Nashua schools forced to dip into reserve accountsBy KIMBERLY HOUGHTON
Union Leader Correspondent
September 19. 2018 8:51PM
NASHUA — Despite a significant citywide surplus from fiscal year 2018, the city’s school department was forced to spend $250,000 from reserve accounts.
Daniel Donovan, chief operating officer for the Nashua School District, said the school department ultimately ended fiscal year 2018 with a remaining balance of $5,046 — from a $143 million budget.
“All in all, this is the fourth year in a row we are down very, very close,” Donovan told the Board of Education’s finance and operations committee last week. “ … This is the lowest it has been, and we actually had to hit reserves.”
According to Donovan, he had to take $50,000 and charge it to the special revenue fund used to pay overruns for out-of-district costs.
In addition, he also used $200,000 from the district’s retirement reserve account, meaning there is now $75,000 left in that account.
“The hope that I have is to rebuild the retirement reserve,” he told school officials. Aldermen have since approved the transfer of $200,000 in escrow funds to replenish the school department’s retirement reserve.
“That will be comforting for me. Even though we don’t have tons of teachers retiring this year, we may next year,” said Donovan.
The most recent balance of $5,046 at the end of fiscal year 2018 compares to balances of about $11,000 and $13,000 throughout the prior two years.
“The reality is, reserve (accounts) are there to cover times like this, so it is not a bad thing. It is good that we have them, and it is not a bad thing to use them once in a while,” said Donovan, explaining the problem arises when the reserves are used year after year and there is no safetynet remaining.
As he begins to prepare the next budget, Donovan said some changes will be made so that the district does not have to dip into its reserve accounts, and to ensure that the remaining funds at the end of the fiscal year are slightly higher.
“There are a lot of moving pieces at the end,” he acknowledged.
This month, the mayor approved using about $1.7 million in citywide surplus to fund various projects that were included in the previous budget but never accomplished last year. In addition, aldermen approved using an additional $2.4 million in citywide surplus on new projects and capital equipment savings.
Mayor Jim Donchess said last week that he anticipates requesting that an extra $4.5 million in surplus be used to offset the tax rate, although that measure would need to be adopted by the Board of Aldermen.