To the editor:
I have been involved in municipal and school district budgeting for the last decade. Over the last few weeks I’ve been asked several questions about the upcoming school district referendum to bond $35 million for maintenance and renovation projects.
The following questions and responses are my opinions based upon New Jersey State laws and my understanding of the budgeting process and not an official HVRSD position.
First, why not complete the maintenance and renovation projects as part of the normal budget process? In 2010 New Jersey imposed a 2 percent cap on the property tax levy and larger projects like roof repairs would exceeded this cap. The issue is compounded by the New Jersey school district accounting rules that prevent capital project costs from being spread across multiple years. The net effect is that larger maintenance and renovation projects, like those needed at several of our schools, cannot be completed within the normal annual budgeting process.
Next, why bond for all of the proposed projects at one time? As Dr. Smith has explained to the community, the current maintenance and renovation projects list exceeds $60 million. Many efficiencies are derived from completing multiple projects under the same referendum; engineering cost, financing cost, and staff distraction are all reduced by addressing the critical maintenance and needed renovation projects at the same time.
Finally, what state aid is available and why is it important? HVRSD is eligible for Debt Service Aid to cover 40 percent of all project costs for most of the proposed maintenance and renovation projects. While we must pass the referendum and bond for the entire amount, the state has committed to paying for a significant portion of the debt service. The Debt Service Aid is only available if HVRSD bonds for the projects, not if the projects are shoehorned into the annual budgets.
The Board of Education and the administration have done everything within its ability to reduce the impact on taxpayers while still addressing critical maintenance and needed renovation projects. This work will continue after the referendum is passed including the discussion of financing options with the New Jersey Local Finance Board. I ask all voters to educate themselves on the proposed referendum at http://www.hvrsd.org/
Please vote yes on Sept. 27. Thank you.
Michael Markulec
Hopewell Township
