School Board Considers Retaining $100,000 Surplus Funds

The School Board considered retaining roughly $100,000 of anticipated year-end surplus as unassigned fund balance.

Since the state law allowing school districts to retain funds for restricted purposes took effect, the District has reserved $202,810 unassigned fund balance, Business Administrator Peter Curro said at the Board’s Aug. 4 meeting.

Reserving the $100,000 would show Moody’s that the District is planning for emergencies and not just reserving funds haphazardly, according to Curro.

“This would show we are planning our steps in order to balance the tax rate and realizing we need to get to a level that is substantial and that protects the School District from any emergency that may arise,” he said. “It would be prudent for the District to put the $100,000 away until we reach a number the board is comfortable putting away in case of an emergency.”

By statute, the District can retain up to 2.5 percent of the calculated school district net assessment – around $1.2 million for Londonderry, based on last year’s assessment.

With $202,810 reserved thus far, member John Laferriere said the District is “grossly under” it’s maximum.

But the law has only been in effect for a few years, Curro noted.

“Since we have the Capital Reserve and money in the Maintenance Trust, which adds up to nearly $1 million, I would say we’ve certainly fulfilled our fiduciary responsibility in recognizing an emergency could arise,” he said, recommending the District set as a target to reserve $750,000 unassigned fund balance. “We should plan in a way that’s balanced and thought out, so it doesn’t put too much stress on the tax rate.”

According to the year-end financial report Curro submitted to the Board, the District anticipates a total year-end surplus of $1.8 million or more. The surplus is to be used to cover the cost of the approved equipment trust article for $100,000 and to add to the District’s unassigned fund balance in the amount of $100,000.

The remaining $1.6 million is to be used to offset the December 2015 tax rate, helping to offset the anticipated reduction in the District’s adequacy grant funds.

On the expenditure side, the budget is expected to come in $1.7 million below the appropriated budget, with the major contributors to the healthy year-end surplus being professional salaries, $364,253; health care premiums, $1.8 million; dental premiums, $110,328; and out-of-district placements, $13,388, Curro reported.

“As a group, out-of-district costs can, and has at times, been $300,000 to $500,000 over the approved budget. By coming in ‘on-budget,’ it is a significant cost savings to the District,” he said.

Accounts that overran the budget include overtime costs and purchased services for snow removal, workers’ compensation, construction services, information technology equipment to support curriculum initiatives, and retirement salaries to meet contractual costs for retiring staff.

Curro noted the District is to receive reimbursement for 75 percent of the District’s costs for snow removal efforts during the January blizzard.

The financial statements as reported are to be audited in the coming month. Curro said the District’s auditors were scheduled to begin their work with the District on Aug. 10.

The field audit is generally complete in three to five days, with the final report to be presented to the Board in early December.

Newsletter Updates

Enter your email address below and subscribe to our newsletter