School reserve funds under review

After his review of all schools districts and BOCES in New York, state Comptroller Thomas DiNapoli cited several districts for having excess funds in its Employee Benefit Accrued Liability funds. Although there is no legal limit as to how much money districts can have in this account, DiNapoli said many district had more money than would be reasonably needed in the coming years.

The EBALR fund is used pay teachers and staff for unused leave time, such as sick and vacation days, when they leave the district. Once money goes in to the fund, it can only come out for that purpose.

DiNapoli wants districts to use this excess money to benefit taxpayers. However, legislation is required for districts to be able to transfer money out of an EBALR account to its operating budget. He is proposing that the state Legislature adopt this change.

Locally, school districts are saying that it's not a mere matter of having "too much" in these accounts, but of being prepared for retirements that will inevitably happen eventually.

In Franklin Square, Assistant Superintendent for Finance Patrick Manley said it's not as simple as just returning money to the taxpayers.

"The most effective way to manage tax increases is to manage spending," Manley said, adding that any savings to taxpayers in the short term would be rescinded in the long term, because schools have to make up the difference somehow.

According to Manley, Franklin Square has more than $2.5 million in the district's EBALR fund, which, he said, is a number arrived at by calculating those eligible for retirement benefits. During the calculation process, Manley includes teachers who have been with the district for longer than 5 years, calculates unused time, then comes up with a number that represents what all of those teachers would be owed if they retired. For him, there's no such thing as an "excess" amount of funds, as long as the number matches with those who are eligible to retire.

In fact, the district tried to increase the amount in the fund in the past in conjunction with offering a retirement incentive, but were told they were not allowed by law.

Ultimately, Manley said, schools needed those reserves to prevent financial disaster in unforeseen circumstances.

"I think that in any business, having reserves is a prudent financial course of action," Manley said. "I think that we do it the right way, we do it person by person, dollar by dollar." He added that, to his knowledge, other districts in the area calculate their EBALR funds in the same fashion.

At the Sewanhaka district offices, Assistant Superintendent for Business Maureen Kenney said the district did not have an overage, and always made sure to stay in line with what the state said they were allowed to have.

"Our philosophy is, if there's a maximum amount you're allowed to have in one of these funds, we don't exceed the maximum," Kenney said.

Sewanhaka did not provide the exact amount in their fund as of press time, but did say that they were not one of the nearly 300 districts in the state that was cited by DiNapoli for having an overage.

In Elmont, the equivalent of the EBALR fund has a total of $3 million dollars, a number that District Treasurer Joe Guadagno said is carefully pored over by auditors every year.

"It's audited every year, and that's what the auditors feel is needed to pay out when needed," Guadagno said. "It's reviewed every year carefully, gone over with a fine-tooth comb."