Budgeting for Capital Projects
Capital Projects supported by Local Tax Levy, Surplus, or Capital Reserve with no
SDA or Bond support: Projects using these revenue sources are budgeted in capital outlay
and expensed in capital outlay. Not in fund 30! The local board is paying the full cost.
Example: Project Eligible and Non-Eligible Projects Cost of $1000
Choose one of the following revenue Lines:
1. Using Tax Levy - Revenue Line 100 (Acct. 10-1210) – Local Tax levy (The local share is part of the
total levy) - $1000
2. Using Surplus - Revenue Line 580 (Acct.10-121) – Budgeted Fund Balance – Operating Budget $1000 No Tax Impact!
3. Using Capital Reserve for an Eligible Project - Revenue Line 600 (Acct. 10-307) – Cap Reserve for
local share $1000 No Tax Impact!
4. Using Capital Reserve for “otherwise” Eligible Projects - These are “eligible “projects that the
board wishes to advance but SDA funds are not available. The DOE will shelve these projects
until such time as state funding is available. If the board wants to move forward and fund the
entire project costs locally, they can declare the project non-eligible. In this way the DOE will
move ahead with project approval inasmuch as no grant funds are to be awarded. The
budgeting process is according to example #5.
5. Using Capital Reserve for “Other” Capital Projects -Revenue Line 620 (Withdrawal from Capital
Res. – for Excess Costs & Other Cap. Proj. $1000 No Tax Impact! By virtue of budgeting the
withdrawal and obtaining county approval for your budget, you obtain approval to withdraw
funds from capital reserve for an “other” capital project.
On the Appropriation Side, the project is expensed in Fund 12
Appropriation line 76080 (Acct. 12-000-400-450) – Construction Services - $1,000
(Other appropriate lines may also be used for professional fees, supplies, etc.
Capital projects supported by an SDA Grant. Remember, you don’t budget for the grant,
only your local share. Although you may budget the “local share” in your next operating budget, the
funds are transferred to fund 30 to be expensed there along with the grant funds. I review this here
because many of you may have SDA offers “on the shelf” where you had 18 months to commit to raising
your local share and now you want to move ahead with the project for 15/16.
Another reminder: All capital projects require approval from the Department of Facilities so that
application process should start now as well.
Example#1: Project Eligible Cost of $1000
Reserve)
Local $600 SDA $400 (Local coming from Capital
Technically, there is no need to budget anything inasmuch as the local share is coming from
capital reserve and this is an “eligible” project. (Note: SDA prefers that you budget the project through
your budget as illustrated below) Capital reserve funds may be withdrawn at any time to support the
local share cost of an “eligible” project. All you need to do is to have the board pass a resolution
withdrawing $600 to support the local share of Project #xxx to be expensed in Fund 30. Your board
secretary report showing these funds in capital reserve and the board resolution secures your local
share. But, we suggest you consult with your budget analyst to be that this method is sufficient to
prove the availability of your local share! The SDA prefers the next example!
OR (and This is the way we believe the SDA prefers)
Run the Appropriation through your budget as follows:
Revenue Line 600 (Acct. 10-307) – Cap Reserve for local share $600
Appropriation Line 76320 (Acct. 12-000-400-931)- Cap Reserve Trans. To Cap Proj. $600
The support docs will provide the detail for the $600
Example #2: Project Eligible Cost of $2000 Local $1200 SDA $800 (Local coming from tax levy)
Note: We are now using tax levy “within” our cap limits
Revenue Line 100 (Acct. 10-1210) – Local Tax levy (The local share is part of the total levy)
Appropriation Line 76240 (Acct. 12-000-400-932) – Cap. Out. Transfer to Cap. Proj. $1200
The support docs will provide the detail for the $1200
Example #3: Project Eligible Cost $5000 Local $3000 SDA $2000 (Local coming from allowable 2%
surplus or audited excess surplus)
Revenue Line 580 (Acct. 10-303) – Budgeted Fund Balance $3000 (If you are required to budget excess
surplus, the $3000 may only be a “part” of the total excess surplus amount budgeted here.
Appropriation Line 76240 (Acct. 12-000-400-932) Cap. Out. Trans. To Cap. Proj. -$3000
Again, the support docs will provide the detail for the $3000