Lindbergh’s fiscal practices a lesson for other districts

Mike Anthony

Mike Anthony

By MIKE ANTHONY

It’s no secret that the Lindbergh School District for years has carried a rather substantial operating-fund balance.

Lindbergh has a longstanding tradition of taking only what’s needed and those reserves are the result of prudent financial stewardship by district administrators and school-board members — both past and present. But those reserves — which today total roughly $26 million — also have been the target of criticism by some state legislators and some residents, particularly when the district has placed funding propositions before voters. In the past, some of those critics have urged the board to spend some of those reserves before asking residents to approve additional funding.

However, we believe Lindbergh officials have made a compelling case for maintaining those operating-fund balances. And contrary to what some might believe, the vast majority of the district’s operating-fund balance already is committed, according to Lindbergh CFO Pat Lanane.

For example, those commitments include pass-through club and activity funds, funds for legal obligations, funds for future land purchases, funds for emergencies and cash-flow funds to avoid borrowing. That last commitment is critical.

” … We think that paying interest to banks is a horrible educational expense …,” Mr. Lanane has said.

The amount of the district’s reserves also plays a major role in maintaining Lindbergh’s excellent Aa2 bond rating, saving taxpayers literally millions of dollars because of the better interest rate obtained on bonds.

Those reserves also have allowed the board to fund some needed projects that either would have not been done or would have required additional revenue from taxpayers — not to mention generating interest income for the district. In fact, that interest income has been the district’s third or fourth largest source of revenue in recent years.

And now those reserves will allow district officials to take off the table for the next 24 months any discussion of asking residents for a tax-rate increase — despite the current economic recession and an inability to roll up Lindbergh’s tax rate in the event of a decline in assessed valuation.

Some might contend that by taking off the table any discussion of a tax-rate increase for the next 24 months, Lindbergh officials are making surrounding school districts look bad. We say they should get over their insecurity and learn a thing or two from Lindbergh’s excellent fiscal practices.