The Millstone Times August 2020

The Lights are Always On

Com hom t Chelse !

A SSISTED L IVING · M EMORY C ARE · R ESPITE S TAYS 732-536-3000 CHELSEASENIORLIVING . COM Dear Members of the Allentown, Millstone and Upper Freehold Communities: The Upper Freehold Regional School District budget for the 2020-21 schoolyear reflects the same hard decisions we’ve had to make in most years over the past decade. This year, we started the process with a projected deficit of over $2 million. We were then surprised by an unexpected reduction in our state funding by over $400,000, which exacerbated our budget challenges. Sometimes our deficits are driven by rising costs, while other times they’re driven by decreased revenues. This year we face both types of challenges. Despite similar challenges, our administrative team has managed to end each of the past few years under-budget. They’ve done this by asking hard questions about our needs, and their efforts have allowed us to put some money aside for potentially more pressing needs in the future. When we run under-budget, we are required by state law to allocate the dollars into the next year’s budget. These funds are permitted to be allocated to only a few specific budget line items and can’t be utilized to increase the general budget on an ongoing basis. As such, they can’t be relied upon to solve general budget deficits that occur over multi-year timeframes. Historically, we allocated these funds to our maintenance reserve account, so that the things that break can be fixed. We’ve also built up our capital reserve ac- count, which is how we’d cover a new larger-scale purchase for the district. As these funds are placed in their assigned accounts, we have very little flexibility to use them for anything other than the purpose of those accounts. As an example, we can’t use maintenance reserves to pay for rising employee healthcare costs. We are in a concerning state budget environment. The surprise loss of state aid in this year’s budget, combined with new state funding guidelines and finan- cial pressure incurred by the Covid-19 shutdown, suggests to us that excess reserves may be seized in order to close state budget gaps. This is precisely what occurred to our district in 2010 when our state-aid was reduced dollar-for-dollar by the amount in our reserve accounts in order to compensate for shortfalls in the state budget. Roughly $1 million of funds that had been prudently set aside to cover the incremental costs of opening the then brand-new Stone Bridge Middle School was lost due to state aid reduction. We are unwilling to have prudent budget management again be lost at the hands of state officials. Had it not already happened to our district; we might not be as concerned. We feel the best defense is to use the funds in a way that benefits our district and our kids before it is potentially taken away. We have considered how we can spend these funds in a way that complies with the strict criteria for their use and best serves the community. ..continued on page 22

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