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Little Egg Harbor Township School District March 1, 2011 Dr. Frank Kasyan, Superintendent Mrs. Lynn Coates, School Business Administrator Board of Education Finance Committee Ms. Gina Frasca Mr. August Daleo Dr. Richard Newman Mr. Robert Wood (alternate) Public Budget Meeting III

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Agenda Adequacy State Budget Information for 2011-2012 Review Public Input Questions Comments

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4 th Public Budget Meeting March 21, 2011, 6:15 pm (please note date change from March 22 nd ) Review Public Input Questions Comments BOE Public Budget Hearing March 28, 2011, 6:30 pm

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What is it? How is it determined for LEH? How does it affect our budget? Adequacy

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What is Adequacy? Its About Equity Adequacy is a calculation developed as the basis of the 2008 School Funding Reform Act to ensure adequacy and equity in education Adequacy represents what each district should be spending to allow each student to attain NJs educational standards The formula is based on expenditures needed to provide a thorough and efficient education, as well as enrollment factors such as special education, at-risk, and low income students It was developed, in part, to ensure that local taxpayers only pay their fair share (Many districts had very high tax levies) Adequacy can be used as a basis of comparison between districts The adequacy amount is not determined on what the State can afford, but is an accurate measure of the true costs of meeting the States standards

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How is Adequacy Utilized? 1. The adequacy budget is used to help determine State Aid to districts 2. Wealth Equalized Aid: allocated according to each districts ability to raise enough local revenue to support their adequacy budget utilizes both property wealth and aggregate income 3. Categorical Aid Does not account for districts ability to raise local revenue

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How is Adequacy Determined in LEH for 2011-2012? Adequacy in LEH School District District Adequacy Spending 2011-12 General Fund Levy $ 10,387,738 A Equalization Aid $ 6,037,820 B Total Budgeted Adequacy Spending = A+B $ 16,425,558 C District Adequacy Budget (determined by State) $ 19,006,390 D Excess Amount = C-D $ (2,580,832) E A + B = C and then D C = E If E is a positive number, then budget exceeds Local Levy If E is zero or a negative number, then budget is below expected local levy In Theory: According to this calculation, the district should be raising an additional $2,580,832 in local tax dollars to meet adequacy. With a 2% tax levy cap, this is not possible.

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How does Adequacy effect our budget? The district is not allowed to raise the local tax levy more than 2% per year The district is not required by the State to meet adequacy budget deficit The districts state aid is not increased to make up the difference between the tax levy and the adequacy deficit The adequacy deficit should be considered by the voters and the township when asking for additional cuts to spending by the district

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State Aid 2011 2012 What the District will receive The impact of last years cuts on this budget

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State Aid Figures for 2011 - 2012 General State Aid Increased by $218,689 in the adjustment aid category Debt Service Aid Decreased by $124, 761 This cut can only be made up through a tax levy Preschool Aid 100% funded at the 2010-11 level Plus the additional 2 classrooms requested in our 5 year plan 2 classes x 15 students = 30 additional students 30 students x $11,205 = $336,150 increase

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The Big Picture on State Aid - General Fund Amount of Aid Lost in 2010-2011 $ (1,092,134) Amount of Aid Returned for 2011-2012 $ 218,689 Net Loss for 2011-2012 $ (873,445)

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Contractual Issues Budget Scenarios Tax Levy Review

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Contracted raises for 11-12 = $681,000 Anticipated health insurance increases with current plan $1 million - $1,230,000 Budget short fall of $1.7 $1.9 million Contractual Issues 2011-2012

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Help From the Staff with Health Benefits All Staff Voted to Change Health Plans District Saves $618,000 for next year Switch to State Health Benefit Program (SEHBP) Higher co-pays for doctor visits Some reduction in health services RX plan is included Over the past several years, staff has made concessions on Benefits.

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HEALTH BENEFIT SAVINGS TOTAL COSTSSAVINGS 2004-2005 PLAN SWITCH $ 561,175.00 2009-2010 EMPLOYEES WAIVING $ 541,591.92 $ 270,795.96 2010-2011 EMPLOYEES WAIVING $ 592,746.20 $ 296,373.10 SWITCH TO ALL DIRECT ACCESS AUGUST 2009 $ 204,832.00 SWITCH TO DELTA DENTAL AUGUST 2010 $ 22,176.39 $ 1,355,352.45 2011-2012 SWITCH TO SEHBP $618,000.00 TOTAL $ 1,973,352.45

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Budget Scenario 1 Raise tax levy maximum 2% = $200,000 How can we make up $1.7 - $1.9 million shortfall ? Reduce Professional Staff by 22 positions Dont replace 3 retirees = approx. $250,000 Eliminate 1 administrator = approx. $100,000 Eliminate 6 special area teachers = approx. $460,000 (for example: 2 PE, 2 Instrumental Music, 2 Media Specialists) Reduce grade level sections in gr. 1 6 by 2 sections + an additional 3 sections (move staff to BSI & SE) (thus eliminating 12 classroom teachers) = approx. $840,000 Utilize $300,000 Federal Job Relief we saved from this year (we were advised not to spend it in current year)

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Budget Scenario 2 No tax increase Reduce Professional Staff by 24 positions Dont replace 3 retirees = approx. $250,000 Eliminate 1 administrator = approx. $100,000 Eliminate 8 special area teachers = approx. $600,000 ( example:2 PE, 2 Instrumental Music, 2 Media Specialists, 2 Computer,) Reduce grade level sections in gr. 1 6 by 2 per grade level and 2 additional sections + move 3 to BSI & SE (thus eliminating 12 classroom teachers) = approx. $840,000 Make 2 building secretaries part-time = approx. $60,000 Utilize $300,000 Federal Job Relief we saved from this year (we were advised not to spend it in current year)

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Budget Scenario 3 Cut tax levy by $200,000 Reduce Professional Staff by 25 positions Dont replace 3 retirees = approx. $250,000 Eliminate 1 administrator = approx. $100,000 Eliminate 9 special area teachers = approx. $670,000 ( example:2 PE, 2 Instrumental Music, 2 Media Specialists, 2 Computer, 1Foreign Lang.) Reduce grade level sections in gr. 1 6 by 2 per grade level and 2 additional sections + move 3 to BSI & SE (thus eliminating 12 classroom teachers) = approx. $840,000 Eliminate 2 School Resource Officers = approx. $93,000 Make 3 building secretaries part-time = approx. $97,000 Utilize $300,000 Federal Job Relief we saved from this year (we were advised not to spend it in current year)

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PROPOSED TAX RATE CALCULATION COMPARISON LEVY DIVIDED BY RATABLES EQUALS RATE 2010-2011 ACTUAL LEVYRATABLESPER ABSTRACT OF RATABLES FUND BALANCE $ 699,309.00 $ 2,967,533,131.00 0.000236 LOCAL $10,184,057.00 $ 2,967,533,131.00 0.003432 DEBT SERVICE $ 1,349,781.00 $ 2,967,533,131.00 0.000455 TOTAL $11,533,838.00 $ 2,967,533,131.00 0.003887 PROPOSED 2011-2012 TAX RATE - OPTION 1- $200,000 INCREASE (2%) LEVY INCREASERATABLESPER ABSTRACT OF RATABLES LOCAL $10,384,057.00 $ 2,955,844,831.00 0.003513 DEBT SERVICE $ 1,199,777.00 $ 2,955,844,831.00 0.000406 TOTAL $11,583,834.00 $ 2,955,844,831.00 0.003919 PROPOSED 2011-2012 TAX RATE - OPTION 2 - NO LEVY INCREASE LEVY FLATRATABLESPER ABSTRACT OF RATABLES LOCAL $10,184,057.00 $ 2,955,844,831.00 0.003445 DEBT SERVICE $ 1,199,777.00 $ 2,955,844,831.00 0.000406 TOTAL $11,383,834.00 $ 2,955,844,831.00 0.003851 PROPOSED 2011-2012 TAX RATE - OPTION 3 - $200,000 DECREASE LEVY DECREASERATABLESPER ABSTRACT OF RATABLES LOCAL $ 9,984,057.00 $ 2,955,844,831.00 0.003378 DEBT SERVICE $ 1,199,777.00 $ 2,955,844,831.00 0.000406 TOTAL $11,183,834.00 $ 2,955,844,831.00 0.003784 2010-2011 TAX LEVY ON 2011 AVERAGE EVALUATION Value of HomeLocal RateDebt ServiceTotal TaxDistrict Tax $ 263,258.000.0034320.0004550.003887 $ 1,023.28 PROJECTED TAX LEVY OPTIONSValue of HomeLocal RateDebt ServiceTotal Tax District TaxDifference *1 $ 263,258.000.0035130.0004060.003919 $ 1,031.71 $ 8.42 2 $ 263,258.000.0034450.0004060.003851 $ 1,013.81 $ (9.48) 3 $ 263,258.000.0033780.0004060.003784 $ 996.17 $ (27.12) *2011 Average Township Evaluation This chart is based on the assumption of all state aid being flat-funded from 2010-11 to 2011-12. This information was reported at the last budget meeting, which was prior to receiving State Aid Notification.

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PROPOSED TAX RATE CALCULATION COMPARISON LEVY DIVIDED BY RATABLES EQUALS RATE 2010-2011 ACTUAL LEVYRATABLESPER ABSTRACT OF RATABLES FUND BALANCE $ 699,309.00 $ 2,967,533,131.00 0.000236 LOCAL $ 10,184,057.00 $ 2,967,533,131.00 0.003432 DEBT SERVICE $ 1,349,781.00 $ 2,967,533,131.00 0.000455 TOTAL $ 11,533,838.00 $ 2,967,533,131.00 0.003887 PROPOSED 2011-2012 TAX RATE - OPTION 1- 2% INCREASE LEVY INCREASERATABLESPER ABSTRACT OF RATABLES LOCAL $ 10,387,738.00 $ 2,955,844,831.00 0.003514 DEBT SERVICE $ 1,324,548.00 $ 2,955,844,831.00 0.000448 TOTAL $ 11,712,286.00 $ 2,955,844,831.00 0.003962 PROPOSED 2011-2012 TAX RATE - OPTION 2 - NO LEVY INCREASE LEVY FLATRATABLESPER ABSTRACT OF RATABLES LOCAL $ 10,184,057.00 $ 2,955,844,831.00 0.003445 DEBT SERVICE $ 1,324,548.00 $ 2,955,844,831.00 0.000448 TOTAL $ 11,508,605.00 $ 2,955,844,831.00 0.003894 PROPOSED 2011-2012 TAX RATE - OPTION 3 - $200,000 DECREASE LEVY DECREASERATABLESPER ABSTRACT OF RATABLES LOCAL $ 9,984,057.00 $ 2,955,844,831.00 0.003378 DEBT SERVICE $ 1,324,548.00 $ 2,955,844,831.00 0.000448 TOTAL $ 11,308,605.00 $ 2,955,844,831.00 0.003826 2010-2011 TAX LEVY ON 2011 AVERAGE EVALUATION Value of HomeLocal RateDebt ServiceTotal TaxDistrict Tax $ 263,258.000.0034320.0004550.003887 $ 1,023.28 PROJECTED TAX LEVY OPTIONSValue of HomeLocal RateDebt ServiceTotal Tax District TaxDifference *1 $ 263,258.000.0035140.0004480.003962 $ 1,043.14 $ 19.85 2 $ 263,258.000.0034450.0004480.003894 $ 1,025.00 $ 1.71 3 $ 263,258.000.0033780.0004480.003826 $ 1,007.18 $ (16.10) *2011 Average Township Evaluation This chart utilizes actual State Aid increase and Debt Service Aid cuts This is the updated information after receiving State Aid Notification.

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Public Input

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Next Public Budget Meeting: Tuesday, March 21, 2011 6:15 pm Frog Pond Elementary School Multipurpose Room Please note date change from March 22 nd.