RESOLUITON
Motion/Request:
title
MOTION to cancel “Resolution Creating a Funding Mechanism for Making Annual Appropriations to a Capital Reserve Fund for the Board of Education” adopted on September 28, 1988.
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Background:
Based on enacted State Legislation (Public Act 24-25) the Board of Education has the authority to transfer unexpended funds from the education budget into a non-lapsing account. Therefore, the 1988 “Resolution Creating a Funding Mechanism for Making Annual Appropriations to a Capital Reserve Fund for the Board of Education” was no longer required; and was being cancelled.
Finance Committee Meeting 10/15/2025: School Superintendent Jason Hartling explained with the implementation of a New State Statute that the Board of Education already took action to transfer their Fiscal Year 2024/2025 Year-End Balance to their Capital Non-Recurring (CNR) Account.
Finance Director noted that the Year-End Balance would not be available until the Annual Audit for Fiscal Year 2024/2025 has been completed; and therefore, the funds could not be transferred until the Annual Audit has been completed.
Connecticut State Statute Section 10- 248a to provide funding resources solely for future Board of Education.
Previous state law (Connecticut General Statutes §10-248a) permitted a town board of finance (or the board of selectmen in a town with no board of finance, or the authority otherwise making budget appropriations for the school district) to deposit unexpended funds from the education budget into a non-lapsing account
However, Public Act 24-25 now allowed for Connecticut Board of Educations to use non-lapsing accounts to carry over unspent education funds (up to 2% of the prior budget) for future educational expenses, a practice clarified and expanded by recent legislation (like Public Act 24-45). These accounts require annual reporting to the Connecticut State Department of Education (SDE) and certified employee unions, detailing balances, deposits, and expenditures, effective for FY 2026 and beyond, ensuring transparency for these funds used only for educational purposes.
What is a Non-Lapsing Account?
• It's a special fund where unspent education funds don't automatically revert to the town's general fund at year-end.
• Allows BOEs to save and use surplus funds for educational needs in subsequent years, rather than losing them.
Key Legal Changes & Requirements:
• Authority: Local BOEs can now deposit funds directly, rather than relying solely on the town's fiscal authority.
• Limits: Deposits can't exceed 2% of the previous year's education budget.
• Purpose: All spending from the account must be for educational purposes and authorized by the BOE.
• Reporting (Starting FY 2026): BOEs must report annually to the SDE and employee unions on:
o Total account balance.
o Amount deposited during the fiscal year.
o Detailed accounting of expenditures.
o Intended uses for the funds in the next fiscal year (with notification to the SDE and unions).
Who Manages It?
• The local Board of Education authorizes deposits and expenditures, although the Town's Board of Finance or similar body may need to approve the deposit itself, depending on the town's structure.
Finance Director Comment/Recommendation:
Items of note:
1. This will require a new fund to be set up as these funds are not solely capital in nature.
2. Per the statute, spending from the account must be for educational purposes. Additionally, Board of Education authorization is required before the funds can be expended.
3. The funds cannot be transferred until the subsequent budget year after the audit has been completed. This has a direct impact on fund balance.
I would urge the Council to request an annual accounting of these funds.
Mayor Comment/Recommendation:
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