The Reserve Fund Story
I appreciate that understanding District finances can be difficult. But take a few minutes to read this post. This is YOUR money that is being shoveled into hidden-from-the-public accounts.
On Tuesday, May 19, you will be asked to vote on an increased school budget, significant spending from reserve funds, and the creation of two NEW reserve funds. The district never explains how reserve funds work, the source of the money, or the balances in these funds. Here is the lowdown:
What are Reserve Funds? They are savings accounts setup for a specified purpose with a maximum total amount.
What are the BCSD Reserve Funds: Unappropriated Fund; Capital Reserve Fund; and a Technology Reserve Fund.
What is the Unappropriated Fund? NYS allows 4% of the total budget to be held in this “rainy day” fund.
What is the Capital Reserve Fund: A savings account set aside for building and grounds capital improvements.
What is the Technology Reserve Fund? A savings account set aside for hardware related technology purchases.
Voters must approve the establishment of the Capital and Technology Funds as well as expenditures from these funds.
How much is in these funds? The District has NEVER made public the balances in these funds during the budget presentation process.
The current:
Unappropriated Fund balance is $2,350,632
Capital Reserve Fund balance is $4,905,390
Technology Reserve Fund balance is $3,404,854
Where does the money come from? Deposits into these funds are derived from lower expenses than budgeted and/or more revenue than forecasted in the previous year. There are no “line items” in the budget that define these potential deposits.
Therefore, always having money “left-over” at the end of the fiscal year means expenses must be “padded” and/or revenue under-estimated.
How much will be withdrawn from the funds next year (with vote approval):
Capital: $1,440,000
Tech: $400,000
How many YEARS of allocation are in the current funds?
Capital: $4,905,390 divided by $1,440,000 = 3+ YEARS
Tech: $3,404,854 divided by $400,000 = 8+ YEARS
Then why does the BCSD need NEW Capital and Tech Funds? They have shoveled the maximum allowable amount of money into the existing funds.
What was the Technology Fund increase this year? +$969,590.
How much is the forecasted tax levy increase next year? +$561,044
Therefore, if “only” $400,000 had been added to the Tech Reserve (instead of $969,590), the tax levy increase would be ZERO ($969,590 - $400,000 = $569,590). With NO change to the educational program. With NO change to the proposed technology hardware expenditure.
Isn’t saving for the future a good idea? Of course some savings make financial sense. However, with 8 years of more than reasonable tech expenditures already available, creating a new tech account with money that could be used to reduce taxes becomes highly questionable. In addition, when projects must be debt financed, instead of allocated from reserve funds, Boards and voters are far more cautious.
With 8+ years of more than reasonable technology expenditures “in the bank”, and 3+ years of reasonable capital expenditures “in the bank”, the BCSD does NOT need additional new accounts into which they can shovel our taxpayer money.
It is YOUR money (potentially $15,000,000 additional) that will be shoveled away if you approve these new funds. This is money that can be used to lessen the tax levy.
Vote NO on establishing these new reserve funds.
(The majority of this presentation was made to the Board of Education at the April 28th meeting. The Board did not respond and did not ask any questions.)
The D&C, May 16, 2009, published an article “School reserves under scrutiny”. Click on the link below to read the article: