e e e good evening I'd like to call the meeting to order and welcome everyone U adequate notice of the special meeting of the korth board of education has been provided to the home News Tribune the local Source a legal ad placed on March 7th 2023 a copy um uh to the Cranford Chronicle The Star Ledger on March 1st 2021 24 I'm sorry a copy has been filed with the korth bur clerk posted in the Board of Education uh business office Harding and Brey schools and the uh korth bur Hall as is provided to the open public meetings act the purpose of this evening's meeting is to review the annual school budget for the fiscal year 2024-25 due to a decrease of 1,691 362 and Equalization Aid assess adjustments to the budget and approve the finalized budget to be submitted to the ex executive County Superintendent by the statutory deadline of March 20th 2024 thank you Mr canala at this point can we please rise to salute the flag I pledge alance to the flag of the United States of America to the for it stands one nation God indivisible and justice for all Mr ganal can we please have a roll call yes biner here David here Drogan here Ferrara here hather here M here Pichi here tear here Zimmerman here all present okay thank you we will now um turn it over to miss Mr Arlington and Mr Gala for the budget budget presentations okay uh I'm going to go up here okay good evening everyone um thank you for the opportunity to uh be here this evening to present the 2024 25 annual school budget uh this evening we're going to be talking about budget goals and the school experience experience the impact of loss of state aid uh budget status a review of the expenditures and revenues Bank cap reserves and tax levies and then ultimately um uh we will uh adopt the budget for tentative uh approval to the county superintendent for his is uh approval Mr Arlington thank you good evening everybody I look back on my notes from previous year's budget presentations in preparation for tonight and I found a common Trend that I usually start with sharing that the creation of the budget reflects likely hundreds of hours combined hours of work and conversation about District needs goals and the resources we need to continue the forward moving path of growth we're currently on this year it seems nearly impossible to quantify the time spent on the budget Mr ganella the district's leadership team and the finance and Facilities committee members have all been extra hard at work thoughtfully thinking outside the box about how to withstand these Cuts without taking away experiences and opportunities for kids in the face of these challenges it was more important than ever that we double down on our commitment to align our budget with our district and school goals therefore these budget goals you'll see here frame our district and school goals they've been ideals to which we've anchored work reflective of evaluating and prioritizing budgetary requests and needs continuing a path towards Innovation maintaining curriculum athletic and co-curricular experiences that currently run and minding students social emotional needs as well as of course upholding fiduciary responsibilities to the community this budget does a lot of work that's what's outlined here in the next slide it does a a lot of work in a few slides you'll see we've had to make Cuts uh to some of these same areas which may lead to cognitive dissonance but this doesn't mean the areas on this slide aren't funded they very much are and are very much priorities what some of the reductions mean is that we weren't able to advance or expand in these areas as much as we had originally hoped or wanted to for next year I could talk more about these and Personnel implications in the upcoming slides uh but as you know what's driving these deductions is a change in state aid and Mr ganal will speak more about that now so last week uh we delved into the historical narrative uh of the uh school funding Reform Act or as Esra uh and explored the reasons behind the loss of Equalization Aid um as we prepare prepare tonight to consider the approval of the tentative budget for submission to the executive County Superintendent for technical review I feel it's critical uh to highlight the Discord and inconsistencies between sephra and the 2% tax levy cap uh the sephra implemented during the 2008 2009 school year established the adequacy budget which theoretically uh defined the sufficient amount to be uh spent on education initially there wasn't much contention regarding uh the formula itself but rather how it would be funded or rather the lack uh thereof the introduction of the 2% tax levy cap in 2010 threw a wrench into the workings of SE Esra uh while Esra uh set forth the notion of an adequacy budget indicating that all schools um should spend a reasonable amount on education based on this model it also stipulated that schools should contribute their fair share based on local demographics including personal income equalized property valuations and uh and population of low-income students districts with low lower property and income levels would receive Equalization Aid to bridge that Gap however the 2% tax levy cap restricted districts from being able to fulfill their fair share obligations in our case while the state asserts that korth's property and income levels are rising uh implying that our community's ability to pay or contribute fairly should increase accordingly the imposition of the 2% cap limits our capacity to do so with korth's shifting demographics increased personal income elevated uh uh equalized property values and a decrease in the lowincome population we witnessed a significant reduction in our uh Equalization Aid with little ability to raise taxes or offset loss conse consequentially kare's budget uh Falls well below the adequacy level envisioned by the formula uh this is not uniquely korth's issue the state has acknowledged the need for reform of the formula four years ago in fiscal year 2021 21 districts experienced an increase in equalized property values of 10% or more last fiscal year 2024 322 districts saw a 10% uh or more increase in equalized PR property values it's important to note that many of those districts never received Equalization Aid in the first place uh so they did not incur the losses like we did so this is basically what um we um as an administrative team uh as well as the finance and facility uh committee had an opportunity to review the series of uh options that were presented uh uh to both groups and uh we came up with this as the reductions to come up with that deficit to come to to the 2% budget cap uh in the areas of professional development we're cutting almost $103,000 supplies of M materials almost $120,000 Professional Services $190,000 Staffing 100 uh $732,000 insurance and benefits uh $324,000 and then these aren't reductions in expenditures but if you find uh options in Revenue um inition additional revenues that also helps as well so we have in revenues and enhancements of $11,000 for a total uh cut uh to the uh proposed budget that we had reviewed in February January and February of 1, 15662 54 Mr AR yeah so uh we're currently working through the complexities that I try to explain up here around Personnel decisions taking advantage of the fact that we're able to have continued budgetary conversations into April and so on one hand we realize the uncertainty of that is unsettling but uh it needs to be balanced with space to make these thoughtful decisions so I did commit to the staff to let them know about a timeline this week um for notifying Personnel if the reductions affect them so at this time we continue to study these complexities um holding space for like these different possibilities and dimensions of uncertainty and I'm just going to walk through a couple of them now so that the 73,000 bundled in there might be a new position or two that we wanted to add that we couldn't add as a result of our financial state so those uh came out but are still reflected in that 731 we're also taking into account these attrition considerations so movement as a result of retirements resignations and um or performance-based non-renewals so things to think about is are like looking at retirements and resignations through attrition can we ask ourselves what the impacts of not replacing these positions are can existing Personnel be used to fill these positions left vacant through attrition that's the same questions that could guide uh whether those people who um won't be here next year as a result of performance-based non-renewals those questions sort of guide the thinking again can existing Personnel be used to fill these positions um there's a lot of considerations there right we W need to look at certifications class sizes and educational impacts uh and then as a last resort reductions in force are also on the table here and part of that 731 thank you yeah so um getting into some more of the technical side of that because this is basically what we're supposed to be doing tonight is review the technical aspects of the budget so we can submit it to the executive County Superintendent uh this is the expenditure side of the budget you can see here if you go down to the fund 11 line that's where you could see a significant uh um one in uh 1.6% decrease for $57,000 um of compared to our adjusted 20232 24 budget um that's the most significant thing you could see on that page but you could see how many negatives there are throughout all those line items uh regarding the re revenues um I'd like to focus on the tax levy uh the 2% uh so we are at the % um um and we'll get into some of the reserves later on but you could see there where we are utilizing some of the reserves to get to that in addition to the um reductions um to the expenditure side uh we did uh use some of our reserves to fill the Gap as well you also note that on line 855 the transfer of $474,000 from the capital reserve uh to offset The Debt Service service fulfilling the district's promise to reduce the cost of the referendum by $2 million um uh and delaying the full impact of the referendum until 2025 26 school year um so last year we appropriated about 1.5 million to reduce that that burden and this year it was close to $500,000 for the total 2 million doll commitment that we made when we were proposing the um uh budget or the referendum report of adequacy uh this is one of the more disturbing Parts about this whole predicament that we're in you know I I talked about it in my opening regarding the adequacy budget that that that basically that model of what a model School District was from a financial standpoint it included a a principal X number of custodians X number of teachers per student all the various services to come up with this this thing this negative here this 1,664 th000 basically is saying that um um the proposed budget is at or below that local level meaning that we're proposing services that are below that adequacy level and that's disturbing because we have no ability to really go and try to even if we wanted to um um uh go beyond that we don't have any ability to do that now there are options in the future we're going to have to consider um some of those options if this continues to um be a um ongoing situation where we continue to lose Equalization Aid uh next year during the B budget development process we'll have to take a look at those so we're prepared in March to do something about it if that's the case whether it be separate spending proposals that we could propose or something to that effect because another cut of that magnitude which is possible would be really getting into programming at that point and that would be unfortunate um the minimum tax levy uh this is a calculation uh that's run by the program and you could see that um we're only allowed to increase the tax levy by $445,900 s that um so we weren't even allowed to do that and that was kind of what I was talking about in my opening we're limited to that 2% the tax levy cap calculation um um so there are certain adjustments that you're allowed to um um ask for um to expand that 2% if you're eligible uh so if you have significant health care costs that are increasing above a certain uh State average then you could ask for a health care adjustment or if you're increasing in um um your student population uh you could have a have an adjustment um we've lobbied um for other adjustments such as a mental health adjustment a transportation adjustment um that has not uh uh come through so you can see that we had no adjustments it was just that 2% that prior year tax levy uh inflated by 2% 2% use of Bank cap um um we haven't generated uh we didn't generate any Bank cap this year we still have $554 that we uh we did not appropriate this year um I guess we could have but you know what I I'm we'll have an opportunity to do that next year um if it's if it gets to that um so Bank cap isn't real money if you remember it it's just a opportunity for you to um um um uh go beyond the spending Authority uh of that 2% because you didn't spend it last year or the year before or the or or in two goes from 2021 all the way to 2025 uh recapitulation of balances um these are our reserves um I just want you to kind of focus we'll get into the details of how we're appropriating it but you could see where uh look at the ending balances on those first two uh lines uh and you can see where it's uh a concern um where uh it went from $1.6 million down to $171,000 that's our Surplus at the end of this year we're projecting that we'll have $171,000 in Surplus that's well beyond well below what we are supposed to have uh that's well below what's recommended um but um we don't have much of a choice uh to to do that other otherwise we've put some freezes on spending this year so hopefully we'll be able to recuperate some of those uh reserves so we we'll we we'll be able to recapture some of that but uh on paper right now we're down to $171,000 which is which is which is uh kind of scary when you're running the budget program actually comes up as a warning edit in the program that says do you realize that you're below the 2% that you're supposed to keep uh I'm like yeah thank you very much um uh so then you get down to the capital reserve and you can see that that as well has gone down but that was a planned decision uh by the board when we were going through the referendum process to basically take that 200 that $2 million and use it to offset some of the uh expenses for the uh Debt Service and reduce that um um so that uh is the reserves you have some other smaller reserves maintenance Reserve uh and emergency Reserve that we will maintain uh as well and there's also finally The Debt Service Reserve where we are appropriating the $1,064 to reduce the tax levy so here you can see where we have the use of the reserves we have the free balance $1,671 th000 and anyone who's ever heard one of my pre my my previous presentations about kicking the can down the road uh this is literally kicking the big can down the road so um this we we just have to work with our legislators to they recognize it um you I put an article in your papers uh in your packets tonight that the re the legisl legislature does recognize that the formula is broken and isn't working and it's not working for a lot of districts so you know when I read the when I gave you that information about 21 districts four years ago and it's up to 322 districts a lot of districts are facing what we're facing it's because the formula is flawed um so they know they have to do something in fact in that article there they're talking about introducing some legislature this year that will um basically restore the loss of Aid so we have to be prepared to you know do a 180 on this po uh hopefully uh that will happen uh happened last year not to the 100% level I think it was 66% was restored to the districts that lost aid so that's that's something um and if you have an opportunity to contact your legislators a legislators I hopefully recommend that you do so uh so I want to review tonight's resolution we're not using a bank cap because we didn't generate any uh we still have that 500 and something dollars that we'll keep for next next year going to repr approve the specific withdrawals in the capital uh from capital and Debt Service reserves approve the capital projects for the 2024 2025 school year approve the transfer the4 um $74 $474,000 from the capital to The Debt Service to cover the cost of the referendum approve submission of the budget to the executive county superintendent and set the tentative tax levy and you can see here that the taxes to be raised uh including the general fund and The Debt Service is 24,7 66 $66,000 um um to be uh raised what's next um the March 20th which is tomorrow we have to get the budget over to the executive County Superintendent um between March 14th uh actually should be March 20th and April 29th we will continue reviewing the budget and focusing on the efficiencies and the savings and tweaking some of those Personnel uh issues that Mr Arlington referred to in during his uh part of the presentation and then April 29th we'll have the annual public hearing uh starting at 7 o'clock which uh we will be adopting the budget are there any questions last year we signed that formal letter to our assembly and asking uh questions about the reform do we think we want to do that again maybe uh we we could uh I think I don't think we'll ask them why because we never got a response as to why uh but I think we could uh once we once this bill is posted if it's posted I think once there's a number associated with it that's when we say Hey you know um we ask you to support this bill um so uh I haven't seen anything posted they said it was supposed to be posted yesterday but I I haven't seen anything posted so um school I'm sure school boards will be on top of that um and uh but yes once once we have some definitive uh information um the good news is one of the Senators the senator of the um education committee his district lost $10 million in Aid so that's that's a that's a good indication that maybe this might have some actual legs to get through thank you skills that's a huge cut 22% and what you know what's going to be the impact of that basic skills Board of educa it says the change is 22% minus so you're taking the money away from basic some of that might have been for materials and supplies and Sh and shifting and shifting of Shifting of personnel too um there is a reduction there but it's not a full a full that you know so yeah yeah that doesn't necessarily agree to staff and facility there was also quite a bit of a cut so I just wonder what's in facilities mhm the maintenance yes just wondering I have to have to make Cuts somebody going to start put shovel in our own snow no no no I sat down with our super what kind of stuff would you sat down with our supervisor builds grounds and looked at some things and we we we we we made adjustments and that just like every everyone here tonight had to you know tighten their belts um so yeah and I don't know what difference it would make and I don't want to be shooting at me here if we took in more Choice children would that help at all um it would but not this year uh so it's something that we'd have to consider I think it's a it's a possible consideration maybe not this year but in the 252 sixth school year when we open up the Middle School move the sixth grade over it might be a natural progression to add to the sixth grade but that's something that we'll have to discuss as a um all of us finan and facility curriculum instruction and ultimately the full board would have to weigh in on that so there is there is opportunities there Thank You Vince yes looking at some of the proposed Staffing Cuts how are we going to juggle and manage the program that would be handled by those that are proposed for the cuts so that's what we're figuring out now that's why these are just proposals there's nothing definite um but it goes back to the slide about seeing if we have my team and I have done a lot of work and looking at certifications to see who holds these certifications of existing staff so that no programs are detrimentally um impacted right just because I mean you know when you talk about about the referendum and the building and and what we've got going on there and one thing that we see here is not filling a vacancy for a middle school science position when we're building new science labs for the high school level so that we can try to elevate things again and and get these kids into real science experiments it doesn't make sense to me when we see the other positions and you know where my heart goes there when we start talking about music programs you know I I've sat on this board for a long time I remember parents over the years I can still remember Mrs Pinto sitting out there as a parent begging the board not to cut the master singers because of how much the music program meant to her son MH and to other students and having seen my own child go through this school system in band and in music and in theater and that being the one thing that was her spark and to think that we might have to cut these for kids when when right down the hall right now they're rehearsing for their musical so I'm uncomfortable talking about these Personnel decisions because we didn't talk to Personnel yet so it's a really lousy way for them to find out you know some of the things that we're trying to to organize I will say that not filling vacancies is a way of saving jobs for those who are here if I was to fill that science vacancy that means a teacher who's here would likely need to be reduced so in the work that I've done with my team we think we can offer the same quality science programs with the science faculty we have now by not replacing that teacher right because these are all really really hard decisions they're the decisions that keep everybody in the front row and me and Vince up at night they're not easy um but I think they have to be thoughtful and unfortunately they have to be made well I'm just saying if we're we don't want to talk about specifics and and these aren't on the out agenda out there for everybody else and I'm I apologize I wasn't aware of that realizing that but looking at these as things that we as a board are looking to well so I I will say that at curriculum we talked about having and Personnel we talked about having a meeting of the the curriculum committee and the Personnel committee between now and April 29th so that other committees can weigh in on that these were just a uh a long list of possibilities that finance and Facilities weighed on my team laboriously lamented over as did as did I but we did say at the last two committee meetings that there would be space for you to weigh in and Personnel to weigh Ino we talked about programs we talked about doing that over Zoom we talked about things but we didn't talk about what things is my point so I'm saying we have to we had to start with something and now we'll bring it to committee review yeah the goal of the goal of this exercise is in a very short time how to find $1.6 million in a budget I understand that so so so and it's to submit it to the executive County Superintendent for his technical review one of those technical reviews is to ensure that your everything I mean you do you run these edits so you run these edits that um um a salary account has to match the position control roster which has to have the full-time equivalence of everything I just can't say ah we're just going to cut $1.6 million here's the budget so if I were to do that it has to be that specific Nancy it's very specific down to the dollar uh and they look for that they look for that detail so so in order for us to get to that detail we have to say all right this is this is where we're going to do whether it be xteer or Y teacher or this program or that program in an effort to get it to this technical review and as Mr Arlington said we still have a month to figure out if all any of those things can be modified and to hear from the finance committee what their hearing and what their opinion is and to hear the from the curriculum and instruction committee what their feelings are um it might be a complete reversal of what we've proposed because right now this is basically what Mr Arlington said it was to say to people you know what your job isn't affected right now um but ultimately maybe someone's job may be I don't know and we won't know until you all weigh in on that and have some additional uh opportunities to talk about it and by April 29th we will find out can you go back to a couple slides please sure the the educational programming one and then the Personnel one please so I'm really proud and really thankful to the people in the front row in the finance and Facilities committee keep going please that we were able to potentially find opportunities for savings that kept the course of studies to run that keep special ed programs remaining stable that commits to professional development yes would we like the other $100,000 that we had to cut think of teaching and learning as a fire and PD is like the accelerant the lighter fluid we wanted to put a lot of lighter fluid on there but we were not able to but we we still have what we believe is high quality PD for teachers we were able to keep the math pilot and a focus on literacy and in Innovation so the student experience may look different but nothing that's running now won't run at this very moment next year like no no Athletics are off the table no co-curricular act activities that run now are off the table now please go to the Personnel side like puzzled into that is the fact that yes there it's there's going to be impacts on not replacing certain positions but as it stands right now if we're able to keep those programs for kids and reduce the number of reductions and force we had that seems like a really really big achievement in a really lousy Financial landscape so like kids always come first so we're looking at those programs and saying okay they they're not going to be the same but there's still going to be opportunities for kids and then thinking about the the humans who work day and night with our kids and say not to reduce high quality teachers I think is a um it's not an achievement but it's a it's something that I think that we're proud of amidst this this icky situation for lack of a better yeah and and this this slide here uh is going is the one that's going to keep me up at night um this one right here okay to run a $35 million budget and you only have $171,000 in free balance scares me to death okay cash flow is big in our in our in my business and to be able to make payroll and to fulfill our obligations whether it be our debt service obligations our utilities or our insurance is is is important um and not to have that ability to have that little bit of buffer I always could I always used to have that capital reserve uh money there is saying well doesn't matter if the burrow pays me this month or this week um because I still have that as a reserve but if the burrow doesn't pay me on time am I going to be able to make payroll that's going to keep me up at night next year um and um you know in addition you know we had some some those uh Revenue enhancements uh that just eats at that as well so those are some of the things that you know you don't see but that's some of the implications of what where we're going uh and and as a concern so can I just so you know the finance committee along with all the administrators and obviously Kyle and Vince we spent a lot of time getting the first budget put together several nights um and just to say that in our last meeting we went over all these proposals that you see in front of you tonight the cut the um proposed maybe reductions um we asked about every single one of these lines that got a full explanation everybody and we were satisfied what's on here right now obviously knowing that there's still a chance we may get some Aid vents that maybe down the line in the next month or so it'll help us out a little bit but we just didn't say give this just the sign off of course Kyle and Vince said it we actually did a little interrogation on all of these items to make sure we were doing the right thing and on all the committee we agreed 100% that this is the way to go if I'm correct right guys absolutely so um tough decisions we spent a lot of time going over all this it keeps us alive for one more year uh until the state comes to their senses and figures out what's wrong with you know the the picture that certain districts in our County got $50 million more that they do not have a clue on how they're going to spend it not a clue had that have those same districts that have have programs and services that that we would dream of having so obviously there's a you know inequality in in school funding in the State uh that needs to be addressed so else any other questions discussions Mr G thank you thank you everyone at this time will now open up the meeting to the public is there a motion to open up the meeting to the public so move second okay motion made by Mr David seconded by Mr hather all those in favor of opening the meeting to the public please say I I opposed okay eyes have it motions carrying Mr Gala can you please vote on the resolution no not yet no we have to uh public comment will now be accepted the Board of Education sets a limit uh to speak to 5 minutes per person unless prior permission has been granted to the board of education for extended time pursuance to kenor Board of Education by law 0 uh 167 for the record when you come up to the podium please state your name and address prior to making your comments you this time does any public have any comments they'd like to make no okay uh motion to close it means public to close second okay motion made by by Mrs Drogan seconded by Mrs tears all those in favor of closing the meeting to the public please say I I opposed eyes have it motion carries meeting is now closed to the public Mr gala are we prepared to have roll call on the following resolutions yes uh resolution number one the only resolution on the agenda um Mr biner yes Mr David yes Drogan yes Ferrara yes hather yes ADI yes tear yes simmerman with the understanding that we're going to as always continue to try to fix things yes panichi yes motion carries okay thank you Mr G um at this point we don't have a need to go into close executive sessions can I please have a motion to adjourn so move second motion made by Mr David seconded by Mr hather all those in favor of adjourning please say I I ofos eyes have it motions carried the meetings now adjourned thank you so much for coming thank you everyone thank you find