>Below is directly from the New Jersey DOE in response to an email I sent requesting information about BOE budgets and Capital Projects.
“Districts are permitted, but not required, to set aside funds into capital or maintenance reserve accounts briefly described below.
1. Capital Reserve – The capital reserve account allows a district to accumulate funds for future capital projects. Once funds are deposited into a capital reserve, they may only be used for capital projects and are not available to be used for general district expenses. The maximum amount that may be placed into a capital reserve is the district share needed for projects included in the long-range facilities plan prepared by the district. Deposits into a capital reserve can be budgeted in the annual budget, or can be made by board resolution between June 1 and June 30 with unanticipated revenue or unexpended appropriations.
2. Maintenance Reserve – The maintenance reserve allows a district to accumulate funds for payment of required maintenance expenses. Once funds are deposited into a maintenance reserve, they may only be used for required maintenance expenses. Deposits to a maintenance reserve can be budgeted in the annual budget, or can be made by board resolution between June 1 and June 30 with unanticipated revenue or unexpended appropriations.
3. Emergency Reserve – The emergency reserve allows a district to accumulate funds for payment of expenses for emergency circumstances that were not budgeted for the year. The maximum balance permitted in an emergency reserve is the greater of $250,000 or 1% of the general fund budget not to exceed $1 million. Deposits to an emergency reserve can be budgeted in the annual budget, or can be made by board resolution between June 1 and June 30 with unanticipated revenue or unexpended appropriations. Withdrawals from the emergency reserve require approval from the Commissioner of Education, unless the withdrawal is necessary to meet an increase in total health care costs in excess of 4% over the prior year.
Note that if a district has applied and received Commissioner approval to exceed the annual 4% tax levy cap, then that district is not allowed to make deposits into the capital, maintenance or emergency reserves for the year in which the approval was granted. School districts are also allowed to keep an unreserved surplus of a maximum of 2% of their general fund budget for items that may arise during the year.”
I don’t see anything in there that says they must “budget and spend” on a yearly basis. I see that they can’t use the Captial Projects money for anything other than Capital Projects and that each district may keep a maximum of 2% of their general budget in reserve for unexpected expenses. I also see that Districts who exceed the 4% tax levy cap can not make deposits into a Capital Projects reserve. It is my understanding that Ridgewood does not exceed the 4% tax levy cap.
As much as the BoE lackey’s wants to assert the opposite, the district is allowed to have a capital reserve maintenance fund. Please refer to NJ State DOE:
https://www.state.nj.us/education/code/current/title6a/chap23a.pdf
Need an example? Teaneck just had a drawdown from their capital reserve fund for extra ordinary repairs:
https://www.teaneckschools.org/v2/download.php?file=823
Specifically, page 9.
The real question to the BoE is WHY have you not established a capital reserve fund, as allowed by NJ DoE, and WHY are you not funding it??
Do NOT treat me, nor the concerned citizens of this Village as the imbeciles you think we are.
