School system must keep a reserve of at least 3 percent of its annual budget.
BLOUNTVILLE — The Sullivan County Board of Education unanimously endorsed a $91.4 million budget plan Tuesday for the county’s school system for the budget cycle that began July 1.
The plan, prepared by school system staff, includes using about $2.64 million of the school system’s estimated $6 million fund balance.
Several BOE members expressed some concern about that facet of the budget, but all said monitoring spending as the school year unfolds will be the key to making sure the system’s reserve funds aren’t depleted too much.
The $2.64 million may be the largest amount of fund balance ever used to balance the system’s budget at the beginning of a budget cycle. But use of the fund balance has become a more common practice in recent years — by both the school system and the Sullivan County Commission.
According to a school system budget history distributed to BOE members last week:
•For the fiscal year that ended June 30, about $1.08 million of the fund balance was used to balance the school system’s budget.
•The year before, more than $656,000 of the fund balance was used to balance the system’s budget.
•In addition, for the budget cycle that ended June 30, more than $404,000 of the system’s fund balance was used to meet unbudgeted spending needs throughout the year.
•The year before, unbudgeted spending from the school system’s fund balance totaled about $1.1 million.
•And two years ago, unbudgeted spending used about $972,000 of the system’s fund balance.
On the flip side of the budget, revenues have outpaced expenditures in each of the last three years, although the figure has shrunk each year:
•For fiscal year 2008 (which ended June 30), spending neared $88.1 million, while revenues totaled more than $88.21 million — a difference of about $114,000.
•For fiscal year 2007, spending topped $83.48 million, while revenues came in at more than $84.05 million — a difference of more than $568,000.
•For fiscal year 2006, spending neared $80.75 million, while revenues totaled more than $82.08 million — a difference of more than $1.33 million.
There were no votes against the $91.4 million budget, including use of more than $2.6 million of the fund balance, by BOE members.
BOE member Larry Harris said the use of the fund balance will leave the system finances close to a benchmark that warrants board attention as the year unfolds — keeping a reserve of at least 3 percent of the system’s annual budget.
“But in this type of budget year, I understand why we have to do that (rely on the fund balance to balance the budget),” Harris said.
BOE member Ron Smith said he agreed with Harris and commended staff in the system’s Central Office for development of the budget.
Smith also said Sullivan County’s school system is in better shape, budget-wise, than some other school systems in the region and state.
BOE Chairman Jack Bales said a lot of effort went into building the school system’s fund balance to the $6 million level — and that the board and school system officials need to be diligent in watching spending levels in the months ahead.
BOE member Jerry Greene said he was confident it’s a good budget for the system, and the board could make adjustments, if needed, “down the road.”