Springs Sets Surplus Aside For Capital Improvements

The Springs School District on Monday beefed up its capital reserve fund with nearly a million dollars, money left over from last year’s budgeted expenses.

The move is expected to keep the district in line with state rules regulating the amount of money schools can keep in their bank accounts, which is limited to 4 percent of their current budget. The move also was made in anticipation of much-discussed capital improvements.

The transfer of $962,712 into the capital reserve fund, approved unanimously by the school board, means the district has more than $4.7 million specifically set aside for construction.

“Everyone, I think, is aware that there are capital improvements that need to be made . . . and it’s always better to pay for things up front than having to borrow, and we’re very aware of that. Hopefully, this will help us out in the long run,” Barbara Dayton, the school board president, said by phone yesterday.

To use some of the money in the capital reserve fund, the district would have to win voter approval. Its most recent effort to do so was in May 2015, when taxpayers rejected $2 million for a new parking lot, to revamp the student drop-off and pick-up area, and for other exterior work.

The school board opted to put its surplus in the capital reserve fund instead of different reserve funds, such as those for Workers Compensation, unemployment, or retirement contributions. The board could have chosen to return the $962,712 to Springs taxpayers in order to reduce the 2016-17 tax levy, provided it acted earlier, but Carl Fraser, the district’s interim business administrator, said by email Tuesday that the board did not think that would have been a smart move.

“Since the tax cap percent increase continues to be very low, the district would not be able to levy enough taxes and stay within the cap to cover budgeted expenses to continue all of its current instructional programs,” he said.

Ms. Dayton cited an example in support of the board’s choice to hold onto the surplus rather than use it to reduce taxes by pointing out that the district is anticipating a larger number of students moving up to East Hampton High School next year than in recent years, meaning tuition, over which Springs has little to no control, is almost certain to rise.

The transfer to the capital reserve fund was dated retroactively to June 30. Mr. Fraser explained on Monday that it was made retroactive to keep the district’s unassigned fund balance at 4 percent of the 2016-17 budget, in accordance with state law. Springs had bumped up against that regulation in 2014, when an audit of the 2012-13 budget by the New York State comptroller found the unassigned fund had grown to about 15 percent, nearly four times the amount allowed.

Monday’s transfer leaves about $1.1 million in the district’s unassigned fund, about 3.98 percent of this year’s $27.63 million budget.

Corrections: The printed version of this story incorrectly reported the Springs School District beefed up its capital reserve fund with nearly three-quarters of a million dollars, instead of nearly a million dollars. Also it incorrectly identified the current year's budget. Also, 3.98 percent of last year's budget is leftover, not 4 percent, and this year's budget was $27.63 million, not $27.36 million.