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Board debates reserve policy change after staff proposal to free referendum funds
Summary
Board members sparred over proposed language that would treat referendum reserve funds separately and potentially make part of that pot available; some members urged caution and recommended consulting the district’s IROC committee and phasing any drawdown.
Board member John proposed language to treat referendum proceeds as a separately identified pot that could be reallocated so the state-reported unassigned fund balance would effectively fall (a change staff said could free roughly $4.2 million under current valuations). "To be more efficient... we need to use the money that comes to us in an efficient way," John said, arguing the district is sitting on reserves that could be put to work.
Several board members, including Bob and two others, pushed back sharply. "I'm uncomfortable with this because it implies there's immediate ability to invade that money willy-nilly," one member said, arguing the district had publicly promised certain referendum reserves and the change could undermine trust. Finance staff (Marcus) explained the accounting distinction: the 8 million referendum reserve is assigned and not part of the state's definition of unassigned fund balance, while the 10% policy target is the unassigned amount required by board policy.
Members discussed two implementation approaches: (1) add policy language that explicitly treats referendum dollars as a separate assigned reserve but also prescribe a multi-year, phased drawdown (for example $1 million per year over four years), or (2) leave policy intact and use a budget-year directive or resolution to authorize any one-time reductions. Several members recommended calling an emergency IROC meeting (the district's internal review/oversight committee) for advice.
No vote was taken. The board asked staff to present revised language and to convene IROC for formal feedback before any policy change or resolution is scheduled for a board vote.
