Board delays decision on transferring $5.18 million surplus into capital reserve

Administrators asked the board to approve transferring the FY23–24 general-fund surplus—reported in the meeting as $5,179,338—to a capital projects reserve fund. Trustees and members of the public pressed for more information about the type of reserve, the legal restrictions on spending, how the transfer would interact with the district’s 8% general-fund threshold and whether the board had actually seen the completed audit that produced that surplus figure.

A public speaker urged keeping the funds in the general fund to cover operating needs after the recent tax increase, saying, “We have 5,179,338 or basically $5 million that you want to transfer to the capital improvement fund… Keep it in the general fund and because we we need it.” Trustees asked the business manager and district counsel to explain options. Mr. King explained there are two capital-account types: a restricted five-year capital reserve and a municipal-style capital reserve that is restricted by purpose but not by a five-year spending window; the district currently uses the municipal form.

Trustees also raised process questions: whether the board had seen or formally accepted the audit and whether delaying would affect the district’s ability to meet state-code thresholds when setting future tax levies. One trustee moved an amendment to table the transfer until auditors could present more detail; that amendment passed and the main motion carried as amended, effectively deferring any transfer until the auditors provide additional information. No funds were transferred at the meeting.

The record shows the board amended the transfer motion to wait for the auditor’s presentation and then approved the motion as amended; the administration said the funds would remain in place and continue to accrue interest while the board awaits more information.