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June 12, 2001 <br /> <br />· The funds returned by the Schools do not represent a recurring source of funds and <br />should not be used for ongoing operating expenditures. <br /> <br />· The use of these funds is at the discretion of the City Council. For example, they <br />may be retained by the City or re-appropriated to the School Division. <br /> <br />· It has been the recent practice of City Council to re-appropriate all or a portion of <br />these funds for School purposes and, with the exception of the current Fiscal Year, <br />Council has been careful to make these funds available only for non-recurring <br />expenses. <br /> <br />· Due to the recent lack of agreement between the School Division and the City as to <br />Council's intent for use of the current year re-appropriation, it is recommended that the <br />City Council establish a policy with respect to unspent funds. <br /> <br />· It is recommended that any undesignated School Fund Balance lapsing at year end <br />be appropriated for specific School capital purposes only upon receipt of a resolution of <br />the School Board designating and requesting the funds for specific non-recurring <br />purposes. <br /> <br />· The proposed policy indicates that Council will appropriate the funds to the School <br />Division for specific purposes. Those purposes may be for the projects or programs <br />requested by the School Board or for different projects or programs, if Council believes <br />that to be appropriate. <br /> <br />· In addition, as the City's undesignated fund balance must support all City and <br />School Operations, I believe it is entirely proper for the City to reserve a portion of any <br />unspent funds to apply to the General Fund fund balance. I therefore recommend that <br />the City retain a portion of any funds returned in rough proportion to the School <br />Division's share of the General Fund. Based on current funding, the City should retain <br />approximately 25%. <br /> <br />Financial Impact: <br /> <br />· The financial impact will be positive as the Schools will have increased funding to <br />address capital needs and the City will benefit by continuing to increase its fund balance <br />to a sufficient level to support city-wide operations including schools. <br /> <br /> Motion by Mr. Pitts, and seconded by Mr. Griffin, to adopt the following <br />resolution, and was adopted by the following vote: <br /> <br />"A RESOLUTION ESTABLISHING COUNCIL GUIDELINES FOR THE <br />REAPPROPRIATION OF SCHOOL OPERATING FUNDS REVERTING TO THE CITY <br />AT THE END OF EACH FISCAL YEAR. <br /> <br /> WHEREAS, any unspent operating fund balances of the School Division revert to <br />the City at the conclusion of each fiscal year; and <br /> <br /> WHEREAS, while the City Council has full discretion with respect to the <br />disposition of such funds, it has been Council's recent practice to re-appropriate all or a <br />portion of such funds for School purposes; and <br /> <br /> WHEREAS, for budgetary planning purposes, the City Council deems it in the <br />best interest of the City and the School Board to establish a clear policy with respect to <br />any future reversion of funds from the School Board, <br /> <br /> NOW, THEREFORE, BE IT RESOLVED by the Council of the City of <br />Portsmouth, Virginia: <br /> <br /> 1. That any unspent operating fund balances of the School Division will, upon <br />receipt of a written report of the School Board designating specific School capital <br />projects, be re-appropriated in accordance with paragraph 2 for the specific projects <br />requested or such other projects as Council may deem appropriate; and <br /> <br /> <br />