Whether it be by over-budgeting, or underspending, the proposed budget presented to the school board on Monday September 8, 2008 shows that just under $1.5M is in "Un-Designated" Fund Balance account 933 000.
Funny this figure has not been widely publicized. In fact, at the August 25 Finance Committee meeting, Phil Frei announced that $500,000 was "leftover" from "dock days and utilities savings. He never indicated that the TOTAL surplus was 3 times as much.
Neither did board member/Finance committee chair Jim McCourt:
"There is one item in here that is very good news. We didn't use all of last year's funds, and there's about a half a million dollars that's left that we are going to be taking as an advisory item at the annual meeting and asking at the annual meeting if we want to use it to pay down the debt or use it to reduce the tax levy, or some combination there of."
[SP-EYE: Are you looking at the same "budget" sheet as us, Jim? Because we see $1.5M...not just $500K.]Roger Fetterly commented that DPI rules and opinion offered by the Attorney General do not allow a school district to plan on (and includes as a line budget item) a surplus in the Ending Fund Balance, Unappropriated (Acct. 933 000).
Stackhouse Steams
Fetterly exceeded his 3-minute time limit and thus quickly summarized: "I think you get the message: your budget isn't very good." Before Fetterly returned to his seat, board president David Stackhouse asked Frei point-blank, "Mr. Frei, has the district violated the law?" Fetterly remained at the podium in order to hear Frei's response even after being told several times by Stackhouse to take a seat. "You don't tell me when to stand and when to sit down," Fetterly said." After a very pregnant pause, Phil Frei gave the classic defendant's response to Stackhouse's question: "Not to my knowledge."
So what about that $$500K??
District Administration and the school board would LIKE to apply that $500,000 against future Wisconsin Retirement System (WRS) loan payments. However, Finance Committee citizen representative Rick Mealy suggested that the $500K should be used to reduce the tax levy and the mill rate, and that the decision should be made by the electors at the annual meeting.
Now Jim McCourt is says that while the board may ask the electors what their preference is for the $500K, that is advisory only...and the board can do whatever it chooses.
What about the other $1M surplus???
When asked about the other $1M in surplus, Phil Frei indicated that it would be used for "cash flow" during the 2008-09 school year. Cash Flow Accounts are kind of like a home equity loan...you use them as you need them but the intent is to return the money to where it came from. Note however that in the budget, the $1.5M disappears. The only thing projected to be left at the end of the 2008-09 school year is $100,000...the intent of which is to add that to the existing "Fund Balance". (Think of it as a "rainy day" fund).
Since that $1M never reappears as an addition to the fund balance, that means that it is intended to be consumed/spent during the 2008-09 school year. And that means that the amount of money needed for the 2008-09 budget is really $1M higher than it appears to be.
Banks have to follow "truth in lending" rules. Why don't school districts have to follow "truth in budgeting" rules???
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