Two members of the WW-P Board of Education voted against sending a preliminary budget to the county superintendent because it contained a tax increase of 3.8 percent — allowed because of some exceptions to what falls under the 2 percent state-mandated cap on property tax increases.
The 6-2 vote, with “no” votes from Ellen Walsh and Todd Hochman, who both represent Plainsboro on the board, enabled the board to send the preliminary $158.8 million spending plan to the county superintendent by Friday, March 4, the state-mandated deadline.
The vote came after another round of discussion on the 2011-’12 budget on February 22. The board will continue its discussions on Tuesday, March 8. The board must adopt its final version by the state deadline of Tuesday, March 29, so that it can be placed on the ballot for the school elections on Wednesday, April 27.
While the overall budget has increased by 1.9 percent ($2.9 million) over last year’s $155.9 million budget, the amount to be raised through taxation is projected to be nearly $149 million — an increase of $5.4 million, or 3.8 percent increase — over last year’s $143.5 million tax levy.
However, according to district spokeswoman Gerri Hutner, the figure submitted to the county superintendent was assuming flat general state aid. “But now that the governor has said he was increasing state aid (at least that was said in the budget address), this will change,” she said.
While officials presented the data — including areas of increase and decrease within the overall budget — during the February 22 meeting, Hutner said the district is waiting for the average assessed home values from both townships before it calculates the tax rate and breakdown for residents in each township.
When it comes to proposed expenses, the biggest area of increase is associated with regular instruction, which is projected to increase by 5.9 percent to $52.6 million. The second highest area of increase is in staff benefits, which will increase by 3 percent to $26.3 million. Smaller areas of increase are seen in co-curricular activities and athletics, which will increase by 0.1 percent to $2.3 million, and special services, which will increase by 0.6 percent to $23.3 million. Administration costs will also increase by 0.6 percent to $11.3 million.
The biggest decrease will come in the transportation budget, which will decrease by 1.8 percent to $8.9 million. Student support will decrease by 0.3 percent to $6.3 million, while improvement of instruction and professional development will decrease by 0.5 percent to $2.5 million.
Overall, the total operating expenses comes to $145.7 million — an increase of 2.6 percent.
In the area of revenues, figures showed that the district’s fund balance will decrease by 45.7 percent this year, down to $3.2 million, while the state aid will show an increase of 9.2 percent to $3.9 million. Larry Shanok, the district’s assistant superintendent for finance, said the base state aid is flat (until the board gets further direction from the state), but there was a one-time increase from the Education Jobs Fund bill.
The district received the money in September as part of the $286 million in funding sent to New Jersey from the federal Education Jobs Fund bill, which was divided by the state Department of Education. The WW-P district received $354,301 but was told to hold onto to the money and avoid using it toward the 2010-’11 budget. That money will not be available again.
Miscellaneous revenues are expected to decrease by 3.5 percent to $2.8 million in the 2011-’12 budget. The figures also showed the project 3.8 percent in the tax levy.
In the area of grants, the district will see a 4.5 percent decrease to $2.1 million, and a 6 percent decrease in debt service to $9.7 million.
During the presentation, the board also heard from its administrators about the impacts last year’s budget cuts had at each level.
At the high school level, North Principal Michael Zapicchi said most of the reductions were felt in the staff areas, with larger class sizes, a reduction in under-subscribed programs and classes, and a reduction in athletics. With regard to athletics, the number of games played was reduced, and WW-P teams played more games within the conference and none outside to reduce transportation costs.
There was also a reduction in some of the sports programs and a reduction in co-curricular activities.
At the middle school level, Grover Middle School Principal Dennis Lepold said there was a reduction in middle school sports, the elimination of one mini-team, and the reduction of Outdoor Education. More students were trying out for teams, but fewer spots were available because of the reductions.
“We still had numerous sixth graders who were not involved in any extra curricular activities,” said Lepold.
At the upper elementary level, there were reductions in health and computer teachers, and a restructuring of support services. Teaching supplies were reduced by 30 percent, which was particularly felt in the ability to buy supplies for the library.
At the kindergarten through third grade levels, there was a reduction in health, computer, and library teachers, as well as supplies.
Officials also pointed to the re-alignment of the Buildings and Grounds department and the reduction of travel and professional development workshops, as well as the reduction of five administrative positions. The district will also have to allot $1.2 million towards the Princeton International Academy Charter School.
However, Walsh and Hochman were not happy with the proposed 3.8 percent increase in taxes proposed for the 2011-’12 school year.
Walsh said she was “very frustrated with this budget process or lack of process.” She said she has asked questions and not received answers throughout discussions so far.
Walsh’s husband, Quentin, was also among members of the public who criticized the budget. He accused the district of presenting information on a budget-to-budget basis to show a moderate increase without pointing to the actual spending, which he says has been lower than the budget (see letters, page 2).
Hochman called the 3.8 percent increase unacceptable, saying that the reason the taxes were able to be increased by more than the state-mandated 2 percent cap was because of a list of exceptions.
The district’s approval of contracts with its teachers and administrators last year did not require contributions to their health insurance, even though a state law adopted shortly after required public employees to contribute 1.5 percent of their base salaries to their healthcare costs when their current contracts expired. Avoiding including these contributions takes the tax increase this year past the 2 percent cap, Hochman said.
Hochman did not vote for that “sweetheart contract,” and said he “cannot support this budget.”
Not everyone was critical. Board President Hemant Marathe said the decrease in the district’s surplus — which he said decreased by 2.5 percent — is a contributing factor to the reason the budget went over the 2 percent cap.
He said the district has “not spent like drunken sailors” and pointed to modest and low increases over the past few years.
The tax levy was not the only matter debated on February 22. Some board members still questioned whether it would be cost effective to go out to referendum for the second phase of the solar project, which will place solar panels at seven WW-P schools. The panels would be paid for through the issuance of no-interest tax credit bonds from the federal government’s Clean Renewable Energy Bonds program.
The project would require a bond referendum on the ballot in April’s school board elections. Officials are estimating that they will need to ask voters to approve $6.4 million in bonds for the project.
In the summer of 2009, the federal government approved the allocation of $7.6 million in federal tax credit bonds to cover the solar panel projects at seven of its schools. The allocation, however, comes with an expiration date of two years, and to be able to take advantage of the no-interest bonds, the district will need to take action before the summer.
Because solar energy prices have dropped since the time of the award, WW-P estimates it will only need the federal government to issue $6.4 million of the $7.6 million in bonds available to WW-P.
District officials say that the amount of money brought in by the solar panels will outweigh the money spent. Over the first 12 months of operation after installation, Shanok said the district would see positive cash flow in energy savings, sale of Solar Renewable Energy Certificates (SRECs), and in debt service aid. The project would bring in about $466,000 in revenue during that year.
The district will save in energy costs as well as receive extra credit by sending extra electricity back to the power company for distribution, officials said. By doing that, the district will receive solar renewable energy certificates, which can be sold for income, they said.
Officials also say that while there will be debt generated from issuing bonds for the project, the district will hold to its promise of keeping the annual debt service levy at or below $11.1 million — the promise it made to voters before the $27.5 million building referendum in 2006.
However, Walsh questioned the viability of bringing in enough money to offset the costs. “The benefits are only good if you sell the SRECs,” said Walsh, who questioned whether there was going to be a market for them.
Board member Randall Tucker said that while SREC valuations show a decline over time, there is still a market.
Shanok pointed to the $900,000 in funds from the sale of SRECs that the Lawrence district was able to bring in last year.
Hochman echoed Walsh’s concerns, asking what would happen if the state cut its debt service aid to districts, which the board would use to help offset the costs. “To say that our government is unpredictable is an understatement.” He asked whether a scenario involving cuts to this aid was considered in the district’s analysis.
Hypothetically, Shanok responded, the Congress could wipe out the SRECs program all together. “There are risks if any of them go,” he said. He said, though, that the state has not done anything as drastic as cutting debt service aid.
Board member Robert Johnson said he did not think the board should be throwing numbers out. “Nothing I’ve seen has shown volatility in the market,” he said.
“We can speculate the sky will fall through,” he said. “It is a pretty good bet we’re going to offset some of our expenses” by going through with the solar project, he said. Marathe said it was a risk work taking. “This looks like a win-win situation.”
Deadline Approaching. The deadline for West Windsor and Plainsboro residents interested in running for a seat on the WW-P school board is nearing. Interested residents must complete a candidate packet and return it to the Central Office on Village Road West by 4 p.m. on Tuesday, March 8. For more information on filing, visit www.ww-p.org.
