By Raymond Monasterski
Buena Vista school district maintains its “rainy day” funds
Less than a month after voting to default on its golf course loan, Buena Vista City Council voted to return a $112,000 surplus from last year’s budget to the city schools.
At its Jan. 5 meeting, City Council unanimously approved a “request for carry-over” from schools Superintendent John Keeler. The surplus money had originally been budgeted to the city schools.
The plan, Keeler said, is to hang on to the leftover money from the 2013-14 budget year in case the school system needs it for what are called capital improvements.
“Unless I need a roof replaced, or a boiler goes out, I’m not going to touch it,” he said. “It’s kind of like a ‘rainy day’ fund.”
On Dec. 8 City Council unanimously voted to default on its Vista Links Golf Course loan, saying it would no longer be able to afford the annual payments. City officials said at the time the city had made debt payments totaling $4.4 million on what was originally a $10 million loan. But they said paying off the entire debt over the life of the loan, including interest, would have cost the city about $30 million.
The default left the city’s insurer on the loan, ACA Financial Guaranty Corp., responsible for paying the remaining obligation. The city has been seeking a negotiated settlement with ACA. Two phone calls to ACA this week by The Rockbridge Report were not returned.
Last year, the school system also had a surplus from the previous budget year. It used $130,000 to replace the heating and cooling system in the gymnasium at Parry McCluer Middle School.
The practice of returning surplus local funding to the school system has been common in recent years.
“This is something the city has honored for the past six years or so,” Keeler said.
A local effort
City Manager Jay Scudder said Buena Vista must meet what’s called a “required local effort” to obtain state funding for its schools.
“There isn’t a city or county in Virginia that doesn’t meet the required local effort,” he said.
Most of the time, he said, localities contribute more than what is required. Buena Vista’s required local effort was $1.2 million in the 2014 budget year. But the city contributed $2.4 million.
Localities would rather provide extra funding and be left with a surplus than have the school system come up short, Scudder said.
“You don’t want to be in the other situation nine months later, after a budget, and say ‘we missed something and we’re doing the opposite,’” Scudder said. “You don’t want to be in that game.”
According to the minutes from the Jan. 5 council meeting, Keeler wants money on hand for roofing, asbestos removal and heating and cooling systems. Parry McCluer Middle School and the school system’s offices were built in 1923. The old building could need major repairs at any time, Keeler said.
“If I didn’t have the facilities budget then I’d have to go back to the city if something happened and the city may or may not have [the funds],” Keeler said.
The trust factor
Scudder said council returned the surplus to the school system because it spent wisely over the course of the year.
“It’s kind of an incentive that says that we trust you with your money,” he said, “and for them not to worry over us cutting their budget because they didn’t spend their money.”