Debt assessment was never part of the deal

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Letter to the Editor Letter to the Editor

To the editor:

The following is condensed from a letter written by Board of Education President James Galvin to state Education Commission Christopher Cerf:

I am writing this letter to discuss my concern regarding the state Economic Development Authority debt assessment for funding provided to the Egg Harbor Township School District by the New Jersey Schools Development Authority.

Last week in Gov. Christie’s budget address he indicated that no district would get less state formula aid next year, and some would see modest increases. Our district was held flat on formula aid but received an additional $70,000 for a new aid category called Under Adequacy Aid; however, our EDA debt assessment went up by more than 55 percent, from $472,583 last year to $736,985 this year. This expense must be budgeted in capital outlay, which it must be within the 2 percent levy cap.

In 2010-2011the Department of Education withheld $400,347 in aid for the EDA debt service assessment. In 2011-2012 the figure was $319,537, in 2012-2013 it was $472,583 and in 2013-2014 it was $736,985.

It is the district’s understanding that the fee is based upon a charge of 15 percent of debt services for money the district received for new construction. However, the district has never received a letter explaining the formula for these charges or what authority the DOE has to withhold state aid for the assessment. In addition, if the number is 15 percent, why did our assessment more than double this year?

The voters of Egg Harbor Township overwhelmingly approved a $55.1 million construction program and related bond referendum on Jan. 25, 2005. The project consisted of an addition to the high school and the construction of two new primary school buildings. These facilities were necessary to deal with a dramatic increase in student enrollment that brought the district to the brink of crisis. Having been designated as a high-density growth community by the Pinelands Commission, the township was experiencing unprecedented residential development. 

After numerous delays, the Davenport Primary School and the Slaybaugh Primary School opened for the 2007-2008 school year with a temporary certificate of occupancy. At the end of the school year the board still has not received a final CO for either primary school. By the summer of 2008 the high school additions/alterations had still not begun, and the board had to meet with the SDA three times in an attempt to facilitate the start of construction. The high school was not completed until the 2011-2012 school year – six years after taxpayers approved the referendum.

Our district did not ask to be designated for high-density growth, nor did we ask to be continually underfunded in state aid. However, we did ask for the construction of the Davenport Primary School and the Slaybaugh Primary School as well as additions and alterations to our high school at an original estimate of $30.2 million. Delays and overruns by the SDA caused the project to skyrocket to an estimated $53.2 million.

Now the district is being penalized for utilizing the SDA with $1.9 million in EDA debt service assessments over the last four years. The district did not agree to such assessments. This year the students of Egg Harbor Township lost $736,985 in funding for programs due to this unforeseen, unexplained and unanticipated fee.
Please help us to understand why the state is all of a sudden charging the assessment, what the correct formula calculation is for same, and what authority the state has to withhold the district’s aid.

James Galvin

Egg Harbor Township Board President


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