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Meeting Date:
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9/13/2022 - 5:30 PM
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Category:
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Business and Finance
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Type:
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Action
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Subject:
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13.4 Approval of Resolution #22-23:06, Fund 17 – Special Reserve for Other than Capital Outlay Fund Balance Commitment
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Strategic Goals:
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3. Fiscal Responsibility We manage our fiscal resources responsibly and align budget decisions with District goals and priorities.
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Enclosure
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File Attachment:
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Rationale:
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Senate Bill 751 sets the threshold for triggering the cap on district reserves and the limits of how much school districts can maintain in their local reserve when certain requirements are met at the state level. These conditions have been met, and a 10% reserve cap has been actuated beginning in the 2022-2023 fiscal year. The reserve amount is calculated based on the combined assigned and unassigned ending fund balances of the “General Fund 01” and “Special Reserve For Other Than Capital Outlay Fund 17”.
To meet the reserve cap when closing the 2022-2023 financials; school districts have multiple tools to address the cap, including committing fund balances and transferring to other funds. Throughout the fiscal year, staff will continue to bring recommendations as the proliferation of one-time funds over the past three years has enabled the District to build conservative reserves.
Committing all amounts within Fund 17 will enable the District to comply with state law requiring no more than 10% unassigned/assigned fund balance while enabling the Board of Education to have full discretion over future spending. Taking this action gets the District closer to the Fiscal Crisis and Management Assistance Team's recommendation to commit up to two months of operating expenses to mitigate cash flow challenges, revenue shortfalls, and unanticipated expenditures. Additionally, approving the commitment will ensure that the Los Angeles County Office of Education will approve both the Adopted Budget and the District’s Local Accountability Plan for the 2022-2023 fiscal year.
Following the Board of Education’s authorization to commit the fund balance in Fund 17, the 2022-2023 budget will be updated to reflect the ending fund balance as committed versus assigned.
The Board of Education has complete discretion to move funds between Fund 01 and Fund 17 whenever necessary.
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Budgetary Impact:
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Recommendation:
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It is recommended the Board of Education approve Resolution #22-23:06, Fund 17 – Special Reserve for Other than Capital Outlay Fund Balance Commitment.
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Approvals:
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Recommended By:
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Signed By:
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Melissa Vera - Secretary to Assistant Superintendent, Business Services
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Signed By:
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Latasha Jamal - Assistant Superintendent, Business Services
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Signed By:
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Arturo Ortega - Superintendent
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Vote Results:
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| Original Motion | | Member Yolanda Rodriguez-Peña Moved, Member Xilonin Cruz-Gonzalez seconded to approve the Original motion 'It is recommended the Board of Education approve Resolution #22-23:06, A Resolution of the Board of Education The Establishment of Fund 17 – Special Reserve for Other than Capital Outlay Fund and Fund Balance Commitment.'. Upon a Roll-Call Vote being taken, the vote was: Aye: 4 Nay: 0. | | The motion Carried 4 - 0 | | | | | Xilonin Cruz-Gonzalez | Yes | | Yolanda Rodriguez-Peña | Yes | | Adrian Greer | Yes | | Sabrina Bow, Ed.D. | Yes | |
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