DOES THE DISTRICT HAVE MILLIONS OF DOLLARS IN CASH ALREADY?

Post date: Aug 9, 2016 1:21:17 AM

QUICK ANSWER: The district's uncommitted general fund balance is less than $2 million, and the monthly payroll is $2.9 million. That is such a low level that the district cut 39 positions for 2016-2017 in order to BOOST the available fund balance and ensure it could meet the annual December payroll. The uncommitted general fund balance is less than 13% of the TOTAL of all fund balances; the remaining 87% is NOT available for teacher salaries.

About 70% of the district's TOTAL fund balance of $15.5 million is legally committed to prior bond issues and their projects and services, and much of the remainder is committed to staying prepared for unexpected large maintenance needs or is dedicated funding for student meals, student organizations, and earmarked donations.

Interest in this topic was raised by an article released this month by the Oklahoma Council of Public Affairs which makes the misleading claim that districts across the state "have 'savings accounts' that are full of cash sitting idle." The article claims that there is a great deal of unencumbered cash in various districts, including supposedly almost $20.6 million in Bartlesville. The fact is the vast majority of the district's total fund balances are fully committed to meet various legal requirements and CANNOT be used for teacher salaries.

Most of the money is actually an accumulation of bond monies: "sinking fund" bond issue money that must be used to pay banks back when their loans come due and "bond fund" money that is held until the projects or services a bond issue is paying for are completed. Almost all of the remaining money is explicitly committed to designated purposes under state law, including facility maintenance, school meals, student clubs and organizations, and earmarked donated funds.

The key point is that the district has less than $2 million in actual uncommitted funds available, and its monthly payroll is $2.9 million. Its uncommitted fund balance in the general fund, which pays teacher and staff salaries, has fallen to 5.5%. That is less than the 7% minimum which is considered safe: 7% is enough to ensure the district can meet its annual December payroll when its cash flow hits a low spot each year as it awaits receipt of property tax monies in January. The uncommitted fund balance is so low that the district has already laid off 5% of its teachers, over 20% of central district administrators, and another 15 support positions in order to to cut its 2016-2017 budget and increase the available general fund balance to a safer level.

The article cited a cash balance figure for the district of $20,577,066. That is old data from June 2014 and combined all funds, more than half of which were actually bond issue funding. Back in 2014 the high school additions were still underway, inflating the bond fund and sinking fund balances that would be used to pay for those projects and pay off the related bonds to the banks which loaned money to the district for the construction.

So how much money DOES the district currently have in each fund, and what uses must those funds go to under state law?

Here are all of the funds, their balances as of June 30, 2016 to the penny, and how they MUST be spent:

Only 13% of all of the district's fund balances, the $1.96 million in the General Fund, is uncommitted money that can be used for teacher salaries. And it is currently not even enough to cover one month's $2.9 million payroll. The district has cut 39 positions for 2016-2017 to BOOST this amount to safer levels because it must have enough cash on hand to cover the annual December payroll since that is its low point each year before ad valorem taxes are received in January.

About 70% of the district's total in fund balances is legally committed to prior bond issues, either in the Bond Fund to paying for projects and services once they are completed or in the Sinking Fund to paying back the banks who purchased the bonds when those notes come due. Much of the remainder is committed to staying prepared for unexpected large maintenance needs or is dedicated funding for student meals, student organizations, and earmarked donations.