Gadsden work session examines why district holds large cash reserves as state and federal funding face uncertainty

At a Gadsden Independent Schools work session, Terry Dean, executive director of the New Mexico Association of School Business Officials, told trustees that the district’s cash reserves reflect one-time revenue timing, project needs and prudence against funding uncertainty rather than excess operating revenue.

Dean told the board that “your cash reserve... it’s not extra money because it’s not going to continue all the time,” and said reserves are often needed to float reimbursable federal expenditures, cover large one-time payments such as Public School Facilities Authority risk payments, and support bond ratings when the district issues debt.

The discussion focused on several specific reasons the district’s reserves grew: reimbursement timing for federal grants (reimbursement requests or RFRs), one-time project and construction costs and conservation during COVID-era spending. Dean said districts were told to…