Nearly two years of negotiations led to the announcement in May that the Pearl River School District would receive a just over $1 million from Olympus Surgical & Industrial America Inc. in a settlement.
The influx of funds changed what could have been a shortfall of approximately $400,000 for the district into an excess of $633,400 for the 2011-12 school year.
The Pearl River Board of Education approved the allocation of that money for two of the district's reserve funds at the meeting Monday in the district administration building. Pearl River Director of Operations Quinton Van Wynen recommended putting $400,000 in the reserve for retirement contribution and $233,400 in the reserve for future capital projects.
That was the most significant of three resolutions regarding the distribution of district funds at the meeting.
"At the end of the day, the only memo that mattered was the third one, increasing the retirement reserve by $400,000 and the capital reserve by $233,000.
"At the end of the year, we had $633,000 left over, which represents one percent of the total budget. Without Olympus, we would have been $400,000 in the hole."
Van Wynen explained that the money had to be placed in one of the district's reserve funds and putting it in with undesignated funds was not an option.
"With the accounting rules, you have to do something with it," Van Wynen said. "We have the reserve account called undesignated, the rainy day fund, but the accounting standards people don't want that number to exceed four percent of the budget. Anything above that, we have to put other places."
The reserve for capital projects was approved by the voters and has a maximum contribution of $5 million. According to Van Wynen, the district had put $1.75 million into it and then spent $500,000 of that.
"The money can't come out unless the voters approve it," Van Wynen said. "It's their money. We just watch it."
Rising pension costs have been cited as a problem for many school districts and municipal governments, including Orangetown, which is the reason Pearl River keeps a reserve account.
"We are allowed to do it and we saw the increase coming for retirement payments," Van Wynen said. "It is much larger than our year-to-year normal increase. This fund offsets the annual increase."
The district will also transfer $546,450 from the 2005-06 certiorari reserves to the current fiscal year. The money is set aside to pay for tax settlements expected in a given year and according to Van Wynen, all pending claims from 2005-06 have been settled.
"There was still money left in that year, so I moved it forward to the current year," Van Wynen said.
This will help deal with current cases including Blue Hill Plaza, which is the largest taxpayer in Pearl River, as well as Manhattan Woods and Cellco.
Monday's agenda also include budget adjustments for items that were either under-funded or over-funded for 2011-12, including personnel, administration and programs for students with disabilities. The full list is included in the agenda, which is attached to this report.
Van Wynen said all adjustments are covered with money from elsewhere within the budget. The largest was spending $820,480 more than expected on special education, primarily due to placements outside the district.
"It's difficult to be precise," Van Wynen said. "Doing the budgeting in the spring, that's prime time for (special education) annual reviews. You may not know a kid is going to be placed outside the district until June or July, but I did the budget in March and April on our best estimate."