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Partly Cloudy District officials want reserve fund flexibility
State comptroller proposes new legislation
Local school leaders support a plan by State Comptroller Thomas DiNapoli which would allow districts more flexibility with a retirement benefit fund.
Upon his review of all 733 school districts and BOCES in New York, DiNapoli found that many districts has an excessive amount of money in Employee Benefit Accrued Liability Reserve funds. Although there is no legal limit as to how much money districts can put in there, DiNapoli said many districts have more than is reasonably needed. EBALR accounts are used to pay employees for unused sick, vacation and personal time when they leave the district.
The comptroller is proposing legislation that would allow districts to take this excess money and use it for its operating expenses. This, he said, would benefit taxpayers because districts could use the money to offset state aid cuts and prevent high tax increases.
He is also proposing allowing districts to create Other Post-Employment Benefit accounts. That would fund such costs as retirement health insurance. Meredith Brosnan, assistant superintendent for business in District 13, said districts were initially led to believe they could use the EBALR account for those other retirement costs. That is why, she said, District 13’s account is overfunded by more than $1 million.
“It would be a very good thing to have that flexibility,” she said in support of the comptroller’s recommendation.
District 24 and the Valley Stream Central High School District were also cited by the comptroller as having excess funds.
Dr. Edward Fale, superintendent of District 24, also supports the recommendation to allow districts to move money out of the EBALR account for other purposes. “We have significant money in there that we can not use,” he said.
The district has about $1.8 million in its account, according to Assistant Superintendent Dan Onorato.
Fale said that beginning in the late 1990s, the district put a lot of its annual surplus into its compensated absences account — similar to the EBALR — to cover costs for unused leave time. “This was a standard place to put money in a previous year’s budget so you wouldn’t run short,” he said.
