Worker’s Compensation Reserve

Purpose:

To fund Workers’ Compensation expenses, related medical expenses, and self-insurance administrative costs. This reserve is an operational reserve, meaning that the funds contained within may be utilized to offset current year anticipated workers’ compensation
expenditures.

Legal Reference:

General Municipal Law Article 2 § 6-j

Account Code:

A814

Source of Funds:

Funded by budgetary appropriations, or other sums that may be legally appropriated through board resolution

Use of Reserve:

The district is a member of the Fulmont Workers Compensation Trust. Funds from this reserve can be used to pay claims through contributions to the Fulmont Workers Compensation Trust, since funding workers’ compensation through the Trust is analogous to being self-insured. (as per Amy Pedrick, West & Company)

Voter approval is not needed to expend funds.

Excess funds may be transferred to other reserves authorized by General Municipal Law and Education Law sixty days before the end of the fiscal year.

Creation:

This reserve was created by BOE resolution on December 11, 2014, effective June 30, 2015.

Funding Level:

The reserve was initially funded at a level of $558,000.

Ideal Balance:

The equivalent of five years of annual expenditure (5 x $120,000 annual premium)

It is anticipated that the rates will continue to increase slightly year to year. The financial health of the Trust is strong and the district’s experience modifier is stable.

Planned Use:

Starting in 2022-23, use the funds in this reserve to pay the District’s self-insured Workers’ Compensation premiums through the Fulmont Workers’ Compensation Trust. Further, monies from this reserve, approximately $400,000 will be used to support the 2022-2023 budgetary revenue strategy in order to bring the reserve balance closer to the ideal balance of $600,000.

Balance as of June 30, 2021:

$1,115,227