Tuition costs drop for Ocean City's sending districts

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Tax rate to remain flat, pending state aid numbers

Tuition costs drop for Ocean City's sending districts Tuition costs drop for Ocean City's sending districts

OCEAN CITY —A less than expected increase in the cost of health insurance for staff members and an increase in the number of retirements after last year’s budget was configured led to a larger than expected tuition adjustment between the Ocean City school district and its three sending districts.

At a Wednesday, Feb. 20 Ocean City Board of Education finance committee meeting, held prior to the regular monthly board meeting, business administrator Tom Grossi said the Ocean City school district owes the sending districts a combined $1,362,992, which will be offset by $800,000 the school district placed in a tuition reserve account.

Ocean City charged Upper Township, Sea Isle City and Corbin City $16,585 for each student attending Ocean City High School. After the yearly tuition adjustment, the new tuition is $14,986 for the 2011-2012 school year.

The tuition adjustment is configured annually for the previous school year. In the past there have been wide swings in the tuition adjustment, particularly in years where Upper Township enrollment has spiked. Upper Township at one time owed Ocean City about $1.5 million. In recent years, business administrators from both districts have worked to estimate enrollment numbers as accurately as possible.

“We budgeted for health insurance based on the worst case scenario and the rates were lower,” Grossi said. “We had a number of retirements after the budget was put together.”

Based on the new calculation, Ocean City owes Upper Township $1,032,106. Ocean City owes Sea Isle City $292,712 for students in all grades, though when broken down, Sea Isle City actually owes Ocean City $52,451 for students in grades six through eight. In grades one through five, Ocean City owes Sea Isle City $47,634. The remainder comes from an adjustment for Sea Isle City students attending the high school.

“The number of students at the high school is down,” Grossi said. “We are budgeting for 2013-2014 with that in mind.”

Ocean City also owes Corbin City $38,175.

Grossi said the state utilizes a formula to configure a state average for tuition. The district’s involvement with the School Choice program, he added, benefits everyone. The district is able to offer more programs and staffing, and taxpayers benefit from reduced costs.

“The savings on per pupil costs is $685 for Upper Township,” he said.

There are 94 School Choice students at Ocean City High School this year, for a total revenue of $1,257,000. Without them, he said tuition would spike for the sending districts and programs and staffing would have to be cut at all three schools in Ocean City.

“We would have to move forward with cutting our budget to the magnitude of 2010,” Grossi said, when a statewide budget crisis caused cuts of around $4 million. “We wondered how we would get by.”

Programs like language labs at the primary school, family and consumer science at the intermediate school, sports at the intermediate school and freshmen sports at the high school would be on the chopping block. There would be more study halls at the high school too, he noted.

“I can’t emphasize enough what a great opportunity School Choice has been,” he said. Next year the district is budgeting for $2,096,000 in School Choice aid.

Grossi said per pupil costs have dropped over the past three years. In 2011-2012 tuition was $16,585. In 2012-2013 it was $15,999 and for next year, it will be $15,256.

“The trend is coming down,” he said.

At last month’s board meeting, Grossi began revealing portions of the school district budget. While the final product remains a work in progress as the district awaits state aid figures, Grossi said many of the categories have been completed.

The facility budget remains $685,000, the same as last year. The prior year, he noted, there was a 1-percent increase.

The district went out to bid for trash collection and secured a lower cost compared to the current vendor. Costs will go down 3.3 percent, from $900,566 to $871,111, a savings of $29,455.

Utility costs went down 2 percent, to $1,488,588. Transportation costs went up 2 percent, from $917,843 to $936,022, an $18,179 increase.

Technological costs remained flat at $580,137.

Personnel, including salary, stipends and benefits went down slightly, from $31,423,498 to $31,050,240, a savings of $373,258.

“Again, that’s because we budgeted for the worst case scenario for health care,” said Grossi, adding that retirements added to the savings.

The missing piece of the puzzle, state aid, he said, is critical.

“We budgeted with the same amount of state aid as last year,” he said. “There are rumors out there that the governor is going to take away the state aid and the $1.7 million excess surplus fund. We would have to go up to cap, which is $432,000.

“As we move forward there are a lot of questions about state aid,” he said.

Grossi said there was a possibility that the district would need another teacher at the elementary level, which was included in the budget.

“We may need a strength and conditioning coach, it’s budgeted, but we have to have a dialogue,” he said.

The school district’s student accident insurance costs continue to “go up and up.” Having a professional in that position could reduce those costs.

“We’re looking at a fulltime athletic trainer to help with the student accident insurance costs too, possibly in-house or an outside contractor,” Grossi said.

There is also the possibility of another coach, but that would have to be discussed with the Ocean City Education Association.

Grossi said the district continues to plan on a zero increase in taxes, but state aid figures would determine whether that was a possibility.

The budget is formulated using priorities, Grossi said, including mandated programs, health and safety, enhancements and facilities.

“It’s bottom up, needs not wants,” he said, adding that efficiency is key.

Teachers work at the department level within each building to begin crafting the budget. It works its way up to superintendent and the business administrator, who sit down with the department supervisors and school administrators to create a budget that best meets the needs of the students.

The board must submit the budget to Cape May County officials by March 7, where Grossi said a “second set of eyes” will deem it appropriate.

Last year the $38.7 million school district budget did not include a tax increase. The tax levy was $21.6 million.

The budget will be presented to the board at a special meeting on Wednesday, Feb. 27.  A March 27 public hearing on the budget has been scheduled.

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