OLEAN — The City of Olean bus system has clocked more than 70,000 rides and counted a $26,000 surplus for the fiscal year that just ended May 31.

The successful balance sheet has prompted state officials to suggest placing the money in a special transit capital reserve account for future needs and possible expansion, said Community Development Director Mary George, who administers the Olean Area Transit System.

The Olean Common Council approved the special fund in a resolution adopted, 6-1, Tuesday night.

George said the state and federal governments provided $69,251 in funding last year and would normally reduce the following year’s funding. But instead, the state Department of Transportation suggested using the money to boost the OATS resources.

The city stepped up in 2007 to shore up the struggling OATS system in a temporary takeover from the Department of Social Services and other county agencies. Now, the city has expanded routes and has seen some increase in ridership while collaborating with St. Bonaventure University and Cattaraugus County.

George said the city is now considering a new partner, the Rehab Center, to share a bus. Even though the final expenses for the year are not yet complete, the reserve funds will soon help the city pay the local share of a new bus that is fully funded and could also extend service into Salamanca and other communities.

Ward 4 Alderwoman Linda Edstrom cast the only vote against the resolution and said after the meeting that OATS should not be a city function.

“But we saved it, and here we are now,” she said.

The Council also suspended the rules to vote immediate approval of a resolution seeking lead agency status and declaring the replacement of the East Olean sewage system and a new pump station would pose no significant environmental impacts.

During a committee meeting before the session, aldermen sent a measure to the Council for future action that would allow parking on the area between the street and the sidewalk in commercial and retail areas on North Union and West State streets, if the owner paves the area.

The aldermen agreed to table Mayor David Carucci’s request to authorize a $15,000 contract for paralegal services with City Attorney Dan DeRose’s law firm, Kehoe & DeRose. During discussion on the issue, several aldermen said the requested 2009-10 term is problematic because the 2009 payment has already been approved. “His firm will still get the legal work” if the mayoral administration changes and DeRosa is not reappointed, said Council President Ray Wangelin of Ward 3.