Daniel T. Connor
Superintendent

227 Main Street
Goshen, NY 10924
(845) 615-6720

Budget News

Clarification on Goshen’s capital reserve fund proposition

April 13, 2011 - There has been some confusion concerning the capital reserve fund proposition that will be placed before voters during the annual budget vote on May 17. Learn what's on the ballot on May 17

What is a reserve fund? As defined by education law, a reserve fund is a separate account established by a school district to finance the cost of various objects or purposes of the district. Reserve funds can be thought of as self-imposed savings accounts for particular purposes into which funds will be deposited over a period of time.

Why is voter approval required to create the capital reserve fund? Some reserve funds require voter approval to be established, such as the capital reserve fund being proposed by the Goshen Central School District. The proposition must specify the purpose of the fund, the ultimate amount, and the term of the fund.

Voters will be asked to authorize the creation of a capital reserve fund on May 17. If approved by the district voters, the capital reserve fund will be established for a period of 10 years, and can hold a maximum of $5 million.

The fund will have a zero balance at its inception. Money for the reserve fund may be acquired from end-of-year surplus funds as well as any interest accrued over the fund’s 10-year term. The fund can be used to off-set future construction, reconstruction and renovation of district facilities. Capital projects proposed in the future will require approval of the district voters.

Please note that the district is NOT asking voters to immediately place $5 million into this reserve – it is only asking for voters to authorize the creation of the reserve fund.

“Essentially, the capital reserve fund is a bank account that will start with a zero dollar balance,” said Superintendent Daniel T. Connor. “The district can deposit money, as it becomes available, into the reserve fund and then use that money for future capital improvements.”

The advantage of the capital reserve fund is that it allows the district to conduct a future capital project without a budgetary impact on local taxpayers, since the money would already be placed aside. A separate vote at a later time would still be needed to conduct any capital projects.

The district decided to place this proposition onto this year’s ballot based on recommendations from its architects, KG&D. Recently, the architects conducted a five-year building and conditions survey, as required by the state. They identified a number of capital improvement projects needed throughout the district over the next few years. The creation of the capital reserve fund would allow the district to address necessary short-term projects identified as top priorities, based on the architects’ recommendations.