School Finance and District Support
Advisory on the Establishment of a Regional Transportation Reimbursement Fund
Chapter 233 of the Acts of 2014 was approved on August 5, 2014 and became effective on November 3, 2014. This new law allows regional school districts to establish a Regional Transportation Reimbursement Fund (RTR Fund) and deposit state regional transportation reimbursements into the RTR Fund, starting in FY15. Once deposited, the regional school district is permitted to carry forward any funds that are not expended in the fiscal year in which they are received. Any funds that are carried forward must be expended in the subsequent fiscal year. Currently, regional school districts must estimate future reimbursements as they compile their budgets for the next fiscal year, which can occur in the fall or early winter before the Governor's proposed budget is released. Allowing regional school districts to carry forward current reimbursements allows them to more accurately plan for the following year's budget.
The regional school committee must vote to establish the RTR Fund. The language of the vote can be as simple as "The committee is planning to establish a Regional Transportation Reimbursement Fund." Once the RTR Fund is established, the regional district is allowed to deposit state transportation reimbursements into the RTR Fund with the approval of the regional school committee. Deposited funds may be used in developing the subsequent fiscal year's budget. Deposited funds may be use to support the current year's budget. In the event that use of these funds increases the budget, the regional school committee must amend its budget by following the process outlined in 603 CMR 41.05 (5). Regional School District Budgets.
Balances deposited in the RTF Fund, within the restricted amount, do not impact the district's excess and deficiency (E&D) calculation. However, if prior year reimbursements remain in the RTR Fund at the close of the fiscal year subsequent to the fiscal year in which they were reimbursed, those funds must then revert to the district's E&D account.
The RTR Fund is for regional school district student transportation expenses only. Transportation expenditures can be charged directly to the RTR Fund and will be considered local expenditures for reporting purposes. If charging these expenses increases the planned expenditures in the current year's budget, the budget must be amended. When expenditures are made from the RTR Fund, they should be reported on the End of Year Financial Report (EOYR) as an additional appropriation of the school committee.
Funds carried over from the previous fiscal year must offset the next fiscal year's transportation assessments. As with all special revenue accounts, regional districts should inform their member municipalities of amounts available and used during the budget process.
Any questions regarding this advisory should be directed to Jay Sullivan in School Finance & District Support. Jay can be reached at email@example.com or at 781-338-6594.