Three Village School District Sees $1.2 Million Fund Overage

Auditors have declared the Three Village Central School District is in good financial condition, finding the district to be over its fund balance by $1.2 million, which is over the 4 percent overage limit allowed by state law.

A fund balance is money that is left over after all expenses are paid, and how that surplus money is spent can often be a topic for vigorous conversation. The district's overage of $1.2 million is not a small figure, but when put into perspective in a district like Three Village with an operating budget of $167 million, school officials said it is not necessarily a windfall.

"The idea is to budget conservatively so that we don't run out of money," trustee Jonathan Kornreich said.

He used the analogy of running a household on $100,000 per year.

"To be 4 percent over would be like having $4,000 to put into your savings account," Kornreich said. "It isn't as much of a cushion as it looks."

Being over the fund balance is an issue every year, according to Jeffrey Carlson, assistant superintendent for business services.

"We have to have a surplus," he said. "We can't overspend the budget."

Taxpayers may see this as a way to relieve what they see as high taxes, but at last week's board meeting Carlson said that would be a mistake.

"It may seem tempting to use it to lower the tax levy; in actuality, it would only put the district in a worse position for next year having to start off with a tax increase of about one to one-and-a-half percent," he said.

So what can be done with the money? New York state law allows schools to have a 4 percent surplus, and anything more must be placed in an account or reserve. While the district said the auditor's comment was that it would be suitable to leave it as an overage with a corresponding note in the audit to explain its presence, one board member felt that this was not appropriate. Once the money has been appropriated to a fund, it can only be used for the purpose designated by the fund. Leaving it as an overage would give more leeway on how that money can be spent.

Carlson suggested that the money be used to replenish the retirement contributions reserve, of which $1 million was used this year.

"This replenishes it, plus $200,000 more," he said.

The idea of using it in the retirement reserve seemed to illicit a consensus between board members, however an official vote has yet to be taken on the matter.