NOTE: After the below article was written, there were even more changes to the budget, and the school board did an about-face. To read the most updated details, check out the breaking news on our website.
After three weeks of tense meetings between members of the Secaucus Board of Education (BOE), the Town Council, and the administrations of Schools Superintendent Cynthia Randina and Mayor Michael Gonnelli, a final decision on the 2011-2012 budget could ultimately rest with the state.
Last month, the voters rejected Randina’s proposed $33.1 million budget for the upcoming school year. Under that budget, $32.1 million would have been raised through tax dollars. The budget called for a tax increase of 3.3 percent.
After that spending plan was rejected, a process was set in motion which, according to state law, allowed the Town Council to make budget cuts to reduce the tax burden on residents.
On Wednesday, the council presented to the public its revised school budget that includes spending cuts and does not raise taxes. In reality, the council presented two spending plans.
Under one plan, the council proposed more than $1.4 million in spending cuts and the restoration of line items totaling $303,658 that had been slashed from Randina’s original budget. This plan reduces the amount of money in the school budget raised from tax dollars to $31 million. Under this plan there would be no tax increase or decrease.
The Secaucus Town Council had hoped to negotiate with Randina and board trustees to restore five school programs.
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So why were two plans presented?
The reasoning
By state law, when a school budget fails at the polls, the local governing body has the authority to make spending cuts in that budget and set a new tax levy. However, a town or city council does not have the authority to request that specific programs be restored.
The Town Council had hoped to negotiate with Randina and board trustees to restore five school programs and other line items cut under the superintendent’s original budget. Thus, the council gave the BOE an ultimatum: Agree to a budget that restores these programs, or accept one with even steeper cuts.
Had the school board accepted the option that restored the five programs, $303,658 would have remained in the budget and the school system would continue to receive the current tax levy. If the school system decided against the restoration of these programs, then $303,658 would be eliminated from the budget and school taxes would go down.
By state law, the council’s revised budget was due to be given to various state and county agencies on Thursday, May 19, and the council gave the school board until 2 p.m. that day to decide whether or not it would restore these line items.
Randina and the BOE let the 2 p.m. deadline pass and seemed poised to appeal the council’s revised school budget to New Jersey’s Acting Commissioner of Education Chris Cerf. They have 10 days to file their appeal.
$1.4 million in cuts
After voters overwhelmingly rejected the 2011-2012 school budget in April, a six-person committee met to strike a new school spending plan.
The committee included Town Chief Financial Officer (CFO) Margaret Barkala; Acting Tax Collector Nick Goldsack (who is also a CFO); Town Administrator David Drumeler; Deputy Mayor John Bueckner; Councilman Robert Costantino; and Mayor Michael Gonnelli. The committee has also received input from Acting School Board Business Administrator Ron Smith, Town Attorney Anthony D’Elia, and the town auditors.
Much of the budget trimming has been done by the members of this committee, although Randina and several board members have also been involved in the process.
The budget committee combed through Randina’s original budget and found another $1.4 million in savings, which they believe won’t impact in-classroom instruction.
The cuts, detailed on Wednesday, include reductions in diesel fuel costs ($25,000); electric utilities ($50,000); legal expenses ($10,000); salary ($100,000); telephone expenses ($40,000); health benefits costs ($475,000); and health broker fees ($125,000), among many other line items.
Some members of the council claimed on Wednesday that a few expenses in Randina’s budget seemed padded and appeared to include too much fat. They specifically pointed to the diesel fuel and water utilities line items as examples. (The BOE had originally budgeted a 100 percent increase for diesel fuel expenses, for instance.)
“We did everything that we could to make cuts and not impact any children or programs,” said Gonnelli on Wednesday, addressing Randina and members of the BOE. “If you take our recommendations, they won’t affect programs or staff. We went through each line item of your budget. We went through your history of past spending. These cuts are in line and won’t affect one classroom, one teacher, one aide.”
In addition to the $1.4 million in cuts, the council would also like to see the restoration of five line items that had been cut by Randina: Camp Wappalany; extracurricular and co-curricular activities; a guidance counselor; supervision for the elementary lunch period; and work hours for teachers’ aides.
School board attorney calls cuts ‘illusory’
But the cuts aren’t sitting well with Randina and members of the school board who don’t believe the school system can realistically realize $1.4 million in savings.
And the council’s expected savings in health benefits costs are a particular sticking point for the board. For more than a year the Town Council has been trying to get school employees to join municipal employees in a Health Insurance Fund (HIF).
“We wanted to pool all the workers,” Gonnelli said in April. “We wanted to pool the town workers and the school board employees to see if we could get a better health insurance rate. [The municipality was] able to keep our increase low because we’re moving into a HIF [a health insurance fund that pools public employees from different municipalities under one provider].”
Gonnelli added, “We wanted them to come into the HIF with us. I think it would have saved money. If you look at their [proposed budget for school year 2011-2012], they’ve budgeted $800,000 for insurance increases.”
But school officials have been skeptical of the mayor’s claims.
At Wednesday’s budget meeting, Vittorio LaPira, an attorney for the BOE, said: “The board is disappointed in the reductions proposed by the Town Council, which will be felt not only in next year’s budget, but for years to come. More specifically, the board believes that approximately $700,000 worth of proposed cuts are unrealistic and illusory because they cover existing contractual obligations and/or items that cannot be reduced.”
But representatives from the town say the board’s concerns aren’t based on actual research.
Town Attorney Anthony D’Elia said Wednesday that the budget committee asked the school board whether it had received any quotes from health brokers regarding how much it might cost to go into a HIF. He said they never received any written quotes on HIF rates.
“They’re saying you can’t force [the teachers’] union to accept a reduction in health benefits,” D’Elia said after Wednesday’s meeting. “We know that. There’s no reduction of benefits in the plan. In this plan they would keep the same exact benefits they already have with Oxford, but they would shift to a HIF. If they shift to a HIF, at worst, our broker tells us they would see 5.67 percent increase [in insurance premiums].”
“We didn’t just throw those numbers out there,” said Deputy Mayor Bueckner, addressing the school board, about the $600,000 in healthcare related savings the council proposed. “They were based on many, many, many hours of research. I think with some diligence on the part of the BOE you can realize some savings there.”
Still, LaPira said the council’s budget will force further cuts and “will undoubtedly affect programs and staff.”
What now?
After Randina and the school board refused to restore the five line items requested by the council, the proposed budget that includes the 1.28 percent tax decrease was submitted to the Hudson County superintendent of schools, the county’s board of taxation, the Department of Community Affairs’ Division of Local Finance, and the local tax assessor.
Ron Smith, acting business administrator for the BOW said late Thursday that school trustees now have until June 9 to strike a final budget.
“I don’t know that we’ll make all the cuts the council recommended,” he said.
“A total of $1.5 million must now be cut from the spending plan.
E-mail E. Assata Wright at awright@hudsonreporter.com.