Finance Bd Recommends Earmarked Account For School Surpluses
Finance Bd Recommends
Earmarked Account For School Surpluses
By Eliza Hallabeck
Board of Finance Chair John Kortze asked his board on Thursday, June 24, to consider doing things a little differently this year.
Roughly one week after the Board of Education voted unanimously during its Tuesday, June 15, meeting that an âunanticipated surplusâ of more than $300,000 in the current budget would be used to return up to $100,000 to the town to offset increased taxation in the next fiscal cycle, the Board of Finance voted unanimously to recommend the Legislative Council put the money into a capital nonrecurring fund to be used for Board of Ed expenses.
âI wanted to put this on the agenda, because itâs been a source of frustration for me personally over the years,â said Mr Kortze. In raising the concept before his board, he said he wanted to address âthis notion that somehow the town cannot accommodate carrying money over from year to year for the Board of Education.â
Every year during budget season, the town hears it is not possible for the Board of Ed to hold money as a contingency fund, said Mr Kortze, adding, as things currently stand that is technically and legally correct. In his opinion, one reason such a fund has never been set up is because the Board of Education would need to return to the town to ask for the money back.
âThe fact of the matter is we do have a mechanism to do it,â he said, âand that is what I would like this board to consider recommending to the council.â
He suggested allowing the roughly $100,000 the school board is returning to the town to be moved to the townâs nonrecurring account. However, he said, to get the money out of that account would require a special appropriation by the school board.
âBut the money could, instead of being left to assimilate into the general fund at the end of the year and eventually added to an amount of money and disappear, we could place it in a specific area and earmark it for a particular purpose for the Board of Education in the future,â said Mr Kortze.
Creating the fund would effectively set the money aside for education, establish a precedent of allowing the school board to have a capital nonrecurring fund in the future, and it would quell, he said, the annual budget myth that setting up such a fund cannot be done.
Finance Director Bob Tait said the townâs general fund account is used for âpay as you goâ items, instead of items that need to be bonded. There is an ability in the fund to create line items, like that suggested by Mr Kortze for the Board of Education.
Board member Michael Portnoy said he is concerned there is nothing stopping the town from using the funds for something else, like in an emergency situation.
âYou probably could,â said Mr Tait in response. âI mean, these are agreements.â
Member Martin Gersten said as it stands, whatever money the school board does not spend at the end of the fiscal year is swept to the town. Creating the fund as proposed by Mr Kortze, Mr Gersten said, would provide an alternative to the school board either spending money or handing it to the town.
âAt least,â Mr Gersten said, âitâs a rainy day fund for capital items, and not spent frivolously.â
Board of Finance Vice Chair James Gaston later amended the motion to recommend the Legislative Council to transfer the Board of Education year-end surplus to the capital nonrecurring fund to be used for future Board of Education purposes. Mr Gersten seconded the motion, and it passed unanimously.
In other business, the finance board also unanimously approved five money transfers, including $80,000 from the contingency fund into $7,000 for capital road improvement and $73,000 to cover contracted overlay projects for local roads.
The Board of Finance also unanimously recommended the consolidation of the town and education department accounting functions.
Consolidating could potentially save money and create transparency and ease in obtaining information, Mr Kortze said.
âOne of the perennial frustrations for me each and every year is trying to get an answer to a particular question,â he said. âWe got a lot of answers this year, but the variance in numbers that flew around, I think, are difficult for us to manage, difficult for the public to digest, and it leads to a lot of confusion.â
Mr Gaston said the Legislative Councilâs ad hoc committee on maintenance spent time looking at the work that went out of the departments.
âThere were a number of things that we learned,â Mr Gaston said. âOne was there are two accounting systems, one for the schools and one for the town.â
The Board of Financeâs action will have the town and school departments looking into consolidating accounts payable, payroll, accounts receivable, general ledger accounting, and moving to one purchasing agent.
Combining systems with the town, Mr Gaston said, could show the true cost to the school district when school buildings are used by the town, and, on the flip side, the true cost to the town when Park & Recreation vehicles are used to plow the driveways for the schools.
âThese are things that we really canât get out arms around because we donât have a universal system for accounting,â said Mr Gaston.