With no discussion, Unionville-Chadds Ford School Board directors voted Monday night to transfer almost $600,000 from the district’s general fund to the capital reserve fund.
That amount, according to Director Jeff Hellrung, is last year’s net surplus.
“It represents the difference between the budgeted and actual revenues, and also the budgeted and actual expenses,” from last year’s budget, Hellrung said. He added the money would be used quickly.
What did generate discussion during the Oct. 24 meeting though, is a recommendation to eliminate the PSERS reserve fund. PSERS is the state teachers’ retirement system.
The district, according to Hellrung, has held $2.5 million in reserve for the fund for years. That reserve could have been used “to buffer the rapid increases in PSERS contributions” that school districts have had to make, but the money has not been used for that purpose and remains in reserve.
After a recent audit, Hellrung said, the district administration has recommended closing that reserve and moving the money into the unassigned reserve. If that’s done, the unassigned reserve grows to about $5.3 million, or 6.5 percent of the district’s budget.
Director Gregg Lindner opposes such a move.
“In my mind it’s a mistake transferring those dollars. I think it’s helpful for the financial discipline that we have in the district to understand that the money we have in the unassigned balance, and have a separate bucket for the dollars that we’ve laid aside for the PSERS fund,” Lindner said.
He said his concern is that putting them together is that “we’ll end up reducing those funds somewhat dramatically within the next year or two.”
Lindner added that the district is already spending money on a 10-year plan and that PSERS money should remain separate from other accounts.
“There’s no issue with us having too many buckets of dollars,” he added.
Board President Vic Dupuis said no legal requirement exists regarding the location of the reserve funds or whether a vote is needed to move money from one reserve to another. His understanding is that some members of the board want the unassigned reserve to be higher, in the 5 percent to 8 percent range, while others want it lower in that range.
“In my view, this is not a significant event,” he said.
Director Michael Rock said moving money from other reserves into the unassigned reserve “isn’t quite right.”
“The way we budget around here, we budget as cheaply as we can because some of us don’t want the school district to be the bank for the community. I fear that once the next recession hits, we might not be well-prepared and wind up doing what we did the last time and let people go. That’s penny wise and pound foolish,” Rock said.
Superintendent of Schools John Sanville interjected, saying that what the board is dealing with is a policy issue that says the district “shall strive to be in that 5 to 8 percent.” It’s not a requirement to keep the unassigned reserve in that range.
Hellrung said ultimately it matters little in which fund the money is kept since it’s still available. He said the board would decide during the next budget process whether the unassigned reserve is at 5 percent or 8 percent of the total budget.
The board made no motion to have the administration transfer the money.
Other business
• The board voted unanimously to approve field trips for the Unionville High School color guard and drumline to attend the Winter Guard International National Championships in Dayton, Ohio, in April.
• Director Steve Simonson read into the record that, per district policy, the board has evaluated Sanville’s performance during the last school year and found that his performance was consistent with district goals and that his performance was rated as “distinguished.”
Rich Schwartzman has been reporting on events in the greater Chadds Ford area since September 2001 when he became the founding editor of The Chadds Ford Post. In April 2009 he became managing editor of ChaddsFordLive. He is also an award-winning photographer.
