The following, paraphrased, was provided by Fernanda Foertter, Friends of Oak Ridge Schools. My paraphrases are in red.
It’s that time of year again that we have to clarify what a Fund Balance means because our City Council confuses everyone:
— schools do not get regular income every month
— schools get lump sums depending on the funding source at various times of the year (fed/state/local)
— school must make payroll and deal with emergencies.
- Fund Balance is mandated by state law.
- Fund Balance is NOT a savings account.
- Fund Balance is NOT schools hoarding cash.
Fund balance is there to make sure the schools can make payroll/light/bus expenses because funding doesn’t come every month. So it needs to keep some cash in the account for those times. The recommended amount is ~10-15% of total budget. For our school system that would be anywhere between $6M – $9M. Yes it’s a lot of money. Yes, our school system maintains less than recommended! But should a fire happen or a hail storm or stampede of angry unicorns, the school would be able to make payroll, fix the holes, and clean up all the glitter and cup cakes left by the rude unicorns, or at least the glitter.
Because once the city/state/feds fund the schools no more funds are added unless a disaster is declared a State of Emergency but even that would take time.
Thank you Ms Foertter.
In closing, just 160 days for the return of civility to City Council.
Mike Mahathy for BOE 