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Board reviews proposed language to target fund balance between 18% and 40% for capital planning
Summary
Policy 6235 updates discussed: Neola-recommended language would set a target fund-balance range between 18% and 40% of prior-year expenditures, with the 40% level acting as an upper cap tied to prior-year funds and expenditures; staff recommended folding the change into semiannual policy updates.
Board members reviewed proposed language revisions to Policy 6235 (fund balance) that would set a targeted fund-balance range and add an upper cap tied to prior-year funds and expenditures.
Staff said they consulted Neola (the policy-service vendor) and that suggested language would set a target fund balance between 18% and 40% of the previous year’s funds and expenditures. Under the proposed approach, the 40% figure would operate as an upper guidance (a high-water mark) expressed as a percentage of the previous year rather than a fixed dollar amount; staff would notify the board if projections suggested the fund balance was approaching that upper threshold.
Board members discussed the purpose of the cap—to balance maintaining adequate reserves without diverting excessive funds from programs—and how the district uses capital funds (funds 41 and 46) to plan capital improvements. Staff said a new capital-improvement program plan is being developed to schedule expenditures strategically and reduce deferred maintenance.
The proposed fund-balance language will be incorporated into semiannual policy updates and returned to the board; no final policy adoption occurred at this meeting.
