On July 27, 2017 the Iola-Scandinavia school board met to discuss a budget surplus amount of $273,000. July 27th was the second day of the annual audit, making July 26th the first day of the audit. The notice for this meeting was posted prior to the start of the audit on July 25th.
At the meeting, the board voted to transfer $200,000 of the surplus from the general fund to Fund 46 (Long-term capitol improvement projects fund). The board also approved assignment of $100,000 for a future chrome book purchase, as well as $150,000 for building safety and security updates.
Please read the word-for-word transcript below from the meeting.
Transcript from Special Board Meeting
July 27, 2017
Kristen Hoyord: “We will call this meeting to order. This is an official meeting of the school board of Iola-Scandinavia, notice was given to the Waupaca County Post, the official paper. We are missing two board members, Ken Wavruk and Gena Gullixson. Otherwise the rest of us are here. Do we need a roll call vote? Ok, no. We will entertain a motion to approve the agenda.”
Mike Koles made a motion to approve the agenda as posted.
Bob Fredy seconded the motion. Any further discussion. All in favor: aye, opposed: silence.
Kristen Hoyord: “That motion carries. Item #3, considering the 16-17 Fund 46 contribution.”
Sarah Thiel: “We are here today because today was the second day of our 2016-2017 audit. We had Jim take a look at everything and see where we are going to end the financial year at. We had a $66,000 budgeted surplus projected. And taking a look at everything, we are potentially going to have a $273,000 budget surplus.”
Kristen Hoyord: “Oh my gosh.”
Sarah Thiel: “Yeah. So the recommendation for tonight would be to take $200,000 of that surplus and move it into our long-term capital improvement account – that Fund 46. We have restrictions on that, that those funds can’t be used until 5 years after creation, which would be July 1st of 2019. And the funds in Fund 46 would need to be used on anything specifically identified in our long-term capital improvements fund. It helps from a shared cost side to be able to spend our full budget allowance and it also helps to have money set aside for long term projects down the road. We took a look at the shared cost calculation and what would be the impact be on our _ for 17-18, and if we put the funds aside or if we didn’t, and there is a difference of $1,500. We will be getting $1,500 less in state aid if we put the $200,000 away verses not. So Ray and I talked and we are both in agreement that it makes sense for us to do this.”
Kristen Hoyord: “For the improvement plan, does our improvement have to be on the current plan now or can we continually add to that?”
Sarah Thiel: “You can update and change your long range maintenance plan at any time, it just needs to be submitted to the state when you do that. If you are using money in Fund 46, the DPI wants to see what your long range maintenance plan looks like and they are going to make sure that the dollars are used on the things that are in that plan that has been annotated with them. So we can continue to make changes and updates to it. When we originally put that plan in place, we weren’t expecting any referendum money, so there are probably several things on that list that will be addressed through the capital projects that were approved through the referendum.
Kristen Hoyord: “Help me to remember, our are facilities, such as track, baseball, gym – is any of that in there? Because those are the things we are going to want to look to add.
Sarah Thiel: So I would need a motion, if you guys are in agreement, to approve the transfer from the general fund into Fund 46. I would recommend the $200,000 transfer which would still have us putting money in the fund balance like we generally like to budget.”
Mike Koles: “That’s where the 73 [$73,000] would go?”
Sarah Thiel: “Yes”
Mike Koles: “I make a motion to put the $200,000 surplus into Fund 46, with the remainder going into the Fund balance.”
Paul Huettner: “I’ll second.”
Any further discussion on that.
All in favor: Aye. Opposed: silence. That motion carries.
Kristen Hoyord: “Then the 16-17 Fund Balance”
Sarah Thiel: “The second part of the conversation is our fund balance percentage. We currently have all of our fund balance in an unassigned category. Our current fund balance policy says that our target balance is between 25 and 30%. When we passed the referendum we talked about having additional funds set aside in reserve if we got to years 2, 3, or 4 that we didn’t need to levy up to that full authority, that we can use some fund balance to help address. So, the recommendation would be that we look to assign some of those fund balance dollars for some of the projects that we specifically talked about. So we are going to need to replace our chrome books at the middle and high school on our ? technology for the students, and rather than getting to that point of having to borrow money we want to assign $100,000 for chrome books to be used in the future when we need to purchase. We’ve also been talking about lots of safety and security updates in our building and Ray and I talked today and we would like to see $150,000 assignment for building safety and security. As of today I don’t have a list of what exactly that could be. We are going to need to have some conversations and develop some priorities, but things like camera systems, buzzer systems at the doors potentially, film on windows, things like that. Coming up with our safety plan and having dollars to address some of those needs that we’ve identified. And then the balance, based on the way things are looking today, we would have to point $5.3 million, which is 32.6% of budgeted expenditures to actual expenditures, which is still beyond the 25-30% that is approved in our policy.”
Bob Fredy: “That’s with taking the 250 [$250,000] out?”
Sarah Thiel: “Yes”
Diana Jones: “Did you say 100 [$100,000] or 150 [$150,000] for safety and security?”
Sarah Thiel: “150 [$150,000]. So $100,000 assigned for chrome books and $150,000 assigned for building safety and security updates.
Diana Jones: “Do you have quotes on the different safety and security things?
Sarah Thiel: “We do not.”
Diana Jones: “So you don’t even know what you need really at this point?”
Sarah Thiel: “No.”
Kristen Hoyord: “Any questions?”
Sarah Thiel: “If you are in agreement, I need a motion to assign fund balance dollars, like we discussed, the $250,000. “
Kristen Hoyord: “That would still keep us above the percentage that we are looking for. Make sense?”
Diana Jones: “If you don’t do it now, you can’t do it once the fiscal year is over? Is that correct?”
Sarah Thiel: “We can, so when we report, we have balance dollars that carry over from year to year, so we would have the amount in unassigned and we would have that amount in assigned. And as we work on projects, the budget will be, we’ll have a budget approved that will deficit spend targeted specifically at that assigned amount and as we work our way through it, if we spend $50,000 of that this year, we would have $100,000 to work with in the following, unless we decide to put additional aside for future projects. But we are pretty early in the conversation about what would need to be done and this gives us a good start.”
Diana Jones: “And what if you don’t use it all and you want to assign it to something else? You can’t? or you can, but it has to be approved?”
Sarah Thiel: “You can reassign it and they would have to have a meeting.”
Bob Fredy: “So the chrome books are is probably going to be a one-time assignment, down the road the safety and security will probably chip away over the next two or three years?”
Sarah Thiel: “Mmm Hmmm.”
Bob Fredy: “That makes sense.”
Bob Fredy made a motion to designate the movement of fund balance reassignments.
Second by Adam Walberg.
Any further discussion? All in favor: Aye. Opposed: silence. That motion carries.
Motion to adjourn by Mike. Second by Paul. Meeting adjourned.
Holly Neumann’s article in the Waupaca County Post is found here: http://www.waupacanow.com/2017/08/03/larger-budget-surplus/