Budget 101: The School Budget Process

1. Budget 101: The School Budget Process A presentation by : Patrick Tierney Superintendent/Principal Rockaway Borough Schools January 25, 2010

2. Public Input • Please try and hold questions/comments until the end. • Please listen and let me know what else you'd like to know about the budget process. Please submit any questions to me - ptierney@rockboro.org.

3. Rockaway Borough School District Pre-K -8 Thomas Jefferson Middle School – 350 students Lincoln Elementary School – 316 students District total – 666 students (as of 1/25/10)

4. What is the school budget? • School Fiscal Year (July 1st - June 30th) • Developed December - February of the preceding year • Presented to public for review/comments – March • Submitted to County Office – March Actual Money Needs & Priorities

5. Where does the budget revenue come from?

6. Where does the money go?

7. How the Budget is builtStep 1 – Review required spending • Contracted Salaries (Negotiated - then fixed for 3 years) • Contracted Health Benefits (Negotiated - then the benefits are fixed for 3 years, however the costs are not.) • Mandated Special Education Spending • Mandated Professional Services: Lawyer, Auditor, Architect • Essential Building Maintenance: Custodial supplies & repairs • Transportation: Required maintenance, fuel, state mandates • Mandated Insurances • Fixed Equipment Costs(financing on trailers, buses) • Mandated Testing Services • Mandated Election Costs ______________________________ • TOTAL REQUIRED SPENDING

8. How the Budget is Built Step 2 – Identify Variable Costs 1)Trends analysis to estimate any increases in current costs (Business Admin.) 2) Superintendent, Principals & District Administration review: • Curriculum needs • State mandates • Textbook review cycle • Professional development • Building equipment • Classroom supplies • Technology needs ___________________________ • TOTAL VARIABLE COSTS

9. How the Budget is BuiltStep 3 - Estimate Aid & Income(Revenue, Other than Local Taxes) • State Aid: Department of Education - figures expected in March (with NJ’s budget deficit, State Aid will PROBABLY decrease or remain the same) • Federal Aid: Calculated on trend analysis and projections • Tuition: Based on current/expected contracts and trend analysis • TOTAL REVENUE (NOT FROM TAXES)

10. How the Budget is Built Step 4 – Calculation of Tax Levy TOTAL REQUIRED SPENDING + TOTAL VARIABLE COSTS (-)TOTAL REVENUE NOT FROM TAXES) ____________________________________ LOCAL TAXES NEEDED TO SUPPORT BUDGET

11. How the Budget is Built Step 4 - Calculation of Tax Levy Budget Cap As per state law - local tax increase cannot exceed 4% per year or Consumer Price Index (CPI) Adjusts every year Unknown at this time Currently working on 3.5%

12. 09-10 Tax Levy Based on 08-09 tax levy - $6,444,711.00 3.0% CAP = $6,638,052.00 allows $193,341.00 increase 3.5% CAP = $6,670,276.00 allows $225,565.00 increase 4.0% CAP = $6,702,499.00 allows $257,788.00 increase

13. Where we are • January (week 1) – Compiled all budgets - Over $900,000.00 • January (week 2) – Reviewed and reduced budgets by $450,000.00. Still over $450,000.00 • January 16 – Special Board meeting to discuss budget • January (week 3) – Explore areas to further reduce • January 25 – Superintendent Roundtable • January 28 – Special Board meeting to further discuss budget & possible cuts

14. Why? • S1701 (Limits how school districts can increase tax levy) • Zero based budget in 09/10 school year • Increase in health insurance costs ($140,000.00) • Increase in special education costs ($150,000.00) • Overall increases throughout the budget • Utilities (heat & electric) • Insurance (liability & vehicle) • Salaries

15. What are our options? 1. Cut Expenses Cuts done in consultation with Administration, Board of Education, and the Business Office 2. Apply for Waivers, if possible Only allowed for certain expenses Waivers are regulated by State & must receive County approval for them 3. Tap into Surplus (Emergency Fund) Rockaway Borough has $245,000.00 in current surplus State allows a 2% or $250,000.00surplus

16. Major concerns • Unsure of CAP for this year (Possible 3%) • State Aid (New Governor) • Possibility of more cuts by DOE • Expired RBEA contract (undetermined) • Taking surplus to offset - $100,000.00 ($145,000.00) • Unanticipated special education costs (???) • Passing the budget in April

17. Possible Reductions • Cut Special Area Teachers to 4/5 time • Restructure Computer Classes@ TJ • Eliminate Guidance Counselor Position • Restructure Spanish Program • Hire 4/5 Nurse @ Lincoln School • Eliminate Class Sections @ Lincoln (Grades 1,2, & 3) • Eliminate Regular Summer Enrichment • Eliminate Washington DC trip • Eliminate School Boards Conference • Eliminate Medical Reimbursement for Principal • Eliminate Superintendent Conferences/Workshops • Reduce Administrative Salaries Increases from 3.75% to 2% • Reduce TJ Secretary to 4/5 time • Reduce Accounts Payable clerk hours • Restructure Speech Program • Pursue Other Options

18. Wildcards • Upcoming Special Education Needs • Create a Learning & Language Disability class @ Lincoln School (anticipate bringing 2 students back to district) • Create a Rockaway Borough Before/After Care Program • May have to cut more???

19. Looking Forward • What happens next year??? • Possibility of 4% increase to future budgets to offset • Be even more fiscally responsible • Do more with less • There is no crystal ball

20. Questions & Answers If I can answer it – I will! The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty. Winston Churchill