Agenda - 10-21-2008 - 4i - Laserfiche WebLink

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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: October 21, 2008 Action Agenda j Item No. 4 -1 SUBJECT: Approval of School Districts Local Current Expense Fund Balance Policy DEPARTMENT: PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: School Districts Local Current Expense Donna Coffey, (919) 245-2151 Fund Balance Policy PURPOSE: To approve .a joint School Districts Local Current Expense Fund Balance Policy between Orange County Board of County Commissioners and Chapel Hill Carrboro City and Orange County Schools. BACKGROUND: At a joint meeting on September 25, 2008, the Orange County Board of County Commissioners and the Boards of Education for Chapel Hill Carrboro City Schools and Orange County Schools agreed to the attached School Districts Local Current Expense Fund Balance Policy. As a final step, elected officials agreed at the September 25, 2008 meeting that each elected board would officially approve the policy at a regularly scheduled open meeting. Both Boards of Education are scheduled to approve the attached policy at upcoming meetings. FINANCIAL IMPACT: Per the attached policy, each school district will make a good faith effort to maintain a level of undesignated fund balance that will ensure sufficient funds are available to address its cash flow needs. The targeted level of undesignated .fund balance for cash flow purposes will be at a minimum of 5.5 percent of budgeted expenditures for Chapel Hill Carrboro City Schools. For Orange County Schools, the targeted level of undesignated fund balance for cash flow purposes will be at a minimum of 3 percent of budgeted expenditures. While the Boards of Education have authority to appropriate fund balance, it is highly desired by County Commissioners that fund balance appropriations be limited for non-recurring expenses. Should either Board of Education appropriate fund balance, the District should note and explain the allocation in their normal annual budgetary appropriation as a part of the budget narrative accompanying the recommended and adopted budgets. RECOMMENDATION (S): The Manager recommends that the Board approve the attached School Districts Local Current Expense Fund Balance Policy.