capital reserve.

Why it matters: the district has a planned $85,500,000 capital project tied to the next phase of its Maxwell work. Kathy told the board that bolstering the capital reserve now would help offset future debt service and reduce pressure on tax levies when borrowing is required. She said the district's reserves and fund balance position are important to bond raters and to future borrowing costs.

Details from the presentation: salary and benefit savings accounted for a large share of expenditure underspend; interest income (reported at roughly $1,800,000) and stronger-than-expected state aid contributed to revenue excess. Specific figures cited included a projected post-allocation fund balance of about $8,900,000 and a year-end fund-balance ratio of roughly 3.98%, slightly under the 4% statutory limit referenced in the meeting. Kathy said the district would fund actuarial-based reserves (workers' compensation) and replenish employee-benefit reserves before allocating to the capital reserve.

Board members asked about federal Title grants and carryover rules. Kathy and Dr. Wilson Turner said Title grants are managed separately from the general fund; some grants permit limited carryover (she cited roughly a 15% carryover allowance for Title I when not fully spent). The board received the presentation and the reserve-allocation package was placed on the consent/action portion of the agenda for formal vote later in the meeting.

Looking ahead: the finance staff said the proposed allocations would appear in a resolution before the board; members were told a separate Title-grants presentation would provide detailed carryover and allocation numbers in a few weeks.