School District of the Chathams. 2017/2018 Preliminary Budget

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1 School District of the Chathams 2017/2018 Preliminary Budget

2 Three Key Factors Affecting the State Aid 2017/2018 Budget Enrollment Health Insurance Costs

3 Direct State Aid $3,000, $2,500, $2,000, $1,500, Direct State Aid $1,000, $500, $ /06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18

4 State Aid Per-Pupil in Chatham $ (Source: New Jersey Department of Education State Aid Summaries ( $ $ $ $ $ $ $ $ $0.00

5 Enrollment, 2005/6 - Current Enrollment /06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17

6 $3,500,000 Direct State Aid versus Enrollment (Sources: New Jersey Department of Education State Aid Summaries and Enrollment Reports ( $3,000, $2,500, $2,000,000 $1,500, Direct State Aid Enrollment $1,000, $500, $0 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/

7 Budget Status at March 6, 2017 State Aid increase = $0 Health Insurance Increase = 14.5% The district qualifies for Health Benefit Waiver of $444,617 and an Enrollment Waiver of $56,989 The district has $220,273 of Banked Capped from the 2016/2017 budget process The maximum tax levy increase the Board could propose = 2% + $721,879 or 3.20%

8 Revenues & Expenses Impacting the Budget Major Expenses Impacting the Budget Tax Increase 2.0% Tax Increase of 3.09% Revenues Tax Increase $1,202,943 $1,858,547 State Aid Increase $0 $0 sub-total Revenues $1,202,943 $1,858,547 Expenses Health Benefit Increase 14.50% $909,000 $909,000 Salary Increase $935,000 $935,000 sub-total Expenses $1,844,000 $1,844,000 Revenue Increase less Major Expenses ($641,057) $14,547

9 Ten-Year Enrollment Changes, Morris County K-12 Districts 30% 25% 20% 15% Chatham Madison Morris Dover Boonton 10% 5% Butler Parsippany-Troy Hills 0% -5% -10% -15% -20% 2005/ / /2016 Mountain Lakes Mount Olive Montville Kinnelon Jefferson Randolph Pequannock Roxbury -25% Source: New Jersey Department of Education Enrollment Reports (

10 Per-Pupil Spending, 2015/2016 (Source: New Jersey Taxpayer Guide to Education Spending, School District Per-Pupil Budgetary Cost Mountain Lakes NA Boonton $17,641 Butler $17,130 Parsippany-Troy Hills $16,771 Roxbury $16,642 Morris $16,138 Montville $16,104 Kinnelon $15,665 Jefferson $15,579 Randolph $15,421 COUNTY AVERAGE $15,530 Madison $15,153 Mount Olive $15,090 Pequannock $15,082 Chatham $13,657 Dover $11,352

11 Per-Pupil Budgetary Costs, % Increase prior 10 years Chatham versus State Average for K-12 districts with students $16, % 25.00% $14, % 15.00% Chatham State Chatham State $12, % 5.00% $10,000 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/ %

12 Comparative School Tax Levies K-12 District Enrollment School Tax Levy Per-Pupil (10/2015) (Property Tax) Tax Levy Princeton 3542 $74,504,606 $21,035 Holmdel 2965 $54,691,561 $18,446 Livingston 5902 $106,771,328 $18,091 Tenafly 3605 $62,722,401 $17,399 Millburn 4903 $82,966,075 $16,921 Ridgewood 5640 $93,030,172 $16,495 Summit 4091 $66,610,925 $16,282 Montgomery 4763 $77,038,683 $16,174 WWP 9608 $153,786,308 $16,006 Madison 2566 $40,705,634 $15,863 Westfield 6265 $96,878,790 $15,463 Bernards 5639 $86,555,824 $15,349 Berkeley Heights 2667 $40,495,210 $15,184 Chatham 4154 $61,719,108 $14,858 New Providence 2386 $35,057,647 $14,693 Sources: State of New Jersey Department of Community Affairs, CY 2016 ( New Jersey Department of Education 2015 Enrollment Report (

13 Expenditure Overview at 3.09% tax levy increase Description Adjusted Budget 2016/2017 Proposed Budget 2017/2018 Adj Bud vs Prop Bud % Change Instruction -- General $22,692,971 $22,740,766 $47, % Instruction -- Special Ed $10,921,125 $11,035,274 $114, % Co-Curricular Activities & Athletics $1,217,473 $1,265,776 $48, % Attendance/Nursing Services $657,207 $672,163 $14, % Guidance $1,401,429 $1,498,068 $96, % Curriculum/Instruction $2,349,724 $2,336,766 ($12,958) -0.55% General Administration $1,263,243 $1,077,105 ($186,138) % School Administration $2,857,072 $2,901,880 $44, % Central Office & Admin Info Technology $1,552,437 $1,603,785 $51, % Operation Maintenance $6,138,268 $6,191,243 $52, % Transportation $2,722,250 $2,749,917 $27, % Employee Benefits $9,716,470 $10,979,523 $1,263, % Summer School $180,215 $184,700 $4, % Subtotal General Expenditures $63,669,884 $65,236,966 $1,567, % Capital Outlay $1,423,687 $2,852,469 $1,428, % Grants & Entitlements $1,231,029 $871,000 ($360,029) % Donations $320,310 $0 ($320,310) % Debt Repayments $2,439,819 $2,863,958 $424, % Total Expenditures $69,084,729 $71,824,393 $2,739, %

14 Overview of Revenues/Expenditures Adjusted Budget 2016/2017 Proposed Budget 2017/2018 Prop Budget 2017/2018 Health Benefit Increase 14.5% Prop Budget 2017/2018 Health Benefit Incr 14.5% & 100% of Cap Funds Tax Increase 2.35% 2.00% 3.09% 3.20% Local Tax Levy 60,147,138 61,350,081 62,007,960 62,071,960 Free Balance 273, , , ,667 Capital Reserve WD 932,459 2,600,000 2,600,000 2,600,000 Other Revenue 777, , , ,318 State Aid/Extraordinary 400, , , ,000 Additional State Aid 2,003,490 2,003,490 2,003,490 2,003,490 Prior Year Encumbrances 559, Total Operating Budget 65,093,571 67,431,556 68,089,435 68,153,435 Federal & State Sources 1,231, , , ,000 Local Grants 320, Debt Repayment 2,439,819 2,863,958 2,863,958 2,863,958 Total Revenue 69,084,729 71,166,514 71,824,393 71,888,393 Expenditures as of 3/3/ ,824,393 71,824,393 71,824,393 Revenue vs Expenditures (657,879) 0 64,000 Revenue Adjustments Health Benefit Waiver (projected 14.5% inc) 444, , ,617 Enrollment Increase Waiver 56,989 56,989 56,989 Banked Cap (expires in 2018/2019) 220, , ,273 Total Possible Revenue Adjustments 721, , ,879 Amount of Waivers & Banked Cap Used Balance of Banked Cap 0 (657,879) (721,879) 721,879 64,000 0

15 Preliminary Estimated Tax Impact Scenarios Proposed Budget 2017/2018 Proposed Budget 2017/2018 Proposed Budget 2017/2018 Tax Increase 2.00% 3.09% 3.20% Local Tax Levy $61,350, $62,007, $62,071, Chatham Borough - Average House Assessment $670,694 Annual Taxes $8, $8, $8, Avg Monthly Tax Increase $17.06 $24.35 $25.06 Avg Annual Tax Increase $ $ $ Chatham Township - Average House Assessment $792,971 Annual Taxes $9, $9, $9, Avg Monthly Tax Increase $14.37 $22.61 $23.42 Avg Annual Tax Increase $ $ $280.98

16 Tax Levy Comparison YEAR INCREASE 2007/ % 2008/ % 2009/ % 2010/ % 2011/ % 2012/ % 2013/ % 2014/ % 2015/ % 2016/ % PROPOSED 2017/ %

17 Items Not Reflected in the Proposed Budget Potential staff reductions at MAS and WAS Kindergarten and First Grade Potential staff increase at SBS Potential staff increases at CHS (enrollment to go up about 50 students) English, Math, Science, Social Studies, World Language, HPE Additional extracurricular programs Sailing Paddle

18 Items Included in Budget One counselor at CHS Additional security cameras at multiple schools

19 Calendar March 6: Open Finance Committee meeting March 17: Submit preliminary budget to ECS March 20: Open Finance Committee meeting May 1: Public Budget Hearing & Board Budget Approval