The Upper Freehold Regional School District anticipates having to cut almost $2 million worth of services even if it privatizes transportation, increases activity fees and raises the tax levy during the 2011-12 school year. Superintendent of Schools Dick Fitzpatrick and Business Administrator Diana Schiraldi presented a budget update at the Board of Education’s Feb. 2 meeting. Thus far, the school district estimates needing $33.8 million for the 2011-12 school year, which amounts to $1.3 million more than the 2010-11 budget.
The district anticipates losing revenue sources next school year, with the most significant decrease in tuition revenue. According to Schiraldi, the tuition revenue is expected to decrease by $945,177 to approximately $9 million as a result of the significant reductions made to high school costs in the current budget, decreased enrollment at the high school and decreased tuition adjustments.
Increasing the tax levy 2 percent would generate an additional $361,678 for the 2011-12 over the 2010-11 budget. The district would collect a total of $18.4 million in taxes to support the budget if it decides to increase the tax levy to the mandated cap.
The district is also reviewing other ways of generating revenue and saving money. Privatizing transportation services could help the district save over $150,000. Eliminating the purchase of new equipment would save $111,908. Selling the Imlaystown property formerly used for classes would generate over $200,000. Sharing services with neighboring school districts could save $100,000, according to Schiraldi.
The district may increase the fees for certain programs to cover the actual cost of those programs. For example, raising the cost of the kindergarten complement program from $3,000 to $3,900 would make that program cost neutral. Charging all subscription bus riders $275 and students $5 per hour for credit completion would help neutralize the costs of those services.
The district may also raise activity fees this year from $160 to $180 at the high school and from $60 to $70 at the middle school to help bring the fees closer to covering the actual costs of sports and other extracurricular activities. Parking fees may also rise to help compensate for the decreased revenue expected next school year.
Even if the district implements all of these changes, it expects to have to cut an additional $1.7 million in services to continue to pay mandated fixed costs within the tax levy cap.
“There’s no way to find $1.7 million without reducing positions and eliminating stipends,” Fitzpatrick said.
In an effort to make up the deficit, district officials will discuss benefit contributions and salary concessions with the collective bargaining groups for teachers and administrators. Although there is one year remaining in the district’s contracts with these groups, school officials will ask all staff to pay 1.5 percent of their benefit costs and a 2.95 percent salary concession. The district would be able to save jobs as well as $816,968 if the groups agree to the concessions. Even if the unions agree, the district would still need $198,747 to achieve the 2 percent tax levy cap, according to Schiraldi.
The majority of the 2011-12 budget, 64.2 percent, will go toward staff salaries and stipends totaling $21.7 million. Benefit costs are expected to total $6 million and make up 17.9 percent of the budget. The district’s energy costs total $955,827, making up 2.8 percent of the budget. The remaining expenditures are expected to total $5.1 million, or 15.1 percent of the budget.
The district has numerous fixed costs, including negotiated salaries, benefits and tuition reimbursements; special education instruction and services; student testing and records management; utilities, communications, state pension, social security, unemployment, legal fees, insurance and aid-in-lieu of transportation costs.
Schiraldi warned that the district has not yet received information about state aid, which is not expected until Gov. Chris Christie gives his public address Feb. 22. The district received $3.7 million in state aid last year and has been planning its next budget using the same state aid figure. However, Schiraldi said the state could cut aid to the district as it did last year. If the state cut the aid by 5 percent, the district would need to reduce the budget by another $185,653. If the state cuts aid by 10 percent, the district would have to reduce spending by another $371,307.
Once the district receives information about state aid, the board budget committee will finalize a spending plan for board approval. The budget is expected to go before the board for a vote by March 2, because it is due in the office of the executive county superintendent of schools by March 4. The budget will be put before voters in the annual school election on April 27.