Bradley County schools report $8.05M undesignated fund balance; outline capital projects and timelines

Susan, Bradley County Schools' finance officer, presented a detailed fund-balance and capital-projects update, explaining why the Comprehensive Annual Financial Report (CAFR) totals differ from the school system's undesignated fund balance and outlining current project funding and near-term timelines.

"The CAFR... is all inclusive," Susan told the committee, explaining that certain amounts are designated or restricted and therefore not available for general use. She said the district's undesignated fund balance as of July 1, 2024, was $13,000,327.266 (noting the CAFR line totals on different pages), and that after accounting for designated reserves the district's current undesignated fund balance as of December 31 was $8,047,669, which equals 6.87% of the amended $117,170,839 budget.

Susan walked commissioners through key designated items that account for the $3 million difference between CAFR and undesignated balances: prior-year encumbrances ($662,163), multi-year restricted amounts such as career-ladder and special-education team-care reserves, a TCRS (Tennessee Consolidated Retirement System) stabilization reserve (about $1.7 million), and other committed/assigned balances. "That number is never gonna go away, and it's never a number we're gonna be able to touch," she said of the stabilization reserve.

She also reviewed amendments that affected fund balance since the budget's adoption: transfers to capital outlay (fund 177) totaling $5,292,033 for projects including Bradley Central High vestibule, OMS CDC wing, Parkview addition and the Bradley Central Science Wing; movements for technology and PA/AVL projects ($49,567); a $60,000 safety reserve; and other smaller adjustments. After those and other adjustments, the undesignated fund balance on December 31 was $8,047,669.

Susan described the system's fund-balance policy context: state statute requires a 3% fund balance; county policy expects 5%; finance staff recommends a "sweet spot" of about 7% (about $8,201,959) to cover one general-purpose payroll and other contingencies. "Most training from the state comptroller's office recommends 1 to 2 months of operating expenditures to be held in our fund balance," she said, noting that two months would be roughly $19.5 million for this district.

Facilities and capital-project updates followed. Corbin, a school system staff member, reported the status of major projects: FEMA technical review for the Bradley Central Science Wing is complete and the project is awaiting legislative action to finalize funding; Ocoee Middle School construction is underway with an August completion projected; Hopewell Elementary is in schematic design with plans to select a construction manager-at-risk in February and start construction late summer; Parkview is partially funded and expected to require an additional one to two fiscal years to complete funding; Waterville expansion is on hold while the district evaluates whether to build a new elementary at the Blue Springs site the board already owns.

Commissioners asked about planning for future schools and operating costs. Corbin and staff said Blue Springs is the first priority to relieve Waterville, followed by a potential north-end elementary and later a middle school. Staff offered a rough construction-cost range for a new elementary (discussed in meeting as roughly $32–40 million, with some discussion of $40 million) and noted that debt service would have recurring operating impacts to be considered by the commission.

Susan said historically the district has used fund-balance growth to pay capital outlay (roofing, paving, HVAC replacements, etc.) while using recurring revenue for salaries and benefits. She estimated a typical annual fund-balance growth of about $3–4 million in normal years but cautioned that revenue and expenditures can vary.

Next steps include drafting detailed funding plans for Parkview and Hopewell, pursuing FEMA/local matches for the Science Wing as needed, advancing schematic designs and contractor selection for upcoming projects, and working with the commission on long-term borrowing decisions for future schools.