April 19, 2016
~ 9:30 a.m. & 7:30 p.m. ~
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Today’s Presenters:
O Dr. Michael Rossi, Superintendent
O Mr. Gary Lane, Business Administrator
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Objectives:
To have a conversation regarding:
◦ Some good things that are going on in the district
◦ Provide an overview of the 2016-17 Budget Process
and outcome
◦ Begin discussion of the financial picture of the
district in future budget year(s) (2017-18; 18-19;
19-20)
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New courses:
Computer Science, Ceramics, Technical Theatre, Astronomy
Implementation of Common Core, NJ Achieve and Student
Growth Objectives (SGO’s)
Implementation of district-wide PARCC exams
Implementation of Singapore Math and History Alive at all
three elementary schools
Implementation of Next Gen Science Standards K-12
Ongoing implementation of the Strategic Planning Process
Initiatives
Continuation of athletic, extracurricular opportunities &
championship level performances;
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Fine and Performing Arts department recognition of student
accomplishments, including being named for the as a Best
Community for Music Education (3rd year in a row )
State-of-the-art High School TV Studio - completed
First stage of High School Auditorium upgrades – completed
Second stage of High School Auditorium upgrades (new
flooring, sound) to be completed by September 2016
District instituted one-to-one Chromebook initiative for
students grades 6-12; K-5 classrooms have Chromebook
Carts
District-wide STEAM initiative that includes curricular and
physical infrastructure changes at the Junior School and
High School
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Upgrades to several areas of our physical infrastructure
Roofing - KRS, HS & JR
Boiler - CAS
Upgrade of HS lobby entrance – summer
Installation of LED sign at the High School -spring
Installation of power operated handicapped door access at
CAS
Stage floor replacement – HS auditorium
New natural grass installed on upper soccer field at HS
Security measures:
Swipe cards at all school entrances and,
Over 90 security cameras installed;
Exterior safety lighting upgrades initiated and
will continue through 2016-17
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The annual school budget is comprised of two sides
(revenue & expenses) and is broken out into the following
three basic components:
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Current Expense/Capital Outlay – Fund 11/12
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Federal/State/Local Grants – Fund 20
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Debt Service – Fund 40
◦ This supports the day-to-day operations of the school
district. Capital outlay funds current year purchases of
items in excess of $2,000. This is the area of focus as
this is what the budget is built upon.
◦ These are grants provided to the district for specific
purposes. The monies in this account zero out at year
end. What we get in (which varies from year-to-year) is
spent according to the grant.
◦ This is the district’s “mortgage” – the bonds sold for
prior building construction and renovation.
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The State of New Jersey has imposed two budget CAPs
that greatly impact school districts:
2% Cap on Surplus: This is calculated on the prior year’s general
fund expenditures, not the total budget. Any amount in excess of
this 2% must be used to reduce the ensuing year’s tax levy or
placed in a capital, maintenance or legal reserve account.
Madison’s 2% surplus amount is currently $931,408
2% Cap on Tax Levy Growth: This is calculated on the prior year’s
general fund tax levy, not the total budget. For 2016-17, this
amount is $759,228
CAP waivers: The State provides limited capability to move
beyond the 2% budget CAP via CAP waivers for enrollment and
healthcare costs. Earned but unused CAP waivers is referred to as
Banked CAP . These waivers are calculated via the State budget
software.
For 2016-17:
The district had $20,123 in Banked CAP (which was used to support
the budget). This is the last of Banked CAP
We did not qualify for the enrollment waiver
We did not qualify for the Health Benefit waiver
In 2009-10 Madison received
$1,588,290 in State Aid.
In 2010-11 Madison received
~ ZERO ~
in State Aid
Over the next few years, only a portion of the
2009-10 level of State Aid has been restored. The
following slide shows the cumulative impact of the State
Aid Shortfall
◦ According to the State’s own numbers, under SFRA
(School Funding Reform Act) Madison should be receiving
$1,588,290 in General Fund Aid for 2016-17
◦ Our current aid level reflects a $571,183 shortfall of
what we should be receiving. How far behind have
we fallen?
School Year
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17 *
State Aid
2009-10 Level
$1,588,290
$1,588,290
$1,588,290
$1,588,290
$1,588,290
$1,588,290
$1,588,290
State Aid
ACTUAL
$0
$698,693
$940,143
$940,144
$987,744
$987,744
$1,017,107
Loss v. 2009-10
($1,588,290)
($889,597)
($648,147)
($648,146)
($600,546)
($600,546)
($571,183)
7 Year Running Loss
$11,118,030
$5,571,575
($4,975,272)
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Our Current Expense State Aid increased by
$29,363
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HOWEVER, our State Aid for Debt Service
decreased by $27,086
Therefore, our NET State Aid increase was a
GRAND TOTAL of:
$2,277
or
2/10ths of 1% (0.0023)
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Tax levy – (2% CAP)
State Aid
Statutory CAP Waivers
$ 29,363
◦ Increase in Enrollment
$ - 0 $ - 0 -
Banked CAP
$ 20,123
◦ Increase in Healthcare
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$759,228
◦ (CAP waivers generated in prior year(s) but not used in the
year it was generated)
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TOTAL
$808,714
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Our opening budget saw increases in:
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Elementary budgets
Jr & High School budgets
Curriculum
Technology
Buildings & Grounds
Special Education
Salaries
Health Benefits
Other
Total
LESS: New Monies
Deficit =
$14,000
$105,000
$133,000
$469,000
$9,800
$333,000
$850,000
$97,000
$237,900
$2,248,700
$ 808,700
$1,440,000
We try to look for ways to reduce expenses as
we have often said, education is a labor
intensive industry. As such, we try to look for
ways to make adjustments without affecting
staff. Those items are identified below:
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New Textbooks
Technology Upgrades
All Budget Manager Budgets
Athletics & Extra-Curricular Activities
Value - $760,000
Unfortunately, we couldn’t close the gap with those
items alone, so we needed to look to staffing
reductions and/or staffing efficiencies. We will
endeavor to maintain class size, especially at the
elementary level as best we can.
For the 2016-17 School Year, we have reduced
our staff by 10.3 Full Time Equivalent (FTE)
Staff Positions
Value - $680,000
Of Note: The district is mandated by law to provide staff with notice of non-renewal on May
15th – that’s 26 days from today (April 19th). As such, between today and May 15th, the
BOE can still make modifications as to the specifics of the proposed staffing reductions.
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The cost drivers likely come as no surprise. Staff
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The 4 major cost drivers are:
related costs are 3 of the 4 major cost drivers.
The 4th major cost driver is meeting the out-ofdistrict placement needs of our Special
Education student population.
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Salaries
Health Benefits
Pension & Social Security
Special Education Tuition Placements
These four areas account for 80.24% of our total Current
Expense (operating) budget.
Local Tax Levy
$38,740,759 ; 72%
Total Tuition
$1,696,500 ; 3%
Fund 40- Debt
Capital Projects
Misc Revenue
$8,269,433 ; 15%
$360,997 ; 1%
Service
Restricted Revenue
$2,901,403 ; 5%
$61,798 ; 0%
Fund 20 - Grants
$816,133 ; 2%
State Aid
$1,017,107 ; 2%
Fund Balance
$150,000 ; 0%
Supplies &
Out of District
Materials;
Placements;
$1,066,481 ; 2%
$1,415,868 ; 3%
Salaries;
$26,132,434 ;
48%
Extra-Curr.;
$1,264,528 ;
2%
Cap. Projects;
$6,758,022 ;
13%
Purch. Prof. &
Technical Services;
Grants;
$752,964 ; 1%
$816,133 ; 2%
Debt Service;
Employee Benefits;
Ins., Energy, Tele.,
$7,386,484 ; 14%
Legal;
B&G;
$2,524,950 ; 5%
$1,296,625;
2%
$2,901,403 ; 5%
Misc.;
Transportation;
$1,246,190 ; 2%
$452,048 ; 1%
Tax levy – (2% CAP)
Banked CAP
Total - (CE)
Debt Service * –
Total Tax Levy
$759,228
$ 20,123
$779,351
$(94,276)
$685,075
* Debt Service decrease due to the Board’s
refinancing of debt in 2015-16
On the average home assessed at: $673,013
The increase will be
1.79%
Which equates to….
$11.72 per month
$140.60 annually
For the past several years, we’ve benefited from a
variety of mechanisms which allowed us to grow
our budget.
Moving forward we anticipate….
NO more health benefit growth waivers
NO more enrollment growth waivers
(Enrollment is holding steady)
NO more Banked CAP
(and, we’re not generating any more CAP)
NO growth*
in employee benefits contributions
(Our employee groups have reached the final phase-in tier)
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The BOE has limited revenue options.
◦ The BOE has no taxing authority nor can it set up utilities and
the like to generate revenue.
◦ The BOE has limited or restricted availability to set aside funds
for future use/revenue.
◦ The BOE can and does charge user fees, fees for use of
facilities; non-mandated programs such as subscription
bussing and has instituted for-pay classes such as the
kindergarten wrap-around and the integrated pre-school
program.
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Budget growth is reliant upon:
◦ State Aid increases – which have been and are anticipated to be
zero to minimal.
◦ Tax increases – however, these are limited by state CAPs and
waiver requirements.
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There is very little discretionary spending in Education
and, labor is our biggest variable
◦ Therefore, budget savings are generally dependent
upon changes in labor (# of staff positions) and labor
costs (salaries, health benefits, etc.).
◦ The number of staff employed has a direct impact
on class size.
◦ Madison is enrolled in the State Health Benefits
Program of New Jersey. These rates cannot be
locally controlled.
◦ Staff contributions to cover benefit costs have been
increased over the past several years as illustrated
on the following chart.
Something that hasn’t been talked about much but has had a
positive impact on our budget is that of the employee health
care contributions.
$2,000,000
$1,800,000
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$-
2012-13
2013-14
2014-15
2015-16
2016-17
~ Fast Fact ~
2017-18
2018-19
2019-20
After 2016-17, the district will be fully phased in, meaning going forward
(2017-18 & beyond), we anticipate the increases to level off
Health Benefits Total Cost
2016-17
NET Cost to BOE
Employee Contribution
$5,858,946
$1,593,405
2015-16
$6,599,269
$5,570,928
$1,028,341
2014-15
$6,221,548
$5,397,434
$824,114
2013-14
$527,331
2012-13
$355,685
2011-12
$$-
$7,452,351
$5,613,876
$5,086,545
$4,973,536
$4,617,851
$3,956,023
$3,956,023
$1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000
Employee Contribution
2% Tax Levy CAP
Banked CAP
$60,000
$806,118
2019-20
$866,118
$70,000
$790,311
2018-19
$860,311
$90,000
$774,815
2017-18
$864,815
$561,200
$759,228
2016-17
$20,123
$1,340,551
$0
$100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000
2017-18
2018-19
2019-20
2020-21
TOTAL
$
$
$
$
$
TAX LEVY
774,815
790,311
806,118
822,240
3,193,484
NET HEALTH
BENEFITS +
SALARIES Under / (Over)
$ 1,165,361 $
(390,546)
$ 1,243,299 $
(452,987)
$ 1,328,532 $
(522,414)
$ 1,421,807 $
(599,567)
$ 5,158,999 $ (1,965,514)
The GVR monies will be used for one-time cost
projects, NOT recurring expenses. The following is a
tentative listing of planned use of the GVR $.
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ROD Grants implementation
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S.T.E.A.M. Initiatives:
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◦ CAS Boiler, KRS Roof
(Science, Technology, Engineering, Arts, Music)
◦ Junior School Media Center Renovation
◦ High School Renovation & New Construction
Roofing – HS & Jr School
Locker Room Renovations – HS
Under Consideration……
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Track & Tennis Court Resurfacing – HS
 A/C – MJS Auditorium
Bathroom Renovations – District-wide
 Other - TBD (to be determined)
Questions?