Sag Harbor Schools End Fiscal Year With Nearly $3 Million Surplus

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The Sag Harbor School District recently found itself with a surplus of nearly $3 million and, last month, set aside most of the money in a number of reserve funds.

The district spent $1.7 million less than expected during the 2012-13 school year through the renegotiation of contracts with its telephone and internet provider, by buying its own school buses instead of contracting with the Montauk Bus Service as in prior years, and by securing grants through Albany’s special education fund to finance summer school expenses, according to John O’Keefe, Sag Harbor’s business administrator. Last year, for the first time ever, the state reimbursed Sag Harbor for about 80 percent—or $246,000 total—of its summer school expenses, he said.

Additionally, the district took in approximately $34.7 million in revenues last year, about $1.1 million more than projected. The unexpected income included a $500,000 increase in tuition payments from 20 students living in Sagaponack Village and Springs; a $101,000 rebate from the Long Island Power Authority for a districtwide lighting retrofit; a $16,000 payment from Hampton Jitney for use of a district parking lot over the summer; and $5,000 in rent revenue from the leasing of the Pierson Middle/High School auditorium to a local theater program.

Mr. O’Keefe explained that $2.2 million of the $2.8 million surplus was placed in reserves because the state mandates that only 4 percent of any budget—or $600,000 for the current school year—can be placed in a district’s unassigned fund balance. The remainder of the money had to split among the other reserve accounts.

He explained that the district divided up the surplus as follows: $738,379 went into the New York State Employees Retirement Contribution Reserve Fund; $500,000 into its Facilities Renovation Capital Reserve Fund; $245,000 into its Workers’ Compensation Reserve Fund; $200,000 was invested in the Fleet Replacement Capital Reserve Fund; $60,281 went into the New York State Employee Benefit Accrued Liability Reserve Fund; and $33,000 into the newly established Insurance Reserve Fund. Additionally, $500,000 went toward the $35 million budget for 2013-14.

Mr. O’Keefe also said the amounts placed into each reserve were based on the recommendations of three separate financial analyst groups: state auditors, the district’s financial management team and an external audit team.

“We didn’t get all these monies completely by happenstance—some of it was by efficiency, and some of it was due to revenues we received that we weren’t anticipating,” Mr. O’Keefe said. “We have the benefit of an extra $2.2 million that we can place in the reserves to help us in future budget years in case there are shortfalls.”

On Tuesday, October 15, at 6 p.m., Mr. O’Keefe will be hosting a financial workshop at the Pierson Middle High School that will provide the detailed formula of last year’s finances, and also look back on the last five years.

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