District Clerk Carole Butler said that if voters reject the expenditure, the board would have to use undesignated funds. “It would come out of our operating expenses instead of our capital reserve, which is specifically for this kind of thing,” Butler said. “[That] would have tax implications, potentially, where this has none.”
The capital reserve is separate from the district’s operating budget and similar to a savings account. Its funds are set aside for capital improvements and emergencies for which the district might otherwise need to issue new bonds. The district does not need to raise new taxes, but use of capital reserve funds must be put to a public vote.
In an effort to save money, district officials will devise more streamlined polling procedures for the October referendum, similar to those used in the district’s special runoff election in June. While a regular election costs the district approximately $40,000, by using East School as a centralized polling location, the district estimates that the vote will cost approximately $5,000.
“Maintaining strong financial reserves, including a responsible fund balance, contributes to the district’s high Moody’s Investment Services rating,” said Jill Sanders, an accountant with Cullen and Danowski LLP who serves as the school district’s external auditor. “Long Beach’s most recent bond rating of Aa2 is equivalent to a high credit score for an individual, and bodes well for the district’s ability to secure favorable interest rates on any future borrowing. It also shows that Long Beach school officials have acted responsibly relevant to the district’s finances.”
Since the renovations must be completed before winter, construction has already begun.
“I would be surprised if people would vote it down because it doesn’t cost anything,” Butler said. “The other way, I’m not saying it would, but it potentially could [cost money].”