Agenda - 09-30-1998 - 1 - Laserfiche WebLink

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MEMORANDUM TO: Orange County Board of Commissioners FROM: John Link, County Manager 01P DATE: June 22, 1998 C' RE: Suggested Parameters for Appropriation of School Fund Balance At the request of Commissioner Gordon, we have drafted some language that we hope might be helpful as the Board considers the question of how much fund balance you would be comfortable with the schools appropriating for 1998 -99. This tries to address the point that it may be appropriate to use accumulated school fund balance for 1998 -99 expansion items /new initiatives for more than one year, if available school fund balance remains well above targeted percentages. Suggested Parameters It is the prerogative of each Board of Education to appropriate available local fund balance in a manner consistent with State law and the goals, objectives, and policies of each Board. The target of available fund "balance as a percentage of expenditures at the close of any fiscal year is 5.5% for CHCCS and 2.7% for OCS. The present status based on information from school audits and review by County Finance Director Ken Chavious is reflected on the accompanying tables (provided to the Board at an earlier work session). It is the expectation of the Orange County Board of Commissioners that the two school systems will generally use fund balance for non - recurring expenditures, particularly those costs associated with the start up of new schools. However, there may be circumstances when use of fund balance for recurring needs may be appropriate, particularly if those uses directly benefit students (e.g. nurses, efforts to reduce student- teacher ratios for special needs children, etc). Such use should occur on an exceptional basis and preferably when there is agreement between the Board of Education and Board of Commissioners on the relative importance of that use. To the extent that actual or projected fund balance exceed the target figures for one or both school systems, the respective Board of Education may wish to indicate to the Board of Commissioners that it considers certain programs, functions, or purposes as especially important to achieving the Board of Education's goals for the upcoming school year. If the Board of Commissioners agrees, the Board of Education may appropriate fund balance to address those programs, functions, or purposes with the understanding that funding for these would be considered as part of the subsequent year's base budget for the schools. As an exception to that assumption, County and school staff will examine the projected available fund balance during each annual budget review process to determine how much fund balance will likely be available for the next fiscal year. If adequate funds