Herald Schools

Lynbrook, East Rockaway schools meet reserve requirements


Documents from the Lynbrook and East Rockaway school districts show that they are in compliance with the state’s 4 percent limit on unassigned funds.

Per state law, school districts’ unassigned funds cannot exceed 4 percent of their budget. Unassigned funds are money that has not been used throughout the year and could be used for any valid purpose.

Lynbrook’s unassigned fund balance was $3.4 million in July, exactly 4 percent of the district’s almost $85.2 million budget. East Rockaway’s unassigned fund balance was less than 4 percent of the district’s $38.4 million, at $2.5 million. Unassigned funds differ from reserve funds because the reserves are appropriated for a specific area, while unassigned funds can be used for any expenses that arise.

Though Lynbrook’s unassigned fund balance is in accordance with state mandates, two of its 10 reserve funds were not used in the 2017-18 school year and are not expected to be used this year, documents from the district show. As a result, the funds collected from budget surpluses are sitting in an account and are accruing interest.

“It’s kind of sitting there, waiting for its purpose,” said Paul Lynch, the district’s assistant superintendent for finance.

The reserve funds that have not been used are the district’s $164,990 unemployment insurance fund and the district’s $1.4 million general liability reserve fund. Lynch said that the insurance fund has not been touched because he was able to incorporate the district’s unemployment insurance reimbursements into the budget. He also said he would continue to monitor the district’s need for the reserve funds.

“If enough years go by and we’re not using it, we may appropriate it,” he said.

School districts use reserve funds as “contingency funding,” Lynch said. In the 2017-18 school year, Lynbrook had $26.6 million worth of budget surpluses in reserves. Those reserves also collect interest, which is applied back into the fund, according to Lynch.

The district’s largest reserve is the capital projects reserve, which was created in May 2008 to fund “all or part of the cost of construction, reconstruction, or acquisition of capital building and grounds projects and equipment,” according to Lynbrook’s “Guiding Principles for Reserves” document. That fund had $6.49 million as of June 30, 2017, $1.18 million of which was used during the 2017-18 school year and another $5 million of which will be used in 2019 to close the fund.

Voters in the district approved another reserve in May 2018 to replace the capital reserve fund, which can be up to $500,000.

“We’re very transparent with our reserves,” Lynch said, adding that the “community is very supportive of us having reserves.”

The East Rockaway School District had $10.9 million in reserve funds as of June 2017, which was worth about 28.5 percent of its budget. The largest reserve was for retirement contributions.