Tuscaloosa City Schools reviews December finances, board hears first reading to lower reserve policy

The Tuscaloosa City Schools Board on March 18 received a financial recap through Dec. 31 and discussed a first reading of a proposed revision to Policy 3.02 that would lower the board's reserve target from 1.75 months to 1.25 months while retaining the state-required one-month minimum.

Chief School Financial Officer Jay Duke presented the financial report, saying the district is roughly 25% through fiscal year 2025 and that December and January are the largest months for property-tax collections. "Those bills go out Oct. 1 and are due Dec. 31," Duke said, and he said total receipts are tracking close to the roughly $33.5 million line the district expects from property taxes. He reported year-over-year increases in motor-vehicle (car tag) tax and sales tax collections for the first three months, and said total fiscal-year receipts have increased only incrementally over recent strong economic years because of shifting tax allocations described as "SSUT" receipts.

Duke also walked the board through expenditures: about 46.1% of spending is instructional services, roughly two-thirds of total spending is in instruction and instructional support services, operations and maintenance represent about 13%, auxiliary services (transportation and child nutrition) about 10%, and general administrative costs about 4.4%.

Superintendent Dr. Dario (identified in the transcript as Doctor Daria) introduced the first reading of a proposed revision to Policy 3.02 on the district reserve. The proposal would lower the board's policy target from 1.75 months to 1.25 months, while reaffirming compliance with the Alabama State Department of Education's one-month reserve requirement. Doctor Daria described the proposal as a framework to give the district flexibility to put funds to work in classrooms and to adjust as state funding discussions evolve during the legislative session.

Board members asked for further analysis before a final vote. One board member said a 1.25-month target gives him "a little bit of heartburn" and preferred a 1.5-month figure; another suggested adding an annual review provision and reviewing the policy at the first budget work session in August. Duke said he would provide additional analysis, including on the potential interest income foregone by holding lower reserves, and the executive team will refine language for the final reading.

No final action was taken on Policy 3.02 at the March 18 meeting; the item was presented for first reading and further board dialogue was requested.