N.J. Admin. Code § 6A:23A-14.3

Current through Register Vol. 57, No. 1, January 6, 2025

Section 6A:23A-14.3 - Establishment of other reserve accounts

(a) A district board of education or a board of school estimate, as appropriate, may establish, by resolution, the following reserve accounts:

1. Current expense emergency reserve account.

i. The funds in the reserve shall be used to finance unanticipated general fund current expense costs required for T&E, or to finance school security improvements as defined at N.J.S.A. 18A:7F-41.c.1. For the purpose of the emergency reserve account, "unanticipated" shall mean reasonably unforeseeable and shall not include additional costs caused by poor planning or error.

ii. The account shall not exceed $ 250,000 or one percent of the school district's general fund budget as certified for taxes up to a maximum of $ 1,000,000, whichever is greater.

iii. A district board of education may appropriate funds to establish or supplement the reserve in the school district's annual budget or through a transfer by district board of education resolution of any unanticipated revenue and/or unexpended line-item appropriation amounts anticipated at year end. The transfer resolution shall be adopted by the district board of education no earlier than June 1 and no later than June 30 of the respective school year.

iv. Withdrawals from the reserve shall require Commissioner approval unless the withdrawal is necessary to meet an increase in total health care costs in excess of four percent, for which the school district did not receive an automatic adjustment for health care costs pursuant to N.J.A.C. 6A:23A-11.3. Total health care costs shall include medical insurance and prescription drug insurance costs.

v. Withdrawals from the reserve made pursuant to this subsection shall be used during the current fiscal year. At year end, any amount withdrawn from the reserve that has not been expended or encumbered shall be reported as restricted general fund balance designated for expenditure in the second subsequent school year budget.

2. Debt service reserve account in the debt service fund for proceeds from the sale of school district property. For the purposes of the debt service reserve account, "property" shall mean land, buildings, and other property that was incidental to the sale of land or a building. The funds in the reserve shall be used by the school district first to reduce the outstanding principal amount at the earliest call date or to annually reduce the debt service principal payments. The funds may be used for any outstanding debt obligation(s) of the school district. The reserve shall be liquidated within the lesser of five years from its inception or the remaining term on the obligation(s). Any remaining balance shall be used for tax relief.

3. Tuition adjustment reserve account in the general fund for up to 10 percent of the estimated tuition cost in the contract year for an anticipated tuition adjustment in the second year following the contract year. In such case, the district board of education shall:

i. Establish, by district board of education resolution, the tuition adjustment reserve account at June 30;

ii. Make full appropriation of the reserve for the tuition adjustment in the second year following the contract year; and

iii. Transfer, by district board of education resolution, to the general fund on an annual basis, or more frequently, any interest earned on the investments in a tuition adjustment reserve account.

4. School bus advertising reserve for 50 percent of revenue from school bus advertising to offset transportation fuel costs, pursuant to N.J.S.A. 18A:39-31.

5. Federal Impact Aid reserves in the general fund, pursuant to N.J.S.A. 18A:7F-41.c(3).

N.J. Admin. Code § 6A:23A-14.3

Amended by 49 N.J.R. 1038(a), effective 5/1/2017

Recodified from 6A:23A-14.4 56 N.J.R. 2141(a), effective 11/4/2024