The Lockport Board of Education is considering a capital projects reserve fund next year to help pay for future school renovation and repair projects.
The fund could save taxpayers money in interest payments if the district doesn't have to borrow a lot. That's because it has reserves set aside to help pay for anticipated projects.
The idea was suggested during a board meeting last week by John Schiavone, of the accounting firm Lumsden & McCormick, who gave the school district a clean bill of health in its annual audit.
Many districts have capital project reserve funds, said Gerald J. Stuitje, assistant superintendent of finance.
"It's a prudent way to go," Stuitje said. "We have money reserved for different things, but we have nothing put away for capital projects. Yet we know with the number of buildings we have and the age of them, we are going to eventually need to have things upgraded and repaired . . .
"It's like a homeowner putting money in a special savings account because you know you're going to have to get a new roof sooner or later. So you put a little money away each year so when you need the money, it's there."
The School Board will have to hold a referendum to get permission from voters to set up the fund.
"We anticipate going to the voters in May with a proposal," along with the budget vote and School Board elections, Stuitje said.
Stuitje said the district would have to state in the resolution the length of time the reserve fund would exist and the maximum amount of money that could be placed in it.
"If voters approve, then we can fund it through whatever mechanisms we include in the resolution," he said. "It could be transferring money from some of our other reserve funds. It could be some surplus money we end up with this year," possibly part of the fund balance. In 2003-04 the district had about a $1 million fund balance, or surplus.
If any capital reserve fund money is needed for a project, Stuitje said the board would have to receive permission from the voters to use it.
"The capital reserve fund is harder to establish than most others because you have to go to the voters, but in my mind it's the most effective way to do it. Other reserve funds are harder to use because they run through the district's general fund, where there are a lot more regulations on how you can spend it, and you still have to budget for it," he said.
"Once the reserve fund is established by voter authorization . . . and say we have $5 million in there, and we decide we want to do a $5 million project," he said, "so all we do is go to the voters and say we want to use it to take care some of the deterioration in many of our schools. If they approve it, we can use the money."