Emergency Reserve Fund

A controversial 3-2 vote took place by the Hernando County School Board last Tuesday night which was not to create an emergency reserve fund policy, even though this was the recommendation of school finance director. The Hernando County School Board chose not to pass this reserve policy even though a three to eight percent reserve fund is recommended by the Florida Auditor General's Office. It has been reported that Hernando County schools have been reprimanded in the past by the Florida Auditor General for not having this 3 to 8% reserve policy. The Hernando County School Board has only set aside 1.5 percent for emergency funds this year even though this amount would only cover approximately 1 month of operating costs for the school system, according to the school district's finance department. This current short-funded reserve account for the school system does not appear to be a fiscally prudent measure in light of cash flow problems being felt within in the school system. This current cash crunch might be caused by the lack of oversight on borrowing money for construction costs and costs related to the use of the half cent sales tax money. In January of this year it was reported that over $6.3 million brought in by the half-cent sales tax increase cannot be touched because the ballot referendum had not been publicly noticed according to the Florida Statutes. In order to use this tax money for new school construction special approval is needed by the state Legislature and then approval must be granted by a judge. School board members Pat Fagan and Robert Wiggins need to be commended for voicing their concerns regarding the creation of a minimum reserve policy but unfortunately they were on the losing end of the vote at last Tuesday night's meeting.