State NJ Education Defeated Budget Presentation 2008

Defeated BudgetDefeated BudgetDefeated Budget Defeated Budget ProcessProcessProcessProcess

NJ Department of EducationNJ Department of EducationA il 2008A il 2008April 2008April 2008

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Defeated Budget ProcessDefeated Budget Process20082008 2009200920082008--20092009

11 Defeated Budget PacketDefeated Budget Packet1.1. Defeated Budget PacketDefeated Budget Packet

2.2. Election DayElection Day

3.3. Consultation PhaseConsultation Phase

District & Municipal Role District & Municipal Role 4.4. District & Municipal Role District & Municipal Role

5.5. Tax Certification OptionsTax Certification Optionspp

6.6. Post Certification and Next StepsPost Certification and Next Steps

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Defeated Budget PacketDefeated Budget PacketDefeated Budget PacketDefeated Budget PacketMemo outlining process Memo outlining process –– posted at:posted at:g pg p pphttp://www.nj.gov/education/finance/fp/dwb/defeated/http://www.nj.gov/education/finance/fp/dwb/defeated/

Memo includes two attachments:Memo includes two attachments:Memo includes two attachments:Memo includes two attachments:Attachment 1 Attachment 1 -- List of required budget List of required budget it di t i t ith d f t d b d t it di t i t ith d f t d b d t items every district with defeated budgets items every district with defeated budgets MUST send to municipal governing body(ies)MUST send to municipal governing body(ies)Att h t 2 Att h t 2 S l M f Di i S l M f Di i Attachment 2 Attachment 2 -- Sample Memo for Districts Sample Memo for Districts to use when sending out Attachment 1 to use when sending out Attachment 1 required items required items

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required items required items

Key Dates & ResponsibilitiesKey Dates & ResponsibilitiesKey Dates & ResponsibilitiesKey Dates & ResponsibilitiesDate County Office School District Municipal ity

Wednesday, April 9 Distribute memo to all districts that Defeated Budget Pkg is posted on the Web

Tues, April 15 E L E C T I O N D A Y

Wed, April 16 By 9:00 am

Report Election Results to

By Noon

Create/Mail Letters (municipal letters) to Governing Body(ies) of Districts with Defeated Budgets (with municipal letter attachment)

County Office

By April 23 (2 days following Certification of election results)

Mail Budget & Defeated Budget Info with Salary info (attachment 1 and appendix C) using Sample Cover (attachment 2) to Municipal Clerk

Send Receipt of Budget & Defeated Budget Info

Apr 23 May 19 Contact District/Muni Officials Schedule Mtg with Municipal Mtg(s) to discuss/set generalApr 23 – May 19 Contact District/Muni Officials CONSULTATION PHASE

Schedule Mtg with Municipal Officials & Notify County

Mtg(s) to discuss/set general fund tax levy

By May 19 CERTIFY TAX LEVY Resolution with required line-item reductions & justifications/statements.

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ELECTION DAYELECTION DAYELECTION DAYELECTION DAY

Tuesday April 15, 2008Tuesday April 15, 2008

District Reports Election Results to District Reports Election Results to County Office by County Office by 9 a.m. April 16th9 a.m. April 16thCounty Office by County Office by 9 a.m. April 16th9 a.m. April 16th

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Districts with Defeated Districts with Defeated B d t d/ S tB d t d/ S tBudgets and/or Separate Budgets and/or Separate

ProposalsProposalspp

WHAT WHAT WHAT WHAT HAPPENS HAPPENS HAPPENS HAPPENS

NEXT????NEXT????NEXT????NEXT????

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Consultation PhaseConsultation PhaseConsultation PhaseConsultation Phase

April 16 April 16 -- May 19May 19

B A il 16 C t Offi B A il 16 C t Offi By April 16, County Office prepares By April 16, County Office prepares Letter to Municipal Clerk which Letter to Municipal Clerk which outlines defeated budget processoutlines defeated budget processoutlines defeated budget processoutlines defeated budget process

Consultation period begins between Consultation period begins between BOE and municipal governing BOE and municipal governing BOE and municipal governing BOE and municipal governing body(ies) with Executive County body(ies) with Executive County Superintendent guidanceSuperintendent guidance

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p gp g

RESPONSIBILITIESRESPONSIBILITIESDISTRICT BOEDISTRICT BOE

MUNICIPAL GOVERNING BODYMUNICIPAL GOVERNING BODY

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District ResponsibilitiesDistrict ResponsibilitiesDistrict ResponsibilitiesDistrict ResponsibilitiesBy April 23rdBy April 23rdy py pTwo days after certification of election resultsTwo days after certification of election results

44BOE prepares BOE prepares Defeated Budget InfoDefeated Budget Info44BOE prepares BOE prepares Defeated Budget Info.Defeated Budget Info.per N.J.A.C. 6A:23per N.J.A.C. 6A:23--8.10(a)18.10(a)1(attachment 1 of defeated budget packet), (attachment 1 of defeated budget packet), ( g p )( g p )Salary info. per P.L. 2007,Salary info. per P.L. 2007, c.53c.53(Appendix C of budget guidelines),(Appendix C of budget guidelines),and Letter of Transmittaland Letter of Transmittal (attachment 2 (attachment 2 and Letter of Transmittaland Letter of Transmittal (attachment 2 (attachment 2 of defeated budget packet) of defeated budget packet)

R i d f R i d f llll d f t d b d td f t d b d t

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Required for Required for allall defeated budgetsdefeated budgets

District ResponsibilitiesDistrict ResponsibilitiesDistrict ResponsibilitiesDistrict Responsibilities

Defeated Budget Information Defeated Budget Information Defeated Budget Information Defeated Budget Information (attachment 1):(attachment 1):

1.1. Proposed Budget for 08Proposed Budget for 08--090922 Separate proposals passed by votersSeparate proposals passed by voters2.2. Separate proposals passed by votersSeparate proposals passed by voters3.3. Salary schedules for all employees Salary schedules for all employees

(07(07--08 & 0808 & 08--09)09)(07(07 08 & 0808 & 08 09)09)4.4. Pupil enrollment by grade as of Pupil enrollment by grade as of

6/30/07, 10/15/07 & projected 6/30/07, 10/15/07 & projected

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6/30/07, 10/15/07 & projected 6/30/07, 10/15/07 & projected 10/15/08.10/15/08.


Defeated Budget Information Defeated Budget Information Defeated Budget Information Defeated Budget Information (attachment 1):(attachment 1): cont.cont.

5.5. # of schools & classrooms in each, incl # of schools & classrooms in each, incl pupil capacity in each classroompupil capacity in each classroompup capac ty eac c ass oopup capac ty eac c ass oo

6.6. Detailed tuition analysis (sent &/or Detailed tuition analysis (sent &/or received)received)))

7.7. Analysis of professional & Analysis of professional & nonprofessional staff, 07nonprofessional staff, 07--08 & 08 &

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projected for 08projected for 08--09 (incl list of 09 (incl list of retirees)retirees)


Defeated Budget Information Defeated Budget Information Defeated Budget Information Defeated Budget Information (attachment 1):(attachment 1): cont.cont.

8. 8. Proposed capital projects and/or Proposed capital projects and/or deposits into capital reservedeposits into capital reservedepos ts to cap ta ese edepos ts to cap ta ese e

9.9. Copies of BOE’s most recent annual Copies of BOE’s most recent annual report, annual audit, comparative report, annual audit, comparative p , , pp , , pspending guide, and report cardspending guide, and report card

10.10. Any other information deemed Any other information deemed

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appropriate by Executive County appropriate by Executive County Superintendent for a specific BOESuperintendent for a specific BOE

District ResponsibilitiesDistrict ResponsibilitiesDefeated Budget InformationDefeated Budget Information –

Salary Information (Appendix C)y ( pp )44 Pursuant to P.L. 2007 c.53, districts must prepare supporting documents p p pp gfor salary and benefit information for certain employees:

SuperintendentAssistant SuperintendentBusiness AdministratorAny employee not a member of a

collective bargaining unit with a salary

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collective bargaining unit, with a salary that exceeds $75,000


As soon as possible, district As soon as possible, district As soon as possible, district As soon as possible, district administration should establish meeting administration should establish meeting date with municipal officials to review date with municipal officials to review date t u c pa o c a s to e edate t u c pa o c a s to e edefeated budget information defeated budget information

Executive County Superintendent should be Executive County Superintendent should be y py pnotified of the date notified of the date Open Public Meetings act applies if either Open Public Meetings act applies if either BOE or municipal governing body, or both, BOE or municipal governing body, or both, have majority presenthave majority present

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Municipal Governing BodyMunicipal Governing BodyResponsibilitiesResponsibilities

By Monday, May 19thBy Monday, May 19th

44 Municipality must certify General Municipality must certify General Fund Tax Fund Tax LevyLevy (not the entire general(not the entire general

fund budget) fund budget) to the County Board ofto the County Board ofTaxationTaxationTaxationTaxation

CANNOTCANNOT certify a tax levy below certify a tax levy below i i l i d b N J S A i i l i d b N J S A

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minimum levy required by N.J.S.A. minimum levy required by N.J.S.A. 18A:7F18A:7F--55

Municipal Governing BodyMunicipal Governing BodyR ibilitiR ibilitiResponsibilitiesResponsibilities

Certify Levy by resolution for the Certify Levy by resolution for the Certify Levy by resolution for the Certify Levy by resolution for the sum of the base budget amount sum of the base budget amount andandany passed separate proposal(s)any passed separate proposal(s)

No authority to change debt service No authority to change debt service levylevylevylevy

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If certifying a decrease from the proposed If certifying a decrease from the proposed If certifying a decrease from the proposed If certifying a decrease from the proposed base budget levy, governing body must base budget levy, governing body must also provide the BOE a:also provide the BOE a:

statement of the specific linestatement of the specific line--item reductions item reductions d i ff h l d i ff h l and revenue increases to offset the levy and revenue increases to offset the levy

reduction; and areduction; and a

certification attesting the revised budget is certification attesting the revised budget is sufficient for provision of a thorough and sufficient for provision of a thorough and

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p gp gefficient (T&E) system of education.efficient (T&E) system of education.


If certifying a decrease from proposed levy If certifying a decrease from proposed levy If certifying a decrease from proposed levy If certifying a decrease from proposed levy belowbelow the adequacy Budget, the municipality the adequacy Budget, the municipality MUSTMUST also provide a specific also provide a specific written written MUSTMUST also provide a specific also provide a specific written written explanation and document by clear and explanation and document by clear and convincing evidenceconvincing evidence for each linefor each line item item convincing evidenceconvincing evidence for each linefor each line--item item reduced that it either will not adversely reduced that it either will not adversely ff t T&E th BOE’ ll ti ff t T&E th BOE’ ll ti affect T&E or the BOE’s overall operations affect T&E or the BOE’s overall operations

given the need for long term planning and given the need for long term planning and b d ib d i

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budgeting.budgeting.


And remember for And remember for And remember for And remember for certifications below the certifications below the adequacy budgetadequacy budgetadequacy budget…adequacy budget…

The Burden of Proof is on The Burden of Proof is on The Burden of Proof is on The Burden of Proof is on the municipality that the the municipality that the reduced levy is reduced levy is reduced levy is reduced levy is sustainable for T&E .sustainable for T&E .

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For defeated separate proposal(s):For defeated separate proposal(s):For defeated separate proposal(s):For defeated separate proposal(s):

b l lb l l→→Restoration by municipality is no longer Restoration by municipality is no longer allowed. Decision of the voters is final.allowed. Decision of the voters is final.

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Governing Body Options for Governing Body Options for Certifying a Reduced LevyCertifying a Reduced Levy

Acceptable LineAcceptable Line--Item RecommendationsItem Recommendations

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Proposed Budget Proposed Budget >> Minimum Minimum LevyLevy

1.1. Reduce general fund appropriations for Reduce general fund appropriations for amount equal to or less than the amount equal to or less than the difference between proposed tax levy difference between proposed tax levy and minimum tax levy; and minimum tax levy; I th l f d I th l f d 2.2. Increase other general fund revenues Increase other general fund revenues (budgeted fund balance or misc (budgeted fund balance or misc revenues) for amount equal to or less revenues) for amount equal to or less revenues) for amount equal to or less revenues) for amount equal to or less than the difference between proposed than the difference between proposed tax levy and minimum tax levytax levy and minimum tax levy

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y yy y

Proposed Budget Proposed Budget >> Minimum LevyMinimum LevyAppropriation of Appropriation of SurplusSurplus less than 2%less than 2%

remember…remember…remember…remember…

A municipality cannot increase A municipality cannot increase budgeted fund balance (surplus) to budgeted fund balance (surplus) to reduce tax levy if the increase results reduce tax levy if the increase results i th BOE’ i i l b l i th BOE’ i i l b l in the BOE’s remaining surplus balance in the BOE’s remaining surplus balance to be < $250,000 or the minimum to be < $250,000 or the minimum amount necessary based on district amount necessary based on district amount necessary based on district amount necessary based on district circumstances and needs, whichever is circumstances and needs, whichever is higherhigher

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higherhigher

Proposed Budget Proposed Budget == Minimum Minimum LevyLevy

If the proposed budget is If the proposed budget is at the at the minimum levyminimum levy the municipality the municipality minimum levyminimum levy, the municipality , the municipality must certify the minimum levy. must certify the minimum levy. There are no options to reduce There are no options to reduce There are no options to reduce There are no options to reduce

below the minimum.below the minimum.

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Use of Use of Capital / Maintenance / Capital / Maintenance / E RE REmergency ReservesEmergency Reserves

Neither the municipality nor Neither the municipality nor BOE h th l l th it t BOE h th l l th it t BOE has the legal authority to BOE has the legal authority to appropriate capital reserve to appropriate capital reserve to offset current expense funded by tax levy offset current expense funded by tax levy

Only legal appropriation would be to offset capital outlay Only legal appropriation would be to offset capital outlay funded by tax levyfunded by tax levy

but appropriation must fund projects that do but appropriation must fund projects that do notnot require require l ( j i h ) l ( j i h )voter approval (projects without excess costs)voter approval (projects without excess costs)

Withdrawal from maintenance reserve is permissible if for Withdrawal from maintenance reserve is permissible if for required maintenance projects in the comprehensive required maintenance projects in the comprehensive maintenance plan that were included in the original budgetmaintenance plan that were included in the original budgetmaintenance plan that were included in the original budgetmaintenance plan that were included in the original budget

Withdrawal from Emergency Reserve requires approval of Withdrawal from Emergency Reserve requires approval of the Commissioner, therefore not an option for reducing levythe Commissioner, therefore not an option for reducing levy

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Capital / Maintenance / Emergency Capital / Maintenance / Emergency RRReservesReserves cont’dcont’d

Lastly…Lastly…→→Reducing a Capital Reserve withdrawal does NOT Reducing a Capital Reserve withdrawal does NOT →→Reducing a Capital Reserve withdrawal does NOT Reducing a Capital Reserve withdrawal does NOT

impact general fund levy and therefore, it is NOT impact general fund levy and therefore, it is NOT a viable optiona viable option

→→RReducing a Capital Reserve deposit DOES impact educing a Capital Reserve deposit DOES impact general fund levy and therefore, it IS a viable general fund levy and therefore, it IS a viable option, even if included in LRFP option, even if included in LRFP

→→Increasing a Maintenance Reserve withdrawal Increasing a Maintenance Reserve withdrawal may impact general fund levy and may impact general fund levy and therefore, it IS therefore, it IS a viable optiona viable optiona viable optiona viable option

→Reducing an Emergency Reserve deposit DOES impact →Reducing an Emergency Reserve deposit DOES impact general fund levy and therefore, it IS a viable option.general fund levy and therefore, it IS a viable option.

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g y , pg y , p

Other Opportunities to Reduce Other Opportunities to Reduce CCCostsCosts

Shared services agreementsShared services agreementsShared services agreementsShared services agreementswith local municipalitywith local municipality

→→County Offices can facilitateCounty Offices can facilitateCoordinate transportation services with other Coordinate transportation services with other districts or utilize a CTSAdistricts or utilize a CTSAJoint purchase copy paper, school supplies, fuel, Joint purchase copy paper, school supplies, fuel, Joint purchase copy paper, school supplies, fuel, Joint purchase copy paper, school supplies, fuel, etcetcPrivatization options (Privatization options (e.g. food services, e.g. food services, maintenance) maintenance) maintenance) maintenance) Energy efficient practices Energy efficient practices (e.g. energy efficient light (e.g. energy efficient light bulbs, 4bulbs, 4--day weeks in summer)day weeks in summer)Courtesy busing taken over by muni Courtesy busing taken over by muni (will affect (will affect

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Courtesy busing taken over by muni Courtesy busing taken over by muni (will affect (will affect cap calculation)cap calculation)

Shared ServicesShared Servicesunder the Uniform Shared Services andunder the Uniform Shared Services andunder the Uniform Shared Services and under the Uniform Shared Services and

Consolidation ActConsolidation ActUniform Shared Services and Uniform Shared Services and Uniform Shared Services and Uniform Shared Services and Consolidation Act Consolidation Act (N.J.S.A. 40:65(N.J.S.A. 40:65--1)1)enables districts to enter into enables districts to enter into enables districts to enter into enables districts to enter into contracts with local units of gov’t to contracts with local units of gov’t to share servicesshare servicesshare servicesshare services

Limited to services which Limited to services which eacheach entity could entity could otherwise legally perform for itselfotherwise legally perform for itselfotherwise legally perform for itselfotherwise legally perform for itself

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Shared Services AgreementsShared Services AgreementsShared Services AgreementsShared Services Agreements

DCA promulgated guidance however no DCA promulgated guidance however no DCA promulgated guidance, however, no DCA promulgated guidance, however, no oversight authority of agreements at the oversight authority of agreements at the state level; established locallystate level; established locallystate level; established locally.state level; established locally.

DCA states generally, a shared service should DCA states generally, a shared service should involve the utilization of one unit’s existing involve the utilization of one unit’s existing involve the utilization of one unit s existing involve the utilization of one unit s existing employees/servicesemployees/servicesIf desire to enter into agreement to jointly If desire to enter into agreement to jointly g j yg j ypurchase a service or good, that would purchase a service or good, that would generally fall under the joint purchasing law generally fall under the joint purchasing law (N J S A 18A 18A(N J S A 18A 18A 11)11) & eg lation & eg lation (N J A C 5 34(N J A C 5 34

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(N.J.S.A. 18A:18A(N.J.S.A. 18A:18A--11)11) & regulation & regulation (N.J.A.C. 5:34(N.J.A.C. 5:34--7),7), not the shared services legislation.not the shared services legislation.

Post CertificationPost CertificationPost CertificationPost Certification

BOE and Municipality Next StepsBOE and Municipality Next Steps

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BOE Revises BudgetBOE Revises BudgetBOE Revises BudgetBOE Revises BudgetBOE is NOT bound by municipal officials BOE is NOT bound by municipal officials BOE is NOT bound by municipal officials BOE is NOT bound by municipal officials specific linespecific line--item reductions; BOE is ONLY item reductions; BOE is ONLY bound by the total amount of the bound by the total amount of the reduction in tax levyreduction in tax levy

District MUST submit revised budget District MUST submit revised budget District MUST submit revised budget District MUST submit revised budget including all supporting documentation including all supporting documentation items and SFRA calcs updated as items and SFRA calcs updated as appropriateappropriate

•• Districts should Districts should notnot change projected 08change projected 08--

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g p jg p j09 enrollment in the revised budget09 enrollment in the revised budget

Revised BudgetRevised BudgetRevised BudgetRevised Budget

If BOE does If BOE does notnot dispute reductions dispute reductions If BOE does If BOE does notnot dispute reductions, dispute reductions, the Executive County Superintendent the Executive County Superintendent will ascertain whether revised budget will ascertain whether revised budget will ascertain whether revised budget will ascertain whether revised budget is sufficient for T&E and maintain is sufficient for T&E and maintain stability for final budget approvalstability for final budget approvalstability for final budget approval.stability for final budget approval.

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Dispute ResolutionDispute ResolutionDispute ResolutionDispute Resolution

If BOE If BOE disputesdisputes reductions the reductions the If BOE If BOE disputesdisputes reductions, the reductions, the Executive County Superintendent will Executive County Superintendent will schedule a combined meeting with schedule a combined meeting with schedule a combined meeting with schedule a combined meeting with BOE and governing body(ies) to BOE and governing body(ies) to reach agreement If revised tax levy reach agreement If revised tax levy reach agreement. If revised tax levy reach agreement. If revised tax levy is agreed upon, county board of is agreed upon, county board of taxation is notifiedtaxation is notifiedtaxation is notified.taxation is notified.

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Failure to CertifyFailure to CertifyF il AF il AFailure to AgreeFailure to Agree

If no tax levy is certified by If no tax levy is certified by May 19 (“failure to certify”) May 19 (“failure to certify”) y ( y )y ( y )or regional constituents or regional constituents certify different amts certify different amts yy(“failure to agree”) then (“failure to agree”) then Commissioner must certify Commissioner must certify yythe amount under the law the amount under the law even if disputeeven if dispute resolution resolution

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ppcontinues.continues.

Application for RestorationApplication for RestorationApplication for RestorationApplication for Restoration

If a tax levy is certified but no If a tax levy is certified but no agreement is reached, BOE can file agreement is reached, BOE can file an Application for Restoration for an Application for Restoration for some or all reductions, some or all reductions, within 10 within 10

ki d f th t l ki d f th t l working days of the tax levy working days of the tax levy certificationcertification..

Governing body then has 10 working Governing body then has 10 working da s afte eceipt of application to da s afte eceipt of application to

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days after receipt of application to days after receipt of application to submit comments.submit comments.


If an application for restoration has If an application for restoration has If an application for restoration has If an application for restoration has been filed, negotiations can still been filed, negotiations can still continue toward agreementcontinue toward agreementcontinue toward agreementcontinue toward agreementAs long as the muni certified a rate As long as the muni certified a rate by May 19 then they can recertify by May 19 then they can recertify by May 19, then they can recertify by May 19, then they can recertify with a with a lesser cutlesser cut after May 19 after May 19 (cannot certify a greater cut)(cannot certify a greater cut)(cannot certify a greater cut)(cannot certify a greater cut)

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And remember…And remember…

There is no requirement under law There is no requirement under law or regulation that Commissioner or regulation that Commissioner ggdecisions on Applications for decisions on Applications for Restoration will be finalized before Restoration will be finalized before tax bills are mailed.tax bills are mailed.

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Generally, all decisions are completed by Generally, all decisions are completed by the end of August the end of August

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State NJ Education Defeated Budget Presentation 2008