School board finally builds back 5% emergency fund required by state

Proposed budget is for $460 million next year

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FLEMING ISLAND – The school district’s fund balance is back at 5% after a years-long upward climb, but the COVID-19 pandemic could cause an upset.

The State of Florida requires school district fund balances to remain at a minimum of 3% of the total budget. That’s because fund balances act as emergency reserves. The Clay County School District saw itself dip lower than that minimum years back, putting itself at risk of a state takeover, but has since seen itself climb upwards toward a healthy 5%. That 5% is within sight so long as the coronavirus doesn’t disturb the district’s plans.

“We’re at a 5% fund balance [after the end of the 2019-20 fiscal year],” Assistant Superintendent of Business Affairs Susan Legutko said to applause from the Clay County School Board meeting on Tuesday, July 21. “That’s great for us...because we’ve been working toward it. A really good fund balance is 10% and we’re on our way. Let’s get through COVID-19 first.”

Board Chairwoman Carol Studdard said she doesn’t want to see the district go through such a period of low fund balance as it did years ago when the percentage dropped below 3%. She said it was scary having the threat of something really bad – including a state takeover – threatening the district again.

Legutko’s announcement of a healthy fund balance came during the board’s special meeting when Legutko presented the tentative 2020-21 budget.

“In order for the district to participate in revenue, we are required to levy a required local effort millage,” Legutko said.

That RQE is a 3.641 millage. The Florida Finance Funding Program mandates a minimum levy that every school district must propose in their budget in order to receive state funds. These state funds account for a large portion of the budget used in an operational capacity. Without these funds, the schools wouldn’t receive funding from the state. That RQE will bring in nearly $50 million.

The district will get $241,224,877 from the state because of that RQE. The other millage includes a discretionary .748, a capital outlay of 1.5 mills and one additional mill voted on by taxpayers two years ago. That brings the total millage to 6.889 which is lower than last year’s 7.047 mills.

All of this equates to a tentative budget of roughly $460 million. This does not take into account the potential additional sales tax that will be proposed by the school board on the November general election ballot. This sales tax could bring in over $300 million needed for school maintenance and more. That sales tax is not included in the tentative 2020-21 budget for two reasons: it is not a part of the budget right now and voters have not yet determined if they’re willing to approve that sales tax.

Legutko said the budget stands based on the projected full-time equivalent or number of full-time enrolled students. This budget accounts for 39,000 brick and mortar students.

“What I’m trying to say is that our budget is based on student enrollment,” she said. “It’s a combination of the required local effort and of course, state funding, and that is a calculation based on a projected FTE of 39,000.

“Because of the pandemic and what could possibly happen, we don’t know for sure what our enrollment will look like. I think when you look at this budget, it seems like we’re increasing our revenue and that is due to projected enrollment. Clay County is growing and we expect enrollment of students to grow as a result but COVID-19 could deter all of that. We’ll see.”

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