School board adopts policy setting 5% unassigned general fund minimum, requires board approval to spend below that level

The Lakeville Area Schools Board on a voice vote approved revisions to Policy 7-14 that set an explicit minimum unassigned general fund balance of 5% of the annual general fund expenditure budget and require prior board approval for any expenditure that would reduce the balance below that threshold.

Board members said the change is intended to clarify which fund the policy covers and to create an explicit control point before the district draws down core reserves. The policy committee had inserted the word “general fund” into section 4 and proposed replacement language for paragraph c to read that the unassigned general fund balance shall not fall below 5% of the annual general fund expenditure budget and that expenditures that would reduce the balance below that threshold may only be made with prior board approval.

In discussion, board members noted the district’s longer-term goal of maintaining a higher reserve (one member referenced aiming toward 7.5% to 10% as a safer level) and said the new language creates an early warning that would prompt investigation and planning if reserves approach the floor. The board moved and seconded the policy revision and approved it by voice vote.

The vote updates the formal district policy language but does not itself authorize any specific expenditure or change the budget; it establishes a governance step the board must take before allowing the district to use unassigned reserves below the 5% floor.

Board members said staff will continue to monitor the fund balance and will bring any proposals that might dip below the threshold back to the board for prior approval.