Mountain Lakes Board of Education 2018-2019 Budget 1

Mountain Lakes School District Budget Goals We are committed to providing the resources that allow us to build upon the successful educational partnership that exists among our students, staff, families, community and administration. We provide a dynamic and continuously evolving curriculum with a focus on rigorous academic preparation, developing personal resiliency and promoting life-long learning skills for all learners. MLHS graduates earn admission to the most competitive colleges, universities and military academies around the world. Achieving our goals enables each student to actualize his or her unique potential. Where

Objectives Discuss Proposed 2018-2019 Budget Expense reductions to support student achievement and district curriculum goals: Salary increases from the current MLEA contract continue to be offset by changes in teaching staff composition (retirements) and other savings from the contract By changing our healthcare benefits provider to Cigna from Horizon as of 1/1/18, we reduced our annual premium increase by $360,000, from $760,000 to $400,000. Had we stayed with Horizon, our premiums would have increased by 19%, while Cigna agreed to a 10% increase. Changes in long-term substitute teacher compensation structure Maintain buildings and grounds in support of district goals and increase capital outlay by 60% Maintain manageable tax increase to provide a thorough and efficient education Budgets for the past 8 years included tax levy increases at an average of 1.66% Maximize alternate revenue sources Before and after-care program at Wildwood continues to be well-received and well- attended, estimated revenue $200,000 Biotech Academy, estimated revenue $254,800 Engage in a Community Dialogue

Proposed 2018-19 Budget(1) 2017-2018 $ (+/-) % (+/-) General Fund 2018-2019 $ (+/-) % (+/-) General Fund Current Expenses $26,639,929 $27,305,395 $665,466 2.50% Capital Outlay $248,298 $398,298 $150,000 60.00% Subtotal $26,888,227 $27,703,693 $815,466 3.03% Fed/State programs $288,000 $244,800 ($43,200) (15.00%) Debt Service $1,137,825 $1,148,125 $10,300 0.90% Total $28,314,052 $29,096,618 $782,566 2.76% (1) For Wildwood School, Briarcliff Middle School, and Mountain Lakes High School 4 4

2018-19 Budget Analysis Current Expenses: $29,096,618 2018-19 vs. 2017-18(1): Special Ed (Incl. Tuition) – up 22.3% Instruction – down 2.8% Employee Benefits – up 6.4% Capital Outlay – up 60% Operation & Maintenance – up 4.7% Maintains budget goals Maintains class sizes: K-3 - 17 4-5 - 19 6-8 - 20 9-12 - 24 (core academic content) Percentage change from 2017-2018 Questions: Contact Daniel A. Borgo; dborgo@mlschools.org; 973-334-8280 5 5

Capital Projects: $398,298 High School: $57,000.00 Floor Covering $18,000.00 Furniture/Cabinet Replacement & Upgrade $28,500.00 Heat System Repairs $10,500.00 High School: $57,000.00 Alertus System $14,000.00 Air Condition, Phase II $30,000 Briarcliff School: $44,000.00 Replacement of Cabinets $12,000.00 Repair/Replacement Unit Ventilation $13,000.00 Alertus System $14,000.00 Gym Floor Repairs $12,000.00 Wildwood School: $51,000.00 Exterior Trim $31,000.00 Floor Covering $13,500.00 Temperature Controls $9,500.00 Lake Drive School: $54,000.00 School Bus Replacement $68,000.00 Grand Stands (ramp) $26,000.00 Tech Lease Purchase $50,000.00 State SDA Assessment $48,298.00 District: $192,298.00 6

Revenue Sources – 2 Yr. Period Current Budget Tentative Budget Change   2017-2018 2018-2019 Balances Appropriated + Reserves $700,000 $549,171 ($150,829) Capital Reserve $200,000 $300,000 $100,000 Boonton Twp Tuition (266 @ $16,291 vs 266 @ $16,617) $4,333,408 $4,420,122 $86,714 Tuition ( Non-res. = 16 - 9 HS, 4 BC, 3 WW; Faculty = 34) $243,700 $262,500 $18,800 Academy for Biotech (35 students) $7,280 $116,025 $254,800 $138,775 State Aid $787,376 $837,405 $50,029 Other Aid $288,000 $244,800 ($43,200) Debt Service $114,197 $99,741 ($15,276) Miscellaneous $187,229 $207,229 $20,000 Sub Total $6,969,935 $7,175,768 $205,013 Local Taxes $21,344,117 $21,920,850 $576,733 TOTAL REVENUE $28,314,052 $29,096,618 $782,566 7 7 7 7

Tax Impact for Mountain Lakes Homeowner 2017-2018 2018-2019 Impact % (+/-) General Fund $20,320,489(1) $20,872,466 $551,977 2.72%(1) Debt Service(2) $1,023,628 $1,048,384 $24,756 2.42% Total $21,344,117 $21,920,850 $576,733 2.70% Tax increase of approximately $343 on the average home assessed at $783,584 Tax levy attributable to Schools represents ~68% of Homeowners’ local taxes, with balance going to Borough, County, and Open Space Refinancing of Serial Bonds in 5/2015 will reduce annual debt service by $30 - $35K per year through 2023 Tax levy cap including adjustment by NJDOE for increases in healthcare costs is $20,978,901 or a 3.24% increase (2) Includes debt service aid of $98,921 and $99,741 respectively for 2017-18 and 2018-19 8 8

Financial Management Appropriations from 2010-11 through 2018-19 were $2.50M below allowable cap 9

Our $29.1 Million Budget Is Hard to Find in State and News Reporting $37.8 million overall 2018-19 school budget Per state reports and news reporting Including debt service and all forms of federal/state aid $8.7 million attributable to Lake Drive Fully charged back to sending districts Absorb some overhead/other expenses (Approx. $1.0 million) $29.1 million “Mountain Lakes” 2018-19 budget $28.0 million projected spending $1.1 million debt service (previously approved via referendums) 10 10

Academy for Biotechnology 1st Year Program Analysis • Advisory Council update • New courses, planned curricular changes • Student Survey/Focus Group results • Faculty Survey results • Overall class size impact • Co curricular involvement • Enrollment for 2018-2019: 18 Returning Sophomores (4 Mountain Lakes Residents) 22 New Freshman (5 Mountain Lakes Residents)

Classes for MLHS students(1) Academy for Biotechnology Budget Year # Students OD/ML Revenue Expenses Net Proceeds Classes for MLHS students(1) 2017-18 15/5 $147,200 Actual $25,000 Start Up Monies $43,700 2 $33,000 (2) 6th Periods $45,500 ML Students $102,500 Total 2018-19 30/5 $254,800 Projected $54,031 Salaries (1) Teacher $107,269 $15,000 HB $146,531 Total 2019-20 45/5 $364,000 Projected $152,000 Salaries (2) Teachers $77,000 3 $30,000 HB (2) Teachers $49,500 (3) 6th Periods $10,000 Supplies $287,000 Total 2020-21 60/5 $473,200 Projected $190,000 Salaries (2) Teachers $133,200 $35,000 HB $20,000 Supplies $340,000 Total NOTE: Expenses funded by Morris County Vo-Tech include books, lab equipment, classroom outfitting, the first year salary and benefits of the Biotech teacher, ~40% of salary and benefits in year two and ~25% in year three. (1) Classes available for ML students (non Biotech) taught by Biotech Academy teacher(s).

Future Budget Considerations Tax Impact of Referendum Change in Budget From Prior Year: 2018-19 2019-20 2020-21 2021-22 Budget Before Referendum (1) (2) $576,733 $395,112 $439,148 $413,032 Operating Costs from Referendum (1) (3) - $300,000 $6,000 $6,120 Referendum Debt Service (4) $850,178 $55,138 ($14,246) Total Change $1,545,290 $500,286 $404,906 Change Tax Levy From Prior Year (5) $343 $258 $287 $270 NA $196 $4 $555 $36 ($9) Total $1,008 $326 $264 Assumes 2% increase in general fund tax levy after 2018-19 Debt service for current debt, net of state aid. Assumes no change in debt service aid after 2018-19 Incremental operating expenses includes: 2-3 new teachers, technology, custodial services, utilities, and other transition costs Referendum debt, net of state aid. Assumes 26 year bond at 4.0% with first principal payment made in 2020-21 Assumes no change in tax ratable base after 2018-19. Assumes the average home assessed at $783,584 13

Additional Future Budget Considerations Long-term capital expenditure plan independent of the referendum. Continued increases in healthcare costs. Mountain Lakes Education Association contract renewal, July 1, 2018. Ongoing efforts to find alternative revenue sources and/or operating expense savings.