Breaking down the budget: Moffat County School District’s reserve funds restricted
September 21, 2012
Moffat County School District officials responded Thursday to an editorial published Wednesday in the Craig Daily Press in which it was stated the district’s reserve funds currently total $10 million.
Although it's true that the school district has $10 million in its reserves, district finance director Tinneal Gerber said the money truly available to the district to spend is closer to $2 million, with half of that to be spent on capital projects.
And there are reasons Gerber said the $2 million shouldn't be spent.
Of the $10,825,206 total amount in the school district's reserve, the funds break down into seven categories.
The first category, activity agency, holds $216,759. Gerber said none of this money can be used by the district.
"With an agency fund, you’re holding money for another entity,” Gerber said. “So really, those aren't our funds to say how they can be used. We are basically just the fiscal agent for those funds. The individual schools compromise the entities the district holds the money for. The money is each individual school's funds raised through fundraisers and parent group activities. The money is used specifically for events the schools want to do.”
The second category, risk related activity, holds $62,672. That covers the districts health insurance costs. As a self-insured district, Gerber said $62,000 is not nearly enough to cover costs if the district receives even one large claim.
"That's a fund we need to work on building our reserves in," Gerber said.
The third category, food service, holds $30,457. Gerber said this money is just for the food service program, and $30,000 won't get them through the year. Gerber said this is the second area that some of the "real" reserve will have to go to.
The fourth category, capital reserve, holds $1,001,996. Gerber said the money has to go to capital projects.
"The money has been dedicated to only go to items over $5,000 that are capital type," Gerber said.
The fifth category, bond redemption, holds $2,175,732. Gerber said this is money in a set escrow account for part of the bond agreement paid for by the recently passed mill levy.
The sixth category, pupil activity, holds $5,050. The money in this fund is for student activities throughout the 2012-2013 school year, covering things such as athletics and clubs like speech and debate. Gerber said the school district does have control over those funds and may decide how to spend them.
The seventh category, the general fund, holds $7,332,640 and is broken into three sub categories. $6,282,540 in the other reserved fund, $350,000 reserved for encumbrance and $700,000 reserved for TABOR.
Gerber said TABOR is a statute requiring the school district keeps $700,000 in reserve that the district can't touch.
The money for encumbrances Gerber said has already been paid out.
"We had to pay back on some of our oil and gas stuff through the county, so that's where that was spent," Gerber said.
The major part of the fund balance is $6.2 million and Gerber said the majority of that is to get the district through the school year.
"Revenues come in at different times and expenditures have to go out, a lot of times, prior to those revenues," Gerber said. "What the board has said is we need to keep 30 percent of our expenses in the general reserve."
Gerber said total expenses for the year are around $18 million, with 30 percent of that being $5,415,000. By the time that amount is taken out to use in addition to the $700,000 in reserve for emergencies, that leaves about $867,540 in the general fund that really could be spent at the boards discretion.
Gerber said sometimes the district has to use that money to help offset the risk related activity fund and food service because they have such low balances.
"It's definitely important not to spend it all," Gerber said. "If you look at our budget, there's $10 million in facility costs that really need to be addressed. We know that, I think that's something we'll be working towards in the next couple of years."
With a $10 million need, Gerber said the district only has $275 budgeted for facility needs this year.
Gerber said the district has major needs for roofing on old school buildings and transportation needs in the form of new buses.
With high mileage, a bus breaking down is something that Gerber said is expected.
"When the roof starts leaking over kids heads and they can't learn, you have to definitely make some of those improvements," Gerber said. "The operations piece continues to be there every year, and really our goal and focus is education, but I think our facilities have been put on the back burner because we have been cut."
Gerber said the district is expecting a 25% decrease in funding from the state this year based on pupil counts and funding per pupil from the state both decreasing.