Does Seattle Schools Have Money?

The simple answer is ... yes and no.  (I didn't say it would be clear, just simple.)

Some weeks back I was sitting at an Audit&Finance meeting where a presentation was given on district investments.  Honestly, I had no idea the district even HAD investments past the properties that it owns (and, of course, their investment in staff.) 

But there sat a couple of guys from the King County Investment Pool which the district participates in.  But they only went over how the pool works, how it diversifies the money, etc.  Oddly, no real explanation of the district's own participation.  So I sent some questions to Financial and they were kind enough to answer.  As well, I asked a couple more questions about other documents that were discussed at the meeting.

Again, clear answers? Not exactly but I wanted to put this out there on the record. 

Me: I actually never knew the district was part of the King County Investment Pool.  Unfortunately, I don't see how much SPS has invested in the fund (I don't see it in the presentation handout.)  What I do see on page 9 of your monthly handout is that it appears that the district made somewhere along the line of $40K last year and is on-track to do slightly better this year at about $60K.  Where do those investment funds go? Into the General Fund?  And how much is SPS' share of that investment pool?

SPS: The investment earnings from the KC investment Pool go back into General Fund for GF’s money invested. During the month of Jan, 2016, the average balance of GF investment was $102.9 million
Me: I see at the bottom of page 6 under "Fund Balance" this term "Unassigned" at nearly $9M. Is that the Rainy Day fund?  If not, where is the Rainy Day fund and how much is in it?  And, if not, what is that amount meant to be?

SPS: There is no “Rainy Day fund” in the unassigned fund balance of about $9 mil at the end of January. If by Rainy day fund, you meant Fund balance committed to Economic Stabilization, that committed fund balance stands at $21.8 mil, a reserve set up by the School Board in case of unanticipated financial shortfalls within a school year.

So to be clear, there appears to be about $30M in two places just sitting there in the district's coffers.  I neglected to ask - what happens to that money if it isn't used for school year 2015-2016.

Me: There was the brief discussion about the Community Schools fund and Director Harris' surprise that it existed.  So it's at about $13M with some loans to capital projects at about $4M.  I believe it was Ken Gotsch who stated this money could only go for capital needs and I think you (this was Linda Sebring in Budget) said that there were many things within capital needs it could be spent on (but you said it so softly I'm not sure the directors heard you.)

What could this money be spent on?  Couldn't it be used - at least some of it - to pay off the JSCEE bonds faster so as not to use future capital levy dollars?  

Editor's note: The Community Schools fund is a fund for money from sale of various district buildings that occurred over the last 10 years.  These buildings were sold because the district perceived they didn't need them and/or needed the money more (usually to pay off the seemingly never-ending bonds on the JSCEE.)

SPS: Regarding the use of community school proceeds, it was approved and restricted for program placement, including the opening of new schools, deferred maintenance of existing schools and up to $2 million for World School, based on approved school board resolution.

You can see my question wasn't answered on using the funds to pay off the bonds (which would mean fewer dollars coming out of BTA IV and future BEX measures.)

Again, I say that within SPS, there is probably careful tracking of these dollars but is it possibly for a layperson, a citizen to clearly see where they all go?  It is not.  That is why I always have suspicion about capital dollars because the district refuses (and I've asked) to put out a detailed quarterly list of :

- projects named in levies and their cost
- where said projects are at any given time and money expended (if any, at that point) and how many dollars are left
- when projects get done and final costs
- what projects DON'T get done (either overruns from other projects or money used for something else)

The district could be a lot more transparent with the dollars than they are (and that Director Harris didn't even know about the Community Schools fund as a new director tells you something.) 

I know some of you might be thinking, "Gee, this information doesn't help when we are trying to get the legislature to fully fund schools and we truly need the money."  Yes on both points but this district needs to shake off that cloak of invisibility on what money have, what is is for and how/when it gets spent. 


Charlie Mas said…
Anytime that significant funds are collected in advance of being disbursed, such as with a levy, the proceeds are deposited in the investment pool.

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