Mary Ellen, finance staff, told the Hamilton County Board of Education on Oct. 26 that final closeout work for the prior fiscal year is nearly complete and that the district’s unassigned fund balance is now projected at about $24,700,000. “Our minimum requirement is 3% of our operating budget,” she said; based on an operating budget of about $570,000,000 she calculated the minimum at roughly $16,000,000, leaving about $8,300,000 above that floor.

The fund-balance update was framed as the baseline for this year’s budget conversations. Mary Ellen said auditors remain at work and noted the district initially modeled a potential $12,000,000 use of fund balance midyear, then later reduced that estimate to about $5.3 million after accruals and stronger-than-expected late sales-tax receipts. “We ended up in a much better place than we had kind of feared,” she said, but cautioned that the unassigned balance is “starting to get closer to our minimums.”

Why it matters: Board members signaled they want to set priorities early this year to avoid the kind of late, reactive budgeting that led to deeper draws on reserves last cycle. Chairman Smith and other board members emphasized compensation — including step increases for employees, raises for entry-level teachers and moving staff onto an updated salary scale — as a top priority for next year’s budget cycle.

Mary Ellen and other staff outlined a planning timeline that moves key board-level decisions earlier in the fiscal-year process. Staff recommended the board identify priorities and trade-offs well before the traditional February–April budget window so community engagement and precise proposals can be ready for adoption and transfer to the county commission on schedule.

Board discussion also flagged health insurance costs as a major ongoing risk. Justin, a central-office staff member, reminded the board that health-care spending is one of the district’s largest single expenditures (on the order of tens of millions of dollars) and that medical claims can be unpredictable. “It’s one of our single largest line items,” he said; staff urged continued monitoring and periodic updates so the board will not be surprised if medical costs trend differently than expected.

The board clarified rough budget math during the session: a 1% districtwide pay increase would cost about $4,500,000; a prior compensation-phase cost referenced by staff was about $5,000,000 to move employees to a new scale. Mary Ellen said the district could not responsibly move below the state-required 3% minimum for unassigned fund balance.

Ending: Trustees asked staff to return with concrete dollar figures tied to compensation options (percent increase, step-plus-percent, and moving employees to a new scale) and to begin community engagement earlier in the calendar. No formal motions or votes were taken during the work session.