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SCHOOL DISTRICT

RESERVE PLAN

UPDATED JUNE 30, 2018

Reserve for Employees Retirement Contributions

Creation – This reserve was created on April 1, 2010.

Purpose – This reserve is used to pay for district expenses to the NYS Employee’s Retirement System only. Payments to the Teachers Retirement System are not allowed from this reserve.

Funding Methods – Funds are placed in this reserve from excess fund balance.

Use of Reserve – A separate plan for use of this reserve has been developed. The plan anticipates that when the district experiences a rate increase, the difference from year to year would be supported by the use of this reserve. However, should years allow, funds used would be replaced.

Monitoring of Reserve – This reserve is monitored by the School Business Administrator.

Funding Level –A funding level equal to approximately two years’ worth of retirement system billings is desired. At current rates, that level could be approximately $600,000. This funding level reflects the fact that future billings are anticipated to decrease. No additional funds will be added at this time with the exception of the interest accrued.

Balance: $609,295.07

Insurance Reserve

Creation – This reserve was created prior to 1993.

Purpose – This reserve is used to pay casualty and other types of losses, except for those for which insurance may be purchased.

Funding Methods – This reserve was previously funded from excess fund balance.

Use of Reserve – This reserve would be used to pay any allowable claims, as described in the purpose for this reserve. For example, insurance deductibles or security breaches not covered by current insurance.

Monitoring of Reserve – This reserve is monitored by the School Business Administrator.

Funding Level – This reserve will be utilized until the funding level is reduced to approximately $10,000 unless a need that arises, in which case funds will be added based on any anticipated claims. The reserve will be analyzed yearly for appropriateness of value.

Balance: $75,601.10

Reserve for Accrued Employee Benefits Liability

Creation – This reserve was created prior to 1993.

Purpose – This reserve is used to pay for unused accumulated leave time contractually provided to certain groups of employees. This typically includes payment for unused sick and vacation pay. This fund cannot be used to pay for items such as: retirement incentives, FICA and Medicare payments or retiree health insurance.

Funding Methods – This reserve was funded from excess fund balance. Due to the current advice surrounding use of this reserve, there are no plans to place additional funds in this reserve.

Use of Reserve – This reserve is used when an employee separates from the District and payment of accumulated leave is required. These transactions flow through the budget via a budget revision with the offsetting revenue coming from a drawdown of this reserve. This reserve will continue to be used in this manner to make these payments.

Monitoring of Reserve – This reserve is monitored by the School Business Administrator. Each year, a detailed analysis of the liability is computed and is used to support the funding of this reserve at 100% of the liability.

Funding Level – This reserve should be funded at a minimum of 100% of the accrued liability for unused accumulated leave time. The district’s current liability is $565,000.

Balance: $738,306.93

Reserve for Unemployment Insurance

Creation – This reserve was created on October 11, 1995.

Purpose – This reserve is used to reimburse the State for payments made to claimants where the district uses the benefit reimbursement method. The District does subscribe to the benefit reimbursement method, meaning we reimburse the State for actual claims incurred. We do not pay NYS a fixed premium for unemployment insurance coverage.

Funding Methods – This reserve was funded entirely from excess fund balance when it was created. It was funded in anticipation of an increased number of staff reductions.

Use of Reserve – The initial funding was an amount sufficient to pay full unemployment insurance at the maximum rate for approximately nine individuals.

Monitoring of Reserve – This reserve will be monitored by the School Business Administrator.

Funding Level – This reserve was initially funded at $100,000. The district will utilize this reserve each year until it reaches a balance of $25,000. During that time, the district will not increase this reserve with the exception of the interest earned.

Balance: $36,457.38

Reserve for Capital Projects-Vehicle Purchases

Creation – This reserve was created on May 20, 2015, via voter approval.

Purpose – This reserve may be used to fund the cost of any object or purpose for which bonds may be issued.

Funding Methods – Voter approval is required to establish and fund this reserve. In accordance with the approved proposition, this reserve is funded entirely from excess fund balance.

Use of Reserve – Use of this reserve requires voter approval. The proposition to use these funds must be specific to a set of projects and dollar amounts. Continued review and update of the district’s bus purchase plan will support balance.

Monitoring of Reserve – This reserve is monitored by the School Business Administrator.

Funding Level – As stated in the approved proposition, this reserve was created with a maximum limit of $1,200,000, plus interest earned. Accumulation of funds into this reserve must cease at 15 years. Through June 30, 2018, the district has funded this reserve in the amount of $1,115,000, excluding interest.

Balance: $803,911.05

Note: Funds spent from this reserve cannot be replenished. Voters would need to approve another Capital Projects Reserve to set aside additional funds. It is appropriate to have multiple capital project funds in place simultaneously.

Reserve for Capital – Snow Removal Equipment

Creation – This reserve was created on May 16, 2017, via voter approval.

Purpose – This reserve may be used to fund the cost of any object or purpose for which bonds may be issued.

Funding Methods – Voter approval is required to establish and fund this reserve. In accordance with the approved proposition, this reserve is funded entirely from excess fund balance.

Use of Reserve – Use of this reserve requires voter approval. The proposition to use these funds must be specific to a set of projects and dollar amounts.

Monitoring of Reserve – This reserve is monitored by the School Business Administrator.

Funding Level – As stated in the approved proposition, this reserve was created with a maximum limit of $200,000, plus interest earned. Accumulation of funds into this reserve must cease at 15 years. Through June 30, 2018, the District has funded this reserve in the amount of $100,000, excluding interest. On May 15, 2018, the voters approved the use of this reserve to purchase the equipment and transfer any remaining funds to the transportation reserve.

Balance: $100,379.78

Note: Funds spent from this reserve cannot be replenished. Voters would need to approve another Capital Projects Reserve to set aside additional funds. It is appropriate to have multiple capital project funds in place simultaneously.

Reserve for Capital Projects

Creation – This reserve was created on May 20, 2008, via voter approval.

Purpose – This reserve may be used to fund the cost of any object or purpose for which bonds may be issued.

Funding Methods – Voter approval is required to establish and fund this reserve. In accordance with the approved proposition, this reserve is funded entirely from excess fund balance.

Use of Reserve – Use of this reserve requires voter approval. The proposition to use these funds must be specific to a set of projects and dollar amounts. Continued review and update of Building Condition Survey will support balance.

Monitoring of Reserve – This reserve is monitored by the School Business Administrator.

Funding Level – As stated in the approved proposition, this reserve was created with a maximum limit of $750,000, plus interest earned. Accumulation of funds into this reserve must cease at 15 years. The district is planning to use the remaining balance in this reserve for its next capital project.

Balance: $457,936.17

Note: Funds spent from this reserve cannot be replenished. Voters would need to approve another Capital Projects Reserve to set aside additional funds. It is appropriate to have multiple capital project funds in place simultaneously.

Reserve for Capital Projects

Creation – This reserve was created on May 15, 2018, via voter approval.

Purpose – This reserve may be used to fund the cost of any object or purpose for which bonds may be issued.

Funding Methods – Voter approval is required to establish and fund this reserve. In accordance with the approved proposition, this reserve is funded entirely from excess fund balance.

Use of Reserve – Use of this reserve requires voter approval. The proposition to use these funds must be specific to a set of projects and dollar amounts. Continued review and update of Building Condition Survey will support balance.

Monitoring of Reserve – This reserve is monitored by the School Business Administrator.

Funding Level – As stated in the approved proposition, this reserve was created with a maximum limit of $1,000,000, plus interest earned. Accumulation of funds into this reserve must cease at 15 years.

Balance: $500,000

Note: Funds spent from this reserve cannot be replenished. Voters would need to approve another Capital Projects Reserve to set aside additional funds. It is appropriate to have multiple capital project funds in place simultaneously.

Reserve for Tax Certiorari

Creation – This reserve was created via resolution at the Board of Education meeting on June 18, 2015.

Purpose – This reserve is used to pay for prior year judgments and claims in tax certiorari proceedings. Current year refunds should be paid through the budget.

Funding Methods – Future funding methods may include from excess fund balance or transfers from other reserves. Funds placed in this reserve that is not used to pay tax certiorari judgments or claims must be returned to the General Fund after four years.

Use of Reserve – This reserve would be used to pay for prior year tax certiorari claims.

Monitoring of Reserve – This reserve, if needed, will be monitored by the School Business Administrator.

Funding Level – Since actual liabilities have not yet been determined, a realistic funding level cannot be determined at this time. It is determined that until further communication is received from the town regarding the assessment challenge no additional money be added unless another claim should arise and all money will be returned to General Fund within four years of establishment or until funds are exhausted to pay judgments/claims.

Balance: $50,949.56

Note: This reserve will be closed at the end of the 18-19 school year.

The following items are not reserve accounts, but are equally as important to planning revenues for the District.

Unassigned Fund Balance

Creation – Retention of these funds are allowed by law.

Purpose – These funds are unrestricted and may be used for any valid purpose.

Funding Methods – These funds have been accumulated from excess fund balance.

Use of Funds – It is recommended that these funds not be used except for an emergent, unanticipated expense, or revenue shortfall, that cannot be handled either in the budget or with other available reserves.

Monitoring of Balance – These funds are monitored by the School Business Administrator.

Funding Level – The maximum legal limit is recommended (4% of the ensuing budget). Fund Balance Plan established to move toward this level. The Board of Education has committed to remain between 4-6% annually.

June 30, 2018, Balance: $2,464,150.54

Assigned Fund Balance - Appropriated for Subsequent Years

Creation – These funds are actually fund balance that have been set aside for a particular purpose, namely to reduce the tax levy required to support an ensuing years budget.

Purpose – These funds are set aside and returned to the community by lowering the required tax levy to support the district’s budget.

Funding Methods – These funds are fund balance that is assigned for a particular purpose.

Use of Funds – It is recommended that the practice of returning these funds continue each year, as budgets permit. In the future, tighter budgets may restrict the amount of excess available to be returned in a subsequent year.

Monitoring of Balance – The balance and use of these funds are monitored by the School Business Administrator.

Funding Level – Over time, it is recommended that the planned amount of assigned fund balance included as a revenue source in future budgets be limited to $550,000.

Actual Use of Funds 18-19: $0

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