Money to be stashed for school building projects

Aug. 13, 2014

Greenfield — Greenfield schools are trying to make it easier to save up for medium-size building projects by creating a separate fund instead of socking money away in its normal surplus fund.

The problem with putting money with other surpluses is that state aid would be slashed when the money is finally spent, said Greenfield School Board President Cathy Walsh.

"It can really distort and change the amount of aid the state gives us," she said.

The advantage of saving up in a separate fund is that the yearly savings, if any, are considered an expense at that time, she said. Because the amounts going into the fund at any one time would be small, they would have only a small or no impact on state aid.

The school board cannot set up what will be known as Fund 41 by itself. Residents coming to the Sept. 8 district annual meeting will likely be asked to approve creating it.

If a fund is actually set up, it would have to be for a specific purpose.

That purpose should be as general as possible in case the money is actually needed for unexpected things such as fixing a roof leak, said board member Robert Hansen.

Even so, Hansen said he supports the fund as a good way to manage capital spending.

Such a fund would only be useful for medium-size or smaller capital projects because the schools have to borrow for bigger ones, Walsh said. Even the relatively smaller expenditures at two elementary schools in recent years were done with borrowed funds, she said.

However, she said, a Fund 41 could signal a new era of saving for projects instead of borrowing.

The plan is still to keep the property tax levy increase as close to zero as possible, Walsh said. But within that, if there are a few dollars here or there that could be saved for projects, the board would like to be able to put it into a fund that won't affect state aid when the money is used, she said.

Currently, the main use of the surpluses contained in the fund balance is to pay the schools' bills from midsummer when its fiscal year starts until late fall and winter when property taxes and other revenues start coming in.

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