Mineola Schools Consider Fund Balance to Pay for Capital Work

The Mineola School District is considering using part of its projected surplus for the 2011-12 school budget as a means of paying for various capital improvements to the buildings following .

“The issue is, as we realize this year is when you put money in the levy, in the tax levy calculation, you get penalized for it,” Superintendent Dr. Michael Nagler said at the March 1 meeting at the , noting that the paperwork for the Meadow Drive library project was ready to be sent to the state for approval.

Dr. Nagler recommended that a transfer from the district’s unrestricted fund balance could be made, similar to the process with for , moving the amount into the budget as a transfer to pay for the redesigned library project. A proposed bus loop at the would also be paid for with a transfer.

Any spending not from the tax levy does not count against the levy under the tax levy cap rules,  “so reserves and transfers of this nature are fine,” according to the superintendent.

“We know we are running a surplus so we would just take the surplus we’re running and make the undesignated fund balance whole again; so we just move it over and make it back to 4 percent,” Dr. Nagler said, asking for needed a little more time to gather the exact figures in order to have the information for the March 15 board meeting.

“We’re waiting for the architects to give us some (information),” the superintendent said. “They took a survey at Jackson, we want to get a solid number before we go out with it.”

Dr. Nagler also recommended the district begin funding the capital reserve using a portion of the surplus as well as setting some of the money aside for future capital work.

Moving the projected surplus into the undesignated reserve would push the fund balance over 5 percent of the budget and exceed the state’s cap of 4 percent.

“It would be an issue that the public accounting firm would note,” assistant superintendent of finance Jack Waters said. “In the corrective action plan we would explain why we’re over the 4 percent and our intent to get it back down to 4 percent.”

The district previously exceeded the cap two years ago, using the funds for the .

“You can look at it either way in saying that the surplus is going to pay for the capital projects, but technically we don’t know it’s a surplus yet so if we’re transferring it into the budget, it would be from the undesignated fund balance,” Dr. Nagler said. “It’s just an extra step.”