Auditor: FCSD fund balance at $10.5M

WINNSBORO – To be or not to be debt free.

That was the question driving a discussion of the Fairfield County School District’s annual audit at last month’s board meeting.

Andrew Dobson, an accountant with McAbee, Schwartz, Halliday & Co., the financial firm that conducted the audit, was on hand to present the audit. He praised the district for maintaining a higher than standard fund balance.

Dobson said the district’s fund balance of about $10.5 million represents 27.6 percent of the annual budget. He called that ratio “excellent,” noting the typical district’s fund balance to budget radio is 16 to 18 percent.

“That gives you three months of short-term funding if something were to happen,” Dobson said. “You have your fund balance perfectly placed for any state cuts, unanticipated events, or any additional spending you might want to do in the future.”

The presentation soon dovetailed into a discussion about debt.

Superintendent Dr. J.R. Green touted what he characterized as relatively low long-term debt that’s tied to the Fairfield Career and Technology Center.

“For the district to have only $7 million in long-term debt is almost unheard of,’ Green said. “When you look at our debt relative to other districts, we have relatively low debt.”

Audit documents actually list the district’s total long-term debt as closer to $8.49 million.

The district owes $7,010,000 in general obligation principal and $353,053 in capital lease principal, but also owes $1.24 million more in interest.

According to audit documents, the district anticipates spending between $1.15 and $1.17 million annually on principal and interest. The final payment in 2024-2025 is a little more than $2.3 million, documents show.

Board member Paula Hartman thought it would be more prudent to accelerate debt payments so the district could be debt free sooner.

“For anybody from families to companies, if you don’t owe on it, it’s better,” she said. “That’s the better situation.”

Green responded by expressing his desire to maintain a rainy day fund.

“I feel a little better about having more in the bank, just in case,” Green said.

“I’d feel better if we weren’t in debt for anything,” Hartman responded.

As of June 30, the district’s debt limit had a borrowing capacity of about $3.8 million, according to the audit.

State law sets a school district’s credit limit at no more than 8 percent of all assessed value within the district.

The audit says the district’s assessed property valuation is $146.5 million for debt service. Eight percent of the assessed value works to $11.7 million, the audit states.