Why did he bring the knife to school? I haven't seen that point addressed? Get to the root of the matter then beat his ass.
I would not pawn the kid off on the school system especially since it causes a financial burden but I do agree the kid needs some good consequences. Got a hole that needs dug?
Have him dig a hole, then fill it in, then dig it again
- kind of like the hard labor mentioned earlier. Got rocks or bricks that need moved?
Cheers
K