South Kitsap School District’s Board of Directors recently voted to return the reserve fund to 3 percent for the upcoming school year.

The school board temporarily agreed to reduce it to 2.5 percent in 2011.

Then-assistant superintendent for business and support Terri Patton said that resulted in $932,000 savings to apply to the district’s deficit.

Kathryn Simpson, president of the school board, said she thinks returning the fund balance to 3 percent this year is viable.

“This is where we’ve historically been,” she said. “Dipping below that makes me really uncomfortable.”

Simpson said that means SKSD will have to be “extremely frugal,” but she feels that is a better alternative than keeping the fund balance at 2.5 percent longterm.

That is because the district receives funding from its maintenance-and-operations levy, state and other sources in inconsistent patterns. Without a sufficient reserve fund, Simpson said SKSD could put itself of not being able to pay its bills.

“Having a reserve … is vital to keep us at a fiscal strength,” she said. “Maintaining that cycle and balance is important.”

Simpson said maintaining a reserve fund requires some balancing. She and other board members have maintained that they do not want to save too much because they said that means taxpayer dollars are not benefiting current students.

“We want that money to be used on kids in the district,” Simpson said. “We don’t want our money just sitting there.”

The district’s fund balance traditionally has been below average in comparison to its peers. In April 2011, Simpson cited an audit that indicated SKSD’s reserve money could sustain the district for 34 days without state subsidies. The state average was 61 days.

“It’s a little lower than what I think the average is, but it’s not uncomfortably low,” Simpson said.

She said some school district’s save as much as 5 to 6 percent, but Simpson believes that usually is the result of “saving for a large project or the money isn’t working for you as it should.”