001education. Mr. Carrigg, would you please take the roll call? Here. Thank you. Please stand if you're able for the pledge of allegiance. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Please take notice that adequate notice of this meeting was sent from the office of the secretary of the board on March 9, 2026 to the Maplewood and South Orange Township clerks and the editors of the News-Record, Star-Ledger, Tap into SOMA, and Village Green. I will now entertain a motion to enter executive session as permitted under the Open Public Meetings Act to discuss personnel, legal, and miscellaneous confidential matters. No formal action will be taken. Board member Ms. Gable, do I have a second?
002Mr. Callahan. Uh show of hands. All in favor? Okay, motion passes. The board will enter executive session at 6:33 p.m. and will be returning to public session. Any action resulting from our discussions will be taken in public session. We'll see you back here shortly. >> Mhm. >> You can do that. Also, they were very loud. I think we're at a good time. Significantly louder. >> Good evening. I'd like to call this meeting back to order at 7:37 p.m. The board is now back in public session. Thank you for joining us tonight. Uh Before we get to our business this evening, I want to pause for a moment because the district has suffered a loss this month. Uh not everyone who has attended our board meetings knows Chris Settle by name, but everyone has been greeted
003by him when they enter this building and met a met by a kind word and his unfailing smile. And when we trudge out of our building late into the evening from our meetings, Chris was still there at his guard post keeping watch. Chris passed away not quite 2 weeks ago, very untimely. Chris was part of the 525 Academy family for a long time and he served his district with distinction. He's left a hole in the lives of many people who loved him including in this building and in this room. And we want to take a moment now in remembrance of him. Uh Chris's family is collecting donations for his funeral arrangements for anyone led to give. Information is available at the back of this room where folks can reach out to me as well. Uh
004we'll be celebrating the life of Christopher Big Gravy Settle, as we called him. One of the most passionate Bills fans around. Uh April 2nd, 2026 at the New Born Baptist Church, 391 Avon Avenue, Newark, New Jersey. Viewing will be from 10:00 a.m. to 11:00 a.m. Service will begin promptly at 11:00 a.m. Tonight is our preliminary budget adoption meeting. Uh and uh we will hear tonight from Superintendent Bing, as well as our uh new uh interim business administrator, uh Frank Servello, who will be joining us remotely to go over our budget. Um unfortunately, our business administrator, Imani Moody, is on a period of medical leave as of the beginning of this month. Uh we wish him well, and uh the uh resolutions uh recognizing uh Mr. Servello as our interim uh BA will be uh addressed
005in the action portion of our meeting. And with that, I'll turn it over to Superintendent Bing. So, tonight we're going to be presenting our preliminary budget. Um just wanted to speak briefly in regards to the work that we've been putting in. Uh we are not there as of yet. Over the next month, we'll be doing a lot more work around this budget, uh revising and refining it as we move forward. We'll be as transparent as possible with that, utilizing our website um to make sure everybody has the same information. So, the development of this year's budget has been exceptionally difficult exercise in balancing educational necessity with fiscal reality. Our primary goal has been to right-size the ship while protecting our greatest asset, our our wonderful staff. As staffing remains our largest expenditure of 64% of
006our total budget, we have approached this cycle with a commitment to empathy, transparency, and the responsible stewardship of taxpayer dollars. Uh to meet our fiscal targets while minimizing the impact on our educators, we have focused on a strategy of minimizing reductions in force. Um we started the strategy last year. We will continue it this year and into next year. Um we are achieving about a two and a half million-dollar reduction uh in pandemic-era staffing through the following strategies. Uh attrition, leveraging retirements, resignations, non-renewals, and natural attrition, uh internal transfers and shared staff, reassigning qualified staff to fill vacancies rather than hiring externally, and policy adherence, uh maintaining strict compliance with the class size policy to ensure instructional quality remains high. Uh this is a sliding scale. Some of the information you'll see tonight because we're
007working pretty hard to reduce any uh layoffs that we currently have uh in this presentation, and we'll do that work over the next month. Additionally, uh by utilizing uh a the health care cap waiver, we are providing the necessary runway to stabilize our finances, contributing to an overall budget reduction over 5 million uh next year. I want to point out, especially to our taxpayers, um that we know this will go above the 2% cap. Uh it is necessary at this time if we want to right-size the ship and make sure we're going in the right direction and put in permanent structures so we're not revisiting the same cycle uh of uh reductions higher reductions higher for the next 3 to 5 years. Uh we need to really focus on creating structures and then holding those
008structures in place moving forward. Uh part of those part of that restructure will be around transportation as you'll see in our presentation. Uh rigorous analysis of our transportation department identified an opportunity to save over a million dollars by moving to an optimized three-tier system. By allowing 30 minutes between tiers, we reduce trip tardiness and increase fleet efficiency. This transition was guided by the following non-negotiable guardrails. One, student safety. Uh one, reducing crosstown bussing. Uh and also uh revising our hazardous routes report every 3 years. It is a district's responsibility to revise their hazardous routes report. So, we now have completed that task. Wellness, incorporating research on teen sleep patterns and aligning with the New York City train schedules. And finally, efficiency, capping trips at 30 minutes so no students are on buses for more than
00930 minutes and reducing the total number of buses in our fleet. Uh a lot of that work will be done by a revision of school and start times that we'll be sharing in the coming weeks. Uh that is about the lowest hanging fruit we could find for a really large savings that has a minimal impact. So, we'll be sharing that data over the next week or so. Also, pre-K optimization and health benefits. Uh we have scrutinized our pre-K budget identifying trends that allow for an optimization of over $800,000. I want to specifically thank Leroy Johnson, Dr. Gilbert, Dr. Weibel, uh Frank Sabellico, and Tiffany Rinaldi for their diligent work in this area. Furthermore, uh SOMSD has joined several peer districts in pivoting away from the state health plan, um which has a projected increase of
010over 30% this upcoming year, and another increase of over 30% the year after. Uh we have moved to a self-insured model, so I would do want to thank both our associations, ASCA and SOMEA, for their collaborative work on that. Uh this move is a critical for long-term cost containment and budget stability. Uh transparency and public engagement, we do not take the support of our taxpayers lightly. To ensure the community is fully informed before the final budget hearing, we will provide the following additional layers of analysis over the coming month: line item detail, granular breakdowns of departmental spends, action committee reports, insights from our community-based budget action committee and transportation action committee, public feedback loops, digital forums for communities to weigh in on specific restructuring goals. Um I do want to extend my deepest gratitude to
011our associations, board of education, senior leadership team, and our stakeholders. Uh this has been a challenging season, but through collaboration, we are ensuring the long-term health of our schools, uh whether you currently have students in the district, had students in the district, or never had students in the district. Uh we want to make sure that you understand we take our role as stewards of the taxpayer dollar uh in a very high priority for this board and myself. Uh all the work that we have been doing uh not only keeps in mind our families, our students, our staff, uh but also our taxpayers. So, we thank you for your support. Excuse me a second. Frank, you're on. Frank, we're pulling up the PowerPoint now. I I see that. So, um It was tiny. I I can't
012say that I've ever presented a budget to a district and met the district at the same time. So, uh I I would um I I would just say, you know, thank you for allowing me the opportunity to uh work in the district. Um this is probably I put together over over 30 budgets during my working career and I've helped another six districts uh put their budgets together since retiring. And this was probably the most challenging project that I've ever ever encountered. Um it it's a very large district. There are a lot of moving pieces and um um you know, getting a handle on a budget this size with with a condensed time frame, uh basically, you know, 3 weeks to really kind of finalize this has been uh a bit challenging. But it But I
013really couldn't have done it without the help of the staff. Um uh the central office staff has been fantastic. You have a great central office staff. Uh the senior leadership team really dug in and spent hours and hours and hours helping me go through the budget, analyzing things. Um so, I really it was a group effort and I couldn't have done it without all the help from the district and uh you really have some great staff working behind the scenes to um to keep things running. Um so, so with that said, um just a little bit of background, I have been working uh in the back end of the district helping out with some staff absences since about um May of last year. So, I was involved with some of the closeout for the audit.
014Uh there was a transition of the assistant business administrator position and once the new business administrator came aboard and got acclimated, I helped the district to perform some financial analysis and projections. Um and I was helping in the back end with some of the budget and then when uh Mr. Moody had his unanticipated leave um there was a natural um transition cuz there were there were a shortage of qualified business administrators and I happen to be working in the district and knew a lot of the staff and um had access into your systems and had a basic understanding of the budget. But with that said, it it was quite a task to actually complete and go through the process of developing the budget. Um one of my strengths is budget development, budget budget analyzing, budget
015forecasting and um I I really feel comfortable in the budget that's being presented tonight with a caveat that it that what Mr. Bing uh said earlier is that the process will not end tonight. The process will continue and we'll continue to refine, continue to review the budget, look for opportunities and up until the night of the public hearing because that's what we need to do. Um so, you know, we're we're presenting the preliminary budget tonight with the understanding that that there are a lot of challenges um that our district is facing and a number of other districts in the state. I mean, you open the paper any given day and you'll see that that we're all facing very similar challenges of trying to to rein in untenable health insurance costs, having all of our costs
016and being constrained to a 2% budget cap. You know, the basic math the the numbers just don't work. So, uh what we are here to present tonight is is um is an overview of the budget that we've come up with that we believe uh a fair representation of of our needs versus balancing taxpayer needs and and and fitting with all the budget constraints and and the requirements that are that are placed on us. So just want to identify some of those constraints that we've been dealing with as we're developing this budget. You've heard of these constraints in our last year's presentation. I do want to emphasize we have a couple new ones that have popped up. One, the growing and fluctuating school enrollment needs as we move forward again. Uh we have high have a
017high needs district about 21, 22% of our students are classified. We have a large neurodiverse population. We want to make sure we're serving these students to the best of our ability. Uh aging infrastructure requiring maintenance as one of our big issues. I think what you will notice in in our final budget presentation next month, I think you will see that for the last couple of years we have kept money in the budget for facilities recognizing that improvements will need to be made. Is it on screen? Oh. You go to the one with the arrows, guys. One more. Yep. Thank you. Um increased health benefits and property casualty insurance costs, technology infrastructure updates. I do want to shout out Mr. Bonds who has really towed the line in regards to restructuring our CHS auditorium. Uh and
018has done a wonderful job around that. Fingers crossed by the new school year, uh rigging is now complete and lighting should be completed by the new school year. So we're excited about that. Uh and also mental health and security initiatives. We'll be having a mental health forum over the next couple weeks. Uh and obviously security is a big issue. I want to thank Mr. Morgan who has had a very smooth transition into the district over the last month or so. So, big thanks to him. Um and as Frank noted, our limited tax capacity is is one of our lingering issues, uh expiring bank cap, and also our fixed state aid limits. Uh can we go to next slide? Go ahead, Frank. Okay. So, So, those those of you that have heard me give this presentation
019before uh will know that that that in in my world of financing, everything revolves around your sources or your revenues of funds because um that's where we're capped by the state. So, our our cap is on the tax levy. Um and we have you know, the limited amount to raise money in other areas. So, by virtue of of capping the tax the amount that we can raise taxes, we will cap our expenses because we need to have our our sources of income or our revenues match our expenses. So, what we've put up here is a version that maybe many of you have seen different versions of this because as we started to delve into the budget process, we started the 26 the 25 26 is our approved budget. 26 27, we started to put scenarios
020in and we said, "Okay, if our tax levy can go up 2%, what is that bias in terms of growth in the the tax levy? If our state aid remains flat, what does that do? If we get an increase, what does that do? Extraordinary aid is an aid that comes in based on your special needs population, but it comes in after the fact, so we never know what what amount we're going to receive. It's also the state has a limited pool of money and they look at everybody's needs and they split up the pool of money that they have, so it's a little bit of a moving target and it's hard to budget for. Um the Medicaid number is a number that is given to us by the state. Um and it's a it is
021the the state requires us to submit Medicaid reimbursements. It's a 65/35 split. The state gets 65% of the money that's claimed from the federal government and we get 35%. So, the reason why there's a mandate to claim this to to claim Medicaid funds is because the state gets 65% of that money. But, our estimate that the state gave us is $110,000 for next year. We take in some money from rent, we take in money from out-of-district tuition, and we have this miscellaneous revenues which captures basically everything else. Interest on investments, um uh if we charge fees, if if uh students break something, they pay fees to us. Um it's about $900,000. Um the next few lines are the district's use of various reserves. We have a couple of slides we can get into lately, but
022when you hear reserve or fund balance, it's basically savings that were generated either from a previous year or that by statute we're authorized to put into various reserves that can only be appropriated into the budget for very specific needs. So, as you can see, um last year we spent we appropriated to to balance the budget almost $14 million. That's that's the 6.9, the 4.45, and the 2.5 to balance that budget. Um many of those reserves simply don't exist anymore. So, this year uh this 5.585 in reserve came from money that was generated in the 2024-25 year that had ended. Um as as many of you know, our default is um if we raise the money and we don't spend it, by default we're only allowed to hold on to 2% of our money in our
023reserve fund balance. That's our savings accounts that that that are not for another purpose. It's just to offset the general budget. And anything above that goes back to the taxpayers for tax relief. So, this 5,585 is generated and was put right back in. It's the second budget year because of timing through audits. And by statute, some people call it a legal reserve. Um this money has to get appropriated. So, this 5,585 came from the 2024 2025 budget. We are estimating because of a budget freeze in the 2025 2026 year that we're recognizing another $3.8 million in revenue generated from the 2025 2026 year. And we're using that as a revenue source. We're basically applying savings from the budget freeze from this year to balance next year's budget. Anybody that knows anything about budgeting knows that
024that is not sustainable in the long term because we can't keep freezing budgets and not not allocating those resources and then using those resources to fund the future year budget. It just it doesn't work. But as you can see, we we can't change this overnight. We can't come from $14 million down to $5 million or $6 million because that requires additional cuts because it as we get to the bottom of this the $174 million is is our general fund operating budget. That's the limit of money that we can spend and our appropriation. So, as we're building this budget we look to build our revenues first because we're limited. Our two biggest revenue sources in terms of tax levy and state aid are fixed. Um and all the other ones basically we're applying previous year's savings
025to help with offset the budget. And when we talk about that fiscal cliff or the structural deficit or this imbalance, this is what we're talking about and we're starting to feel the pain because we have we have about $5 million less of revenue sources even though we were we received the state aid increase, which I'll talk about in a second. Um there's a shortfall and we've had to make up that shortfall. The most we can raise our budget is $174 million. That $174 million includes a 5.63% tax increase of almost $8 million. Over to the right-hand side, you can see that our base tax increase of 2% is worth about $2.8 million. And if if we didn't get that additional 5.1 million that we still have to apply to the county or the state to
026get that approved, we have to justify that we need that money. It's it is a it's an exception. It's one of the only exceptions to that 2%. Um and the state put that in. It's automatically calculated. We were actually entitled to go up to raise an additional uh 5 to $600,000 and we could have taken this up to 5.6 million, but again, every dollar that you raise um comes to comes at a cost to the taxpayers. So, we settled on 5.1 million based on our our health insurance estimates um which we can get into in a little bit and we're able to raise $7.9 million as a revenue source to help plug these other shortfalls. Um down here, we went from 6,893 to 5,585. We lost 1.3 million in that that line item of money
027that was generated. Additional balance we lowered that by $644,000 and we're not budgeting any money for maintenance reserve mostly because uh we only have about 700 and 700,000 little over 700,000 left. Um this maintenance reserve although it's although it's restricted for use on required maintenance, went to help offset our operational or ongoing maintenance costs. So, um you know, we had to make up for all these shortfalls and thank thankfully, we have this 7.9 million-dollar banking availability available to us. Previous versions, you know, there's been a lot of talk about different versions of what this deficit could look like. The reason why we had different versions is we were we were doing different versions of what happens if we don't get any, you know, what happens if the state last year we weren't entitled to a
028health insurance increase. Um we don't know if we're going to get any additional state aid. So, we did a bunch of different different scenarios as we were preparing to come into this season because we knew that this was going to happen. We just didn't know the extent. And unfortunately, it was all lumped in with, you know, we had a a governor that made a change. We were supposed to get our state aid figures at the end of February and that got delayed for several weeks. So, that was compounded. So, we had a very condensed time to finalize what these numbers look like to come up to this 174 million dollars and then back into the budget and the expenses that we need. And the only other thing that I would say about this is that
029um even though we got a 6% increase, we were entitled to to quite a bit more. Um we were entitled to I think we were shortchanged just over 1.3 million dollars. Um because the state sends you the calculations of how much aid you're entitled to and there was a fail-safe in this year's budget. I think it existed last year and possibly the year before that said no district will swing more than 6% each way. So, if you were one of the districts that was supposed to lose aid based on the the formulas, you couldn't lose any more than 6%. They set they the consequently, they also capped the other end which unfortunately hurts this district is that we were entitled to much more and we were capped at 6%. So, we lost about 1. a
030little bit over 1.3 million dollars in direct state funding that would have helped to ease this. It would have been built into a habit. It would have would have had a positive impact on the budget. Yeah, I do want to I want to reinforce what Frank said uh in regards to our structural deficits. Um if we do not act uh on these structural deficits, we will continue to be in this vicious cycle uh every school year. So, part of this work this budget cycle is really trying as we noted to put some of those structures in place. We cannot keep relying on budget freezes every year and our savings. It it is a formula for disaster. Right. We we can see some Yep. Yep. The next question. So, you know, during this budget cycle obviously
031we were looking for fiscal efficiencies to close the gap that Frank talked about Part of that work was around third-party contracts. We started this work last year. This year we are initiating a robust uh request for uh a proposal process um really to see what companies are out there in regards to custodial, in regards to paraprofessionals, in regards to security uh to make sure we are getting uh the best price uh and the bang for our buck. Uh district has not gone out for RFPs in quite some time. So, not only does going out for RFPs every 3 years one keep your current vendors honest. Uh it also can present opportunities through other vendors. Uh we also looked at custodial coverage a little differently this year. We used the formula just using square footage uh
032instead of looking at personnel. So, that square footage uh audit came into play during this budget saving us some funds. Our security staffing we're currently looking at as well. Uh we're looking at sharing staff at secondary school level. Our transportation as I noted earlier, uh looking at changing our school start stop times, looking to put about 30 minutes in between our bus tiers uh to really reduce uh some of the major inefficiencies we were have been experiencing for I'd say over 5 to 6 years uh at this point. Uh we did an in-depth pre-K analysis as well. Uh our energy costs, we are partnering with an energy company this year uh to really look at our energy culture and how it is utilized. Uh so, we're hoping to uh reap some savings from that as
033well. Uh strategic staffing planning, again, I want to make sure I'm mentioning this. Uh we are leveraging our non-renewals. We are leveraging our resignations. We are leveraging our attritions, and we are leveraging our retirements uh in regards to not filling vacancies uh for people who resign, who are non-renewed, who retire, or just plain attrition. Uh we won't be filling those vacancies. We started that work last year. Uh we will continue that work this year. Uh 25-26 budget freeze, as I noted, we froze this budget sometime in November. Uh it is a practice we can't keep doing. Uh and also we made a insurance change as I noted earlier. We left the state plan that has been anticipating over 30% increase for the upcoming year and a greater increase the year after. So, not only South
034Orange-Maplewood School District, but many other districts decided to leave the state plan and self-insure. Go ahead, gentlemen. You can go to the slide. Frank, did you to talk on that? But we can the the only thing that I wanted to hit with the RFP process is that we're really taking a look at this and and we also have a resolution on the agenda for Thursday to get some assistance from probably the most the most experienced person in the state with purchasing and bidding and specification writing. Um because because again it's it's going out to bid, but it's also tighter of a the tighter of the specification that we can have the better accountability we can have over the contractors and we really want to look at these major our major service providers and become up
035with a performance based spec and a very tight spec that will give us the most efficient bid possible. So we will we will be hopefully using the assistance of a professional who who basically spent their life doing this to help us tighten up these RFPs and with with a hope and then we make significant changes like we talked about in the custodial area that will help to help us to lower our operational costs because those are you know, they're not direct instructional costs. So our you know, our goal is to try and you know redirect as many funds back into direct instructional costs as we can and kind of knock off you know what Mr. Bing referred to is you know, low-hanging fruit or other areas that that that if we can achieve savings if
036we can get a better product out of our custodial cleaning staff and achieve money achieve the savings, it's a win-win because that money can go right back right back to either you know, provide tax relief or to be used in in in direct instructional and and more impactful ways. So Yeah, for pulling out also that transition to a self-insured health plan, I do want to first shout out uh uh, the work between uh with Asken and Somer, they were collaborators on that process. Um, they realized that the state health plan would be unsustainable with the rising costs. Uh, and they worked with us to transition to a self- insured health plan, uh, maintaining the coverage quality. Uh, I also want to make sure that everybody notes we have a lot more control with a self-insured
037plan. We also have a lot more data in regards to budgeting and things of that nature. Um, also want to point out that we'll be working with, uh, our new self-insured companies to really, uh, push staff wellness. You'll be hearing more of that through the personnel committee. Uh, we're looking to create a staff wellness committee. Uh, and really focus on the mental health and physical health, uh, of of our, uh, staff. Uh, this job, no matter what you do, whether you're in the classroom, whether uh, you're in central office, whether you're an administrator, um, it has changed since the pandemic. Uh, and it does require extra intentionality in our parts to make sure our staff is well. So, we'll be working around that. Uh, if you go to the next slide, gentlemen, I I do
038want to point out where we currently are in regards to health costs. Uh, Frank, uh, you can touch on that, uh, if you choose to. Well, this is this is this is uh, an an enormous cost. As you can see, these costs have crept up. Um, so, my last year as a full-time business administrator was about 5 years ago. These rates were were close to half of what we're paying right now. Um, they have skyrocketed over the last 3 years. And if anybody who's is reading about what's happening at the state, we're we're in this this mire the state health benefits plan as more and more districts that have any opportunity to leave to go into the because when you're in a self when you're in a a fully insured plan your rate is your
039rate and it doesn't matter what your claims are. Um this direct 10 plan for a family is up over $70,000 in the school employees health benefit plan for next year. And they're talking about more more increases in the 30% range. So as more and more districts are pulling out of the state health benefits plan um it's leaving the districts who don't have any other options are the only ones that are available and that are going in there and it's it's like a death spiral. You've heard it maybe read the paper that's the death spiral because only your your people that don't have any other options are going into this plan and because those are people with bad you know high claims experience the premium needed to cover those claims is not offset by districts that
040have better claims experience. That's the whole idea whether you're self-insured or you're with a pool is that people with no claims or very little claims offset the people that have higher claims. So in the state health benefits plan as more these and more more districts that have and um good claims experience leave the only ones that are left are the ones with really bad experience and that's why you know it's not just the cost it's it's getting control over your long-term health insurance needs. Why the move was made to go to a self-insured plan because we fully we're we're buying we're buying our insurance and we're paying for our claims. Um you know the downside is we're not we're not in a fully insured plan and that cost can be can be somewhat subjective. You
041know we have reinsurance in place but there are carters that we need to meet so we we also need to be cognizant of the fact of how much money we're putting into our health insurance line because we have to cover all of our potential claims and it is a very new plan. Um, we're into month three. But as anybody who knows anything about insurance, you know that there's like a two-month lag. This is called incurred but not reported and those claims are just starting to tail in. So, as we go through this, we're not going to know for until 6 months past, we're not going to have reliable claims data. So, we're putting this health insurance budget together based on a number of different factors without a really, really, really pinned down knowledge of what
042our claims experience is trending and look like. So, um, this is one of the variables that that that we had to take into consideration when putting a number in for that health insurance line. So, we've we've done some nice work around this. So, I'll I'll give a shout out to this board and other boards before them. More at a point right now where if you're looking at the last three negotiation cycles with our largest union, so may I they're at about a 30% increase in salaries. Uh, if you're looking at uh, ASCA, we're at about a 20-plus percent increase in salaries over the last six to to eight years. Um, one of our goals was also to uh, increase our starting salaries in the district which we significantly have which has made us quite competitive.
043Uh, our staff, our staff here, our teachers are now one of the highest in Essex County. Um, so we'll continue uh, to really monitor uh, the health insurance side uh, of this coin because it is significant and it is something uh, we will have the ability to project out as Frank noted once we start getting some claims experience numbers. We have a we'll have a lot more control moving forward and a lot more data that we never had with the state plan. And that's key. I mean, the data the data that we're able to see now, not I'm not talking about, you know, individual claims. It's just the the types of claims and the and how the trends are running, we can really analyze that data and make sound decisions moving forward. So, this should
044be a long-term investment uh of us managing our own basically our own health insurance company right now. So, there are a lot of other positives to to being in this type of a plan. Go ahead, gentlemen. Go ahead, Frank. You can talk about operational efficiencies. Uh you know, one of the advantages of having Frank in the district as a consultant uh was that he could see behind the the curtains uh and really take a deep dive into our operational efficiencies, which one of the things we noted uh when we first came into the district that we needed some major changes. And when we talk about structural changes, a lot of them are in in our operational efficiency. Go ahead, Frank. Yeah, let's start. So, um I you know, when when I'm looking at the district,
045the the biggest area for improvement that I can see is that um at least in in the business office, and I'm sure it's probably mirrored in in other offices, is we are in a constant reactionary state. So, instead of we are constantly reacting to something because there's a deadline, there's something there's something that was missed because there was a staff turnover, there's a transition, and when it you know, we have we've had a lot of turnover, and when a new person comes in, they're they're digging out over they're trying to play catch-up, and then another one of their support staff members leaves, and they're playing catch-up, and there's a vacancy, and one of the reasons that I was retained was that you you still have you had a vacancy in an assistant job, and then
046you have another absence in a in a higher level back end position um that that the person's has been out. So, all of that work in the back end was not really you know, it was falling out of their people. And when you have, you know, the equivalent of two full-time people um trying people trying to make up for all of that work, you end up being sitting in the back seat. And I think you've had a cycle of being in the back seat. And you know, my hope is that the district goes from being reactive to proactive and staying on top of things and looking things proactively and and monitoring things. And and a few things that we put in that will help us to to kind of flip that switch is um we
047went to an electronic budget development system. That was put in place the first year it was put in place was last year. Um as you put these systems in, there's a learning curve. Um and and this was year two, and I think the process was a lot easier for everybody to understand, so that all of these account codes, we have 109 We have over 900 budgetary lines. And every line is built with data. And it either gets pulled from the personnel system, uh a subject supervisor will enter something, something one of the building principals, uh the director of technology. Everybody has their lines and builds their accounts. We can go into those accounts, and we can review those accounts. We can look at past historical trends in spending, and um and really kind of dive
048in and really have a real-time look at what's happening with the budget. Um that process didn't exist. And that that provides a lot of useful data and a lot of help with I don't know that we could have ever gotten through this process this year if that system wasn't in year two of of uh being implemented. We have an electronic purchase order system that we started in in the with the concurrent start of this school year in the 25-26 school year. So, now that anybody that wants to place an order has to put a system a purchase order in the system electronically, it gets approved electronically. It automatically gets coded to the proper uh budgetary account line. Um but we we need to do as a district, we need to do a better job at
049identifying our our lingering commitments and our encumbrances and making sure that that the purchase orders that are in the system accurately reflect um our needs. And that that I think is one thing that that has probably been lacking, and I think that again, we have to be proactive, and we have to start looking at all these the the budget forecasting analysis. I can't stress to you how important it is for us to to to analyze our budget, stay on top of our budget, and forecast our budget. We're making a lot of assumptions in next year's budget. Uh it's March, and this budget has to get us through next June. A lot of things happen, and a lot of things change, and a lot of the assumptions that we make um may or may not come
050to fruition. And one of the one of the most key things and the vital thing that we need to do is to once we set this budget in process in May, we need to immediately, you know, I'll take the custodian bid for instance. If we go out to bid in the and those we do the analysis, we're slated to do the analysis in May, the minute those numbers come in, and we're ready to award that bid, we need to compare that bid to what we have budgeted on that line and the savings that we're supposed to achieve. And if we achieve the savings, great. If we achieve more savings, we need to track that. And more importantly, if the savings aren't realized, we need to now look for another line and look look to see
051how we're going to pay for those savings. And we need to book that order for the amount not the amount that we have budgeted, but the amount that we're going to spend. And if if that's going to override that line, at that minute, we need to find another source and move the money and cover those expenses. That's what we That That is the goal that we need to get through from the business office and and as a district. And you know, that that process there's quite a number of people involved in that process and this way when we're looking at financial reports, we're looking at the most up-to-date accurate financial reports cuz the financial reports are only as accurate as the information that we we put into those those systems. So, these all these all
052tie into our operational efficiencies. Um and the last one that's on here is I think I addressed it earlier that talking about really refining our RFPs. You know, the better spec that we have and the more precise we can be and we can throw in penalties for non-compliance and go to performance-based specs as opposed to, you know, the number of staff that we need. We think that that's going to materialize in savings, but the most important thing we need to do once we establish the budget is to measure ourselves against that. And then we're using that as as a guide when we're assessing our 26-27 budget. And as we roll right into the development of the 27-28, we're going to look at what our projected expenditures are and roll that into the 27-28 budget. So,
053that's that's the long story about where where we ideally should be heading. And I think we have some we have some demonstrated success this year in regards uh to making sure we're controlling our costs. We did a nice job this year in regards to overtime and sixth period pay, dropping that by about 80%. Uh we've done a nice job with powers as Liz could note, we have a report out every month. We try to keep a tab on that. Uh we need to do the same with custodial. We need to do the same with security. We need to do the same uh as Frank noted with our POs. We're not guessing if this PO might hit in June. So, those are three big areas that we really need to control and really put a person
054in charge of and hey, this is what you're responsible for and make sure we're aligned to our budget. Good gentlemen. So, this this page has a lot of information on it. If I showed you my version of this page, um So, so one of the things we look to do is these categories on the left-hand side are the state defined categories. And when we roll into our accounting systems, we have to report everything into one of these categories. So, when we set up an account code, when we put a purchase order in the system, um we code it and one of one of the things that makes me able to go into your school district and see what you're doing is I know that all of your I know that all of your facilities, your
055maintenance needs to go into your 261 accounts, your custodian is your 262s, your transportation your 270s. And every district has to report this way and roll up all these expenditures. So, when we roll this up, you know, we've heard of the taxpayer guide to educational spending. They key in on all of these different we call them here, we have a name we call them cost centers. They they key into these cost centers. And we we track these these these expenditure expenditures by cost center. The accounting system is automatically set up to subtotal everything and track everything by these cost centers. So, one of the things that I like to do and and this is when we talk about, you know, me personally as I start to go through, you know, the last 3 weeks as
056much as we've been putting this budget together and we've got our state aid figures and making reductions, we're busy in the back end monitoring all those accounts and fixing all those accounts and making sure everything ties. But, what I really need to do is I need to flip the switch and look at this budget holistically and look at it by by program or cost center and say, "What is this number telling me?" And I So, I can the basic math of this number is So, we know that our general fund can be 084 129 and our revenues and our appropriations were off by $2. Uh the revenues are round numbers. The back end of our system doesn't round and we actually have to go through now in the back end and get rid of all
057those decimal points so that the $2 is off. So, if anybody if anybody sees a difference between our 26 27 or proposed revenues and appropriations is off by $2, but um $2 is is a is is is easily easily obtained by the time we finish this process and it's not going to have any anything close to material impact. But, we can see now our total budget went up 3.858. It's important to know that our budget even though our taxes are going up almost 6%, our taxes are going up because we have to make up for those other revenues that we lost in terms of all the savings that we had applied in previous years to offset that budget. So, our expenditures can only go up by 2.27%. And this is where we've made reductions, we've
058had additions. So, I mean, we can see that that our employee benefits is not only health benefits, it's pension costs, it's social security costs. Some of these other we're looking proposed to proposed, some of these other lines within the employee benefits line were under budgeted this year. So, in order for us to right align those numbers, uh we've had to put a larger increase on that, which is why you're seeing our total employee benefits line go up $6.3 million. And basically, in order to pay for that $6.38 million, you'll see minuses. You'll see operation and main- maintenance of plant is down $2.4 million. So, the minuses are paying for the pluses. Um, and the net result is that our overall budget is going up. Um, basically, we're going up $3.8 million. We can see all
059the pluses and minuses. And now, what our next phase is we're proving this out, because again, there's 900 lines of budgetary backline data is now proving out this story and saying, you know, does this story make sense and is it trending? And if I had shown you this from from my other district, and I'm even building some back-end stuff for you, like I'm looking at it it's most im- you know, the taxpayer guide to educ- educational spending does a per pupil cost. And while I think that's important, I like to also key in on what percentage overall is what percentage of the budget is each one of these functions, and what's happening for year to year. And and if I had showed if I showed you my screen, you would see that that the employee
060benefits line um, is 28,687,187. That represents a $6.3 million increase, but it's 28.61% of the general fund budget. So, 28% of that budget is employee benefits, the 100 and the 174 million. In our current year over the previous year, that employee benefits line Oh, sorry. So, that it's 16.48% of our budget. So, 16% $28 million is of $174 million. The current year, our budget is 13% of the overall budget. So, in 1 year, we've recaptured it's eaten into 3% of our budget at the expense of some of these other lines. And when we go into the public hearing, I I think it's important for us to see these trends and what we can do with these trends is we can go back and we can look and we can say, you know, we can compare
061ourselves to our peer districts and say what percent of our budget is uh you know, how much of our budget are we spending on transportation versus some of our peer groups and it it just gives us data to understand where we fall within our peer groups and how we track from year to year. Um some of these are very similar. They track with the same percentage of the budget and some of them have have reduced as an overall percentage of the budget and some of them have been increased. So, when we go through the public hearing, I'll really take you through a lot more of this. Again, um this is the tentative budget submission and now we're in the budget proofing and verification process. Um and but these are all the different functions that these
062are all the different cost categories that we track because this is what the state tracks and we're able to we're able to kind of compare ourselves to peers to to to district-wide averages. So, we kind of report this in this matter so it allows us to kind of expand and be able to compare and contrast. Um you know, our our total budget So, our general fund is really that's our operating budget. That's our day-to-day budget. Special revenue is all of our grants and it also includes our preschool program. Um you will see that it looks like there's a 1.9% increase or $1.9 million increase is 17%, but this is proposed to proposed and if anybody sat in on our budget meetings last year, um we knew that we were all instructed to budget a very
063low percentage for all of our federal grants, not knowing what was happening with the federal government. So, everybody who budgeted budgeted a very low amount for all of our grants. We ended up getting pretty much our entitlements. So, if I showed you our adjusted budget for our special revenue fund, it would be much closer to the $13 million. So, it's a little bit skewed. Um our debt service is right on line, so we do have some level debt service. And I think we looked at that. We don't really have any debt falling off anytime soon. So, it should be pretty stable and pretty level. And then our overall budget is just over $200 million and represents 2.96% increase on the expenditure side. I think one of the things we need to keep in mind is
064what is happening at the federal level right now in the US DOE. Uh it's being dissolved. Grant money's are going to different departments. So, I think that's going to come into play as we're moving forward and probably impacting what we do receive from the federal government. We have not received a lot of information on that. Uh we will share once we do, but uh that's going to be a variable moving forward. Go, gentlemen. So, on this slide, you'll see some example of some of our work in regards to reductions to non-salary lines. Uh when we talked about some of the work that we have been doing, uh you'll see a lot of lines. We've been basing a lot of this work on 3 years uh and what was spent. So, you can easily go down
065that and and share. Uh you can see what uh reductions uh we have made. Frank, want to talk on that at all? Yeah, the you know, these are not insignificant reductions. I mean, we're we are trying to carve out $6 million in program cost. So, I mean, if I start the bottom, we we've reduced our instructional supply and textbook accounts by almost a half million dollars. We've reduced the text budget that the the technology budget in terms of our ongoing by $330,000. It was originally 250 and we needed more and we made modifications. Um again, these modifications that you see were the combination of hours and hours and hours and hours of sitting down with with all of our groups and pouring through what changes could be made to lower our lower our operating costs.
066And we came up with over $6 million worth of changes, but you know, some of them a lot of them require a lot of work. You know, we're restructuring our outsourced custodians. We think we can save $400,000 by doing that. We want to change how our lunches are being provided. We think we can recapture $200,000 by doing that over what we're currently what we are we currently the initial budget, which is where we thought we were going to end the year plus any increases. We think that we can carve $1.6 million out of transportation, but it requires us to earn our bus routes. Um we had a line that was being used if somebody wanted to go on a sabbatical leave and um we removed that line. So, now there's we don't have the ability
067to send any anybody on a sabbatical leave um because we're we're removing positions. So, And some of these changes uh will change next year. For example, we removed science textbooks purchasing. State has changed the standards for science. Uh so, we're able to push that back this year, but that's going to be a must purchase as the standards change and the state changes its assessments uh as well as we were purchasing uh, some new uh, ML uh, textbooks as well that we're going to push off uh, for another year, but as everybody knows that's our growing a growing population and uh, we'll need to make that purchase uh, in 2027-2028. So, a lot of these you'll you'll see coming back uh, the year after. So, again I I we go back to the idea of really
068making structural changes in this budget. Yep. Go ahead, gentlemen. So, here this is where we are currently. Um, we're at 23 positions eliminated. Out of that 23, five are riffs. So, this is not 28. This is 23 total. Out of that 23, five are riffs. So, what I what do I mean by that? So, currently, and this is a sliding scale, this will change. As Frank noted, we are still doing work on efficiencies uh, and working uh, to reduce our our layoffs. Um, so, you're looking at positions that are being eliminated and what that simply means are those people are not being handed a layoff slip, a pink slip. We're just eliminating positions that people are either resigning from, uh, they are retiring from, they are being non-renewed uh, from where they are resigning. Uh,
069plain and simple. We're not filling those vacancies if we don't have to, utilizing our current class size policy. Uh, as we noted, we have to right-size this ship since 2019 and the pandemic funding that is now gone that was utilized to shrink class size by bringing more staff on. Close to, if I recall last year we were utilizing the number of around 75 or more staff were brought on to shrink class size when the pandemic hit. Those staff are still on board. Um so, we made a promise not only to Aska, but also to Samaya that we would do this in a strategic and intentional manner, reducing staff through attrition, through non-renewal, through retirement, and through resignation, and we're sticking to that plan. So, as noted, right now we're at 23 total. Five of those
070are RIFs, and again, we are working to reduce those RIFs over the next month. Uh that is currently bringing us to about 2.5 million dollars uh in savings. So, we'll continue to update folks as we move along. Obviously, if you're comparing this to other districts, we we are in a good we are in a pretty good place right now. However, we want to get into a better place over the next month. So, as I noted, this is a continued work uh in regards to uh reducing the impact on our on our wonderful people in this district. All right, gentlemen. So, if anybody can read this, you get the uh bonus points for the night, which is uh So, I um I'm going to actually This is actually so small for me to read that So,
071it's it's in the handout, I believe, that everybody received tonight. Um there's been a lot of discussion about about fund balance and what the district has in its balances and various balances and what it doesn't have. Um I took the liberty to that I could A, get a get an understanding of what the trend is like in our balances, um and also B, to kind of present and and I think when you present it, you can you can see that there has been this shrinking of overall balances and the balances for different purposes. So, I just wanted to to kind of go through these numbers, and these numbers tie out to all of your audits. On the left-hand side, um I put the source down for the 24-25 year. It's either the the ACFR or
072the AMR. Um in previous years, it'll be close. It will be within like a page or two of the 24-25 reference. If anybody really wants to go back and take a look at this. Um we have the the B set the B exhibits of the order the governmental fund balances and this is where um every order across the country tries to align things so that we can compare ourselves to another district in Texas or Arizona. Um I listen, I've I've looked at financial statements for a long time. When they convert the C schedules to the B schedules, there's a lot of information that's thrown into to make it be comparable so that we can compare all all across the nation, but New Jersey is so different as is every other district that the ski the
073C schedules, which is the budgetary basis, the ones that we really follow. So you can see that our as of June 30th, our our total fund balance for our governmental funds is $29 million. Um two years earlier, it was $40.8 million. That's significant drop. over two years. Our maximum unreserved fund balance so we I you know, I can't talk enough about this. I've been around for a really long time. Um when we first started doing budgets actually up until the time that that the the 2% in the budget vote got put in, we weren't allowed to have less than 3%. They there was a recommended range of between 3 and 5% of your operating budget. And when all that came through, we were we were restricted to a hard 2%. So we have a district
074that has a $174 million operating budget and we're only allowed to have $3.7 million in in our savings account that isn't designated for a specific purpose. That That's a scary thought at a district this size. And you can see these are all the reserves that we have. I'll I'll take you through how they're reserved. Um but $3.7 million in unreserved fund balance is is a frighteningly low low number. Um so we just need to keep that in the back of our mind when we're talking about health insurance budgets and talking about the magnitude in salaries and out-of-district placements. Um this is the only contingency above and beyond what we have budgeted. And if we do have any contingencies budgeted, which we do have some in our budget because we have to because we only have
075three $3.7 million to rely on. Um reserve for encumbrances or typically it's it's orders that were placed but the services weren't rendered. So that rolls over into the future year. You can see that we've steadily um we don't have the money, we can't place orders for the following year. So this is all it's all declining. Um our legal reserve is is designated um for a subsequent year. These are funds that are generated in the prior year. Um listed as your excess surplus number. We have additional assigned fund balance. Um so so in order to balance this budget, if I if I if I held up that projected revenue screen a couple of slides earlier, you can see how these all tie in. These are the numbers, portions of the numbers, that were used to help
076funds this this 25-26 budget. Um we have a reserve of $4.6 million as of June 30th. Uh Uh, you can see over to the right, uh, there are maximums that statute it's regulated by statute. And this is, um, 60% of the amount of projects identified in your long-range facilities plan. So, the board just approved the long-range facilities plan. And the maximum that we can have in our capital reserve account is $155 million. Um, we're currently funded that we're funding at at less than 3%. Um, so we have $4.6 million to deal with all of our capital needs um, that that hasn't been designated for anything else. Um, it just Can you Can you just do me a favor and just toggle back to the, uh, to that to slide number nine. Frankly, we didn't rehearse
077this. No, we didn't rehearse. Toggle back. So, I just want I want to show you because I was looking at this tonight. Nope. Nope, next one. Yep. So, if you can see this capital outlay, this is where all of our capital needs are budgeted, okay? Capital reserve helps to go fund our capital needs. We're budgeting $82,000 for our capital needs. And 68,000 of it is in a repayment that we're owed back to the state. So, we're budgeting nothing to for the ongoing capital needs for our district. And we have $4.6 million left. And we all know the the condition of our buildings. So, um, I just wanted to point that out as I go backwards because as I was looking through the budget tonight and I was starting to get a feel for the story
078that this budget's telling me and I rolled in those percentages, I saw that we're we're spending almost nothing in capital when we're such a we're such a massive district that we're putting nothing in our operating budget for our our ongoing capital needs and all we have left is $4.6 million. dollars. For me, from an outsider standpoint, that's a that is um that was something that stuck out to me as as um as significant. Um so, can you go back to the fund balance one? I think that is slide I lost my screen here. So, slide >> It's up there, Frank. Yep. Yeah, good. So, that's our capital reserve, our maintenance reserve, again, our maintenance reserve as of June 30th of 2025 was 3.225 million. Um we used two and a half million dollars as as
079an offset to our general operating expenses that were required maintenance. If we need to replace doors, if we need to fix a boiler, um if we need to replace the entire boiler, it goes in capital, but if we need to repair the boiler, it goes into maintenance reserve out of our operating budget. So, we have at June 30th, we had 3.2 million, but we used two and a half million dollars to offset the current year's budget. So, as of June 30th, we'll only have about $725,000 left. This is also a a statutory calculation, and it's built up it's based on the square footage of our buildings multiplied by replacement cost. And um if we get this back if we don't do anything about the $725,000, we'll have about 10% of what we're allowed to have
080as a maximum the statute for for our maintenance reserve. So, these numbers are are very very low. We have an unemployment reserve. We basically self self-fund our unemployment claims, which is not uncommon for uh you know, a larger school district. So, we take the employer contributions, and instead of sending them to the state, we put them into a reserve account, and as employees file for unemployment, unemployment sends us the bill, and we're we're basically self-funded just like the health insurance. We have a reserve that has been steadily declining. It was 639 2 years ago. In June 30th of 2025, it was 393. If we run out of money in that reserve, we we can't not pay unemployment claims. We have to start funding that of the budget, and that will be another line for us
081to deal with. So, this is something that we also have to watch. Um and then excess surplus again is money that was generated This is money that was generated in the 24-25 year that goes that automatically has to be used toward the 26-27. So, if you look at that revenue line, you'll see that the 5,585 is used as a revenue source to help build the 26-27 budget. So, this is a snapshot of our revenues, and this is a snapshot of our our fund balance that that ties to the last few audits that we've had. Good, gentlemen. So, the next steps for us on the 27th, we'll submit the budget preliminary budget to county office for review and approval. Uh ongoing assessment will be really the next uh and biggest thing we're we're doing moving forward,
082uh keeping in mind that this current budget is a living document. We expect more retirements, resignations, attrition, non-renewals. Uh and our intent, as we did last year, was not to fill those vacancies or to fill those vacancies if needed with transfers uh from throughout uh the district. Um so, as we move forward over the next month, we'll be giving our board more details uh and also providing the public with more details. Um this budget, I stress, is not static. It is a living document uh as we work on more efficiencies and look to reduce layoffs. Uh and as Frank noted, um stay within our plan of putting instructional structural parts that will keep this budget strong over the next two to five years. So we're not revisiting the scenario at this time every single school
083year. And the one other box that's on there is the tax impact and so again South Orange Maplewood is a very unique situation because they are two towns that share in in one school system and they share the cost of that school system. The breakdown between how much each community pays toward the overall nut. So our our general fund tax levy next year is $149 million. That is the only number that we can control. So there's a debt service component that was previously authorized in in the case of this school district. We have a another unique situation where in other school districts that would have been authorized by the voters but we have a board of school estimate for referendums only. And if we were going to go above our statutory limitations that can authorize
084on behalf of voters. So the total tax needs are the general fund tax levy and the debt service needs which has been pre previously authorized. The most critical piece of this breakdown is we need the county equalized values. So when the when the county develops their tax bills, they need to figure out a fair way to apportion their tax need and they're all the constituent districts within their county or the municipalities. So they have a formula every county provides they use a formula to so that they do an apples to apples comparison of every single municipality in that county. We use that equalized value because it equalizes South Orange and Maplewood to do the split and decide how much of our total tax needs goes to South Orange and how much goes to Maplewood. Um,
085that's the most critical piece of information because everything then flows and says, "Okay, you know, what's the total ratables, what's the average for each town?" But until we know that split, we can't throw a tax number out um, and we are not going to know that. I believe we heard yesterday that it looks like the county is looking to um, approve the equalize values on April 4th. So, within the next, you know, 2 weeks we'll have that information that we can push out. Again, we have no control over the split and ratables and average homes. We have to report it because we want to let people know what what their impact could be, but the only number that we can control is how much we need to raise how much we need to raise to
086support the program that we have. Yeah, I think our work going forward as as we noted uh, we will continually assess this over the next month. Uh, this one is navigating our contractual increases. It's navigating uh, the millions of pandemic funds that have sunset. Uh, it's navigating the inflation of operational costs and really staying within our goal of protecting the classroom while honoring our taxpayers. Uh, so that's the work we have in front of us over the next 30 to 40 days. You sure? All right. Questions? As a reminder, we're going to have this discussion portion regarding questions on the budget when the resolution comes up to approve the budget, that's when we're having any questions and discussion about that resolution itself. Questions on the budget. Probably everyone has one. I saw your hand first.
087Board member Higgins. Well, first of all, I just want to say thank you so much for all this work. It's It's very clear that this has been hours and hours and hours of everyone's time and that you've been very specific and focused and digging as deep as you can, which I think is the general ask. Um, and I think it hopefully will set up success for future years. I also really appreciate you saying our district and we, even though you've been only been here for a little while, even though you've been like shadowing for a while. I really, really appreciate that. Um, I just had a question about the equalized values. Does this Does that affect the 5.63%? How are those two things related or not? So So, the 5.63% is Oh, I mean, it
088it depends on how how in the weeds you want the answer to be, but the 5.63% is is how much how much we are proposing to raise the taxes needed to fund our general fund or operating budget for the '26-'27 school year. So, those tax needs will be combined with the tax needs to support the debt service that was previously authorized. The combination will give us the total tax needs for the school year. That gets calculated into a calendar year because we we go on a July 1st to June 30th. The municipalities work on a calendar year. We convert We basically take half and half, so we take half of our needs from the '25-'26 and half of our needs from '26-'27. That becomes our '26 calendar year needs. So, we take those total tax
089needs and then we look at the ratio of the equalized values between the two towns. And so, I'm I'm I'm going to throw just a hypothetical number out. One town has a $10 million equalized value and the other town has a $6 million equalized value. The total equalized value is $16 million. And the one with 10 million would pay their percentage of that of that 16 million dollars. So, once we know the percentages, we know the splits, then we do separate calculations for each town and then we look at their actual ratables and we look at their average assessed home and we calculate what that tax increase would be for the theoretical average homeowner. So, that's the long story of how this how the rest of this this Do you want to summarize I will
090not be summarizing. Thank you so much. I will not be summarizing. You know, it would put the time I'll throw a screen up and I'll show you the breakdown and I'll take you through the breakdown and it'll make more sense when you can actually see numbers behind it. I just I don't you don't want to I don't want to throw speculative number out because you know, I I spent 16 years in a regional district and a lot of times that regional district um sometimes the ratio between the two towns had more of an impact than what we were doing in terms of how much of an increase or decrease we were proposing for our taxes. So, it's just and once that number's out there, it's out there. So, I'd rather just wait and get the
091real numbers and present the real numbers and I can I can walk you through that calculation to have you understand that a little bit better. Great. Thank you. Okay. And I know everyone's going to have some questions, so I will start from the beginning. I know Jeff has a follow-up. Go ahead. Uh can we just say that there are actually two important areas in our taxes where the number 57% comes up because about 57% of our all-in taxes go to the school district and historically, Maplewood has had 57% of the total equalized valuation of the two towns. So, um perhaps the number that's going to be certified in April by the county is going to be a little bit different from the usual 57% to 47 Sorry, the 43% split, but traditionally, like Maplewood is
092about 57%. Um I think South Orange Maplewood based on the October certification. Um, South Orange had more equalized valuation growth, so it might be a bigger tax increase proportionally for South Orange than for Maplewood, but I guess we'll see. Anyway, remember 57% comes up twice here. Jeff, do you have a question while we're here? No, I don't. Okay, fair enough. I just wanted to share that. Fair enough. Board member Brown. Um, I just want to make sure I understand this correctly. So, we are Well, I guess it seems like we didn't use any of our capital reserves or maintenance reserves like as a, you know, since the end of the um, since June. Is that correct? So, like what we're seeing here is the balances is likely what the balances are in the capital? Yep.
093So, so capital reserve is an easy answer. The capital reserve, no funds have been appropriated into the 25-26 budget for for capital reserve. So, you know, we'll earn some interest on those funds, so the number may change a little bit. Um, we also have an old old old project um, from 2001 that we're trying to close out that's in our capital projects funds, and if we are able to close that out, a balance of that money since it was funded from capital reserve may go back to capital reserve. So, those are the only things that would change the capital reserve balance. Maintenance reserve, uh, we did have a balance. Um, we appropriated two and a half million dollars to fund the the the portion of the budget, uh, let me see if I can throw
094a number. >> No, I I I remember that distinctly. Um, I was actually wondering of the 700,000 that we had budgeted to have be left in our maintenance account, is that still roughly how much we have in our maintenance reserves. >> So, this is the trickier part. Okay. That That That $2.5 million went to offset it's called function 261. It's required maintenance. And that total budget was about $2.8 million in the 25-26 year. So, right now, if we don't fully expend everything in our 261 accounts, everything above $300,000 will revert back to the maintenance reserve account. So, it's very likely that we may not spend down all of our 26 all of our 261 accounts in the 25-26. And that again, everything goes back to the funding source. So, with any other with any other
095line, if we don't spend it, it gets set up for tax relief because you can't have more than 2%. If we funded money in those lines using maintenance reserve and we don't spend it, it has to go back to maintenance reserve. So, you know, this is compounded by the fact that we've had a change in directors of facilities. So, all the projects that were initially slated in in the budget may not all get done. And if they don't get done and we don't spend that money, it will automatically revert back into that account. So, that that account is very difficult for us to pinpoint you know, we're looking at we can look at what we have encumbered and spent today. We have a plan in place for all the the needs that we have. And
096whatever we don't spend will automatically reserve back in the It'll go back into that maintenance reserve fund. So, it's likely that something will come back to it. Okay, thank you so much. And then, um related to our use of additional fund balance to balance this year's budget, it looks you know, we're using $3.8 million. So, is it Is it a fair statement to say that essentially this year to balance our budget Well, I guess one way I'll say it is are we 4 million are we spending $4 million more than we are getting in reimbursements? Like I'll phrase it a different way. Okay. We We are front-loading and we're saying that So So by default if we didn't put anything on that line at 3.8 million which 2 years ago he didn't. And the years
097that I you know did my budgets I never I never front-loaded anything. By default if if in the 25-26 year if that year ended and we ended the year with $5 million that $5 million would be used to build the budget 2 years until it would help us in 27-28, right? Does that make sense? Yes. But because we're front-loading it and we're we're we're anticipating that we're going to accrue the savings Now we have in order to do this on our we have this thing called a recapitulation of fund balances. On the recap of balances we have to plug in that we're going to we're going to generate an additional $3.8 million. I have to send by Friday all the documentation to the county and say like these are all the lines and here's our
098board secretary's report and we think that we can generate $3.8 million and and they have to approve that and in order for us to be able to to use that. So like when when Jason says that the budget process is not over there's still a lot of moving pieces that we need to put together. One of them being this $3.8 million that we think we're going to use. I'm I think that we can justify to the county that we do have the money because we frozen funds and we have a supplemental document that is that we've highlighted $3.8 million but that means that we're basically freezing money and we're taking money that was originally raised to be used in the 25-26 budget, and we're we're pushing those monies off the balance to 2026-2027 budget is
099exactly what we're doing. Right. So, in a way, we're we need to be spending $4 million less, ideally. Ideally, yes. >> Yes, okay. But, understand that the other piece of that is we generated 5.8 million from 2 years ago. So, as we go to build when we look at budgets, we have to look at 3 years. So, as we're when I'm looking at your at your 26-27 budget, I'm already thinking about 27-28. And this this problem is not going to be fully resolved because if we're using 5. $5.8 million from money that was generated 2 years ago, and then we're also saying we're going to generate another 3.8 million, that 3.8 million isn't going to be available for the development of the 27-28 budget. And that's going to present another budget for 27-28. This is
100the cycle that we're trying to break out of, but we can't we have to do it proactively, and we have to do this with with a vision, like what Jason said earlier is always looking 2 and 3 years down the road of what's going to happen. Um so, it's in an ideal world uh in an ideal world, it's it's not ideal to do it, but the alternative is we have to make another $3.8 million in reductions, and you know, that's that's a balancing act. So, so if you look at it in the aggregate of all the money that we're putting for reserves for the 25-26 to balance it, and to the 26-27, we've cut it down by almost a third. And if we can look to make these changes over 2 or 3 years, and
101balance all these things through attrition, and and and and looking, you know, at a 2 or 3 year basis, we can kind of ease that ease that pain a little bit. Thank you, Frank. Board member Nair. Question? No question. No question. Board member Callahan. Yes. Um first, thank you again. Um Frank, Mr. Bing, SLT, Asken, and Somaya partners, um I know that tonight is a result of a lot of hours of your time and and labor, so thank you. Um so, as we're reviewing this preliminary budget, um I think staffing is always an area of heightened sensitivity and interest probably for us as a board, and I know certainly for the community. Um so, as we move forward in the process, I think you know, we talk about kind of making more of these structural
102changes, and I think a part of that is some of this right-sizing effort that we have discussed tonight. I think it would be helpful for us to maybe see and share some more information about hiring and enrollment trends, and then that analysis just to have that visual of what are these efforts following this pandemic era hiring, cuz I think providing that context might also help us better understand some of those decisions as we talk about this through the lens of being kind of a long-term process to help stabilize what we're doing in terms of budgetary decisions. Um so, you know, if there is any like high-level, you know, additional insight tonight, that would be great, but certainly acknowledging how that might take shape in the future, um and understanding of course the fluidity to that.
103I I think that would be a net benefit for the community to kind of understand that process and and be able to see those trends over time, um particularly as they might impact where we go in the future. We have a couple slides in that This is 12 slides out of 30 something. So, we have three slides that actually cover that. We just didn't want to share that tonight, cuz it's work in progress, but the HR did a nice job around that data, so we'll be sharing that data moving forward. Uh I'll jump in quick. With regard to our uh our total special revenue funds, uh you You that in light of the uh questions of what the federal government was going to do last year, we had budgeted less than we were entitled to.
104As I recall, I think we had budgeted maybe 75%. Do you know what we are budgeting and expecting for the current school year? We are now looking at the full amount that we would be entitled to or a percentage of that? Uh, it's I believe we used 80 or 85%. That's kind of a standard that they use, but but the year before um where, you know, typically you're you're asked to you're suggested that you budget 80 to 85%. Um, I know the districts cut this and I and I think I think one of your line items, maybe the IDEA grant, instead of budgeting it at 70%, I think it was even budgeted at 30%. So, it was it was it was a really low estimate, which made these numbers look higher and it's also being
105compounded by by the by the preschool numbers. You know, it's not hard to break down. We we really as a district, we don't get a lot of federal assistance. I mean, if our our total budget is our total budget for next year is 13 million, the preschool program is like 10 or 11 million dollars of that. So, I think there's only 2 million dollars in non-preschool numbers. And again, I I I'm getting more and more familiar with the numbers of for our district, but I but I this piece I'm I've really only been here for like 3 weeks. So, I in a perfect world, you know, I'd love to be able to tell you that that we have 2 million dollars in our other grants and we have we have 11 million dollars in this
106and I think I'm really pretty close to those numbers. Um, I just would really have to look at it and and get back to you let you know, but the but the bulk of that special revenue fund is the preschool program. I I know that for a fact. Yeah, we were given we were given numbers a couple of ago when the new regime came into play. Uh so, our county office gave us numbers and some guidance in regards to hey, budget this. Um cuz we don't know what's going to come down the pike. Okay, over this side, Deb. We're going to go to Patty. Any questions? Uh Frank, first off, excellent overview. 10 out of 10, no notes. It was uh it was great. Uh but you did mention something that resonated I think it's
107worth repeating and then I'll I'll have a question over that is that in the in the public hearing that we're going to get an analysis of where in our cost centers at where our cost centers as a percentage of the general fund compared to other districts. I think that's important context for all of us to to to walk away with. But that said, is there anything in this preliminary budget that stands out where we're over indexed or even under indexed? I you know, I I I wish I was in a better spot to give you that answer because I and I I you know, I said this to you when I met with you last week. Like we really jumped in March 2nd and we looked at we have 900 lines and we looked at
108each line individually to make sure that we could substantiate what was happening in each line. And then the state aid came out and then we had to make adjustments. And then you know, we've been constantly in this flux of making adjustments. And I'm just now and then we had to start to put you know, budget presentation stuff in and it was like a week between the the all of this stuff. So, the short answer is I really need to delve into that cost center analysis and look to see what these trends are and look to see what's happened over the last two to three years to A, explain what happened and make sure that the story that those numbers are telling is reflective of what we think is happening. And that's the last piece that
109flushes out if there's something that's over budget or under budget because any one of these increases and decreases we should be able to have an explanation for and I'm just I'm I'm personally I'm I'm doing the best that I can. I'm just I'm not at that level where I could say like this is this looks out of line well, I'll tell you that the capital the capital looks very out of line to me. I added up all your administrative costs and I looked at the percentage of of your administrative costs to your overall budget. Hang on a second. I just if you just humor me for 2 seconds. I just Okay. So if you if you can look at this number, I just started delving into this stuff in the last day or two. So
110so as we can see this so your administrative costs I just bold I'm a big color guy. You'll get to know that but these are our different these are our different areas. So you can see that that we're hovering right under 7% for our total administrative costs as a percentage of our general fund budget. When I look at these numbers from last year if I highlight these guys I'm at 6.75. I'm right in line in terms of the percentage of the overall budget for your administrative costs. And what I do is I look right across and say okay, here's your library media center. We went from 1.35% of the budget to 1.36. The next line we're at 1.5. So I am now building in the back end I mean at this. So this number right
111here. I don't like this number. We went from 29.7 to 27.39. And when you go through these numbers, we did that because this line was 13% of your budget and now it's this 16 and 1/2%. So this to me becomes very clear where our budget funds are being diverted to knowing that we can we we have to keep reducing our budget funds but now it the to me the percentage of the the general fund budget is a very telling number more so than per pupil and all that stuff because it says okay like how much of our budget's going to these different pockets and and I would like in my last year of Chicago I went back I could go back 10 years and look at this stuff and say okay you know 10 years
112ago health insurance was 10% of your budget now it's 16% of your budget and it's coming at the expense of all these other areas. So this is very telling for me and by the time we get to the public hearing I'll I'll have a lot more you know listen if you're not a numbers person you're not going to be very happy with me during the public hearing because I I can talk to you for for a long time about this stuff and our our taxpayer just to frame it for folks or taxpayer guide we're compared to 96 other districts that are students or more. So that's the cohort that we compare ourselves to. We have a slide in the in the longer version of this but we'll have that comparison as as we move forward
113with between those 96 other school districts. Yep and and I just listen I just I just want you to understand the the stuff that's going on in the background. So we put this together I think a few of you have seen this. So these are not my numbers these come from the taxpayer guide these different indicators of what the state feels that people should be you know checked on in terms of our ranking and our our these are cost per pupil. The number one piece is your budgetary cost per pupil it's your budget divided by your pupils. You can see that we have been steadily declining. Right? But this number it it's important to know that we're 49th out of 90s 96, right? So, we're 49th out of 96. What's also important is I look
114at this indicator and I say, "Okay, our total cost per pupil we're spending we're 49th, right?" But our classroom instruction, and again, these are not my numbers. Our classroom instruction is 74th. So, that to me, like if you're saying what I see from the outside I saw that as a powerful thing saying, "Okay, if our if we're only ranked 50th with our total cost more of our funds to more of our funds are going to classroom instruction than our peers because in a perfect world, if we're spending the same on everything, we should be right around the 40s on all these indicators. So, anything that's higher than 49th I would look at and say, "Okay, we're spending more money than our peers in those areas." And if I see it going to classroom instruction that's
115that's if it's going to go somewhere, that's not a bad thing, right? Our administration 49th, we're at 53rd. I mean, we're we're right within that's not something to me that would stick out. You know, legal. Everybody knows that, right? You guys have been talking about this. I've heard this. But we went from 85th down to 77th and our budget is down to 65th. This is a good trend. So, as we go through this, there's a lot of this data that we can use. And again, this is not necessarily for the public hearing, but this is like in my last issue, we delved into this stuff and we had, you know, the standing committees would look at this stuff and we track it and we track it over years to just see where we are compared
116to this ranking and then we develop peer groups and said, "Okay, we compared ourselves to, you know, you're not going to compare yourselves to all 96 districts. Hopefully, there's a peer group that there that are like-minded, and you can pull their rankings up against your rankings and check it from year to year. And there's just there's a lot of positive data that can come out of this if you're into analyzing data and looking at stuff that I think that I think would be a worthwhile endeavor for this district to to understand because it can help guide you when you're making these decisions and feel comfortable about some of the things you're seeing, but but some of the stuff that I'm seeing from the preliminary basis, which I'll share and listen, I have no skin in
117the game. I'll show you that, you know, the areas that I think are positive and the areas that I think that that stick out just based on looking at all these different these different comparisons and these different analysis that that I can look at and and which is why I kept stressing when we were talking earlier about the finance committee about tracking all of our stuff and using the predefined cost centers to to really look at our stuff because then we can measure ourselves in all the data and the reports are generating this stuff. I mean, it's it's it's powerful stuff if you're if you're into it. So, I'll get And again, just to reinforce, this is in our data, right? So, the Taxpayer Guide is public access. Uh performance report card public access. Uh
118these are all public documents uh that are accessible by uh anyone. Yep. Okay. Board member second table. Yeah, just for um for Superintendent Bang, um building off of Board member Callahan's question around um staffing, I was just thinking about how the seeing those numbers for possible transfers and maybe even possible riffs um could cause some anxiety for staff members who are who are looking at that. I was wondering if you can give like a rough timeline for the process or for communication that that our staff members can can expect as we move into May and final budget adoption. Yeah, I know for us, if you look at our 3 years of data, we we should expect more retirements, more attrition, and more resignations over the next couple weeks. Those are coming in, which obviously will
119have a major impact on these numbers. And again, I do want to emphasize that these are positions. Okay, these are not people getting riff notices or pink slips. These are simply positions that we are economizing based upon our pandemic spending in 2019 and 2020 and adding extra staff on. So, where we can share instructors, where we don't need to keep a class open, we can just move kids into another class that may have very low student size, we are doing it. Where we have someone with a special cert, where we can move into a vacancy, a retirement vacancy, and don't have to externally hire, that is what we're doing. So, these numbers will change and our work is to change these numbers for the good to reduce the amount of riffs, but if you're looking
120at the total number of 23, 19 18 of those we're not giving people pink slips. These are vacancies that we are not filling. Plain and simple. So, over the next 2 to 3 weeks, we'll have a lot more information as we did last year. We if we had transfer notices, we got them out as early as possible. So, we'll continue that work and we'll continue working with ASKEN and Sume as well and keeping them in the loop. We just had our initial meeting today. All right, Board member Stefan. How do you pronounce your last name, Frank? Well, that that's that remain that depends who you ask. If you ask me, they they told me it's Cervelle's. So, Okay. Sounds nothing better than Mr. Cervelle's, okay. So, the the item that really jumps out is healthcare.
121Our healthcare costs are going up 30.74%, which to be fair is not a criticism of anybody here. They're skyrocketing nationally. We changed from a state healthcare plan to a self-insured plan a few months ago with the idea that it would bring our healthcare cost increase from 30 some percent down to 11%, but it looks like we're at 30.74%. So, what do you think happened? How confident are you in that number? Could it go up or down this year? And do you have any sense of what we're looking at next year or the year after that? So, so this is clearly it's one of the largest line items in in our budget, and it's something that that we can provide much more clarification on how we arrived at those numbers. You know, we we talked about
122this in some detail at the finance committee meetings. You know, we're self-insured now. So, that number that we put on that line has to cover all of our needs. And we're a little bit of a backseat because as much as we've had an analysis done, and in theory, we're in a plan that should save us money, the reality is we're fully self-insured. We have $3 million in savings to fund above and beyond that line, you know, aside from anything else we can scrap from another area, and our we have a large potential exposure. And we really don't have reliable claims data because of the timing. So, we're not going to get reliable claims data until 6 months into this process, which is way too late for us to set reliable rates. So, so we're using
123our best judgment with the input of our of our broker with knowing what an anticipated renewal is going to be for our reinsurance, knowing where our corridor is going to be and really we're we're trying to protect ourselves knowing that we have also this allowance that allows us to raise taxes to cover this specific cost and knowing that we could have raised another $600,000 more. So, there's an acknowledgement that knows that we could need this. So, you the difficulty is if if we cut a million dollars out of this and we certified the budget and claims started coming through 3 months from now, 4 months from now when we really have an idea and we don't have enough money to cover our claims, we have a huge problem. So, so the this placeholder you know,
124the the beauty about a self-insured plan is that we're in control of all of our claims. The difficulty and the scary part of a a self-insurance plan is that that you're on the hook for anything that gets incurred and you know, there's been some bad experiences including one, you know, potentially in this district that that the self-insurance numbers didn't work out exactly as planned and you know, we we took a little bit of a bath dealing with it. So, this number is a very very very critical number to to the health of our the health of our budget and our district next year. Um it's it's a it's a it's a big number. So, that relationship with our broker is is really important. So, we get updates from our broker on a regular basis in
125regards to trends. And as Frank noted, we need some more time to really say that data is solid. But we are getting at this point some positive info on trends and that's at this point. Still months out. We're getting great data, but it takes it takes 2 two to to to spin up and then we need a couple of months of spun up claims to really reliably come up with an estimate. So, um it's it's a it's the toughest number outside of our our out-of-district placements to to pin down and it and I think in this given year um it's even tougher because of the timing of everything. So, the the goal is to put what we what we believe will fund it adequately um knowing that that we need to monitor it and we
126need to we really track this and and be proactive and we we've set up the mechanism to be proactive about this particular line and proactively monitor it. And you know, there's there's no thing that if we if we get into September and October and we start really having reliable claims data and we find out that that we have a shortfall or that we have money, we can you know, the budget is a fluid it's a fluid document and we have to get to the point where we can In in a perfect world, let's say the best thing happens and we we ask for you know, $25 million in that line and we get to September or October and it is getting more and more reliable that we might only spend $23 million, we may look
127at that $2 million and see if there's something. We may have a whole somewhere else that we need to plug. I mean, this this is the job of this is like the person sitting in my seat really the job to to put all this stuff together. It's not just any one line. It's just this is such a big line and it's and it's such a tough year for us to deal with. >> Yeah. I So, just a couple follow-up questions. Go ahead. Sorry, I'm two two other things just quickly. You would you know, capital reserve is $4.6 million, maintenance reserve is $700,000 and your colloquy with board member Brown, we talked about how those might not be exact numbers, but in an ideal world where we don't have these kind of fiscal pressures, what would
128be an ideal amount in capital reserve and maintenance reserve for this district? Listen, it's it's it's I So, I just saw I got a report sent to me last week from the architect that you guys just had a new long-range facilities plan put together. And it's hundreds of millions of dollars worth of projects. And you have you So, so far you have secured funding for 4 million of it. Um that to me would be that's seems very low to me. I mean, just seeing what's been happening, I just started to get keyed in by your facilities director, and every day there's there's a problem happening somewhere. And all those the facilities are aging and and you have significant, from what I can see, and I've just gotten into this, there are significant facility needs. So,
129I I would say as much as you can have in those funds, but the difficulty now is how do you get the money to put in those funds when you're cutting positions, and you don't have a line item for those funds. I mean, it's a it's a it's a it's a it's a very difficult position that we're in to talk about, you know, adding funds to those reserves when when we're talking about having structural deficits in operating budget. I mean, it's a it's a it's not an ideal situation, but I I was I I was shocked at the amount of money that you don't have in those funds given the size of your district, personally. Yeah. And one one last thing, if you could just help help me understand something. If you go to slide
130nine, I see special education instruction, we're increasing our spending there. Speech, OT, PT, we're increasing our spending. Child study teams, we're increasing our spending. Okay. But then I go to the next slide, and it says, the first line here, I know this is non-salary, it says special ed {slash} special services reduction, and then a couple lines below there's a reduced paraprofessional budget. So, could you explain to me or we can you can you square this for me? Yes, the paraprofessional will be the RFP we've been talking about. So, right now we're in a pretty bad contract. We've discussed that a few times in regards to uh the extra compensation we are pushing out. Um so, she then went also went through her data. I think some of the numbers you're talking in the previous slide
131we are adding as we did last year some programming to keep kids in. Also, we're extending expanding our ERI program to the middle school level. We got a lot of good dividends out of that at the elementary level. Um and right now I think as we hit the wall last year um it's difficult to predict what's down the road in regards to evaluations and what those evaluations are going to turn out to you. So, some of that stuff was supplies, some of those things uh were basics, but we tried to keep her as steady as possible. Um her voice was pretty loud throughout these meetings just knowing what we've anticipated last year. We had a year's worth of data and what we saw happened in June, July, August in regards to more kids coming in.
132Yeah, and and I appreciate that. I I think it's really important that we are continuing to invest in in special services. So, I I do want to commend uh the superintendent and and Mr. Servell? Is that how you say it? Uh thank So, I I I really really appreciate that cuz I want to make sure we're continuing to invest in in students who have higher needs. Thank you. Yes, she had a obviously it's one of our biggest expense line. So, she had a really loud voice. Not literally, but she she she had a pretty powerful voice during the construction of the of the budget. Okay, follow. I think we have a couple of follow questions that a few of them. Okay. >> Fine. We'll go this way. We'll go to the Callahan first. Um I
133just want to pivot back. Uh Paul stole my special education question. so thank you board member Stefan. Um I'm going to pivot back to health care for a minute though. I think Superintendent Bing you had mentioned that we had joined other districts in making this shift away from the state plan. And so you you'd said maybe we're kind of like working with with those districts a bit. If so, is there an opportunity to maybe benchmark our costs against some of those comparable districts just as we're trying to start anticipating what it could look like in future months. Is there information that you you know have been getting from those conversations that would kind of help help close the gap in our kind of understanding as we navigate this in the first few months. >> Yeah,
134a few of our districts have been in the exact program that we're currently in like Livingston and Bloomfield. So we're able to really look at what their costs were when they first jumped in the program and then see where they were going. Obviously costs are unique by district, but this will be the first time that we're actually that we actually have the opportunity to look at costs. I want to really make that as explicit as possible in the state plan. You receive no data at all. So one of the positives of being self-insured is you can really get into the data analyze and perform trends in regards to where you're going. And that's what a really a good broker does and we've been pretty lucky with this current broker. She just met with Askin Sumaya
135because I had some questions about and Askin Sumaya were very happy with that meeting. She'll continue to do that. But yeah, we'll be sharing a lot of the data moving forward cuz we have it for for for for the first time. And Alyssa, I had that very same question and that is one of the benefits that we can see is we can benchmark ourselves, you know, again removing any personally identifying information out and we can benchmark ourselves. We received the report last week that that showed our top 10, you know, the top 10 drug users. Not like like the the the prescriptions that were being prescribed to our employees, so we got a listing and we can benchmark that against other people that that have that data that's available. So we'll we'll be able to
136see, you know, how many of our employees are using, uh you know, I don't I don't want to pick on a a weight loss drug, but how many of our employees are using a weight loss drug versus and and what's the percentage of the claims versus other versus other districts that that can have that data and we've been sure that that we can benchmark that data, again, removing any personal identifying information and be able to benchmark ourselves. And that's that's again, it's one of the benefits of looking at looking at and being self-insured and truly knowing what your claims are. Right. Thank you. Board member Nair. This is less of a question, just more some statements that I wanted to make. So I can do it now or resolution time. I think statements would be
137good for the resolution as we're debating the book. Okay. Thank you. Board member Brown. Thanks. Um I do want to I want I want to reiterate that I'm I'm really impressed by your observations, how forward-thinking you are, and just how passionate you are about digging into data and and the whole budget environment. So thank you so much. Um just one question. I know you had mentioned that it sounds like we might, um hire someone to help us going out to bid for various services. Could we include or I I I guess I want the district to include legal services within that because I don't think we've done RFPs for any of our legal services in recent years. We haven't done RFP for any of our services in recent years. So we'll come up with a
138list. We'll share that with the board moving forward. Yeah, the gentleman we're using is one of the well, is number one gentleman uh in the state, very well known. So, yeah, we have a running list. But I think just we'll hear this in the read out on Thursday, but part of the reason for hiring is that the legislature has just changed uh the rules for what we can use our co-ops for. So, we can't get certain services unless we have a competent person to go out and find them in a different way for us now. Yeah, we we just entered brought another co-op on board as well, MUJC, formed the co-op, so we have some other opportunities out there as well. Okay. Board member Higgins. Did you almost forget my name? Um so, it is
139very unnerving to hear about the line items that are as low as they are, but I really appreciate to Deirdre's point the responsibility of pointing them out so that we can create long-term planning, shift to proactive, not reactive, such as performance-based RFPs and contracts. That's a really, really great forward-thinking thought. So, thinking more immediately of next year, as much as I love planning for the future, when we when we have been more than we're getting, which is clear to me. So, now we're doing the due diligence of spending within our means. As it pertains to, let's say, the mental health crisis, the fact that 22% of our students are neuro-diverse and just have more specified needs, it would be really helpful to see what this impact is direct to students, student access to resources, like
140what a little bit more detail around the reduction. I know that that will happen. Um and then >> was actually those are were guardrails put in place during this budget. So, that we're not touching mental health, we're not touching special services, IEP needs. Those guardrails were were already in place when we started. That's great. And then I know with class sizes that the optimization is happening, so I think that whatever, you know, massaging of the experience of going from a smaller class size to a bigger class size, and therefore, you know, shifting from that that that will be a little bit of a blunt change, I'm sure, for some. So, I think thinking about that and hearing about those plans would be helpful. Okay, I'm going to go to Boyero Bennett first and Um Um
141one source of savings in this budget, which makes it all work, is that we are going to be spending less money on transportation next year. Um you know, it's come out that part of that will come from discontinuing pre-K courtesy bussing. But, you know, there's another change, too, with actually, like, you know, how the schools are scheduled. And I know we're not ready to release like the times of what the new start But, we're not ready to release what the new start times would be. But, I was wondering if you could say, like, how our changes to bussing for K-12 would uh save money and actually, you know, even improve service? So, at this point in we'll have those times probably by this week, uh coming end of this week or early next week. Uh
142when we analyzed what we were doing, um and you you will get the emails. Um what we found was when Sussex did the routes, uh they did not put enough time in between our current tiers. So, if there was any traffic or pothole or something of that nature, we were getting kids late to school. So, one of the first things Sandra did was ride all routes, but also we made determinations that 30 to 35 minutes between the tiers would prevent um the tardiness we were seeing in emails we were receiving. Then, we also put guardrails in place such as not keeping kids on bus for 30 minutes or more, not going cross town. Uh we redid the hazardous routes plan, which we'll be receiving next week, the whole plan. Um what we did project uh
143from those numbers currently, and this could change uh at a minimum, a reduction of about 10 buses from the fleet. Um one of the things we did keep in mind as we were looking at times and we looked well you saw the versions we had about nine different versions I believe. Uh, we were looking at New York City trains. We were looking at the early and late schools we currently have. We are looking at sleep research in regards to adolescence and teenagers. Uh, we were trying not to make that significant of a change at the elementary level trying to keep it within 10-15 minutes. Um, so we'll share that work either end of this week or beginning of of next week. Um, but as Frank noted you know, that is low hanging that's some low
144hanging fruit to save that amount of money. And as we continue to move forward we'll continue to explore uh, bussing and and efficiencies that we can see within the next two, three, four, five years. That that's going to be an active analysis as we move forward. Board member Callahan. Uh, so as we've been talking tonight about, you know, the main goal trying to lower operational costs. Um, talked about the RFP process. Um, and this is one described as an area of where not necessarily instructional expenses. Um, I'm just wondering if you could speak to how the bidding process and this expert that we're considering bringing in um, balances maintaining quality in examples like paraprofessionals um, where this is a student facing service. So how does this expert potentially try to balance the cost savings with
145ensuring we're trying to maintain quality? Like what does that look like when they're trying to kind of balance the two pieces? Frank I think I I can I can handle this if you the the the technical piece of the specifications in terms of you know, paraprofessionals is a very specific um, you know, this person is not going to come in and and tell us how what that paraprofessional should be doing and our district will be will be very much hand-in-hand with with what we think our needs will be for those power professionals. So, like if Cathy's going to be the point person for the power professional bid, there's going to be a a collaborative working between her and and this person that's going to be looking at the bids, but he's going to structure the
146bid out a certain way saying um you know, we're going to put penalties in for non-performance. We're going to make sure that we're that we're efficiently filling people's schedules. We're going to make sure that we're not just putting we're not just buying bodies, but we're buying a our performance. And and I don't know that that that this person's work with a power professional contract exactly you know, he's not going to supersede what the district believes the power professionals be using, but there'll be an ongoing dialogue of where we can possibly gain efficiencies in all of these different specs, whether it be power professionals, the custodians, our our time and materials vendors that that service our boilers, that electricians that come in to see if we can make those specifications very, very tight because the specifications
147that we're using for a number of these services are very much cookie-cutter that you know, there's a bid spec that goes around that that that three other districts have used and we just put that one in and it may not best suit the needs of our district and be as specific to us that that's going to give us the exact performance. So, we're wanting to dial in the performance that we want and have that mirrored in the spec and then go out to bid based on that spec. I do want to just to make sure everybody knows we we've also explored the non-privatization route. We ran those numbers. We ran those numbers for paras, transportation, custodians. Uh and I forgot what slide it is. I mean you you've seen the health cost slide. It's just
148not doable for us. Uh we started privatization I guess a decade ago. So currently uh We did explore other options. It just physically was not possible for us moving forward. All right, any other questions in this section? All right, seeing none. Mrs. Revell, thank you so much for your presentation and Superintendent Bing. And we're now going to turn to our hearings of individuals and delegations. Thank you for coming in person and joining us online this evening. We value public comment at our board meetings. We cannot engage in a dialogue with you. However, we take your comments very seriously and your input will inform our work. Our comment period this evening is limited to 1 hour. Each speaker will have 3 minutes. Uh as you please begin by stating your name and your town. Uh we
149have currently four online public speaks, but first we have no in person speaks. So, we will first move to our first online public speaks, Bob Lyons. None of the online public speaks have arrived there. All right, we have no online public speaks members available. I apologize this was a lengthy presentation but very worthwhile. So, we will now move to the action portion of our meeting. Uh we have four resolutions, one uh three part and one individual. Uh what I'm going to do is just divide this up briefly. I'm going to uh first invite a motion to hear resolution 4932A and B as well as uh 4933. That would be everything except for the budget. Do I have a motion? Board member Bennett, do I have a second? Board member Stefan, thank you. Um all right,
150we are in discussion. So, these are the resolutions to appoint Mr. Savells as the interim business administrator and board secretary, as well as approving the organizational appointments related to that role for the balance of this school year, and approving the leave of absence for Mr. Moody. Now, Board member Higgins, keeping in mind that we cannot have discussion on the personnel piece. >> Of course. So, no offense Frank, you are wonderful. Thank you for everything, but is there a cap or a ceiling on your services? Hours >> And is it in the budget? Hours are capped in the contract. Great, thank you. Any other questions? All right. Uh Mr. Carey, would you please call the roll? Yes. Board member Brown? Yes. Board member Callahan? Yes. Board member Higgins? Yes. Board member Payne? Yes. Board president Byer?
151Yes. Board member Nyer? Yes. Board secretary Gable? Yes. Board member Stanton? Yes. Council passes. All right, very good. Uh and now I'll entertain a motion to take on and consider resolution 4932C, the 2026-2027 school year preliminary budget. Do I have a motion? Board member Callahan, and second Nyer. And we're in discussion. Board member Nyer. I just had a few things that I wanted to note. Um So, I've been working quite closely with Frank since he started, and I really want to say thank you so much for jumping in and taking the reins of this budget. Um I also want to thank the members of the BAs office, Mr. Moody who's on leave, and Mr. Nyer who's been working very closely with Frank and Mr. Moody on pulling all these aspects of the budget together and
152of course the senior leadership team and all the other members across the buildings who've helped get us to this point. You mentioned this at the beginning, Mr. Wing. The process has been less than ideal given the scrunched timeline that we have um and really we haven't had a chance to get much public input up until this point. Um but I do understand that from this point till we adopt the final budget, there will be opportunities for clearer documentation of the details to the board as well as to the public before we adopt the final budget, Sabra. There's a couple of cute down holes, okay? Um as a board there are a couple of things I think we can um talk about not at this meeting, not necessarily at the next one, but I do think
153we should put on the table for further discussion. Um and the first I would say really is um just kind of debriefing on the budget process itself, how it's gone this year and the past year, so we can kind of come up with a standardized timeline and a standardized set of documents that should be produced by the administration for the members of the board, FFT, as well as the public, so that there is clarity in the type of analysis that's being requested and it is consistent year over year, so we're not inundating the district with a bunch of questions and there is clarity and transparency in um what we're asking for. So, I would like to propose um that in at a future board meeting we consider putting something like that together um to make
154the process smoother going forward in future years. I do think at a uh another board meeting we really should delve into our um capital projects. What has been completed as part of the 2019 resolution, what's remaining, what's the status of those projects, how much money is left in in bond proceeds because to the point that Frank made earlier, we do as you all know, we have aging facilities and never enough money to get everything done and we have priorities. So, I do think we should spend another board meeting talking about that. As far as this budget budget is concerned, I do think that there are certain things that as a board we should continue to sort of oversee um and it may not necessarily be in the next four weeks, but as we kind of
155finalize the budget, you know, we should just think about certain things such as the transportation plan um which is being proposed and once it's finalized, we really should ensure that it's pressure tested so that the savings are actually realized and we don't have run into situation where the school year starts and we all of a sudden we need new routes and then, you know, costs go up. Um I would as I said love to get public feedback on aspects of the budget um as well as certain things that might impact families like school start time and things like that. Um I do think it's important to merit's point um to understand what aspects of this budget proposal might adversely impact students and families particularly with respect to instructional effectiveness and school climate especially as we're
156sort of thinking about optimizing class sizes, um transferring uh staff, what is how does that impact school climate and how are we going to mitigate against the negative impacts of that? I do think we should have a discussion around that. Um I do want to understand how we will guarantee appropriate oversight of the new contracted services as a board and again, this can be something we kind of standardize so that we're not kind of asking the same questions over and over again. Um and then two two points around staff transfers, I really would like to understand um and I think the board should understand how this is going to be communicated in a timely manner to to the staff so that that have enough time to prepare their classroom and their coursework. Um and then
157finally I think we talked about health costs which um which is one of the big drivers of cost increase this year. Um My it's not really a question. I think we do have to keep an eye on what billings and claims come in and then if they do exceed what we've budgeted, a discussion around what are alternatives? How do we get to go back to the state plan or what have you? And so that's something we should really keep an eye on. So I I would also recommend we bring the broker in to maybe every other FFT meeting. Similar to what we do with CPAC. You know, we bring them in for the first 10 minutes. Yeah. But in in order to get to the final adoption of the budget, I do want to propose
158as FFT chair a set of analysis that I think the district should be able to produce and I think I can work directly with the team um to kind of and the board to kind of you know, hone in on what that is and and put that forth so we can have more robust discussions around certain aspects that that have been brought up at this board meeting. Thank you. Any other comments? Board member Bennett. Thank you. Um I just want to riff on what you and a few other board members said. Um I agree very much with board member Nayar about the need to talk about our capital projects. And I also want to you know, reiterate what board member Hickey can said about all the hard work that went into this budget. Um you
159know, Tony Mooney's not here tonight, but you know, he did a very good job I think on transitioning us from the state health plan to self-insurance. He did that very quickly. He explained things pretty well. And you know, this budget, this tax season is not worse than it is because we did make that big change. Um I wanted to make a informational point about state aid. When you know, people in education in New Jersey, superintendents, school boards, journalists, members of do legislature, when they talk about state aid, they almost always mean, you know, K-12 formula aid, um of which we're getting a bit under $12 million next year. Um sometimes, like we talk about extraordinary aid, pre-K aid, and debt servicing aid. But, you know, there's a very big stream of aid that we almost
160never talk about, and that goes back, you know, many decades actually, you know, like the Education Law Center doesn't talk about it, the Garden State Coalition of Schools doesn't talk about it. Uh and that's like the state spending for TPAF, uh post-retirement health care, disability insurance, and teacher social security. Um according to the most recent audit we have, we're actually getting about $33 million uh for um for those four lines, uh TPAF, post-retirement medical, social security, and disability insurance. So, you know, the amount of money we get in the in indirect state aid, which is considered off budget, um is basically three times bigger than our K-12 formula aid. Um riffing on that, like I want to reiterate that there's really no straightforward amount for what the district's budget is. Uh Mr. Cornell has the
161one point, you know, one line, uh which is um the general fund, that's about $175 million. Another line, total appropriations, is $200 million. If you were to include, like, you know, the state's payments on our behalf, it would be like another $30 million. And, you know, likewise, there are different amounts which are equally correct for what our spending per student is. So, um that's about all I just wanted to say. You know, uh think about indirect state aid, too. Thank you very much. Any further comments? Board member Higgins. Sorry, it's a small one. With the maximum travel expenditure, um with the 2,200,000, I was just curious if that is going if that's been reduced, raised, like what was it prior, or is it just a set every year? I think we set it. That maximum
162>> you Where are you referencing? >> It's in uh 4932C. It So, it it has to be, in order for us to submit it to the county, we have to maximum. Okay. This is the same figure that appeared last year. I don't I can we can run an analysis. I don't think we spend anywhere near close to >> no. More just curious if it was up, down, or the same just because I was not here last year. Exactly. That's the figure that was in there last year. Great. Thank you. Board member Stepper. I just wanted to highlight, obviously this is not a fun budget to be voting on, but there you know, there were alternatives that have been discussed over the past several months that you know, the district has been able to avoid. There
163was discussion of eliminating courtesy busing K K to 5. Courtesy busing is continuing this upcoming year. There was discussion about having to amend our policy to allow for larger class sizes. We're not going to have to amend our policy and I really recognize board member Higgins for her relentless advocacy on that. And and one thing that was in the presentation, but I I just want to highlight is there's a tightening up of our procedures in terms of paying vendors and making sure that there's purchase orders for payments. It sounds like a basic thing, but I think it reflects the district's commitment to making sure we're really watching every dollar that goes out the door. So, as much as there's some really unfortunate pieces of this budget, I think we we do need to recognize a
164lot of really good work has gone into this to make really smart decisions as best we can. Yeah, you know, I'll just go ahead and echo that. I was thinking about that earlier today. Really the um you know, you I've read a lot of different times over the past couple weeks that a budget is a moral document, right? Showing what you prioritize. And that's hard to see when you're looking at the you know, areas of reduction, but the invisible win here are the number of things that are not on the table tonight. Um the things I mean I you you you scratch the surface as far as things that could have been on the table and that unfortunately other districts uh in much tougher situations than us have had to do. Uh and you know,
165I have seen the district working late hours long time. Unfortunately, this this budget really isn't coming in at the the time frame that we would ideally like to see, but they have gotten us to this position through a tremendous amount of hard work and every day the news has been better and better as far as things that we are not having to take tough decisions on. Um so, you know, kudos on that and hopefully over the next month and change before our final budget, we're going to see uh some additional wins. Board member Kapatid here. We'll build on your point a little bit, Will, and expand as well. Um That's redundant. The So, I'm heartened to see a genuine effort to minimize staffing impacts. I I I really mean that, particularly those that are closest
166to the students, our teachers. Um one thing I do want to point out though is that when you look at budget line items and we've heard it here tonight in scattered amounts, is that transportation does stand out to me. And I appreciate Superintendent Bing's attention towards transportation improvements. To be blunt, and we've heard the negative impacts this year, it's bloated and inefficient. So, I'd like to see maximum effort toward transportation improvements both short-term and long-term before we land on any teacher riffs. Teacher riffs should be a last resort, especially when you look at the amount that we're considering. And but what I see tonight, and Will, you had mentioned of the work that's been put in is but what I see tonight of proposed cuts to make a budget work for this year only not
167a restructure for long-term sustainability. A restructure that gets us out of freezes and more and move us toward actual investment in our districts across academics, arts, athletics, and our aging infrastructure. Which is directly connected to a strategy to replenish our reserves. We must break the habit of using reserves to balance a budget, especially when we look at 27 and 28. Where if anyone looks ahead in this preliminary budget, 2028 looks bleaker if we don't put if we don't start putting structural changes now. So, we will be in those spots where the other districts are this year. We're just postponing it. Any other comments? I do want to just put it uh what Bimal just said in an echo chamber in regards to student achievement. We made a commitment to focus on student achievement, and I
168don't think I mentioned it once in this budget. So, I just think collectively we we need we need to refocus on on the idea that student achievement piece. Mhm. Board member Brown. Thank you. Um I'm actually going to expand upon what board member Kapadia said. Um I do agree with uh board member Nair on a number of things in the for the near term, you know, that we need in terms of getting towards final budget approval. And I want to proactively thank Frank and Mr. Bing um and the whole department for your continued hard work as you do move to gather more firm data to uh finalize the budget. But again, thinking towards the longer term, I am deeply, and I know you are too, concerned about our financial trajectory. I completely agree that fundamental
169changes are needed if we have any chance of operating consistently consistently within our revenues. We need a strategic long-term plan that prioritizes student learning and moves the district back into the black so that we can rebuild our reserves and invest in our infrastructure as well as bringing services in house. We cannot bring those in house. It that takes initial investment. So, whether that's buying buses, bringing pairs in house, we can't be budgeting the way we're budgeting now if we want to do that. Um so I guess what I'm saying is, you know, once this budget is refined and finalized, which I know requires a lot more hard work, but once that's done in May, I really urge us all to keep our eye on starting to explore and make fundamental operational changes. We cannot keep
170operating within our current structure. It is not sustainable, and it's going to take teamwork, and it's going to take a lot of hard choices. I also think we need to leverage our transparency using our website. We just I had a partnership with a company that's able to do our fiscal dashboards as we move forward. So, that is something I think we need to really focus on just to keep us accountable as we're moving forward, but yep, I agree. Any further comments? Okay, hearing none. We just lost the Oh, I said all right. No, all right. Are we So, we're we are not streaming to the community? We we Okay, can they hear us? Yes. Well, all right. I'm going to propose we move forward and we can report out what our vote was. So, Mr.
171Carrick, can you use the I was going to say use the microphone, but now there's no one online to hear you. So, will you please take the roll? Board member Stack? Yes. Stack again. Yes. Board member Knight? Yes. Board President Mine? Yes. Board member Payne? Yes. Excellent. We now will move to this is the end of the action portion of our meeting. We will now move to our second hearing and delegations and individuals this evening. I do not see anyone else online. Let's see a show of hands. Is there anyone who wants to come up? You guys have been here the whole time. Nothing to say? Then I'm going to close our second hearing of individuals and delegations. Do we have any new business this evening? No, we do not. The board will meet again
172in public session in just 2 days, Thursday, March 26th, 2025 at 6:30 where action will be taken. Reminder, we do have our next two strategic planning sessions coming up April 15th and May 11th. If you're interested in joining, please go to the website. And I will now entertain a motion to adjourn the meeting. Board Callahan, I have a second, board member second Gable. All in favor? Show of hands. All right, this meeting is adjourned at 9:57 p.m. Have a good evening. Good night.