BRIDGEWATER, NJ - Current plans for the 2017-2018 Bridgewater-Raritan Regional School District budget are to use some of the banked cap money from 2014-2015 and raise the tax levy by 3.23 percent – and some board of education members said they are willing to entertain a little bigger jump.
Business Administrator Peter Starrs and Superintendent Russell Lazovick presented a plan for the upcoming budget based on board of education consent to use some of the banked cap money from previous years in its budget configuration, allowing for an increase in the tax levy by more than 2 percent.
Every year, the district approves a banked cap, which, by state law, allows a district that has not exceeded the tax levy cap of 2 percent to bank the unused tax levy for use in any of the next three succeeding budget years.
If a district does not go to 2 percent in a given year, the money that would have been used to go to that cap is saved for a three-year period.
Currently, the district has $562,087 banked from the 2014-2015 budget, $1,653,331 from the 2015–2016 budget and $60,611 from the 2016-2017 budget.
The original proposal from the district is to use $416,714 from the banked cap in the 2014-2015 school year, with a remaining $145,373 set to expire.
Starrs said the district is beginning its planning for the future, starting with a number of permanent allocations that will be included in the budget each year.
“This current year, we have $0 toward facilities in the operating budget,” he said. “As reviewed, we need $4 to $5 million per year for the foreseeable future to maintain the buildings.”
“The technology plan, that is better funded as far as our needs, and curriculum will probably never be enough, but program evaluations will dictate where that money goes,” he added.
Lazovick said there has not been consistent planning in the past with regard to facilities, and it is not practical to try and maintain everything out of the capital budget.
“Three-quarters of our budget is staff, and oftentimes those increases come well over the 2 percent we’re allowed,” he said. “While we want to reward the staff, we have to keep the buildings up.”
Lazovick said that, in terms of facilities, they are trying to put everything into a multi-year plan for the future.
According to Starrs, the budget as outlined currently requires permanent allocations of $500,000 for facilities, $734,000 for curriculum and $400,000 for technology.
In addition, there is an additional $1,049,000 needed for a special education program expansion, which includes money for an autism program, pre-kindergarten program, behavioral program and multiple disabled program.
Starrs said close to 77 percent of the budget is spent for personnel and staffing, with another 6 percent being discretionary spending.
“Other things that are mandated or required are tuition requirements, transportation, operations maintenance,” he said. “We are a personnel heavy industry, as we say every year, and we try to do the best we can with the remaining portions of the budget.”
With the estimates, the budget is projected at $150,213,386, an increase of 2.73 percent over the 2016-2017 budget of $146,226,814.
The funding, Starrs said, is expected to come with a 3.23 percent increase in the tax levy – from $129,859,985 in the 2016-2017 budget to $134,051,557 in the 2017-2018 budget – plus an expected flat state aid of $9,445,829.
Starrs said the district is also reducing its reliance on fund balance, reducing it by 2.96 percent from $6,921,000 in the 2016–2017 budget to $6,716,000 in the 2017-2018 budget.
As for the banked cap, Starrs said, the district is required to exhaust all its spending authority before it can raise the tax levy above the 2 percent cap. The expectation, he said, is that the district will have a $1 million health benefit cost adjustment, which would then necessitate only needing some of the banked cap money from the 2014-2015 year to round out the expenditures in the budget.
That number – which comes from the fact that health care costs are always increasing and are required for the district to pay – will be finalized in February.
“This is a fairly solid number that we’re working with here,” Starrs said.
If the board chose to use the remaining $145,000 from the 2014-2015 banked cap funds, the tax levy would be about 3.3 percent higher than last year, instead of 3.23 percent, Starrs said.
Board member Lisa Weinstock asked if the administration is planning to give the board a budget that also includes that extra $145,000 banked cap so they can determine if that should be used as well this year.
Lazovick said that money would probably go to facilities to take away from the reliance on the capital fund.
Board members also questioned whether it would be beneficial to take even more money from the banked cap this year, potentially using some of the 2015-2016 saved money. Lazovick said it is certainly an option, but that they are trying to do things gradually, rather than all at once.
“One of my recommendations was to take a level step this year, knowing we have more money next year,” he said. “So we’ll be having this same conversation next year to do a gradual plan so as not to shock the community.”
“If the board wants to have that conversation, we can take from the 2015-2016 banked cap too, but the board’s goal was also to save some taxes,” he added. “Hopefully we can build this over time.”
The biggest question, Lazovick said, is to determine what $4 million in facilities costs equates to and then go from there.
“We answer those questions and then look at what we need in staff and administrators,” he said. “Those are conversations we have to have first.”
Board member Barry Walker noted that the budget as presented does not address the issues with full day kindergarten, and the extra facilities needs for that. He said they could potentially take that remaining $145,000 from the 2014-2015 year and use it for that.
“We are trying to move slowly, but we have many goals, and it’s going to ebb and flow over the next few months,” he said. “I have my concerns both in upping the budget and in cutting.”
Board member Jeffrey Brookner said he believes not using the remaining $145,000 would be fiscally irresponsible.
“It’s one thing to say we don’t really need the money, and we could find a way to get around using it, but I think we have a real need for more,” he said. “We’re talking about a paradigm shift, and it’s a different way to approach. We’re not spending enough to keep the facilities from falling apart.”
“I think it is irresponsible to say we will continue to starve the school district of resources that need to be spent,” he added. “We’ve cut a lot of things in a lot of areas, and we need to at least stop cutting, if not restore things.”
Brookner said he would be open to bringing back a fraction of the $1.6 million in the 2015-2016 banked cap.
Lazovick said the district is currently in a position where they’ve been cutting to keep programs afloat.
“Are people the most important thing in the district?” he said. “Yes. But there other responsibilities that we have to maintain when running a school district, and we’ve been cutting some of those to fund other things.”
“The recommendation would be to not touch capital reserve and start adding money going forward,” he added. “What I’m telling you is we will always be playing catch up. We are looking to rebuild the base over the next couple of years.”
Most board members said they would be in favor of taking the remaining $145,000 from the 2014-2015 banked cap into this year’s budget. Some expressed an opinion that they would consider approving a budget that takes about half, or $600,000, from the 2015-2016 banked cap funds.
Starrs said that would necessitate increasing the tax levy by about 4.5 percent, as opposed to the 3.23 percent.
Board member Ann Marie Mead said she would like to see more concrete information and evidence of the need for additional funds before agreeing to how much banked cap to take this year.
“I’m convinced that we need to invest, but I don’t think it’s responsible to say yes without information,” she said.
Board president Jill Gladstone agreed.
“I would like to see how the strategic plans are drawn out, and how they’re implemented before taking all the money,” she said. “I’m open to taking part of the 2015-2016 banked cap.”
Lazovick said taking the money allows the district to spend that as opposed to using money from the capital reserve, which is supposed to be what the district saves.
“We’re strengthening the foundation of the budget,” he said. “It doesn’t force us to go into savings. Basically the school district is getting a raise rather than having to go into the savings account.”
“Trying to balance the steps, I think, would be most responsible,” he added. “It is balancing the needs of the district with the needs of the community.”
Board vice president Melanie Thiesse said she believes the goal is to have 10 percent of the budget in capital reserve.
“I think that’s the responsible thing to do,” she said. “We need to have money to be able to fix things if something happens.”
Resident Howard Teichman said he understands the board’s concerns, but he is also concerned about the talk about more spending. He said he believes that if the district raises the taxes by a large amount, and then has to go to a referendum for additional spending for something like full day kindergarten, it is unlikely such a question would pass.
“There are people out there who care a little more about what their tax bills are than some of the members of this board,” he said
The board is expected to approve a tentative budget March 14, and a public hearing is scheduled for April 25. Additional conversations about the budget in the meetings leading up to the March 14 meeting are also expected.
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