PLAINFIELD, NJ - Business Administrator Gary Ottmann of the Plainfield School District gave an overview of the district's finances at Tuesday's Work & Study Meeting.

Ottmann began by sharing slides from a meeting he, along with Attorney Phil Stern, then Board of Education President Emily Morgan, and board member Carmencita Pile had had in Trenton in June 2017 with the Commissioner of Education.  During the meeting, they reviewed district challenges, some, Ottmann said, that are due to decisions made by the Department of Education over the years.

Speaking tonight, Ottmann said one of the challenges for the district for the current year was an $8 million deficit.  "Luckily we did receive over $2 million in additional state aid in July.  We used the insurance proceeds from 504 Madison, we eliminated 65 positions, we cut ten percent in supply money from all schools and departments, and we had savings from transportation.  So when all was said and done, we entered the current year with a balanced budget."

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He said they had pointed out to the commissioner the challenges of having charter schools in the district.  There are five in Union County, all of which are in Plainfield. 

In tonight's overview, he said, "As you can see, in two years, the growth in our charter school payments of over $6.6 million, +41% in two years, you can see further out when we're talking about this year's budget that we're looking at a substantial increase for next year as well."

While charter school payments went up $6.6 million, the state aid, upon which the district is so dependent, only went up two percent in that same period, or $2.5 million. 

Ottman continued, saying that district enrollment growth is up 27% over eight years, from 6,372 students in April 2009 to 8,112 students in April 2017.  However, he said, the bad thing is that the state hasn't been living up to its funding formula.

So as of this year, according to the formula from the Educational Law Center, Ottmann said the district has been shorted $112 million.  "But this year alone, per the formula, we're shorted $62 million."

Another challenge, he said, is that because the tax base has been so low for so many years, when you do a two percent increase, that amount generates less than half a million dollars.

And the fund balance is yet another concern.  "We've been going to the piggy bank every year to balance our budget.  This year, we took $6 million out of the piggy bank."

Ottmann said that when they presented to the commissioner back in June, at that time they had anticipated for FY19, which starts in July, that "we would have zero."

Last year, he said they told the commissioner there would be a projected $11 million deficit as of July 1 if there was no change in state aid.

Next year's proposed budget is $199,654,317, an increase of $5,789,705, or three percent.

The bad news is that there are no new positions, no new programs.  "This is strictly a maintenance budget.  Which you'll see will be hard to maintain." 

Ottmann also noted it's hard to plan the expenditure side of a budget when you don't know what your revenue side is.  But he said the district is fairly certain of the federal and local monies.

Federal is anticipated to go up less than $20,000 as a result of Medicaid reimbursements.  The local revenue is projected to decrease $5 million.  The big question mark is what's going to go in the state column.

Revenue Comparison

FY18

FY19

Federal

$4,338,727

$4,357,055

Local

$39,415,559

$34,279,905

State

$150,110,326

?

A two percent tax levy increase is being recommended.  "We've raised taxes 37% since 2008, and with the new federal tax laws limiting your deductions, we just think it's problematic to go more than two percent."

He reiterated that the district used $6 million to balance the budget, leaving $498,499 in the piggy bank, to be used for the FY18-19 budget, which is increased by $5,789,705.  Four categories are budget drivers:

  • Charter schools:  $2,815,618
  • Salaries, including PEA and PASA contracts:  $2,369,000
  • Prescription coverage:  $325,709
  • Tuitions:  $279,378

The state will dictate the exact amount but right now the FY19 budget for charter schools is $25,000,000, an increase of $2,815,618.  Ottmann said that both Cresthaven Academy and College Achieve are each adding another grade.

It was also noted that the charter school budget comes directly from the state.

The FY19 budget for salaries is $83,646,453, an increase of $2,369,000; the prescription coverage budget is $4,536,000, an increase of 52% in four years.  And the tuition budget is $14,447,127, an increase of two percent.

There was some good news in the form of proposed capital projects:

  • Cafetorium addition at Barlow
  • Cafeteria renovation at Hubbard
  • Cafetorium air conditioning at Stillman
  • Locker replacements at secondary schools
  • Locker room renovation at PHS
  • Elevator replacement at PHS
  • Pool renovation at PHS
  • Stairwell renovation at PHS 1916

The user friendly budgetpdf is available on the district's website. 

Next steps include a special budget meeting on Thursday, March 15 when the district learns the amount of state aid it will receive, and the amount of money that will be needed for charter schools. 

A preliminary budget adoption will take place on March 20, and the final budget adoption date is May 8.

(State Funding Formula)