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Board asks staff to draft fiscal-stabilization policy; staff to return with 3% supplemental proposal
Summary
Deputy Superintendent Jennifer Stall presented a draft board policy to create a fiscal stabilization (rainy-day) account above the state-required reserve. Trustees discussed target levels and governance and directed staff to return with policy language showing a 3% supplemental account for consideration on May 28.
Deputy Superintendent for Business and Operations Jennifer Stall presented a draft vision for Board Policy 31000 that would establish a fiscal stabilization account in addition to the state-mandated reserved balance. Staff described the fund as a reserve for economic uncertainty or urgent events — for example, midyear state revenue shortfalls or disaster-related costs — and outlined options for how the board might establish, use and restore the account.
Stall summarized fiscal mechanics and showed illustrative target levels: a 4 percent, 5 percent or 6 percent supplemental target above the 3 percent state-required reserve. She noted the district’s second-interim unassigned reserve and provided dollar examples for each percent level. The presentation described how the account could reduce the need for short-term borrowing (trans notes), improve creditworthiness, and provide flexible runway to avoid immediate, drastic program cuts during a downturn.
Trustees asked operational and governance questions, including when the board would be notified if staff accessed the account and whether a designated official should be empowered to authorize emergency access. Staff said access would be by board action or by a designated official with board notification at the next meeting; the board may also require a special meeting for approvals if members prefer. Trustees discussed the trade-off between reserving funds versus using them for facilities and other district needs.
A multi-hour discussion ended with trustees asking staff to return on May 28 with a revised policy draft that inserts a specific illustrative target of a supplemental 3 percent fiscal stabilization account (i.e., beyond the state-required 3 percent minimum) to promote transparency and public review before action. Trustees also asked staff to include restoration language and operational procedures in the draft.
Staff noted the district currently earns interest through the county treasury and that funds in a stabilization account could be managed to earn interest while remaining liquid.
