001So, thank you for the opportunity. We'll be talking about tonight's public hearing on the 267 budget. We've started these conversations back in January when we talked about expenditures and cost attainment. Talked about revenues in February. We had our preliminary budget um adoption in March. And now tonight will be the synopsis of what was approved by the county office and what we will be presenting to the board for approval tonight. So we always start our budget season with what are our primary budget goals and I'll let Rich kind of speak to those overarching goals that help us frame our budget. >> Sure. >> So you know we've talked about this, you know, a lot over the last few months, but I just want to reiterate, you know, these are our main objectives with this budget. Um
002maintaining a comprehensive educational educational and extracurricular program. you know, we offer um um every academics you could possibly want in the school for our students and also extracurricular activities um in regards to sports and activities. Um our students are very involved. They have a great experience in high school and that's what we want to maintain with this budget. We also want to ensure safe and functional facilities that is um to make sure that they are those activities they're able to do um are done in a safe and efficient manner. So facilities uh as I think everybody knows it's very expensive to maintain [snorts] um two facilities of this size, two distinct high schools in the county. We also want to attract and retain our highly qualified staff. Um you know retaining our staff is you
003know really important and attracting new people to come to our district is um is just as important as well. So we want to make sure that we have um you know the um pay scale that will attract people keep them here and also the activities and the things that we provide for our staff um in supporting a budget of this nature so that they feel that they have the support to do the job that they're doing in the classroom. We also want to exercise um the fiscal responsibility and cost containment and I think we tried to demonstrate that with the presentations that we've done over the last few months to make sure that you understand what we've done to make sure that we have sharpened our pencils. We have done everything we possibly can to
004contain the costs. Um, but there are some things that were out of our control. I think we talked health benefits, you know, at nauseium and we'll probably talk a little bit more about that tonight. But, you know, those are just some things that were out of our control, but we still made it work within the most reasonable way we could. Um, and then of course we have our strategic goals and state mandates. Our strategic plan is what drives, you know, our actions in this district for the next five years. We're finishing up year one of it now. And you know, state mandates, I I don't want to get too far into that, but we have mandates that come down from the state that we have to do. Um whether it is part of the curriculum
005or whether it's things like cell phone bands or, you know, there's all kinds of mandates come down from the state and those are typically um unfunded. It's not like the state says we need you to do something else and we're going to give you a little bit more money to help you do it. Um that is on the burden of taxpayers, but we don't have a choice but to do those things. So those are the budget goals. Um I hope everyone understands that uh as we go through the rest of this presentation and that's what we should be focusing on. >> So what were the budget challenges that we had when we were facing putting this together and I'm going to highlight these and we're going to have some additional slides to kind of highlight
006some of these as well is the state aid funding that we had that's been declining since 2018. S2 hit this district specifically hard. Um and it was over that six-year period during SU2 that we had a large amount of our state aid eliminated. our healthcare costs. Again, we've talked about this at length, but we'll be talking about it again tonight. The healthcare marketplace is experiencing significant increases this year and we were not insulated from that. Um, our increases were significant. Special education costs are increasing at a rate greater than 2% specifically for out of district placements. transportation continues to escalate due to continued driver shortages and also gasoline costs and the um bus costs for our vendors and also state mandates as Rich has alluded to. So, how did we bridge the gap and see
007savings in order to balance this budget? So, again, our budget drivers are increasing at a rate that are much greater than the 2% tax levy cap. So, that gap is bridged by these following items and I'll kind of let you describe. So, and again, we've we've talked about these again, but I want to reiterate them. Um, we we're creating an ESL program at our district because our numbers are increasing in for our ESL population, and um the out of district cost for sending those students out um is now going to exceed having our own program. So, we're able to reduce our um costs from out of district placements by creating a program. Um we also increased our special service offerings to reduce professional fees. What that means is we hired um professionals like speech language
008therapists instead of contracting those services out because those contract services ended up costing us more. Even when we were offering benefits to an employee when we did all math, it ended up costing more to have those contracted out. So by bringing those in-house, we saved money and we have um professionals inhouse that are serving our school community. We did some right sizing with non-instructional staff. Basically, what that means is looking at all of our um staff and making sure that we kept any reductions in staff outside the classroom. Made sure that our non-instructional program was um where we looked when it was possible to reduce any staff. And that leads into streamlining security operations as well. Looking into um what what how we're staffing and what we are doing to keep our students and our
009staff safe on a regular basis. And we um were able to streamline some of that as a matter of circumstances and things that happened and save some money at the same time. Uh we also increased our um Hunter County vocational school district students with no increase in NHB staff. So what that means is additional it's really additional revenue but it's not revenue because what happens is we get that taken off of our polytech bills. So it's less expenditures. Um make long story short we were able to reduce our expenditures because of those Polytech kids and um and not have to increase our staff in order to do that. you know, as the programs continue to grow and we have three more cohorts coming into our district with the new building, you know, that might change.
010We might have to add some staff to supplement for that. Uh but again, those costs will be offset by those increased tuitions um that we'll be getting from those students in Polytech. When we do reuse staff, we do it through attrition um whenever that's possible. Um meaning that somebody leaves, we look at our numbers um you know, we look at the hard numbers and we make sure that we um determine whether or not we have to replace that person if we don't. then that's a salary we can save instead of having to cut somebody in their second or third or fourth year of employment with us. And then our budget um our building budget requests, the principles can attest to this if you ask them, but we were very hard on them this year. We
011asked them to look at this budget line by line and really look at every single expenditure that they've had over the last two years and um determine whether or not they needed that or they needed a reduced amount with that. And because of that, we're able to reduce our um building budget requests um significantly and that helped us close our budget back. So how do we spend our funds in the budget and this is the district operating budget. So salaries are about 50% of the budget. Benefits are 18 and a half. So almost 70% of our budget is driven by salaries and benefits. The next largest categories would be of course transportation out of district tuition and then of course utilities purchase services and other miscellaneous expenditures. But as you can see, the biggest budget
012driver for us is salaries, which are collectively bargained and benefits, which which we saw a huge increase in this year. So just to touch on enrollment and again we we talked about Polytech and how it's beneficial to us, but I think it's important to highlight that although our district is seeing overall declining enrollment, you can see our our enrollment numbers are stabilized based on the Polytech students attending our our buildings. So the total works enrollment you can see is stabilized based on the environmental sustainability and engineering academy the computer science engineering and the animal science program. As you can see in the north enrollment you can see it's stabilized by the north campus building the new building that's out here that just started this year and the biomedical sciences academy. So you can see the
013small chunks of the bars are kind of helping to to sustain the number of students in our building so that we can sustain our staffing. As we've talked about in the past, state aid in the past six years, we've experienced significant declines in state aid. So although you could see year-over-year 25 26 to 26 27 looks fairly stable, um you could see the six years prior to that were significant reductions. So although one one year over another may not be a huge um decline, it's still almost 0% increase which is difficult to sustain with the expenditure increases that we're experiencing. And to touch on health benefits again, you can see the orange line is the state health benefit plan and the blue line is our Norththeast school health insurance fund um increase. So as you
014can see in our current year projection for next year, it's 20% increase for the school's health insurance fund, which is a joyer that we're included in with over 100 districts. So there's is success in numbers in comparison to the state health benefit plan, which has experienced over a 30% increase this year. So what that allows us to do is to use a health benefit waiver to raise taxes above the 2% tax levy cap. So again, we've seen this slide before in the past um months, but it's describing the fact that we can go above the 2% tax levy cap due to this one-time um increase in expenditure of the health benefits. So every district in the state of New Jersey is allowed to use this waiver this year um due to that state health benefit
015plan increasing over 30%. So that's what drives our local tax levy. As you can see in this chart, you can see the past several years of [clears throat] our tax levy being fairly stable and this year being a one-year anomaly because of that health benefit increase and as the state has um acknowledged that health benefit waiver is available to us. So currently our increase is 4.29%. The available increase for our tax levy is 4.6. The board did ask us in the past month to look and do a deeper dive and see if there was any other way that we could cut any additional funds. So, we will be generating bank cap in the amount of $171,975. So, we were able to decrease our budget um tax levy increase from 4.6 to the 4.29 based on
016just some additional um staffing reductions through the attrition process. So, this is a year year-over-year revenue comparison. So, you can see the local tax levy increase of 2.4 million. other revenues going down $120,000 due to um projection projected decreases in interest income and also the parking fees that were eliminated. The state aid reduction [cough] due to [clears throat] the extraordinary aid reduction that we are projected to experience next year. Small increase in Medicaid reimbursement and also a plan budgeted fund balance reduction of $235,000. So as you can see for the operating budget, the net increase would be the 1.9 almost $2 million. And the other small pieces are the federal and state aid revenue and grants which is just typical of 80% is expected for grant funding and also the debt service that the taxpayers
017have approved in prior fiscal years. So how does that impact taxes? So the tax share per per municipality is based on a regional aortionment chart that we get from the county office and that's a snapshot date of October 15 of 2025. The two drivers of this chart is the equalized valuation of the municipality and also the number of students that are attending our regional district um at that time. So what that does is it takes our total tax levy that we're looking to raise and it allocates it out to all of the 12 municipalities per those two um pieces of information. So that chart then flows into what we do. We calculate our tax rate based on a calendar year instead of the fiscal year that we are looking to raise taxes for next school
018year. So as you can see on this chart, you can see the 2025 estimated tax versus the 2026 estimated tax and then we ascertain the average home value from the tax assessor of each municipality. And then you can see the difference expected for an average home in each of those municipalities. So you can see exactly how that's going to impact your municipality where you live. And this will all be available on our website as soon as we're done and the board has approved the budget. So what are the next steps? Tonight is the public hearing and the adoption. So we'll open for public comment and ask the board to approve this budget. Then I will certify [clears throat] taxes to municipal clerks. We will implement the budget on July 1st and make sure everything is
019available on our district website so that everyone is well aware of this presentation and all of the tax impact. I'm happy to answer any questions. >> Questions for Katie at this time. Katie, could you just go back to the I think it was the last two slides and just talk through them one more time because as you were explaining, I was trying to to to follow. >> So, we are a unique district. Most K8s in this area have one municipality. We have 12 constituent districts. So, we have to go through a a process of taking our total amount that our district budget needs to go up, which is our total 70 $70 million budget, let's say, and then we radically um aortionment between all of the the districts. So the county gives us this information
020and there's two driving factors of this worksheet and it's the equalized valuation of the municipality and it's also the number of students that attend from each of those municipal municipalities >> that gives us a regional aortionment for that municipality >> and then that's a that's unique every year >> because of that changes every year. >> Okay, got it. >> Thank you. that is the driving factor to calculating our tax rate for the calendar year of 2026. >> Okay. >> And then you said these were on average home values basically for each. >> So we asked the tax tax assessor to give us this information instead of saying per 100,000 we say what's the average home value in your town so that it makes a little bit more sense. Okay. The average taxpayer. >> All right.
021Thank you. And that's the annual difference in the last column. >> Yes. Okay. Yeah. That's what I was just trying to make sure I understood. So there can be reductions. Again, that's based on this chart. If there are less students attending from that municipality or perhaps um if there was changes in the equalized valuation of other towns, that could shift um how it's um how the impact in the share is of the other municipality. So let's say Beth Township had the reassessment. I know their equalized valuation went up. that may impact some of the other towns and actually force them into a negative difference. So that's where some of these hybrids is actually going down for 2026 because they could have less students and less equalized valuation in the totality. >> Okay. Thank you. >>
022Other questions or clarifications for Katie? >> Question. It's not concerned on this. >> Uh it's on the on the NHV web um legal page where we posted the the budget advertised budget. >> Um there was a section there for advertised enrollments >> and it's showing current enrollments and an estimated enrollment for October of next year. Um it's showing a increase of almost 300 students from this year to next year. Is that mainly made up of the cohorts coming from the BCH as well as the DSL coming back in what what is [clears throat] that increase >> those comp that is part of the components and then it's also our projection of any other housing units coming in. Um, we have two that are potentially coming in for September. >> We have two that we know
023will be open for actually three, >> right? >> Um, that will be that we know will be open for September and then other ones that are they're starting now and there's a possibility that the way the construction paces go sometimes they we might see those kids in October or November. >> We have a plan for those next year. >> All right. And when we So we use that number that estimated number >> Yeah. >> in our calculations in our plan >> and all that is is a projection for the budget software really that it's just a function of the software. It's really not driving any of the other calculations. >> Okay, thank you. >> And we use that October 15th date because that's when the state has us do a snapshot. >> [clears throat]