Agenda - 09-27-2004-2 - Laserfiche WebLink

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Cavil • The Chapel Hill-Carrboro Schools rely on the supplemental school district tax in addition to the monthly County appropriation. The supplemental tax is approximately 1/3 of their local current expense fund revenues and is received primarily during the months of January and February. Because of this reliance on the district tax and again, using the County's 8% minimum standard as a gauge, a 5.5% fund balance level should be adequate for the Chapel Hill-Carrboro Schools. In addition to my own analyses of the above percentages, I have discussed the fund balance level appropriate for school systems with others in state and local government who are familiar with school and county finances. The consensus was that the fund balance level for school systems should be somewhat lower than that of the County's 8% standard and that a system relying on a supplemental tax would need. a higher level than otherwise necessary. Based on my analyses and discussions, I recommend that the following policies be established: 1. Orange County Schools begin each fiscal year, to the extent possible, with fund balance available but unappropriated in the local current expense fund that is equal to no more than 2.7% of the budgeted expenditures in that fund for that year, and; 2. Chapel Hill-Carrboro Schools begin each fiscal year, to the extent possible, with a fund balance available but unappropriac- + n he local current expense fund that is equal to no more that 5.5% o the budgeted expenditures in that fund for that year. • It must be noted that, based on the local current expense budgets as originally adopted for 1985-86, Orange County, Schools fund balance level was approximately $86,000 short of the level recommended in this draft, polidy. Also, Chapel Hill-- Carrboro Schools fund balance level was approximately $204,000 short of the recommended level. Considering the federal cut-back in assistance to local governments, the County should not be expected to build-up the school systems fund balance levels in one fiscal year. I recommend that this be accomplished gradually over a period of several fiscal years.