Ithaca City School District

Financial Reserve Fund Plan

Fiscal Year July 1, 2023 - June 30, 2024
Potential Adoption by the Board of Education in January, 2024

District Mission Statement

The mission of the Ithaca City School District is to engage, educate, and empower. We
will strive to engage all students in the importance and relevance of thinking; to
educate every learner to communicate, comprehend, and collaborate for
understanding; and to empower all in the ICSD to achieve academic excellence.

The Ithaca City School District (ICSD) maintains Legally Adopted Reserve Funds in
the form of Restricted Fund Balances that may be used for specific purposes.
Reserve Funds act as legally authorized savings accounts and play a role in the
district’s annual budget and long-range planning processes.
The ICSD Reserve Fund Plan includes the following information for each reserve
fund:
● The type and description of the reserve fund;
● The date the reserve fund was established and the amount of each sum paid
into the fund;
● The interest earned by the reserve fund;
● Capital gains or losses resulting from the sale of investments of the reserve
fund;
● The total amount and date of each withdrawal from the reserve fund;
● The total assets of the reserve fund showing cash balance; and
● An analysis of the projected needs for the reserve fund in the upcoming fiscal
year and a recommendation regarding funding those projected needs.
Annually, the plan will be updated and implemented as follows:
● Finance Committee will review balances;
● Finance Committee will review reserve targets, adjust targets as appropriate,
and present recommendations to the full Board of Education;
● The Board will review and adopt the updated plan;
● Throughout the year, by Board resolution, staff will adjust the budget to
allow for charging appropriate expenditures to reserves as necessary per
recommendations;
● In June, by Board resolution, staff will allocate funds to reserves as
established in the plan.

Summary of Fund Balance Accounts for Fiscal Year ending 2023-2024

Restricted Fund Balances (as of June 30, 2023)

RESERVE BALANCE

RETIREMENT CONTRIBUTION 2,463,193

RESERVE

TRS RESERVE 1,458,077

TAX CERTIORARI RESERVE 608,975

INSURANCE LIABILITY RESERVE 259,476

PROPERTY LOSS AND LIABILITY 369,400

RESERVE

EMPLOYEE BENEFIT ACCRUED 298,958

LIABILITY RESERVE

CAPITAL RESERVE FUND 5,508,867

HEALTH INSURANCE RESERVE 5,018,848

Subtotal of Restricted Reserve Funds $ 15,985,794

 ITHACA CITY SCHOOL DISTRICT RESERVES

Tax Certiorari Reserve

Purpose: Chapter 588 of the Laws of 1988 amended Section 3651 of the Education
Law to permit the establishment of a reserve fund for tax certiorari and to expend
from the fund without voter approval of the qualified voters of the school district.
The new chapter further stipulates that the total of the monies held in the reserve
fund shall not exceed the amount which might reasonably be deemed necessary to
meet anticipated judgments and claims arising out of tax certiorari proceedings in
accordance with Article 7 of the Real Property Tax Law. Any monies deposited to
such a reserve fund which are not expended for tax certiorari proceedings in the
year such monies are deposited must be returned to the general fund on or before
the first day of the fourth fiscal year after deposit of these monies into the reserve
unless claim(s) are still open and not finally determined or otherwise terminated or
disposed of. This reserve is accounted in the General Fund (A 864).
Creation: Via board resolution
Funding Goal: Based on the tax certiorari claims received against the District
Funding Level: Evaluated and adjusted on an annual basis in coordination with the
Tompkins County Department of Assessment
Funding Methods: Funding methods may include from excess fund balance or
transfers from other reserves.
Use of Reserve: To pay for prior year judgments and claims in tax certiorari
proceedings and to return the balance of funds to the Unassigned Fund Balance
Monitoring of Reserve: By the Business Administrator based on data from the
Tompkins County Department of Assessment
Balance as of 06/30/2023: $608,975
Recommended Adjustment:
Recommended Balance as of 12/2023: $608,975

Employee Benefit Accrued Liability Reserve (EBALR)

Purpose: The purpose of this account is to reserve funds for the payment of
accrued ‘employee benefits’ due to employees upon termination of service for
vacation, sick leave, personal leave, etc.. The reserve is accounted for in the
General Fund (A 830).
Creation: Via board resolution.
Funding Goal: The amount of the liability calculated by the District based on
estimates informed by prior year expenses
Funding Level: This reserve will be funded as deemed appropriate, which would
cover the calculated liability at year end. If the District determines that such an
account is no longer needed or is overfunded, monies may be transferred to a
reserve fund established under Education Law §3651, but only to the extent that the
monies in the employee benefit accrued liability reserve fund exceed a sum
sufficient to pay all liabilities incurred or accrued against the employee benefit
accrued liability fund, as certified to the governing board by the fiscal and legal
officers of the local government prior to the discontinuance of the fund.
Funding Methods: This reserve fund may be established by a majority vote of the
Board of Education and is funded by budgetary appropriations and such other
reserves authorized in the GML, subject to permissive referendum. The source
from which the funds will be obtained can include any and all of the following:
unappropriated fund balance from the general fund as determined by the Board of
Education, interest income related to the investment of monies in the fund, and any
other additional monies thereafter authorized by the voters of the District. Upon
termination by BOE, the balance not required to satisfy all incurred or accrued
liabilities may be transferred to any other reserve fund(s) authorized in the General
Municipal Law. Funds may not be used to fund health or other post-retirement
benefits.
Use of Reserve: To fund cost of employee accrued benefit days payable upon
severance from the district.
Monitoring of Reserve: This reserve is monitored by the Business Administrator.
Balance as of 06/30/2023: $298,958
Recommended Adjustment:
Recommended Balance as of 12/2023: $298,958

Employee Retirement Contribution (ERS) Reserve Fund

Purpose: This reserve is used to pay for district expenses to the NYS Employee's
Retirement System only. The reserve is accounted for in the General Fund (A 827).
Creation: This reserve was created via board resolution.
Funding Goal: A minimum funding level equivalent to value of five consecutive
highest assessed years.
Funding Level: The reserve funded as deemed appropriate.
Funding Methods: Funds are placed in this reserve from excess fund balance.
Use of Reserve: Funds will be used to offset New York State Employees Retirement
System billings.
Monitoring of Reserve: This reserve is monitored by the Business Administrator.
Balance as of 06/30/2023: $2,463,193
Recommended Adjustment:
Recommended Balance as of 12/2023: $2,463,193
Teacher Retirement Contribution (TRS) Reserve Fund
Purpose: This reserve is used to pay for district expenses to the NYS Teachers
Retirement System only. The reserve is accounted for in the General Fund (A
827-01).
Creation: This reserve was created via board resolution.
Funding Goal: A minimum funding level equivalent to value of five consecutive
highest assessed years.
Funding Level: The reserve funded as deemed appropriate.
Funding Methods: Funds are placed in this reserve from excess fund balance.
Use of Reserve: Funds will be used to offset New York State Teachers Retirement
System billings.
Monitoring of Reserve: This reserve is monitored by the Business Administrator.
Balance as of 06/30/2023: $1,458,077
Recommended Adjustment:
Recommended Balance as of 12/2023: $1,458,077

Unemployment Insurance Reserve

Purpose: This reserve is used to pay the cost of reimbursement to the New York
State Unemployment Insurance Fund for unemployment benefit payments to
claimants. The reserve is accounted for in the General Fund (A 815).
Creation: This reserve was established via board resolution.
Funding Goal: An amount that is deemed adequate to offset the costs of
unemployment benefits for the District.
Funding Level: This reserve will be funded as deemed appropriate.
Funding Methods: This reserve will be funded from excess fund balance.
Use of Reserve: In accordance with the law, this reserve may be used at the
discretion of the Superintendent and Business Manager specifically to offset
expenses tied to unemployment insurance claims related to employee attrition.
Monitoring of Reserve: This reserve is monitored by the Business Administrator.
Balance as of 06/30/2023: $0
Recommended Adjustment:
Recommended Balance as of 12/2023: $0
Insurance Liability Reserve
Purpose: This reserve is used to pay liability, casualty, and other types of uninsured
losses, except losses incurred for which the following types of insurance may be
purchased: life, accident, health, annuities, fidelity and surety, credit, title residual
value, and mortgage guarantee.
Creation: This reserve was created via board resolution. The reserve is accounted
for in the General Fund (A 863).
Funding Goal: An amount that is deemed adequate to offset the costs of exposure
to the district not covered by existing insurance policies.
Funding Level: This reserve will be funded as deemed appropriate.
Funding Methods: This reserve will be funded from excess fund balance.
Use of Reserve: This reserve will be used to pay claims.
Monitoring of Reserve: This reserve is monitored by the Business Administrator.
Balance as of 06/30/2023: $259,476
Recommended Adjustment:
Recommended Balance as of 12/2023: $259,476

Property Loss and Liability Reserve

Purpose: This reserve is used to establish and maintain a program of reserves to
cover property loss and liability claims. The reserve is accounted for in the General
Fund (A 862).
Creation: This reserve was created via board resolution.
Funding Goal: An amount that is deemed adequate to offset the costs of exposure
to the district for potential claims.
Funding Level: This reserve will be funded as deemed appropriate.
Funding Methods: This reserve will be funded from excess fund balance.
Use of Reserve: This reserve will be used to pay property loss and liability claims.
Monitoring of Reserve: This reserve is monitored by Business Administrator
Balance as of 06/30/2023: $369,400
Recommended Adjustment:
Recommended Balance as of 12/2023: $369,400
Capital Reserve
Purpose: The purpose of the fund is for construction, repair and construction of
capital improvements and the acquisition of equipment. The reserve is accounted
for in the General Fund (A 878).
Creation: This reserve was created via voter approval, May 2022. Establishment of a
new capital reserve is put before the voters as the previous capital reserve is
exhausted. Currently, there is a capital reserve that was established May 2022.
Funding goal: Funding an established capital reserve is dependent upon a review of
year-end finances, capital project needs and bus replacement needs. Since school
bus replacement comes from this reserve, a minimum goal is to replace the amount
spent on buses yearly.
Funding level: Typically, a new capital reserve is established not to exceed
$10,000,000.00 with a 5 year window in which to accumulate said $10 million
dollars.
Funding Methods: The source from which the funds will be obtained can include
any or all of the following: unappropriated fund balance from the general fund as
determined by the Board of Education, State aid related to expenditures from the
capital reserve fund, interest income related to investment of monies in the fund,
and any other monies thereafter authorized by the voters of the district.
Use of Reserve: Use of this reserve requires voter approval. The proposition put
before the voters to use these funds must be specific to a set of projects and dollar
amounts.
Monitoring of Reserve: This reserve is monitored by the Business Administrator.
Balance as of 06/30/2023: $5,508,867

Health Plan Reserve

Purpose:Reserve fund accounts are often used in these circumstances to mitigate
the financial risk, provide stability to the budget, and protect the financial
resources of the school community. To this end, the Ithaca City School District has
been authorized by the State of New York under paragraph (a) of subdivision 2 of
Section 6-n of the General Municipal Law, and Section 3653 of Article 74 of New
York State Education Law to establish, fund, and maintain a Health Insurance
Reserve through resolution of the Board of Education.
Creation: This reserve was established via board resolution.
Funding goal: Upon advice from district financial and insurance consultants, the
optimal funding of a health insurance reserve should include a terminal reserve
amount, in the event that the self-funded plan is terminated, and a contingent
reserve amount to mitigate ongoing claim and expense volatility. The total reserve
balance should be at least equal to fifty five percent (55%) of projected annual
health insurance expenses, calculated and adjusted annually. Insurance market and
financial environment volatility may require deviation from recommended
parameters to safeguard the District’s financial resources. Optimal funding of a
terminal reserve shall be at least equal to thirty percent (30%) of projected annual
health insurance expenses. Optimal funding of a contingent reserve shall be at least
equal to twenty-five percent (25%) of projected annual health insurance expenses
according to the distribution below:
1. Large unpredictable individual medical claims expenses – five percent
(5%)
2. Large unpredictable group-wide prescription claims expenses – five
percent (5%)
3. Unpredictable expenses relating to PPACA or its replacement regulations -
five percent (5%)
4. Unpredictable expenses relating to Medicare cost-shifting activity – five
percent (5%)
Funding level: The health insurance reserve shall be funded upon recommendation
by the Superintendent of Schools and Board of Education action consistent with
paragraph (a) of subdivision 2 of Section 6-n of the General Municipal Law, and
Section 3653 of Article 74 of New York State Education Law.
Funding methods: The source of funds was the district’s share of fund balance
received upon withdrawal from the Tompkins Seneca Tioga BOCES Health
Insurance Consortium and from excess fund balance in accordance with all
procedures included in the board resolution.
Use of Reserve: Health insurance reserve funds may be used, upon
recommendation by the Superintendent of Schools and Board of Education action
consistent with paragraph (a) of subdivision 2 of Section 6-n of the General
Municipal Law, and Section 3653 of Article 74 of New York State Education Law, if
cash expenses exceed district funding during the annual accounting period.
Monitoring of Reserve: Health insurance reserve funds shall be replenished or
reestablished, upon recommendation by the Superintendent of Schools and Board
of Education action
consistent with paragraph (a) of subdivision 2 of Section 6-n of the General
Municipal Law, and Section 3653 of Article 74 of New York State Education Law, on
an annual basis. The Board of Education shall review the health insurance reserve
fund balance on an annual basis.
Balance as of 06/30/2023: $5,018,848
Recommended Adjustment:
Recommended Balance as of 12/1/2023: $5,018,848

Debt Service Reserve

Purpose: This reserve is used to cover debt service payments on outstanding
obligations (bonds, BANS) after the sale of district capital assets or improvements.
Expenditures are for debt service only or for the purpose of retiring the
outstanding obligations. Remaining balance of sale in excess of indebtedness may
be expended for any other lawful district purpose.
Creation: This reserve is created via board resolution.
Funding Methods: As defined in GML § 6-c, the funding of this reserve is from (1)
the proceeds of the cash sale of capital assets and improvement (including, but
limited to land, buildings, equipment, and vehicles), and (2) State and Federal Aid
received on account of a capital improvement to the retirement of outstanding
obligations issued to finance such improvement.
Use of Reserve: Through budgetary appropriations for debt service only or to retire
outstanding obligations.
Monitoring of Reserve: This reserve is monitored by Business Administrator
Balance as of 06/30/2023:
Recommended Adjustment:
Recommended Balance as of 12/2023: