Eight Florida school districts — including Manatee — are being monitored by the state Department of Education because their reserves are dangerously low.
All the districts have less than 2.5 percent of their operating budgets set aside in rainy-day accounts.
State law says that school districts considered to be in a condition of financial emergency may face state management of their budgets. The state is hoping that monitoring now can prevent state intervention later.
“We want to make sure we’re watching what’s going on,” Department of Education spokesman Tom Butler said. “If you get low, we want to offer assistance. If we can do anything at all, we will help you.”
Manatee schools had to spend about $3.6 million from its reserves two years ago to offset budget cuts from the state.
This school year, the district has $6.4 million in its rainy day fund — about 2 percent of the district’s operating budget, said Superintendent Tim McGonegal.
Generally, accounting practices recommend that school districts maintain a 5 percent reserve.
Miami-Dade’s reserves dwindled to almost nothing over the summer because of overspending and budget mistakes.
At one point, the district had just $7.2 million in rainy-day money — less than 0.5 percent of its operating budget.
Since Superintendent Alberto Carvalho was appointed, the district has boosted reserves to about $39 million, Chief Financial Officer Richard Hinds said. That is about 1.3 percent of the operating budget — still not enough.
“We know we’ve got problems,” Hinds said. “However, we are bound and determined we’re not going to have a deficit budget this year. We’re going to take whatever means necessary to do that.”
Both the Manatee and Miami-Dade school boards repeatedly trimmed costs this school year, eliminating positions and cutting salaries.
McGonegal said it’s likely that more school districts in Florida are dealing with smaller reserves since the state identified the eight last June. The other counties on the state’s radar are Columbia, Dixie, Franklin, Gulf, Jefferson and Taylor.
“There are a lot of counties that were still in negotiations or have just settled with their teachers. They may have been holding money in their fund balance,” said Walter Miller, chairman of the Manatee County school board, about the reserves. “But that doesn’t take away our situation.”
More cuts are likely to come based on the results of a special legislative session that started Monday. Districts could lose still more money if the Legislature cuts its budget further at the start of the regular session, as it did last year.
McGonegal and Hinds said that boosting the reserves and cutting the budget further will probably be on hold until the district knows exactly how much cutting has to be done.
“I think everything is on the table,” McGonegal said. “We will respond as we move forward. ... We will at least know the kind of numbers we are talking about in mid-January.”
According to the auditor general’s report on school district finances for 2006-07, the combined reserves for districts statewide grew from $1.27 billion in 2002-03 to $2 billion in 2006-07.
That is consistent with the growth in student population the state has experienced in the last five years. The auditor general also noted that the current economic downturn will likely affect funding reductions to Florida schools.
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