001April 7th, 2025 at 7:0 p.m. Can we all please rise for the flag? I pledge algiance 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. Um and we have the opening statement according to the agenda. Mr. Helenbeck, will you please call the role? Dr. Capella, present. Uh Mr. Davio here. Miss ShraMM here. Mr. Chaffy here. Mr. Dphano present. Miss Paulina here. Mr. Citridge here. Miss Gwan here. Miss Falcone Schubert here. At this time, we will move on to public comment, and this is for agenda items only. So, we have uh Mrs. Nancy Raleigh on the um list to speak. Yes. Um last year in the fall, you said if we voted yes, there would be no
002taxes. So, now we're being faced with another tax increase. There's only so much we can take. With everything going up in price, our pocketbooks are getting empty. So, I don't think this is right. I mean, why two raises within 6 months, you know, and if if this just keeps continuing, it's going to be a disaster for everybody. We have a presentation for you tonight to explain the situation we're in and to go through all of the information. Then afterwards, you're more than welcome to stay around and ask follow-up questions. Okay. Thank you. Is there anybody else in the public who'd like to speak? Okay. All right. I am going to read the resolution and then um I would like to have a motion. Um so um item number five resolution is application for submission for
003additional expenditures and tax incentive aid. Whereas in the proposed FY2026 state budget, certain districts have the opportunity to apply to the commission of education to increase expenditures, including an allocation of tax levy incentive aid in order to satisfy the thoroughess and efficiency standards established pursuant to NJSA 18A7F-46. Whereas the hopacam burough schools is below local fair share in spending below adequacy to be eligible to participate in this program. Whereas the hopakam burough schools is eligible to increase expenditures by $397,216 and qualify for tax levy incentive aid in the amount of $19,861. Whereas the OPAC burough schools is requesting the approval to increase expenditures based on the following reasons. Over the past 5 years, our district has experienced a cumulative reduction in state aid totaling 8.4 million due to the implementation of S-2. Despite these reductions,
004the district has made every effort to increase the local tax levy while maintaining fiscal responsibility, ensuring that budgetary decisions prioritize student needs and instructional quality. However, the loss of state aid has necessitated difficult cuts to essential programs and services, which the district now seeks to restore with the requested expenditure increase. Additionally, according to state figures, our district will enter the 2025 2026 budget year $4 million under adequacy. These investments are crucial for maintaining compliance with the educational standards set forth by the state of New Jersey. Without these resources, our ability to provide students with a thorough and efficient education as mandated by law would be significantly compromised. Therefore, the board of education is approving the submission of this application to the commissioner of education. Now, before um there is a motion and a second, what
005I'd like to do for the public and for each of you is to give you a brief presentation on the screen behind me that will address certain components of this so that everybody understands um all of the details that are involved and then I'll have a chance to answer Miss Ry's question with regard to the referendum. I'll do that. I got to jump off to the side. You are free to turn your chairs or if you'd like to sit out in the front so you can see. Whatever works best for you. So, some of this information is information that we've discussed at board meetings. We've discussed in detail at committee meetings. So major expenditure drivers for us as our as a school district salaries as a school district 80% 79.6% 6% of your entire budget
006is made up of salaries and benefits, right? We don't produce widgets. We don't produce automobiles or furniture. We produce students. To do that, it is a very laborintensive component. Our salary increase across all of our collective bargaining agreements is 3.1% for the upcoming year. We are experiencing expenditure increases tied to FICA, Medicare and Social Security as a result of those salary increases, pension contributions, health care costs. Um, as we talked last year, probably at about this time, we are participants in the state health benefits, a cooperative uh benefits plan across the state that takes into account school districts, municipalities, um, agencies and the like. The state plan experienced a rate increase last January of 22%. Heading into this coming January, which will be the second half of our budget year. The tough part is that
007the insurance is based on a calendar year and a school district budget is based on a fiscal year of July to June. The state is anticipating another 13.5% increase in health insurance premiums. That 92,000 is the combination of the second half of the state's increase from last year and our anticipated increase for the upcoming year. insurance. This is just our workers compensation insurance increase does not include our liability, our general liability, automotive uh insurance increases as well, decrease in facility spending, an increase in tuition for out of district special education students. State of New Jersey has limits on certain schools for outofdist tuition but not on other schools to cap how much tuition can increase. The increased cost for charter schools is also not capped by the state of New Jersey. So if you own
008a charter school that receives public funding, you are not limited by how much your budget can go up each year. You set an amount based on how much your expenditures go up and you apply to the state for that increase. But there is no fixed hard cap on those costs. And then transportation costs predominantly for outofd district students that require specialized transportation. They go to a private school um 30 40 miles away. I gave the board an example um of a student who is in a wheelchair. The specialized wheelchair van that's necessary to pick this student up. The cost to take him back and forth to school is $72,000 for one child. And we are required by law to bid that route out, which we have. That's the lowest bid, $72,000. And we're required to
009provide that transportation under the law. major revenue reductions. The end of federal ESSER funding, the windown from COVID leaves a hole of 250,000 in our budget. Title grants reduction. If everything goes perfectly with the abolition or the abolishment of the uh federal department of education, we anticipate $188,000 in federal funding reduction. If there are additional amounts that the federal government decides to do away with from a federal grant process, our entire exposure to federal grants is almost $900,000. All right. Semi Medicaid reduction. We are required by law for children who are eligible for Medicaid if we have to provide medically necessary services in school, occupational therapy, physical therapy, speech therapy, nursing, counseling services. We are responsible for billing the cost of those services to the federal and state Medicaid program. This year, the state of
010New Jersey and the federal government changed the funding formula for reimbursement through Medicaid. We were required to budget $97,000 in revenue, which means we have to go out and generate $97,000 worth of billable services in order to f to fill that revenue hole. Okay. state changed the funding formula. It went from $23 per service to $3.85 per service. As of today, ending the February claiming period, the school district has build and received $14,000 of reimbursement from the federal government and the state government in the Medicaid plan. Even though the total number of services that we have build for is up 13% year-over-year and that's the reduction. It's not a promise of revenue. It is we are told you must budget this much revenue in your budget and if you don't get it, you don't get
011it. And as of this year, we're $84,000 short on that projection. state aid. When we entered budget season in February, the state was telling us to project for a 10% reduction in state aid. All right? You know, we actually ended up getting a little bit more state aid. But again, if you read the news and you talk about other school districts across the state, the state put two caveats on on state aid this year. One, your state aid could decrease by no more than 3%. And if you were entitled to a state aid increase, your aid could increase by no more than 6%. We fall in that category of our aid can't increase by more than 6%. Based on the state's notice to us, we're entitled to X amount of money. But because we're capped
012at 6%, the state still owes us an additional $530,000 in state aid that it will not pay to the school district. We are one of 312 across the state that are capped at that 6%. All right. one one member of the legislature um legislature Ocanlin out of Mammoth County has introduced a bill um that would require the state to abolish the state aid cap on increases. Right? There was no cap when we lost state aid for six years in a row. Now they put a cap on growth. He has introduced a bill to do away with that. That bill has not made it out of committee. It has not made it to a committee hearing. it will not as of right now make it to a vote before the legislature um to address that issue.
013And then the last thing in there, uh excess surplus reduction. My apologies. This is something we've talked about for for a number of years. As your state aid declines, the amount of potential money you might have available outside of your savings declines as well. And when you don't grow or increase your budget during that time period, you use what is called excess surplus. Amount of money you have available over 2%. In the state of New Jersey, we are limited to 2% surplus. All right? If you are involved in any kind of finance and an understanding, uh, generally accepted accounting principles ask that you have anywhere between five and 8% in surplus. We're allowed 2%. Any amount above that goes back to taxpayers in the form of a credit for the following year. But when you
014year after year use excess surplus as revenue to fund a future year's budget and the following year there's no excess surplus left, you have to fill in that hole, which is what as a board of education you have to do this year. There is no excess surplus left to pay future years. The budget impact, we've talked about extraordinary aid, preschool expansion aid. We've talked about how our salary and benefits go up. I think it's important that you understand transportation makes up about 8% of our budget. Tuition, VOTE, charter, we pay $2,500 for every student that goes to the vocational technical school. We pay about $17,000 for every student that goes to a charter school, public charter school. All right, that makes up 6.5% of your budget. facilities, oil, electricity, maintenance on the buildings and grounds
015make up 3.3% of our budget. The referendum, the dollar amount that was approved last year, 1.539 million, makes up 4% of your total budget. And then discretionary spending, textbooks, supplies, clubs, activities, professional development makes up the remaining 3% of your budget. This is a look at what the state calls educational adequacy as a school district. In the uh left column, you'll see pre-budget year levy. Then you'll see local fair share and highlighted here is hopacong in the middle. And what the state says is last year our pre-budget local tax levy was $28 million. According to the state of New Jersey based on equalization of all of the properties and values in town, the local taxpayers, their local fair share is $34 million. Then we jump to this side. This is called adequacy spend. How much
016does the state say you should be spending on every student, regular ed, special ed, lowinccome, uh free and reduced lunch, um low socioeconomic, non-English-speaking students. Based on what we spend towards students, we spend $30,916,000 towards adequacy. The state says we should be spending based on their formula $34,938. Okay, we are under adequacy by over $4 million. So the school districts that are highlighted in yellow are Sussex County school districts that are under taxing according to the state their local taxpayers and are under spending on a per pupil basis based on what the state says is an adequate education. So you look Byum is under adequacy by a million3 4 million for us Ogdensboroough 780,000 Stanh Hope 954,000 Sussex Wantage 1.4 million and Vernon 1.2 million. the other school districts are either their local tax levies
017are more than what they their local share is or they're spending more than what the state says they necessarily need to be able to spend. So, we've had this conversation over the years and four years ago we had conversations with other school districts around the region looking at regionalization and consolidation of schools. And one of the things that I told the board and the public was that a neighboring school district right next door to us, a regional high school, spends $3,500 more per student than we can spend to educate our students. So if you look at it and you say we have 500 kids in a high school at $3,500, it's $1.5 million more that they can put into the classroom to offer programs and teaching staff and supports for their students than we can.
018We're also constrained by a choice system that doesn't allow new school districts to join school choice. and we lose a number of students who go to other school districts every year. We are locked in in terms of we can't participate in choice, we can't accept other students, we spend less than other students, and we can't offer anywhere near the same programs that other stu school districts offer. What does that mean in the context of tonight? This is a historical look at the tax levy in hopong since 2009 2010. And what you'll see is everywhere there is a dash is a year in which the school district did not increase the local taxes here, here, here, here, here. This is a year in which the school district cut taxes by another $240,000. Under state law, these
019years were years in which there was a budget vote and the taxpayers of the community voted down the local budget. Subsequent to that, starting here, as long as your budget was presented that included a no more than 2% increase on the local tax levy, your budget could be passed and approved by the state of New Jersey. If you look over the last 16 years, the total tax increase has been 27.69%. An average tax increase of 1.73%. The CPI inflation over that same time period is 43.7%. I understand when people look at it and they say, "My taxes are going up. For the same reasons that your costs go up at home, the costs here to educate a child go up as well. Even though last year this board of education it approved a large tax
020increase and and it goes to your question, the tax increase very clearly said the district will not increase taxes again to pay for the referendum if the referendum was approved in November. So the tax increase that the board passed in June, there wasn't going to be another tax increase in November to pay for the referendum. That had already been paid for by increasing taxes 9.9%. To say that as a school district taxes aren't going to go up every year or by some percentage every year in order to pay for increased costs would be disingenuous. And it and it isn't it isn't reality. Costs go up. Unfortunately, they may not always go up in in concert with salaries. They may not always go up evenly across the years. When you look at the CPI increases, you
021see when COVID hit and you see the years since when COVID hit. Our budget as it's struck right now does not take into account tariffs. It does not take into account the costs for additional materials that are undoubtedly going to go up. You have to budget based on what you have and what you have available. The numbers at the bottom are the important one that I think everybody needs to see. The total local tax levy increase outside of the referendum is $6.4 million. The inflation total when you take a look at how much you increased your taxes based on CPI over that time is actually a negative $3.1 million. Your dollar has been worth less every single year as a result of CPI. When you factor in how much state aid has been taken from
022the school district since that time period, $8 million, even with a 6.4 $4 million tax increase over 16 years, you're still $4.7 million to the negative, which coincidentally almost matches up to the $4 million that you're underfunded according to the state of New Jersey to educate children. So, this was something that we talked about last year. We talked about as a percentage of your tax bill in hopacong your taxes whatever that dollar amount is on a percentage basis about 53% of that is paid for to schools. We are the third lowest amongst all of Sussex County as a percentage of your taxes going to the school district. This is the budget that you approved in March. That shows you the positions that are going to be cut. And they're listed here as position numbers because
023the employees that are potentially going to lose their jobs don't know yet that they're going to lose their jobs and they are entitled to privacy as a result of it. There are nine positions, teaching staff, administrative staff, support staff that are slated to lose their jobs as a result of the budget that we approved in March. There are additional advisors and athletic coaches positions that will not be filled as a result as well. And then there are additional line items that have been cut from the budget. We've cut tuition for homeless students. Professional development. As an aside, I've talked with the board, but I'll mention it to the public as well. A family lives in Hopakon and they become homeless for whatever reason, and they move to Rockaway. Okay. We are responsible under the law
024for either continuing to educate them in hopon at which time I have to send a bus to Rockaway every day to pick them up and bring them here and take them home or I have to pay tuition to the Rockaway schools 21 $22,000 a year for those children to go to that school district. The whole pack schools do not get the choice under federal law. The family gets the choice of where they want to go and they remain in that position for up to 364 days. If during those 364 days they move they they move from Rockaway to Stanhome because they're still homeless, the clock 364 days starts all over again. and we are responsible for continuing to pay for their needs. We've cut professional development. We've cut seasonal custodian help during the summers to
025help clean our buildings and prepare our outside grounds. We've cut additional custodial overtime. We got lucky with snow and ice this year that we didn't have to spend a lot of money on overtime. And that's one of the reasons why we had several delayed openings. And people said, "Can't believe you have a delayed opening." Well, we're trying to be fiscally responsible by not spending money on overtime to allow salt to work, to allow the temperature to warm so that we don't have to pay those additional costs. We've cut additional supplies. We've cut tuition reimbursement, substitutes, attendance. We are going to defer the purchase of Chromebooks. We have a 1:1 Chromebook initiative in grades K iPads and K to2 Chromebooks in grades 3 through 12. We're going to delay replacing those Chromebooks for an additional year.
026We're going to cut the purchase of additional textbooks for next year and delay purchases of textbooks for another year. At the end of the day, all of those cuts just got us to a balanced budget. With all of our cost increases and our revenue decreases, we're just able to balance a budget. So, what is tonight all about? Tonight is a resolution that would allow us to apply to the Commissioner of Education based on the adequacy amount to say, "Commissioner, here's what we'd like to do. We'd like to increase the tax levy by more than the statutory cap. And in doing so, here's what we'd like to add back to our budget. We'd like to add back or in this case add new. We have a newly enrolled child who is coming from a foreign country
027that has severe disabilities, is deaf and and cannot communicate in the English language. That child must go to a specialized school for the deaf. And as a hopacon board of education, as taxpayers of of Hopakon, we are responsible for paying for the cost of sending that child to this school. that child enrolled in the school district after we developed our March budget. Which means if the commissioner doesn't approve $98,000 for this child to go and we increase our budget by that amount, we will have to cut an additional $98,000 from our budget. Salary and benefits is basically one additional teacher would have to be cut. So when you look at the positions to be cut, that was at nine. Now we have to make it 10. We would like to add back a grade 9
028to 12 teacher at our high school to be able to offer elective classes for students to manage both class sizes but offer students an opportunity to take uh additional business and math classes. All right? So that they can compete. There are health insurance benefits and social security that we have to pay as an employer. You know, as an as an individual, you work somewhere, you contribute to social security and Medicaid, you pay 7.65% of your salary into that every year. As the employer under federal law, we pay and match that same amount, 7.65%. We would like to add money back to homeless tuition and homeless transportation. We'd like to address our attendance office staff. Those were positions we were looking to cut. A technologist, FICA benefits. These are all things that we would look to
029do. Now, based on this information, it would mean that the tax increase would go from 6 or excuse me, 3.62% to 5%. on the average annual house that is, and this is a typo, it's 345% is the average annual assessed property in town. The total increase for that home would be $166. It would be $13.90 a month. This out here, $3.84, is the difference between if we did nothing other than the 3.62% that you approved in March. This is how much an average homeowner's tax bill would go up for us to add these things back at three point $3.84. Okay, that's how the numbers work. It's divided amongst all of us as we take a look at the information that's made available. All right. The only other thing I can say to you is this
030resolution that will be before you tonight if someone makes a motion and seconds it is just the application. Okay? If the commissioner of ed reviews our application and there are nine or 10 pages to the spreadsheets and everything that have to be sent to them, the commissioner may look at it and say, "I'll approve four of those items, but not all of them." We'll get a letter back that will state how much is approvable or not. When you come back for your public hearing at the end of the month, your budget will appear exactly as it appeared on your March agenda, the budget that you approved. It would then require at the public hearing a board to make a motion based on the commissioner's approval or disapproval of this application to add an additional amount
031or make changes to the budget at that time. So tonight is not about making any actual changes to your budget. It is simply approving a resolution to allow you to submit the application to the commissioner's office for the purpose of him evaluating it to determine if it's feasible. And so the question I've heard is, isn't this really a way for the state to get out of paying what it's supposed to pay? And if you asked yourself that question, give yourself a gold star because that is exactly what this is. This is an election year for every member of the legislature in the state of New Jersey. And not one of them wants to go on record as passing a tax increase on members of the the the taxpaying public. That's the reality. So, what they're
032saying is we're increasing our state aid even though they owe us $530,000 more, which by the way, the $530,000 that they owe us is more than what we would be asking here. If a miracle happens and between now and the end of April, a bill makes it out of committee is approved by the legislature that removes the 6% cap, then we could add all of these things just using that state aid and this application wouldn't be necessary. But if we take no action, you have no choice whatsoever moving forward. All right. I told you last year, right, in what were we, May, end of May, June, when when the rumblings of that other bill were coming out, that I thought there wasn't a chance in heaven's sake that the legislature was going to act. And
033in a total of six days, they moved a bill out of committee, approved it, and sent it to the governor's desk for signing. So, just when you think you've seen it all, but I don't know where it's going to go. So, that's our intent tonight by putting this in in front of you is to say, "Hey, we need to be able to approve an application, send it to the state, let them review it, and then we'll wait to hear back." Applications are due to the state by the 14th of April. And because the window to have budget hearings opens on the 28th, which is our our first day, that means they have to turn what could potentially be 300 applications around in a week's time period. All right. I'd rather be able to submit our
034application sooner, get an idea back from the commissioner's office as to whether we're applicable so that we can begin to plan and prepare for an April board meeting to be able to say, "Hey, this is what we can do or can't do." And as far as I'm concerned, that's my responsibility to you as as the board and that's my responsibility to the taxpayers is to provide every avenue and opportunity for you to understand where we're at and what are the rules that that we have to operate under. So, I'll turn it over to the board with any questions that I might be able to answer for you as you kind of head back to your seats. This was excellent. Thank you. Yes. Thank you. Yeah, charter charter 1700. Jen's question was, "Does the public know
035how much tuition cost?" Yeah, charter school tuition is 17,000 a year per student. And when a student does choice, their CD follows them. Right. Correct. So any money a student who goes to Lenipe Valley or goes to Mine Hill, their state aid that would normally be sent to us goes with that student to that school district. All right? And we get them a and then we have to pay to transport those children if they live within 20 miles of the school district and their new school is within 20 miles or based on the cost. If I'm one student that goes to ABC public school district, I can pay what's called aid in loo, which right now is $1,143 and the parent can make arrangements to transport that child. But if I have a large number
036of students, it's cheaper to get a bus and pay for the bus to transport those students back and forth. All right. So, choice works on either a bus or a loo vocational technical school. I'll give you another example. We have two students in our district that go to Morris County VOTE because the program that they want to participate in is not offered at Sussex VOTE because those students are out of county. Think about going to a state university, right? If you're in state, you pay one tuition rate. If you live in Pennsylvania, you pay a different rate to go here. The same is true with vote. Two hopacon students that go to Morris votech by law I have to let them go. We pay $14,600 for each of those students to go to Morris Votech
037and by law I have to bust them to Morris Votech. I cannot pay Aiden Lou because it is not a choice program. It is a mandated offering that I have to give. All right? So, a lot of times some of these things are things that aren't even within my control or our control. They are mandates from the state. These are the laws that we have to follow. Um, and some of them come with large price tags associated with it. Okay. So, I read the resolution. We would have a motion to accept it and then discussion and then we would vote on it. Correct. So, is there a motion to move item five, the resolution for application of additional expenditures and tax incentive aid? I'll make it. I'll second. Thank you. Okay. Any discussion? hearing none.
038Let's call a vote on the motion for the submission of the application to the commissioner of education by Mr. Chaffy, seconded by Dr. Capello. Dr. Capella, yes. Mr. Davio, yes. Miss ShraMM, yes. Mr. Chaffy, yes. Mr. Dphano, no. Miss Paulina, yes. Mr. Mr. Citri. Yes. And Miss Gulan. Yes. And Miss Falcone Schubert. Yes. Okay. And with that, I'd like to make a motion to adjurnn. All in favor? I 7:39. Thank you. by the way. And I will certainly stick around if anybody has any questions or would like to share thoughts.