Next school year’s budget could be the first to ever include fund balances, Superintendent Margaret Hopkin told the Grand County school board Tuesday.
A fund balance is a surplus of funds – think of it as a savings account – that many businesses and organizations use when planning their finances.
It means essentially that there is more money in that fund than officials think they will need to spend.
It’s a good thing, Hopkin said.
The school district has spent the past four years climbing out of a financial hole created largely when a former administrator inappropriately transferred funds from one account to another. When that was discovered, the school district was forced to trim spending in many ways.
An anonymous donor has helped the district the past couple years.
But the district now is moving into much more stable times, Hopkin said. And officials hope to keep it that way.
“A healthy district has an approximate 5 percent fund balance in their maintenance and operations and capital outlay accounts,” Hopkin said. “As we stabilize, we want to see at least a 5 percent fund balance in our accounts.”
Budgeting for line item expenses under each account is also now being done, Hopkin said. If carpets need to be replaced, for example, that will be budgeted as its own expense.
“We’re planning ahead now,” she said. “We’re budgeting ahead.”
In the past, the school district had to take out what’s called a “tax anticipation loan” to pay its employees each November and December because the district didn’t have enough cash flow. That problem is fixed now, too, Hopkin said.
The administration is asking the school board to designate 5 percent of the money in both the maintenance and operations and capital outlay accounts as “committed funds.” That would earmark that money for emergency use.
Administrators are also asking the board to set aside other money – about $400,000 – for the district to use to cover monthly shortfalls.
“It’s planned very carefully right now,” Hopkin said. “This would be a good buffer so we’re not moving into our committed funds.”
The district and the school board also need to decide whether to renovate the middle school or build a new one.
Fixing the school’s old plumbing alone would cost about $1.5 million, officials said. Both the electrical and the HVAC systems also need to be redone.
It could cost an estimated $9 million to renovate the middle school. A new building could cost between $12-$15 million, Hopkin said.
Officials are considering several funding options for either a renovation or a new building.
“The big picture when you look at where we’re going, we’re making great progress,” said school board president Jim Webster. “But there’s a huge problem looming in front of us and it’s that middle school.”
A public forum on the school district’s budget is planned for Wednesday, May 16, at 5 p.m.