WEBSTER CENTRAL SCHOOL DISTRICT Brian Freeman, Assistant Superintendent for Business 119 South Avenue, Webster, NY 14580 (585) 216-0017 brian_freeman@webstercsd.org
1/23/2026 To: Brian Neenan, Superintendent From: Brian Freeman, Assistant Superintendent for Business Re: Creation of Property Loss Reserve Fund It is the recommendation of the Business Office to establish and fund a Reserve for Property Loss (A861) beginning in the fiscal year 2025-26. As authorized by Education Law Section 1709 [8-c], this reserve is specifically designated for the payment of self-insured property loss claims. Establishing this reserve will mitigate the impact of rising insurance costs by establishing a dedicated self-insurance fund, thereby increasing fiscal autonomy and reducing long-term premium volatility. This reserve acts as a shock absorber, ensuring that a single large deductible payment does not cause a mid-year budget crisis in the General Fund. By funding our own deductible layer, we change the math of our renewals for the district's benefit: Small claims are expensive for carriers to process, so they charge high premiums to cover them. By paying these internally with our reserve we become a lower-risk profile, which invites more competitive bidding from insurance carriers. A district’s "Loss Run" (claims history) is the primary driver of premium costs. Utilizing the reserve for minor repairs prevents them from being recorded as "claims" on the district's permanent record. A cleaner claims history leads to lower experience modifiers, which should translate directly to lower annual premiums over a 3-to-5-year horizon. Attached you will find the resolution to establish the new reserve, which may be created by a formal resolution of the Board of Education. After consultation with our auditors and legal team, the following parameters are recommended: We recommend an initial funding of $500,000 from the unassigned fund balance. The total amount of this reserve cannot exceed 3% of the annual budget, exclusive of any planned balance presently authorized. Based on our current budget, the maximum allowable threshold is $6,607,993. Funds are accessed via budgetary appropriations for the self-insured property loss purposes for which the reserve was established. The reserve cannot be reduced below the total amounts estimated to be necessary to cover incurred but unsettled claims or suits, including related expenses, except by the payment of those specific losses. Any interest earned on the monies deposited for this reserve shall accrue to and become part of the reserve. The creation of this reserve will place the district in a stronger position to mitigate the impact of rising premiums while ensuring we meet our liability for potential property losses. Please let me know if you have any additional questions.
RESOLUTION ESTABLISHING A PROPERTY LOSS RESERVE FUND BE IT RESOLVED, by the Board of Education (the “Board”) of the Webster Central School District (the “School District”), pursuant to Section 1709(8-c) of the Education Law, as follows: 1. The Board hereby establishes a reserve fund to be known as the Property Loss Reserve Fund; 2. The source of funds for such Property Loss Reserve Fund shall be such amounts as may be provided therefore by budgetary appropriation or other sources authorized by law; 3. The Treasurer is hereby authorized and directed to deposit and invest the monies of such Fund in accordance with Sections 10 and 11 of the General Municipal Law and other applicable law; 4. Such reserve fund shall not be reduced to amounts less than the total of the amounts estimated to be necessary to cover incurred but unsettled claims or suits including expenses in connection therewith other than by payments for losses for which such reserve amounts were established, except the Board may authorize use of such funds other than amounts allocated for unsettled claims or suits including expenses in connection therewith to pay premiums for insurance policies purchased to insure subsequent losses in areas previously self-insured, in the event of dissolution of the self-insurance plan; 5. The sum of up to $500,000 being no more than three percent (3%), exclusive of any planned balance presently authorized, from the unreserved fund balance of the annual budget, is hereby appropriated to such fund; and 6.
This Resolution shall take effect immediately.
February 3, 2026
_________________________ Heather Murphy, District Clerk Webster Central School District