Schools

District Sees Additional $2M to be Spent in Tentative Budget

Board of education approves tentative budget with a 1.5 percent tax increase.

With an increase of $1.3 million in state aid coming to the district this year, changes were made to the predicted 2011-12 school budget that will require only a 1.5 percent increase in the tax levy, rather than the maximum 2 percent originally predicted.

As introduced and approved Tuesday, the tentative 2011-12 school budget sees an increase in the total budget from $128,639,881 this year to $129,503,750 for the coming year.

As far as the tax rate, Bridgewater residents will pay $1.30 per $100,000 of assessed property value, an increase of 6.17 percent over the 2010-11 rate. This is equal to an increase of $310 on a $410,817 home.

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Raritan residents will pay $1.27 per $100,000 of assessed property value, only a 0.24 percent increase over the previous year, or an increase of $10 on a $320,441 home.

According to business administrator Peter Starrs, the tax rate is dependent on the budget increase, the state-mandated ratio for the split between the two towns and the rateables in each town.

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“Bridgewater rateables dropped 3 percent this year,” he said. “Raritan has gone up 0.02 percent.”

Superintendent of Schools Michael Schilder said the change in the budget was first articulated after Gov. Chris Christie’s budget introduction Feb. 22, which was followed by the announcement of state aid for school districts.

is set to receive , an increase of $1,331,546 from this year’s allotment of $5,386,217.

“It was an unexpected increase,” Schilder said. “A welcome increase.”

From there, the district was also informed of other incoming funds, paving the way for an additional $2,248,648 available in the budget.

Aside from the additional state aid, Schilder said, the district found it had an extra $807,933 to level the budget.

“We were predicting receiving 15 percent less in aid,” he said. “To come up to the flat aid, there was an addition of about $800,000.”

In addition, Starrs said, the state determined that the district had too much money in its fund balance, based on a formula handed down by the Department of Education. That amounted to an additional $39,203 the district was required to spend in its budget.

And finally, Starrs said, there was a reduction in the amount of money the district needed to budget for school development authority, which requires paying back interest from grants given by the Department of Education.

The biggest chunk of that additional $2 million, Schilder said, will be going to pay for increases in health benefits costs, for a total projected cost of $1,172,575. Basically, he said, the district had assumed for about a 20 percent increase in costs from Aetna Medical, and was recently told the renewal increase is actually between 30 and 35 percent.

“The estimate given was beyond what we thought,” he said. “We took the lowest increase, which was 30 percent.”

Schilder said he understands the district has the option of shopping around for a better deal with another company, but chose not to do so.

“Our experience rating is what got us into this,” he said, citing illnesses, some serious, that plagued staff last year. “If we shop around, that experience rating goes with us.”

“We thought the responsible thing to do was budget this in now, and at least cover ourselves,” he added. 

The costs could change as the district is still considering looking at other providers, but for now, Schilder said, this was the best course of action.

Board of education member, and finance committee chairwoman, Lynne Hurley said after the meeting that she had thought the district was being conservative in assuming for a 20 percent increase, but never thought it would be as high as 30 percent.

“I think we did the best we could considering the circumstances,” she said. “When we were blindsided by the numbers from our broker, we felt we had no choice but to prepare for a 30 percent increase.”

Other costs to spend the additional funds, Schilder said, were budgeted for out-of-district tuition and transportation, and reducing the tax levy increase from 2 percent to 1.5 percent, among other options.

The final decision made to use the funds available, Schilder said, was to increase the number of textbooks being ordered, for an additional $100,000 in costs. The choice, he said, was to replace seventh grade United States history books that have a copyright date of 2001, as well as an increase in language arts materials for ninth graders.

“We would like to replace these history books, and keep the language arts goals alive,” he said.

At this time, Schilder said, the budget does not include salary increases because the district’s three unions are currently in negotiations. Changes may be made to the budget if salary increases are agreed upon.

And while budget discussions continue, Schilder said, there are still several items under consideration if further cuts are needed because of unforeseen additions or if voters vote it down in April. Among those suggestions that are available if needed are supplies reductions; district-operated before and after care programs; student activity fee increases; middle school club reductions; and others.

The district is already actively pursuing an option for facilities use fees, Schilder said.

“That is more alive than the other suggestions,” he said. “This has been happening in discussions for a while now, and there may be facilities fees for the before and after care programs.”

“But right now, further reductions are not needed,” he added.

Board of education president Jeffrey Brookner said his only hope for the budget when the additional state aid was announced was for money to be put into the capital budget.

“When I heard about the extra money, I thought, ‘good, there will be money for capital projects,’” he said. “Then I heard about the increase in health benefits costs.”

“My biggest problem is that this budget neglects putting money into the capital reserves,” he added, saying that his fear is there will be a problem with one of the older roofs or other buildings, and there will not be enough money available to fix it.

Brookner said after the meeting that he was on the finance committee when he first joined the board of education, and had pushed from the start to put more money in the capital reserves.

“I think the capital reserves are deficient,” he said, adding that it has been at least one to two years since additional money was budgeted for capital projects.

Bridgewater resident Howard Teichman was the only one to comment on the budget at the meeting, and he praised the district for not sticking to the 2 percent tax levy increase.

“I commend the finance committee and the board on what I perceive as a compromise in the budget,” he said. “A 1.5 percent increase is better than 2 percent.”

Hurley said they are very pleased to be increasing the budget at a lower rate than is allowed through the cap.

“Last year the cap was 4 percent, and we had a waiver to go a little over 4 percent,” she said. “With the huge state aid cut, we were concerned about preserving the district offerings.”

“But there was a good transition here,” she added.

Schilder said the district is planning on several community and PTO presentations on the budget, beginning March 10 at 9:30 a.m. at for parents at both Van Holten Primary and schools.

and JFK Primary parents can see the presentation at Bradley Gardens Primary School at 9:15 a.m. March 22; families can see a presentation there at 9:30 a.m. March 25; and families can see the presentation at the middle school at 7:30 p.m. March 31; families can see the presentation at 7 p.m. April 6; and primary school families can see it at Crim Primary at 7 p.m. April 7; and families can see the presentation there at 9:15 a.m. April 15.

The vote on the budget, and the vote for those running for seats on the board of education, will be held April 27 from 7 a.m. to 9 p.m.

A public hearing for the budget will be held March 22 at 8 p.m. at the .


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