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Residents will vote on capital reserve proposition with NO ADDITIONAL COST to taxpayers

April 16, 2019

In addition to the proposed 2019-20 school budget and bus propositions, voters will decide on a proposal that has no additional tax implication to residents. Voter approval is needed to establish a capital reserve fund to defray the cost of building and maintenance projects in future years.

By establishing a reserve fund, districts plan ahead and save incrementally for the future. This helps mitigate the financial impact of major, non-recurring or unforeseen expenditures on a school district’s annual operating budget. It also can reduce or even eliminate a district’s need to raise taxes and/or cut staff, programs and services in response to certain financial obligations, such as legal judgements or emergency repairs.

If the proposal passes, it will only establish the fund. The district would need voter approval to use any monies from the fund.

Here’s how the proposition will appear on the ballot, along with a plain-language explanation:

How it’s written:

PROPOSITION # 3 – CAPITAL RESERVE FUND

“SHALL the Board of Education:  A) establish a capital reserve fund under the provisions of Education Law 3651(1)?   The purpose of the fund is for construction, repair and reconstruction of capital improvements and the acquisition of equipment, including incidental expenses in connection therewith.   The ultimate amount of the fund shall not exceed $10,000,000.   The probable term shall be 15 years.  The source from which funds will be obtained can include any or all of the following: incentive aid; non-appropriated fund balances from the general fund as determined by the Board of Education, from time to time; State aid related to expenditures from the capital reserve fund; interest income related to investments of money in the fund and any other additional monies thereafter authorized by the voters of the District; and B) shall the board be authorized to initially fund $3,000,000 to the newly established capital reserve fund from unassigned fund balance?”

What it means:

PROPOSITION # 3 – CAPITAL RESERVE FUND

C-R wants to save money for future building repairs and projects, but needs voter approval to establish a reserve fund to do so.  The funds can only be used for specific purposes and only after the district gets voter approval. In other words, the money that goes into the reserve fund cannot be spent without taxpayers giving their approval.

The district could fund the reserve up to $10,000,000 to defray tax levy increases in the future, and will immediately allocate $3,000,000 in unassigned fund balance to the reserve (again, at no cost to taxpayers).

Category: Budget, CRHS, Golding, News, Radez, Ryder