The Star-Telegram reported that Keller ISD has more money in its savings than the Texas Education Agency says it should. Why doesn’t the district use that money instead of cutting programs?
The current balance in the Keller ISD fund balance – or district savings account – is $47 million. This represents approximately 20% of our current annual expenditures. While KISD’s fund balance represents a greater percentage of its annual expenditures than what the Texas Education Agency (TEA) describes as our “optimum” fund balance, there are many prudent reasons why.
The district’s fund balances exists to help the district in meeting its daily cash needs, including payroll, as well as provide funds for unforeseen events such as district emergencies and/or insurance deductibles. Were cash not available through the fund balance, KISD would be forced to borrow money which would in turn cost the district in interest payments. Having a strong fund balance also aides the district in achieving a good bond rating that in turn makes the district bonds a more desirable investment and lessens interest payments in the future. It may be easiest to think of the fund balance like a home owner’s savings account, which can provide financial security in various ways.
It should be noted that the TEA’s “optimal” fund balance is based on an average school district in the state of Texas. KISD is a fast-growing district and thus relies on its fund balance for the up-front funds to provide for a growing population while we wait for TEA reimbursement.