good evening I'd like to call the meeting to order and welcome everyone uh good after good evening adequate notice of the special meeting of the count board of education has been provided to the home News Tribune the local Source uh as a legal ad on February 27th 2025
the craford chronicle The Star Ledger on 20 uh February 21st 202 5 a copy has been filed with the k b clerk posted in the Board of Education Office the Harding and brle schools and the Kenworth burough Hall as is provided by the open public meetings act this
evening we are videotaping the meeting and hopefully be able to post it to our YouTube page tomorrow but we currently are not live streaming due to outage of the internet in the area uh if that is resolved during the course of the meeting we will live
stream thank you at this time can we please rise to salute the flag I pled allei to the flag of the United States of America and to the Republic for it stands one nation under
God indivisible with liy and justice for all Mr Galo can we please have a roll call yes biner here Koli here David here Ferrara here hather herina LTI panichi here Zimmerman
we have Quorum several board members uh there is a bug going around and some board members do have that do you like me to read the purpose uh sure okay to review the uh tonight the purpose of this meeting is to review the annual school budget for the FIS
school year 2025 to 2026 and approve the finalized budget to be submitted to the executive County Superintendent by the statutory deadline of March 19th 2025 at this point in time we will have the budget presentations
and board discussion on the 2025 2026 proposed budget uh good evening everyone um yeah so uh been as Mr Gan had said at our last meeting the budget process begins um months and months and months ago and we're finally here on March 18th to talk
through um this presentation about where our budget stands right now um our agenda is there up on the screen uh we've had some budget goals that I want to go over uh and talk about the school experience and we'll go into the impact of state aid we'll talk about the status
of the budget right now with expenditures and revenues U Mr talk about hand cap the reserves and our tax so that'll be our agenda uh for the next few minutes um I want to start off by just talking kind of globally about our goals and how we entered into the budget
process for 25 26 um we have been hearing from our executive County business administrator who have been hearing from the state uh and all indicators were U pointing to the fact that we would not be getting um any
great gifts in state this year um so we began our budget process back in the fall back in October even as an administrative team knowing that we should not expect State 8 to come in and that we could expect there to be further Cuts in addition to what we experience
last so when we entered into the budget process this year we did not put in um a lot of new uh or added um requests for supplies professional development um so
we we really started off be um with that said though um our other goals included prioritizing acch that's our main District goal uh that's our district goal for this 25 24 25 school year and so we're extending that obviously to
next school year um academic achievement so we'll see that our budget prioritizes academic achievement um we're also moving forward in funding programming to meet the needs of diverse Learners uh you heard at our last meeting um Miss Koo talking about
how we're expanding our LD program we heard from Miss H talking about how we're expanding our professional development for our teachers and our multi- Learners um so we're really proud that our budget does that um also I'm really proud that our 2526 budget
maintains all the curricular co-curricular and athletic opportunities for our students that was the priority as we set off to develop this uh budget and we are able to keep that as I'm also really proud that we're providing new course offerings and new
career Pathways specifically here at rley um we're enhancing Innovation at both schools through our stem um work and then of course a main goal for us through our budget process is to uphold a fiduciary responsibilities to the
taxpayers the community fores so that's a huge priority for us and we make sure that that's um in terms of some specifics with the schools um the budget does the following uh so you'll see this playing
out um it continues to fund educational materials and resources that our teachers need we have a new math program coming online next year we continue to focus on literacy continue to focus on Innovation um so these are our district priorities these are our district goals and you'll
see those goals um reflected in the budget um we're also really excited to be offering full day prek moving forward um so our budget incorporates that uh we're increasing as I said course offerings and programming up prly um and
then we're keeping all current operating student athletic and extra programs in place so students will not be feing any um impacts to because um we're committed to professional development in our budget and we have worked to find efficiencies
within the leadership team um so we're working to make sure that we are lead and mean uh as a as a district Personnel uh as I said at the beginning um when we went into this budget we did not add a whole lot of supplies New this
new that new this new that um because we knew based on uh reading the tea leaves and hearing from our superiors at the county level and the state level that there was not going to be um much State a coming our way we also know that our expensive RIS so we didn't have a lot to
cut when we look at our budget so um we are having to cut some staffing this year and I think that's the difference between the 2425 budget process that you saw last year and then this year's process last year when we stood up here this time last year we were talking
about cutting um $ 1.5 million wor the supplies and um PD curriculum and those types of things we cut those last year we didn't bring them back this year because we don't have those things to come this year um and that's an unfortunate reality um so a lot of what
we have to talk about is is personel um personnel as you know is the district's biggest expense that's not throwing shade at anything or anyone that's just a reality of all schools of all districts and of most companies and anything uh where people exist Personnel is your
largy um so that that is where we are going to see some cuts um when we think about cing Personnel we think about these different complexities um first and foremost we want to eliminate new positions that were proposed and that did happen um we had
Visions back in the fall of some new positions those never even made it on to the budget um dos to because we need come to FR uh we thought about attrition um we did this last year as well thinking about retirements resignations
and non-renewals and utilizing those um those positions as best we can um so for example we ask the questions are we replacing someone who's retiring are we replacing someone who's resigning is there opportunity there to find a
different way to provide the supports for our students and what our students means to programming by maybe not replacing cling intern Bas to do that um so you see if if so can the staffing needs let vacant be met way and I
believe that we've done that and we're doing that and continue to explore those um and then we just OB obviously when we think about Personnel we have to keep an eye on teacher certifications staff CER certifications we're very mindful of class sizes um and then we're of course
mindful of any educational of any reduction course turn it over to Mr G Going take us into a little bit more about our [Music] numbers Jes uh thank you for the
opportunity to uh review the proposed comped budget for submission to the executive dependent um so like to start off with the state aid um as a note here we see an overall
reduction in state aid however it was reported uh by certain sources of the district received an increase in Aid um this is due to how certain AIDS are categorized uh the do only reported um AIDs that are
actually categorical AIDS um associated with the funding formula um they left out the calculation for stabilization Aid um which was a legislatively proposed and funded Aid that we received
in June after the budget was uh adopted at the uh public hearing um so that did not want L up on their analysis but I'm including in our analysis because I don't care what you call it it's still the loss of state A would you call it a
categorical Aid or a stabilization Aid it's still reflected as a loss of state aid um um and uh so that's how we're reporting it um and it's clear there that the LW stabilization a did have an
impact on um uh the overall uh Aid getting into the legalization Aid again we lost a significant amount of Equalization Aid we did receive some additional uh categorical AIDS and choice aids to uh make up some of that
difference um but we see that trend of decreasing uh Aid uh last year we delv into the historical Narrative of the school um funding Reform Act or seph uh and explore the reasons behind the loss
of the utilization Aid as we prepare to prepar tonight um to consider the approval of the intive budget for submission to the executive County Superintendent uh we still struggle with that realization uh that there Still Remains
a Discord between and inconsistencies between sephra and 2% tax that account seph implemented in 2008 2009 school year established the adequacy budget uh which theoretically def find uh uh the
sufficient amount uh to spend on education uh initially there wasn't much contention regarding this uh formula itself but really focused on some of the Howell it was going to be funded however in the introduction of
the 2% tax levy cap in 2002 2010 two years later through a real monkey rench into the working of sephra um while sephra set forth a notion about an acus budget indicating that all schools should spend a reasonable amount on
education um based on this model it also stipulated that schools should contribute their fair share based on local demographics including personal income equalized property valuation and population low their students uh districts will lower property uh and
income levels would receive Equalization Aid to bridge that Gap however the % cap of restricted districts from being able to fulfill their fair share obligations in our case while the state asserts that count with property and income levels
are increasing implying that our community's ability to pay or contribute fairly should increase accordingly imposition of the 2% cap limits our capacity to do so uh with counterart shifting demographics increased personal
income and elevated uh equalized property valuations we we witnessed a significant reduction in our equalized Aid uh with little ability to raise our taxes uh to offset the loss consequentially uh Kart's budget fell uh
continues to fall well below the adequacy levels envisioned by sephra so we're really trying to play catchup at this point and we're still falling behind uh getting into the expenditure side overall costs are increasing you
could see that in your own household uh we have salary in increases attached to collective bargaining agreements health benefit obligations property insurance uh is increasing utilities are increasing and all these things have an A a challenge when you're talking about
a 2% budget cap uh in addition um due to the loss of state aid you can see significant reduction here in fund uh 11 current expansion totals many many categories are showing reduction the revenues in a school
budget need to equal the expenditures balance budget here um so I'd like to focus on three areas um the board members I do I did um include some of these um smaller Pages blown up versions for you to follow along on um so the
local tax levy here at 23 million uh 6 3 3 67,5 is increased by 2.75% we'll talk about why we're allowed to go beyond the 2% in a little bit I'd also like to focus on that yellow line
um which uh is the um fund B uh Bal budgeted fund balance or our use of reserves to offset the tax levy of 1, 8,416 uh and then finally down at the bottom uh down uh in The Debt Service Area uh in
2025 we made a $474,000 uh contribution to Debt Service to offset the tax levy that's conforming with the board's original commitment to use $2 million um of capital reserve towards the referendum so if you take those two
lines there where you see um um they would be ly that's tight um let's see line 855 transfers from Capital uh Reserve you see the 1 million in the one year the 23 24 year you see
the 1 million uh $525,000 and then second year see the 4 uh 74803 combine those two that's $2 million that was the board's commitment to reduce the tax levy uh due to the referendum and see now we're not we're
not appropriating any additional funds in 25 26 to do so so we're getting up to a point where this will be the year um we started that process last year where there was a gradual increase and this is the final year after this year your your
your your tax levy will your tax uh Levy will stabilize regarding Debt Service it will always rough run around that uh that that that same dollar amount plus or minus and until 2930 when the um the 2016 debt drops off at that point you'll
see a nice decrease in the overall uh tax levies so where do we stand today uh the first chart on the top um is a look at the budget from year toe utilizing unadjusted figures provides a good look of how the
reductions and Aid have impacted the district mostly negatively um the chart on the bottom adjust the current year uh for prior year incumbrances uh this is how the state uh requires us to submit the budget uh and is more in line with the
generally accepted accounting principles um so you can see there there's a significant decrease um uh in the budget that's because there were uh prior year encumbrances included in the adjusted figure uh uh in the general fund um
specifically in capital outlay um so sometimes that it's hard to follow so that's why sometimes I I prefer to use for um graphical purposes the chart above but the chart below is how it you would see it in the actual budget that
was is being submitted uh to the executive County Superintendent as well as the advertised budget and ultimately the userfriendly budget that would be on our website uh so report of District ad we touched about a little bit about accuracy uh a little while ago um uh
regarding regarding the state formula uh which theoretically defined the uh sufficient amount to be spent on education uh here you can see the calculation results in the proposed budget that is well below the expected
adequacy uh level so we're uh 460 400 I'm sorry $4,690 th000 below adequacy several years ago we're above adequacy uh a budget that's above adequacy you have to put in a disclaimer in the budget advertisement of why you were above it
and things like pre uh our prek program our all day kindergarten program certain programs that exceeded it um unfortunately we on the negative side so it's swung a significant amount uh uh in the past several years and that's all due to the loss of Equalization
Aid um the next piece that ties into the adequacy is the minimum tax levy this uh the sephra formula uh also stipulates that schools should contribute their fair share um based on local demographics including as I said earlier personal income equalized proper
property values a population of lwi income students the districts with low property and income levels would receive that Equalization a to bridge that Gap uh in your packet tonight um is the actual state aid printout that
calculates the district's adequacy budget and local fair share and if you want to play along and take a look at this it's fun to follow you know N1 to N3 to it's like a bingo game uh but you could sit here and you could actually
figure out uh how the mathematical equation and how the kind of where shifting demographics uh in in the personal income and the elevated um Equalization values have resulted in that reduction of Equalization a uh you
could also see here some of the subtle changes to to the formula the legislature made this year um which use a three-year average for equalized valuation and District income so if you look up to the left uh I'm sorry the right side the top figure
you'll see three figures there under the equalized valuation which is a three-year average calculation so in last year's formula all they used was the most recent Equalization to calculate your Equalization a um so but
this time they're using a threeyear average so if this was last year they would have used the 2024 figure which was 2 Mill 2 b559 th000 but now they're using that three-year average you can see that as
well for the income uh level so just thought that would be interesting for you to see um the tax levy cap calculation you essentially come up with that formula by
taking your prior year tax levy increas ining by 2% now there are allowable adjustments we're eligible for an allowable adjustment this year for health care costs that in increase above a certain amount uh so that 174,00 adjusted tax levy to come up with
what our tax levy cap is of 2 m 23, 367,000 the disconnect between the uh adequacy budget and the inability to raise taxes beyond the 2% um the state is
considering a tax levy incentive initiative uh this initiative is aimed uh this is a blurb from the state uh from our county office that you could read up there um this initiative is aimed at districts that are spending below the adequacy and
below their local fair share uh d details are not yet known uh but it could allow us to increase the tax levy beyond that 2.75% um and increase the the the tax levy further if the board so chooses
rumor has it that it's going to either be a percentage or a dollar amount don't know yet um but apparently it's not ready for tonight obviously and hopefully we'll have more information and we'll have a discussion uh between
now and the public hearing um okay use of Bank cap um we aren't using any Bank cap we haven't um um um generated any additional bank cap um so there's not much to talk here Bank cap isn't real dollars it's really the
ability to exceed the cap um but if this um incentive I um what do they call it what they this if this tax levy incentive which is a terrible term by
the way it's not an incentive it's not incentive to it's only incentive to what en entice us to increase taxes on everyone yeah okay so it's not an increase in state aid it's nothing it's just our ability to do so so it's like it's like adding something to your your bank
cap so uh that's Bank cap uh recapitulation of balance B es um our reserves are play a very important role um in balancing the budget uh as I've talked about year after year I'd like to
break the res Reliance on using the unassigned and the restricted uh legal Reserve fund balance um it's okay to use capital reserve and maintenance Reserve um and those but those two uh what we call Surplus un
assigned and legal restricted legal Reserve I'd love to be able to to to break our Reliance on those um there are various different categories uh of the recapitulation of balances each category has specific requirements on how it
could be used how it could be accumulated and the maximum levels that can be um uh accumulated so we look at the use of reserves um the first is the unassigned free balance our goal should be
not to use this free balance ever our goal should be to have this as zero in the future um makes it very difficult when you have loss of state aid uh but at certain times we were adding to our free balance and adding to our reserves as part of
the budget process um um it is essentially using our savings to supplement our expenses um our current proposals are calling for the appropriation of 1,814 $1 to reduce the tax levy uh this
is a reduction from the current level uh which was $1,816 th000 uh so we're moving in the right direction um and we're able to if you can see here uh last year we had almost zero on that ending balance 630
on the unassigned um we're able to get a little bit back to normal and be have a little bit it's still below the recommend the 2 % uh but it's better than where we were uh at the end of uh last year's Budget moving into this time
of the year capital reserve uh we will appropriate $1,100,000 for projects that I will uh outline momentarily um uh and as I previously discussed earlier there is no capital
reserve transfer to The Debt Service um uh We've committed our we've made our commitment to you our original commitment of $2 million to reduce the uh impact on the uh uh referendum um that commitment uh um has been completed
and maintenance reserve and emergency Reserve we anticipate no um Appropriations uh this current year even though we do have some balances um keeping emergency Reserve um based on discussions with the finance committee
for the time when we have uh some type of um add District placements that come into the district that we can't deal with um that would be the best way to deal with um using that those funds um
if need be capital projects we're looking at um doing this $1.1 million projects these are all tied to tangentially tied to some of the uh work with the referendum as you know we cut a lot out of the
referendum but we also knew that we were going to generate a significant amount of interest um uh uh during the process because the non proceeds that we started to invest immediately have been earning um plus 4% uh interest um so we've been
generating a lot of money so the these projects again also have no tax uh Direct Tax impact on it um we're looking at uh spending $28 $5,000 in the area of Safety and Security upgrades uh in the Middle School um and the additions the
science Wing uh spending another $410,000 on various projects um including Furnishing uh furniture for the new uh middle school and then uh finally site improvements of $45,000 including some work on the
Harding playground to supplement the uh money that uh we received last year uh from uh Senator cryan's uh with the senator of cryan's help in receiving that grant for um the playground so we have a nice little Nest Egg to work out
uh Harding's playgrounds getting into the tech tax impact um the total current expense uh is increasing uh by $148 on average house assessed at
$14,888 debt Services increased inreasing 112 almost $113 for a total of $261 uh doll per household uh as I mentioned earlier that debt service will be basically stabilized so next year's
we'll be in the roughly the 500 to $600 range so you're not going to see that significant increase you're going to still be paying it uh the $600 but it's not going to look like an increase that people you know are very concerned about rightly so about the increases in
taxes um this is something that I put together you have this uh also in your your um handout so you could look at it we look at a lot of different
um data points when it comes to the budget so in this particular case and these are all tied to the current expense budget not the total budget just the current expense budget so you have to tax rate you have the tax levy you have the net valuation taxable you have
equalized valuation you have District income all those have different effects and impacts on one another so you look at the tax rate the tax rate is going up 3% it's going to 3.48 you should would think that the tax
levy is going up 3% it's not it's going up that 2.7% CU that's a hard dollar amount okay so there's things that happen in the tax rate that affect it that don't just correspond to a 2.7% increase and that for example could be
the net valuation taxable you could see here how we've had a decrease in the net valuation taxable so that net net decrease in that net valuation taxable had an impact on the tax levy a tax rate I'm sorry a negative impact on the tax
rate as your net valuation taxes taxable levels increase your ta rate tax tax rate should decrease unfortunately our tax net valuation tax B has been decreasing at the same time our
equalized valuation has significantly increased and the net equalized valuation is tied to our state aid so that increased over that same period of time 61% whereas your net valuation decreased by almost 5% and
then to compound it the district's income meaning the wealth of the community in total has increased over that same period time 33% so you look at it and you say well our
current expense you could see there we've done a pretty decent job in keeping our current expense tax levely relatively level um it's never increased above 3% um and it's the lowest it's gone is
2% so it's ranged from 2% to 2.91% for uh over that same period of time of of of 16.17 per. a lot of that has to do with our inability to raise the taxes beyond the 2% um but you can see there that I believe that you're this district is
doing a it's it's it's is responsible to provide a decent tax levy um despite the challenges of the net valuation tax and decreases the equalized value increasing um so there are any questions about
that slide um when we get to the public hearing I'm going to break this down even further and add another section of of actual where we've gotone actual with the operating costs of the district because that's really going to be
interesting to see I just didn't have time today internet crash didn't have time to do much about it so so um um okay so moving on tonight's resolution um it's covering the approvals we're not using Bank cap we're
approving withdrawals for Capital and Debt Service we're approving capital projects we're approving submission of the budget to the executive county superintendent and it sets a sets a Tex a tentative tax levy um for both current
expense and Debt Service for a total uh uh total tax levy to be raised at $25,865 584 so what's next tomorrow is the statutory deadline for submission to the executive County
Superintendent um hopefully internet's up um March 14th to between March 14th uh which was actually should say March 19th and the 29th will continue to review the budget focusing on efficiencies and savings I know the
leadership team has some discussions regarding Personnel that they still have to flush out um and April 30th is our public hearing which uh at time we will hopefully submit the uh public here uh public for public discussion and
opportunity to uh set the budget we'll also probably have uh a couple committee meetings between now and then um like to meet with the finance committee uh if this uh initiative tax levy initiative comes to fruition to see what their
appetite is for um going further into that um so if you have any suggestions for the committee um um you know feel free to give them a a shout out okay any
questions no okay thank you Mr Gana no questions on resolutions or anything before we open up the meeting to the public and then vote at this time we would like to open up the meeting to the public for comment is there a motion to open up the meeting
to the public second motion made by Mr fr seconded by Dr canoli all those in favor of opening the meeting to the public please I I opposed eyes have it motion carried Mr ganela [Music] uh public comment is will now be
accepted the Board of Education sets limit for the public to speak at the board meeting to 5 minutes per person unless prior permission has been granted by the board to extend time pursuant to Board of Education bylaw 0167 for the record please include your
name and address uh prior to making your comments thank you any public like to make any comments at this time please step up no okay thank you um see none motion to close the public portion of the meeting okay motion made by Mr David
seconded by Mr biner all those in favor of closing the meeting to the public please say I I oppose eyes have it motion carried the meeting is now closed to the public Mr Galo we ready to vote on roll call resolutions please yes there's one resolution on this evening's agenda to adopt the tenative budget for
submission to the executive County Superintendent um biner yes roli yes David yes Ferrara yes panichi yes motion carries thank you we have no need to go into Clos
executive session so if we have a motion to adjourn on a second so Move Motion made by Mr David seconded by Mr H Mr H or Mr Ferrara all those in favor please say I I oppose eyes have it motion carried the meeting is now adjourned
thank you everyone for coming thank you