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