Albemarle County schools’ rainy day fund has reached a historic low.
The division has about $22,500 left in the fund balance used for emergencies, officials said Thursday.
“Absolutely, I am [concerned],” board Chairman Ned Gallaway said.
The depleted reserve amounts to about one-hundredth of 1 percent of the division’s $155.6 million budget.
Changes in anticipated state subsidies, an increase in federally mandated program costs and an $880,000 gap in savings expected through turnover among the division’s 2,400 employees drove down an already drained balance, officials said.
Years of dipping into the reserve to shore up gaps in budgets hamstrung by the recession left the division in a precarious position, said schools spokesman Phil Giaramita.
“The safety net that we’ve had is largely gone,” Giaramita said.
Past policy prevented the board from spending any reserve below 2 percent of its current budget, said Jackson Zimmermann, the division finance chief. When the recession hit, local governments and schools across the state drew down their reserves, he said.
“What we are seeing here is, we’ve emptied out everything we could empty out to deliver services as effectively as possible, sacrificing as little as possible,” Zimmermann said.
The division implemented mid-year cuts to departmental and school operating budgets and slowed down hiring to save money, he said.
“We’re doing the kinds of things that nibble at the edges,” Zimmermann said. “When we do something that takes us over the edge, I don’t know.”
Officials said turnover over the summer could help bump up the fund balance, but they were not sure by how much.
“We have to be very, very careful,” Zimmermann said.
Without the cushion, the prospect of another year of increased state and federal mandates leaves the division vulnerable, officials said.
Faced with a $3.9-million budget gap heading into the next fiscal year, the school board voted to increase average class sizes by 0.2 students, reduce a planned raise, slash discretionary funds for schools and departments and forgo restoring programs nickel-and-dimed by the recession.
As recently as 2012, the board had up to $7.9 million in reserves to tap. A change in county policy last year stripped the board of its authority to retain more than 2 percent of its budget in reserve, Giaramita said.
Any amount in excess of that 2 percent remaining at the end of the year now goes into the joint capital improvements program that funds county and division projects.
“I don’t think they should have passed it in the first place,” Gallaway said. “I disagreed with it then; I disagree with it now.”
Supervisors initially directed the board to develop a policy on managing their fund balance, then rejected that policy and developed their own, Gallaway said.
“There were a lot of conversations and it took a lot of time,” he said of drafting a policy. “It was a very different [Board of Supervisors] then.”
Should any emergencies arise in the interim, Gallaway said, the board would turn to supervisors for help.
The county’s governing boards met this week to develop a process for improving their communication. At the end, clerks for each were directed to find a time that would work for all 13 representatives to get together for team-building exercises and conversations about sustainable school funding, Giaramita said.
“We just can’t keep going through this year after year,” he said.
Part of that conversation likely will include increasing the county’s tax base, he said.