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Chair Carey said that this document has already been adopted, but the Board can amend it later. d. Fund Balance Policy Laura Blackmon said that since 1986 the school systems have maintained a fund balance. The CHCCS has maintained 5.5% and OCS has maintained 2.7%. She said that there have been no changes implemented in the policy since 1986. This is on the agenda for discussion to see if changes need to be made to this. Dennis Whitling said that this may be something the school collaboration group can look at for review and/or updating. Superintendent Pedersen said that CHCCS is using $500,000 from fund balance for Elementary School #10 and $500,000 for startup costs for Carrboro High School. He said that there has been a struggle with the budget far Carrboro High School, and they have identified $500,004 for one-time purchases for startup programs far the new school. Chair Carey thanked Superintendent Pedersen for making the Board aware of this far the first time. He thinks that the County Commissioners would like to think this over. Superintendent Pedersen said that there is a need for cash reserves to cover payroll when the school system is not collecting any district taxes. He said that CHCCS has looked to the Board of County Commissioners for assistance in the past when this has happened. He said that he is comfortable with the 5.5°~ fund balance. Commissioner Gordon said that if either school board has anything to mention about their fund balances, then please let the County Commissioners know, such as if the targets are not right, what to use it for, etc. She said that there has been a lot of misunderstanding about this issue. Dennis Whitling said that in OCS, the creation of a fund balance is a savings from year to year that accumulates. He said that he understands the concept of using fund balance for non- recurring items. He said that when their operation budget is not fully funded, then money must be taken from the fund balance. It is also a judgment that the school board has to make about funding programs or waiting. Debbie Piscitelli said that when spending occurs between now and the end of the fiscal year, this can make people upset, and this should be addressed. Commissioner Jacobs said that the larger the County's fund balance, the better the bond rating, and they want to build back their fund balance to increase the bond rating. He said that when schools need money, the County takes it out of its own fund balance. He said that as long as the County has a good fund balance, everyone has a good fund balance. Ted Triebel asked about a target goal for the County and Donna Coffey said that the Local Government Commission recommends 8%. The County's internal target is 15%, but it has not been this large in a tang time. Jean Hamilton asked about the County's band rating and it was answered Triple A. Chair Carey said that the bond rating agencies do not tell entities what they need to boost or lower the band rating. Laura Blackmon said that band raters are looking for consistency. Chair Carey said that the school collaboration work group will discuss this topic. e. Fair FundinaJEguity Laura Blackmon said that the joint boards had looked at this topic last year. Attachments E-1, E-2, and E-3 were the minutes from the Fair Funding Work Group meeting in May 2006, the recommendations, and the goal statement with regards to the recommendation of the Fair Funding Work Group. Commissioner Gordon said that the school collaboration work group should take this topic up.