3470 Fund Balance Regulation
3470 Fund Balance Policy

Establishment of Reserves:
Reserve funds (essentially legally authorized savings accounts designated for specific purposes permitted by law) are an important component in planning for the future.  The Lakeland Central School District may establish and maintain reserve funds in accordance with New York State laws, Commissioner’s Regulations, and the rules or opinions issued by the Office of the New York State Comptroller. The District shall comply with the reporting requirements of Article 3 of the General Municipal Law of the State of New York and the Governmental Accounting Standards Board (GASB) issued GASB Statement Number 54, Fund Balance Reporting and Governmental Fund Type Definitions.

All reserve funds shall be properly established and maintained to promote the goals of creating an open, transparent, and accountable use of public funds. The School District will authorize all payments or transfers into a reserve fund by resolution.  The School District may engage independent experts and professionals, including, but not limited to, auditors, accountants, and other financial and legal counsel, to monitor reserve fund activity and prepare any and all reports that the Board may require.

Periodic Review and Annual Report:
An annual report of all reserve funds will be prepared and submitted to the Board of Education by the Business Official or designee. The Board shall utilize the information in the annual report to make necessary decisions to adequately maintain and manage the School District’s reserve fund balances while mindful of its role and responsibility as a fiduciary of public funds.

Reserves Established by the Lakeland Central School District to Date:
Employee Benefits Accrued Liability-(General Municipal Law Section 6-p)
Creation – June 2005

Purpose and Funding Method – This reserve may only be used to pay for unused accumulated leave time contractually provided to certain groups of employees, normally upon retirement. This typically includes payment for unused sick and vacation pay. This reserve is funded by budgetary appropriations and excess fund balance. The reserve may also be funded by transfers from other reserve funds as permitted by law, and such other funds as the Board may legally appropriate.

Use and Monitoring of Reserve – This reserve may be used when an employee separates from the District and payment of accumulated leave is required and not available in the general fund. These transactions flow through the budget via a budget revision with the offsetting revenue coming from the reserve. The Business Official or designee will recommend to the Superintendent and the Board of Education when reserve funds should be used. The Board will be made aware of the use of the reserve. The Business Official or designee will be the primary monitor of the reserve and will share information annually with the Superintendent and the Board.

Funding Goal – This reserve should be funded up to a maximum of 100% of the accrued liability for unused accumulated leave time. This reserve is funded by budgetary appropriations and excess fund balance. The reserve may also be funded by transfers from other reserve funds as permitted by law, and such other funds as the school board may legally appropriate.

Employee Retirement System Reserve -(General Municipal Law Section 6-r)
Creation – June 2009

Purpose and Funding Method –Pay for retirement contributions for the NYS Local and Employees Retirement System (ERS) especially when the contribution rates have major swings due to market forces.  This reserve is funded by budgetary appropriations and excess fund balance. The reserve may also be funded by transfers from other reserve funds as permitted by law, and such other funds as the school board may legally appropriate.

Use and Monitoring of Reserve – This reserve may be used to pay for ERS pension contributions.  These transactions flow through the budget from the reserve. The Business Official or designee will recommend to the Superintendent and the Board of Education when reserve funds should be used. The Board will be made aware of the use of the reserve. The Business Official or designee will be the primary monitor of the reserve and will share information annually with the Superintendent and the Board.

Funding Goal – This reserve should be funded up to a maximum of 4 years of latest contributions.  This reserve is funded by budgetary appropriations and excess fund balance. The reserve may also be funded by transfers from other reserve funds as permitted by law, and such other funds as the school board may legally appropriate.

Teachers’ Retirement System Reserve (subfund) -(General Municipal Law Section 6-r)
Creation – June 2019

Purpose and Funding Method –Pay for retirement contributions for the NYS Teachers’ Retirement System (TRS) especially when the contribution rates have major swings due to market forces.  This reserve is funded by budgetary appropriations and excess fund balance. The reserve may also be funded by transfers from the Employee Retirement System Reserve and other reserve funds as permitted by law, and such other funds as the Board may legally appropriate.

Use and Monitoring of Reserve – This reserve may be used to pay for TRS pension contributions. These transactions flow through the budget from the reserves. The Business Official or designee will recommend to the Superintendent and the Board of Education when reserve funds should be used. The Board will be made aware of the use of the reserve. The Business Official or designee will be the primary monitor of the reserve and will share information annually with the Superintendent and the Board.

Funding Goal – This reserve should be funded up to a maximum of 10% of prior year TRS members’ salaries. The maximum funding in any given year is limited to 2% of prior year TRS members’ salaries.  This reserve is funded by budgetary appropriations and excess fund balance. The reserve may also be funded by transfers from the Employee Retirement System Reserve, other reserve funds as permitted by law, and such other funds as the Board may legally appropriate.

Tax Certiorari Reserve - (Education Law Section 3651[1A & 3A])
Creation – June 2006

Purpose and Funding Method –Pay for judgments and claims in tax certiorari proceedings.  This reserve is funded by budgetary appropriations and excess fund balance. The reserve may also be funded by transfers from other reserve funds as permitted by law, and such other funds as the Board may legally appropriate.

Use and Monitoring of Reserve – This reserve may be used to pay tax certiorari judgments and claims. These transactions flow through the budget from the reserves. The Business Official or designee will recommend to the Superintendent and the Board of Education when reserve funds should be used. The Board will be made aware of the use of the reserve. The Business Official or designee will be the primary monitor of the reserve and will share information annually with the Superintendent and the Board.

Funding Goal – This reserve should be funded up to an amount reasonably required to pay the judgments and claims, up to a maximum of 40% of the total exposure.  This reserve is funded by budgetary appropriations and excess fund balance. The reserve may also be funded by transfers from other reserve funds as permitted by law, and such other funds as the Board may legally appropriate.

Capital Reserve – (Education Law Section 3651[1])
Creation – June 2017 with voter approval

Purpose and Funding Method –Pay all or a portion of the costs of the construction of, additions to, improvements to, reconstruction, renovation and equipping of School District buildings, facilities, athletic facilities and vehicle purchases.  This reserve is generally funded by unassigned fund balance up to the amount authorized by the voters plus interest earned. The reserve may also be funded by transfers from other reserve funds as permitted by law, and such other funds as the Board may legally appropriate.

Use and Monitoring of Reserve – This reserve may be used to pay costs of construction and vehicle purchases as approved by the voters of the District. These transactions flow through the budget from the reserves. The Business Official or designee will recommend to the Superintendent and the Board of Education when reserve funds should be used. The Board and the voters will be aware of the use of the reserve as a proposition for the use of capital reserve funds must be placed before and approved by the voters. The Business Official or designee will be the primary monitor of the reserve and will share information annually with the Superintendent and the Board.

Funding Goal – In accordance with the voter approved proposition establishing this capital reserve, this reserve may be funded up to a maximum amount of $20 million with a maximum term of 10 years. This reserve is generally funded by excess fund balance and may also be funded by transfers from other reserve funds as permitted by law, and such other funds as the Board may legally appropriate.

October 28, 2019