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Manager reviews new Portsmouth Public Schools capital reserve fund: $7M annual deposit, $21M balance cap
Summary
City Manager Steven Carter reviewed the ordinance (adopted Dec. 2024) creating a school capital reserve fund under Va. Code §22.1‑100, explaining eligible uses (capital and emergency capital only), annual deposit maximum $7,000,000 and total balance cap $21,000,000; council asked about audits and reallocation rules.
City Manager Steven Carter told the council that the new Portsmouth Public Schools capital reserve fund, adopted by ordinance in December 2024 under Virginia Code §22.1‑100, is intended as a restricted savings account for major school capital projects and emergency capital needs.
"The annual deposit limit is $7,000,000. The overall cap is $21,000,000," Carter said, describing the mechanics. He emphasized the fund is limited to local general‑fund monies that remain unspent after the budget year and is not a repository for state or federal education funds. The account is not available for operating or recurring costs such as salaries; earned interest remains in the fund and does not count toward the $21,000,000 cap.
Carter said the ordinance specifies how money is put into and removed from the fund, and that any reallocation above the $7,000,000 annual amount would require council action. The ordinance also requires an annual audit that must include the fund; Carter stated that audit is "due on the 30 first" as presented and that noncompliance would trigger notice to the school system and an opportunity to submit a remediation plan.
Councilmembers asked how the $7 million and $21 million figures were derived (Carter said the numbers were agreed with Doctor Bracey) and requested clarity about the role of the council if a reallocation request exceeds the annual deposit threshold. Several members noted this is the ordinance’s first year and said they welcome staff reminders and a similar briefing to the school board.
Next steps: staff will provide additional documentation about compliance triggers and how the capital reserve fund interacts with the existing CIP and budget process when reallocations are proposed.
