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Council adopts financial policy to codify school year-end reserves and CIP carryovers
Summary
Manassas Park council approved a financial policy formalizing a school stabilization/reserve account in the city general fund and clarifying treatment of year-end school surpluses and school CIP carryovers; the policy includes guardrails and a proposed 10% maximum discussed by council.
The Manassas Park City Council voted Dec. 2 to adopt a financial policy that formalizes accounting for school division year-end balances and capital-improvement program funds. Staff said Virginia law does not allow school divisions to hold a separate reserve, so the city will create a dedicated line in the general ledger (often described as a school stabilization fund) to track and hold year-end surpluses on behalf of the schools.
Under the proposed policy, the city will set minimum and maximum guardrails for the balance, with staff referencing a 10% maximum (which would equate to several million dollars for the school division) and noting prior informal practices to carry over unspent school funds. Council discussed the proposal during the meeting and a council member voiced concern that a 10% cap could be as high as $5–$6 million; others supported codifying the practice to reduce manager-to-manager variability.
Council moved to adopt the accounting policy as presented, with an amendment regarding interest allocation (staff said interest earned on the accumulated reserve would remain with the general fund, with the school division aware of the treatment). The motion to approve the policy as presented, amended, passed by voice vote.
Next steps: staff will implement the new general ledger lines and the accounting treatment and will report balances and interest treatment as part of routine budget reporting.
