PUTTING FUNDS FROM LEOPOLD REFINANCING INTO THE DISTRICT'S CONTINGENCY FUND IS A WISE MOVE

I would like to address the issue of how the $276,000 from the Leopold refinancing would be handled in the 06-07 school year if the referendum is passed.

The money for the debt service related to the Leopold construction is currently in the Business Services Budget for the District. If the referendum passes, the Board has committed to moving that $276,000 to the District's contingency fund. Questions have been raised about the wisdom of moving the money to the contingency fund. I believe that is a wise move.

The Board has three options for the funds if the referendum is passed. It can either leave that money in the Business Services budget, it can decide to spend that money in another way, or it can decide to move the money to the contingency fund and potentially use it to soften the budget cuts that will be required for the 2007-08 budget period.

I believe the best course is to put the money in the contingency fund and use it to soften the budget cuts needed for 2007-08 if possible. I don't believe it is wise to put something back into the 2006-07 budget now - after it was already cut - especially if it is likely that it would need to be cut again in 2007-08.

Putting money in the contingency fund does give the Board discretion on how to spend or not spend the money. Therefore, if 5 out of the 7 Board members believe that the contingency fund is needed in 2006-07 for some unexpected or unbudgeted item, the money could be used for that item. However, and I believe most importantly, the Board could decide not to spend that money at all and use it to address the cuts needed in the 2007-08 budget. If the Board instead determines now to spend that money in 2006-07, that money would not be available to cushion the blow in 2007-08.

Posted by Lawrie Kobza at September 26, 2006 1:29 PM
Subscribe to this site via RSS/Atom: Newsletter signup | Send us your ideas