Oneonta City Schools Superintendent Dr. Michael Douglas provided the following explanation of the school system’s $5 million bank account, in regard to ongoing discussions with the city of Oneonta on school funding. City manager Ed Lowe last week commented on the seemingly large $5 million reserve fund and questioned why it could not be used to hire an assistant band director and art teacher that appears at the top of the school system’s list of instructional needs.
“I have tried my best to explain our financial situation to city leaders,” Douglas said in his preamble to the breakdown.“I have always been under the impression that they understood school funding, and that they understood our financial situation. It wasn’t until recently that it has been communicated they doubt we truly need city funding. School finance is governed by earmarks and money is assigned as to where you can and cannot spend it. It is true that we have $5 million in the bank. The money is broken out in the following manner:
“Roughly $500,000 is tied up in federal funds and the school lunch program. I can only spend that money as the federal government allows. I can’t spend it anywhere else.
“Roughly $3,000,000 is in capital improvements/debt service. I can only spend that money on capital (projects). I cannot hire people with that money. It is common to put back (money) for emergencies (tornados, bad roof, heat or air conditioning, etc.). We are paying on the elementary school debt ($350,000) and renovating a science lab this summer which will cost $250,000. I did a capital projects survey with parents…., and we are prioritizing projects based on their desire and (our) ability to afford. I wish I could take some of this money and spend it on people, but that would be unethical and illegal.
“Roughly $1.5 million is what we have to pay the bills and run the school. The state requires that we maintain a one-month reserve in this pot of money. Most systems try to maintain between two and three months. Our board of education requires us to maintain 1.5 months in reserve. If you drop below one month reserve, the state starts to get involved. One month reserve for Oneonta City Schools is $801,000.
“So, essentially I have $700,000 (Ed. – $1,500,000 –$801,000 = $699,000) to pay all the other things the state doesn’t pay for. (That $700,000) pays for all of our support staff, aides, office personnel, maintenance personnel, janitorial personnel, central office personnel, supplements, maintenance/janitorial/ transportation supplies, furniture, and utilities. I guess I could hire a band director (using that money), but I would have to cut the position after the state intervened due to being below the one-month reserve threshold.”
Thus is the $5 million reserve account explained.