Lexington Richland School District 5 reviews finances and fund-balance policy; board debates using set‑aside funds for construction management vs. teacher bonus

CFO Heather Tucker presented the district’s monthly financial summary for the month ending Nov. 30, 2024, and led a broader budget discussion that covered cash-flow timing, reserve thresholds and the district’s upcoming bond work tied to rezoning projects.

Tucker summarized year-to-date figures through November: the district reported roughly $76,500,000 in revenue year to date and approximately $80,700,000 in expenditures through November, noting that property-tax receipts generally arrive later in the calendar year and that the district remains on a standard seasonal cash-flow pattern. “We operate essentially on fund balance from August, September, October,” she said, explaining why the board’s reserve policy matters when much revenue is received after school starts.

Tucker walked the board through the composition of district revenue and long-term risks. In the district’s audited budget, state revenue accounted for about $147,000,000 — roughly 62% of total revenue — while local revenue (primarily property taxes) made up about 37.5%. She told trustees the district had relied on federal ESSER funds in recent years — an average of about $7.7 million per year over the last three years — and noted that ESSER funds will not continue at that level moving forward. Tucker warned of enrollment-related risk and charter-school adjustments that can reduce state funding, and she listed commonly used reserve thresholds: South Carolina law requires 8.33% (one month) while the district’s board policy references roughly 16.3% (two months); the Government Finance Officers Association recommends two to six months.

Board discussion focused on how to use an assigned fund balance the board previously set aside for capital support related to the bond program. Administration said $3.5 million had been reserved for capital purposes such as property acquisition and construction-management support for four initial projects (Chapin Elementary, Lake Murray Elementary, Chapin/other sites tied to rezoning). The administration argued that reassigning the money now would jeopardize options if bids come back higher than estimates; conversely one board member proposed using $2 million of that set-aside as a one-time teacher bonus instead of deploying it for construction management.

Administration responses and context: - Dr. Ross said the $3.5 million was approved for capital reasons and that reassigning it now could limit options when bid results arrive; he advised waiting until the bidding and look-back period before reallocating proceeds if feasible. - Tucker noted a 90-day look-back after bond issuance (anticipated March) during which funds could potentially be recategorized to general fund if bids are favorable; she stressed caution because the district’s $240,000,000 bond estimate dates to three years ago and prices have risen.

Construction update: facilities staff and GMC Architects presented design concepts for new wings at Chapin Elementary and Lake Murray Elementary intended to replace portable classrooms. Presenters said Chapin’s plan would replace eight portables with a permanent wing and Lake Murray’s plan proposes a two-story ~20,000-square-foot addition that would return students to permanent classrooms and allow growth space; architects reported the projects remain on schedule for summer 2026 openings.

Votes at a glance (formal actions recorded in the transcript): - Approve minutes of Jan. 13, 2025 board meeting — motion passed 6–0. - Approve selected employment items (Exhibit A) — motion passed 6–0. - Authorize chair to sign an amendment to the superintendent’s contract to add an annual annuity contribution equal to 10% of the superintendent’s salary (revised paragraph 4(d)) — motion carried 4–2. - Authorize chair to sign an amendment revising severance language and providing severance pay equal to 18 months’ salary (revised paragraph 10(d)) — motion carried 4–2. - Approve appointment to Lexington County First Steps board member for School District 5 (Exhibit F) — motion passed 6–0. - Second and final reading and approval of five policy revisions (IHAA; IHCA; IKE; ILBB; IKF) — motion passed 6–0 as a group. - Motion to approve district realtor listing for 2425 (Exhibit L) — motion made and seconded; vote outcome not specified in the available transcript. - Motion to approve assigned fund-balance for Construction Management Group (Exhibit M) and a competing amended motion to instead use $2,000,000 of that fund balance for a one-time teacher bonus — motions made and seconded; final disposition not specified in the available transcript.

What was decided and what remains open: the board approved minutes, employment items, a First Steps appointment and multiple policy revisions, and it approved two contract amendments to the superintendent’s contract (annuity contribution and severance language). The board debated using an assigned $3.5 million fund balance for construction management tied to bond projects versus repurposing part of it as a one-time teacher bonus; transcript excerpts show the motions and debate but do not record a final roll-call outcome for the fund-balance reallocation or the realtor-listing vote.

Budget calendar and reserves: Tucker asked trustees to consider codifying the district’s practice of holding roughly three months of operating reserves into board policy as the administration prepares the 2025–26 budget, noting that the district cannot rely on ESSER funds going forward and that state-level funding changes and charter-school enrollment shifts can reduce formula-based state aid.