Chatham TownshipCommittee Meeting

March 26, 2015

2015/2016 Spending ProposalAnnual operating budget

Referendum

Annual Operating Budget--Goals

To maintain all district programs at a level of excellence.

To maintain all current class sizes.

To deliver a budget at the lowest possible cost to taxpayers in order to uphold the district’s track record of efficient spending.

How Chatham ComparesPer-Pupil AP Participation Post-Secondary

Budgetary Cost Rate EnrollmentChatham $12,954 70.1% 93.0%New Providence $13,165 42.2% 88.0%Millburn $14,608 61.9% 87.0%Livingston $14,385 55.4% 89.0%Madison $13,752 49.6% 85.0%Westfield $13,087 44.8% 90.0%Bernards $13,897 53.6% 88.0%Summit $14,291 68.0% 84.0%Montgomery $13,907 62.4% 88.0%Princeton $18,688 87.8% 86.0%State Average $14,783 NA NA

School District

1. Budgetary costs are taken from the NJDOE Taxpayers’ Guide to Education Spending, 2014 (http://www.state.nj.us/education/guide/2014/)

2. Performance data are taken from the NJDOE School Performance Reports, 2015 (http://education.state.nj.us/pr/)3. AP Participation Rate = Number of students, as a percentage of 11th and 12th graders, who took at least one AP test in 2013-20144. Post-Secondary Enrollment = % of students enrolled in higher education 16 months after high school graduation

How Chatham Compares—Morris County

1. Budgetary costs are taken from the NJDOE Taxpayers’ Guide to Education Spending, 2014 (http://www.state.nj.us/education/guide/2014/)

Per-PupilBudgetary Cost

Mountain Lakes NABoonton $17,777Morris $15,883Parsippany-Troy Hills $15,310Roxbury $14,904Kinnelon $14,840Pequannock $14,572Montville $14,462Randolph $14,403Jefferson $14,224Madison $13,752Chatham $12,954Dover $11,738

School District

County Average = $14,568

State Aid and Levy CapState Aid is flat

The district qualifies for $183,801 of tax levy waiver

The maximum tax levy increase the Board could propose is $1,338,653, or 2.3%

Budget Prior Two Years2013/2014: 3.46% tax levy increase

◦ “second questions” for school counseling staff and security personnel

2014/2015: 3.34% tax levy increase ◦ “second question” for STEM staff and

resources

Overview of ExpendituresDescription Adjusted Budget

2014/2015Proposed Budget

2015/2016 Adj Bud vs Prop

Bud % Change

Instruction -- Regular $21,966,711 $22,487,021 $520,310 2.37%Instruction -- Special Ed $10,300,070 $10,538,625 $238,555 2.32%

Co-Curricular Activities & Athletics $1,101,454 $1,132,117 $30,663 2.78%Attendance/Nursing Services $719,953 $705,927 ($14,026) -1.95%

Guidance $1,342,742 $1,379,272 $36,530 2.72%Curriculum/Instruction $2,274,839 $2,322,407 $47,568 2.09%General Administration $1,215,263 $1,108,432 ($106,831) -8.79%School Administration $2,795,321 $2,840,346 $45,025 1.61%

Central Office & Admin Info Technology $1,417,479 $1,435,655 $18,176 1.28%Operation Maintenance $5,607,326 $5,724,313 $116,987 2.09%

Transportation $2,528,907 $2,509,854 ($19,053) -0.75%Employee Benefits $9,356,011 $9,567,421 $211,410 2.26%

Transfer to Charter School $10,500 $0 ($10,500) -100.00%Summer School $167,150 $182,000 $14,850 8.88%

Subtotal General Expenditures $60,803,726 $61,933,390 $1,129,664 1.86%Capital Outlay $1,712,771 $426,669 ($1,286,102) -75.09%

Grants & Entitlements $1,392,552 $915,214 ($477,338) -34.28%Debt Repayments $2,732,888 $2,683,751 ($49,137) -1.80%

Prior Year Open Purchase Orders $3,281,688 $0 ($3,281,688) -100.00% Total Expenditures $69,923,625 $65,959,024 ($3,964,601) -5.67%

Overview of Revenues and Tax Increase

Adjusted Budget

2014/2015

Proposed Budget

2015/2016Tax Increase 3.34% 1.77%Local Tax Levy 57,742,607 58,767,459Enrollment Adjustment 0Free Balance 276,750 282,490Capital Reserve WD 1,570,000 412,459Other Revenue 574,000 544,510State Aid/Extraordinary 400,000 400,000Additional State Aid 1,953,141 1,953,141Prior Year Encumbrances 3,281,687 0Total Operating Budget 65,798,185 62,360,059Federal Sources 927,846 740,140Other Grants 175,074 175,074Debt Repayment 2,732,888 2,683,751Total Revenue 69,633,993 65,959,024Estimated Expenditures as of 3/6/2015 65,959,024Reduction in Expenses to Balance Budget 0

Estimated Tax Impact2013/2014 2014/2015 2015/2016

Tax Levy Increase 3.46% 3.34% 1.77%Local Tax Levy 55,874,234 57,742,607 58,767,459

Chatham Borough $33.63 $25.79 $15.23Chatham Township $41.32 $48.45 $27.95

Chatham Borough $235.43 $180.56 $106.62Chatham Township $289.27 $339.12 $195.67

Estimated Annual Tax Impact--per $100,000 of Assessed Value

Estimated Annual Tax Impact--$700,000 Home

Tax Levy ComparisonYEAR Increase

2005/2006 6.8%2006/2007 4.1%2007/2008 8.2%2008/2009 7.6%2009/2010 2.2%2010/2011 7.4%2011/2012 2.4%2012/2013 2.3%2013/2014 3.5%2014/2015 3.3%

PROPOSED 2015/2016 1.77%

Tax Levy Comparison1.77% proposed tax levy

increase results in tax impact per $100k of assessed value that is 41% lower than last year’s tax impact in both the Borough and Township.

Tax Levy AuthorityThe district is proposing a budget that

does not exercise the $183,801 in tax levy waiver.

The district’s proposed budget is $130,000 below the 2% allowable tax levy amount.

The district will have $313,801of “banked cap” available for the 2016/2017 budget year.

Referendum OverviewSDOC has a range of capital needs.Past referenda have focused on

classrooms, athletic facilities, and libraries.Over the past 10 years, all capital

improvements have been funded out of the operating budget and/or capital reserve.

Enrollment has continued to grow over past 10 years.

Arts facilities in particular have been under-invested.

Referendum Overview--GoalsAddress the inadequacy of the district’s

two auditoriums, which date to 1958 and 1976.

Create space for STEM classrooms to meet program growth.

Add classrooms at the elementary level to relieve pressure from enrollment.

Address aging infrastructure of athletic complexes at Cougar and CHS.

Incorporate district offices into SDOC property.

Referendum Overview—Project Scope

Build a new auditorium at CMS.Convert existing CMS auditorium into

STEM labs and district offices.Renovate existing CHS auditorium.Build six new elementary classrooms.Install turf fields behind CHS.Upgrade Cougar Field infrastructure.

Referendum Overview—RationaleAuditorium Facilities

◦ It is not feasible to expand CHS or CMS auditoriums.

◦ Renovating the existing auditoriums = less seating capacity.

◦ Renovating = inadequate storage, set-building, dressing room, and other features.

◦ Renovating = cheaper, but inferior.

Referendum Overview—RationaleAcademic Facilities

◦ SDOC has expanded its STEM programs◦ CMS has less dedicated STEM space than any

school

◦ Elementary buildings are tight Six classrooms = net gain of two classrooms for each school

Building Enrollment # of Tech. Labs Student:Lab RatioMAS, SBS,

WASLAF 681 2 341CMS 997 1 997CHS 1194 5 238

1264 3 421

Referendum Overview—RationaleAthletic Facilities

◦ Cougar Field has aging infrastructure Bleachers, macadam, fencing, press box,

concessions stand are all original. Parking is not well-designed Fastest-growing sports at CHS by far are cross

country and track; cinder path would provide course for XC use

◦ High School fields have been beaten up Three expansion projects in past 15 years have

led to degradation. Fields are not properly graded or drained. Fields are not usable early in the spring.

Referendum Overview—Cost Total cost estimate for all improvements = $24.8

million State debt service = $2.9 million Local share = $21.9 million

(District has also just refunded current debt from previous referenda to save roughly $3.8 million)

Operating Costs:◦ Projected estimated annual operating costs for new auditorium =

$40,000◦ Projected savings from moving district offices = $85,000 -

$100,000◦ Annual operating costs would be net positive for the district.

Referendum ComparisonTotal $ Amountof Referendum

Gymnasiums at CMS and WASClassrooms at CMS, WAS, and LAFCougar Field HouseLibraries at CMS and LAFTurf FieldsAuditoriums at CMS and CHSSTEM Labs at CMSClassrooms at MAS and WASCougar Field ImprovementsTurf Field at CHS

2015 $24,838,000 $25* $25*

Year Projects Tax Impact per $100,000 of AssessmentBOROUGH TOWNSHIP

2005 $26,712,000 $71 $57

*includes $5 savings derived from refunding of the current debt and state’s share of over 10% of project cost

Tax ImpactAnnual Tax Impact Annual Tax Impact for

per $100k of Assessed Value House Assessed at $700,000Chatham Borough $25.43 $178.03Chatham Township $24.56 $171.91

*These figures represent the latest estimates, assume a 3.5% interest rate, include the state’s share of over 10% of the project, and reflect the roughly $5 per $100,000 of annual reduction in tax from the refunding of the current debt.

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Annual Tax Impact Monthly Tax Impactper $100k of Assessed Value per $100k of Assessed Value

Chatham Borough $25.43 $2.12Chatham Township $24.56 $2.05

Referendum Overview—LogisticsLocation

◦ Location of new auditorium makes it less disruptive to educational program during construction.

◦ Most high school athletes now practice and compete offsite; student performers would function in the same way.

◦ Location of new district offices would be a dramatic improvement from an organizational point of view.

Aesthetics◦ New auditorium entrance and design would represent an

improvement over current façade of Chatham Middle School.Timeline

◦ If the referendum were approved, the district would work with its architects on a timeline that ensured the availability of at least one auditorium throughout construction.

CalendarMarch 31: Deadline for voter registrationApril 21: Vote-by-mail applications must be

received by County Board of Elections

April 21: Budget Vote, Referendum Vote, and School Board Election

7:00 am – 9:00 pm, CMS and CHS

Questions?