The District 200 Finance Committee submitted its revised draft policy concerning managing its fund balance at its Oct. 14 meeting.
Following up on the work of the district’s ad hoc Finance Advisory Committee (FAC) from last year, the district’s standing board committee last week discussed the first draft on the revised policy. The district currently has a fund balance policy and is looking to revise some of the recommendations of the FAC.
The draft, which will also be vetted by the district’s standing board policy committee, was written by the administration. Much of it includes language taken from District 97’s fund balance policy, explained Tod Altenburg, D200’s chief financial officer.
The draft includes language stating that D200 will target an overall fund balance between 25 and 75 percent of operating cash flows, which was FAC’s recommendation. The board also will require “quarterly budget variance reviews, and obtain explanations of significant variances from budget to actual at the major level,” according to the draft.
This particular provision was among the key discussion points of last year’s FAC, said Tom Cofsky, who sat on the FAC and currently chairs the district’s standing finance committee.
“This is something, as a group, we talked about and we said, ‘How do we incorporate it,’ and, so, I think you have effectively brought in a key part, which is the requirement. (This) will force certain procedures to be in place,” Cofsky said, adding that the draft, overall, “is pretty comprehensive; it covers a lot of ground. When we first started this journey to talk about these things, one of the things I was wondering was how some of these pieces would fit in. And some of the things have been captured in here.”
Another provision concerns the district striving to adopt a “balanced annual operating budget.” What to do if that does not occur drew some discussion at the finance committee. Altenburg explained that this was a reference to the way the state budget is set up.
“If you adopt an unbalanced or deficit budget, you’ve got to adopt a plan for correcting it in three years. That’s in the event when districts are struggling and are going to have to make massive cuts because they don’t have the revenue stream to support the expenditure stream,” Altenburg said, noting that D200 is not in such a position.
Committee member Jeff Weissglass noted that that language might need to be modified.
“Balanced budget doesn’t mean what we think it means when we say balanced budget in this language,” he said. “Because it doesn’t mean that your revenues are equal to or more than your expenses. It means that your revenues, plus money that you can pull in from other places, meet your expenses, and that’s not a balanced budget.”
All three committee members, including Ralph Lee, said that specific paragraph will need some more work.