Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Fund Balance topic
No spam. Unsubscribe anytime.
Budget would deplete reserves, raising cash‑flow concerns and possible state oversight, CFO warns
Summary
Scott said the draft budget reduces fund balance from $25.7M to about $11.7M and leaves the district short of the 4% unassigned minimum required by policy 6022; without levy revenue the district risks binding conditions and state financial oversight in 2027–28.
Michelle Scott told the board the recommended budget requires using about $14,010,770 of fund balance and would reduce the district’s reserves from approximately $25.7 million to about $11.7 million under the proposed plan. “That would put us at a 4% fund balance, so we are short $2,000,000 to meeting that,” she said, explaining that a $2 million difference in unassigned reserves would be needed to meet the district policy minimum.
Scott described operational and procedural consequences of falling below the board’s fund balance policy, including daily cash‑flow pressures (district apportionment timing provides 22.5% of apportionment in July and August) and the prospect of official binding conditions and oversight if a levy is not approved. She also flagged the district’s safety net (about $3,800,000) as a significant August payment that must be covered in cash flow planning.
Why it matters: The projected reserve depletion constrains the district’s ability to respond to unanticipated costs, increases the likelihood of interfund borrowing or external borrowing, and could trigger a state audit finding or oversight if policy thresholds are not met.
