Dade County School’s Reserve Fund, How COVID Money Increased The Fund, How It Will Be Used

By Editor | March 20, 2025 |

By LYDIA BERGLAR
News Editor

This past fall, the Dade County School District spent the last remaining bit of federal funds allotted due to COVID-19. These ESSER (Elementary and Secondary School Emergency Relief) funds, colloquially referred to as “COVID money,” had to be used by September 2024.

After three rounds of funding, Dade received a total of $5,675,603.18 from fiscal years 2020-2024. Now, in the second half of FY25, the school system is back to normal funding patterns—property taxes, E-SPLOST (Education Special Purpose Local Option Sales Tax), and searching for state and federal grants to supplement tax revenue.

Josh Ingle (superintendent) said of the COVID money, “We didn’t ask for it, but we spent it wisely. I know superintendents who went out and hired a bunch of people, but when the money went away, those jobs went away.”

Dr. Jayne Griffin, chair of the Dade County Board of Education, said, “My take is that other school districts spent the COVID money on things that would have to go away once that money went away, but Dade County was a very wise steward of that money.”

For example, news broke in the second week of March that the Hamilton County School District was considering cutting 20 central staff positions and 88 in-school positions. Later in the week, changes to the special education staffing model were breaking news. Griffin suspects that these decisions are at least in part due to the end of ESSER funds. (However, per “The Chattanoogan,” enrollment is also decreasing by 729 students in fall 2025. This decrease warrants 33 fewer teachers.)

One way Dade used its COVID money was to hire some retired teachers as part-time interventionists to prevent learning loss during the years of remote learning and shut-downs. Even though the COVID money is gone, these roles continue because they’re now funded by another federal source.

Dade used a large chunk of COVID money for fuel, transportation costs, and other regular operating costs.

Griffin continued, “Realizing that COVID money was not going to be there forever, we used it for operations so that the money designated for operations could go into the reserve fund for when ESSER goes away.”

The Georgia Public Policy Foundation published an article last month which partly looked at Georgia school districts’ reserve funds. Titled “Georgia school districts prepare to block property tax relief while holding billions in reserves,” the article included the following: “Cumulatively, Georgia’s 180 city and county school districts have more than doubled their reserves to a staggering $6.5 billion…These cumulative reserves amount to more than $3,800 per student.”

The foundation’s article included a spreadsheet with the five-year histories of each school district in Georgia, but before we dive into the data on Dade, there are a few caveats.

Loran Grasham (business services director) noted that the foundation grossly overstated revenues. She reported that she checked with three other districts who said the same thing. “We couldn’t figure out how they got to those numbers. I tried adding in state and federal grants, and I still couldn’t get it to add up to these numbers.”

She believes that the Georgia Public Policy Foundation looked at fiscal years (even though the spreadsheet didn’t specify). Grasham also used fiscal years when looking at this data. In that, at least, the two parties are aligned.

Gresham noted that the foundation’s FTE data (full-time equivalent, i.e. the number of enrolled students) was very close to accurate, but the FTE and the reserve fund data don’t align perfectly with Dade’s numbers (which are reported to the state). For this article, we’re not looking at the revenue but rather at the reserve fund and FTE numbers. Since the foundation’s data on these two matters is close enough, we’ll use it.

Dade’s full five-year history of enrollment, reserve fund balance, and reserve fund per student is at the end of this article. Here are some highlights.

In FY19, Dade County Schools had 2,038 students enrolled, and the reserve fund balance was $3,560,080, or $1,747 per student. By FY24, enrollment dropped to 1,923, but the reserve fund balance increased drastically to $9,575,325 ($4,979 per student). This is an increase of $3,232 per student in the reserve fund.

So, what exactly is the reserve fund, and why this drastic increase? Griffin, Ingle, and Grasham explained that any excess money that isn’t spent goes into the reserve fund. Money isn’t specifically collected for this fund through federal, state, or local taxes. Rather, when the district is able to use less than what was originally budgeted, the excess is saved in the reserve fund.

The reason for the large jump in the fund is that Dade received the $5,675,603.18 in COVID money and by and large used it to cover expenses that were already in the budget.

After subtracting the FY19 reserve fund and the COVID money from the FY24 reserve fund, the difference is only $339,642.

Griffin noted that (as covered during the 2024 budget discussions) the deficit in the FY25 budget is $653,862, so the board had to take that amount from the reserve fund to balance the budget. In Griffin’s words, “The reserve fund funds the general budget to shore up the holes in the general budget.”

Gresham added, “It’s not a separate fund sitting over here that we can do anything we want with. It’s the same account number, same bank account, same rules, same everything as the general budget.”

Griffin anticipates that pulling from the reserve fund to balance the budget may be a pattern for the next few years. “There may be a couple transition years to get used to not having those COVID monies, and we may have to dip into the reserve fund even more. I’m so thrilled and amazed at Loran and Josh and the way they chose to spend that money so wisely so that we did not end up in the same shape as other districts that are having to cut teachers.”

The primary factor driving the increased budget is health insurance. (We saw this with the county and city budgets as well.) Ingle reported that in FY21, it cost Dade County Schools less than $12,000 per employee per year to offer health insurance. For the upcoming fiscal year (FY26), the district is facing an astronomical $22,000 per employee per year. This doesn’t include the employee premium, which Ingle said has not changed since FY21.

As of February, the school district has 296 full-time teachers, putting the health insurance costs in the ballpark of $6,500,000. (Some employees might not sign up for the insurance, but by law, the schools must offer it. Therefore, it must be accounted for in the budget.)

Ingle noted that sadly, the cost of health benefits is higher than some employees’ salaries. For example, Dade’s bus drivers earn less than their health insurance costs the school system.

Griffin and Ingle made it clear that their focus is avoiding staffing cuts. Noting that 90 percent of the budget is for personnel, Griffin said, “When you don’t have the money to pay the personnel and when you’re losing teacher positions—that’s just not a way we want to operate.”

Ingle recalled working for the school system during the 2008-2009 recession. Positions were cut, and teachers and administrators lost pay due to furlough days, “yet the expectations remained the same. We were doing more with less.”

So, what is a healthy amount for a school district reserve fund? Like in personal finance, county governments are recommended to maintain at least the amount needed for three months of operations. In the last two years, Dade’s county government general fund balance has been enough to operate for a little over three months without any additional revenue.

Ingle cited the Georgia School Boards Association’s recommendation that school districts keep enough for four to six months of operations in the bank. In FY19, Dade’s average monthly expenditure was $1,600,000, so the district had about two months (2.22) in reserve.

As of June 2024, the average monthly expenditure was $1,839,367, meaning the district had approximately five months (5.21) in reserve. Ingle noted that of that monthly expenditure, over $1,500,000 is for payroll alone.

The Sentinel asked if we can anticipate seeing a decrease in the reserve fund over the next few years. Gresham answered, “It is going to go down because we’re not having that influx of federal funds coming in, but we still want to maintain that three to four month margin.”

In addition to filling any gaps in the general budget, the reserve fund also covers the routine slow revenue seasons. Collections vary from month to month, and Grasham reported that so far this fiscal year, the district has had four months that the reserve fund was used to make payroll until revenues came in.

Ingle said that the district tries to avoid using a tax anticipation note (think of this as a payday loan) because of the added cost of interest.

While the nine million dollars in the reserve fund is a shocking amount at first glance, Ingle said, “If health insurance costs were the same as they were in 2020, then that nine million dollars would raise a lot of red flags, but I’m thankful we looked this far down the road and somewhat planned this way.”

Griffin concluded, “We don’t want to lose our personnel—that’s what it comes down to. It may be counterintuitive for citizens out there, but this reserve fund amount is really a sign that we’ve been fiscally responsible with their tax dollars so that continuity of services can move on after all of that COVID money has gone away and while we are in a time of economic uncertainty.”

From the Georgia Public Policy Foundation spreadsheet:

FY19