Ocean City owes Upper school district $775K

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Adjustment will go towards 2012-13 tuition bill

UPPER TOWNSHIP – The local school district will receive $775,236 from Ocean City as part of a tuition adjustment.

The tuition adjustment is based on the difference between estimates of the number of students that Upper Township sends to Ocean City High School and the actual number, which is determined in an annual audit. It also shows how much it actually costs to educate each student, as opposed to what the school district budgeted and charged the sending districts.

The number of students attending Ocean City’s schools from its three sending districts, Upper Township, Sea Isle City, and Corbin City, varies from the best estimates provided by the districts leading into the school year. Like a pendulum, the annual tuition audit swings back and forth from the sending to the receiving district.

Upper Township and Corbin City send their students to Ocean City High School. Students from Sea Isle begin attending the Ocean City school district in fourth grade.

The tuition adjustment figures show that Ocean City owes Upper Township $775,236 and Corbin City $137,475. Sea Isle City owes Ocean City $106,648. In total, Ocean City owes the sending districts $806,062.

The sending districts each paid $16,600 for each high school student for the 2010-11 school year. According to Ocean City school district business administrator Tom Grossi, the audited amount showed that, based on actual costs, the figure should be $15,675.

Ocean City therefore owes Upper Township $925 for each of the 718 high school students sent to Ocean City. The average daily enrollment, Grossi said, was down just slightly from the 725 predicted.

When the 2010-11 school year budget was being constructed, Grossi said Upper Township was sending 77 less students than in the 2009-10 school year. The refund, he said, was in part due to the fact that the Ocean City school district had been frugal.

“Historically, fewer students would mean cost per pupil would go up unless programs were cut,” he said. This, he said, led to a budgeted increase for the high school tuition rate which was “consistent with the way tuition had been calculated in the district.” “However, due to continued cost containment by the district, the actual rate came in lower,” he said. “Another reason for the lower actual rate is that the shared services agreement with Sea Isle City was agreed upon after the budget was finalized, and this agreement led to administrative savings at the high school level.”

Grossi said Ocean City has $500,000 in a tuition reserve account, which was created for this purpose. The district will have to find an additional $306,062 in the budget to cover the adjustment.

Tuition adjustments have swung wildly over the years. Many years ago, the then burgeoning Upper Township district owed Ocean City nearly $2 million. As the so-called “bubble” – four to six years of unusually large student classes – moved its way through OCHS, Upper Township paid the debt off over several years.

In ensuing years, both districts have tried very hard to limit the swings.

“We have worked together very closely to try to get the numbers as accurate as possible,” said Grossi.

Upper Township will receive a credit for the $775,236 owed them, which will come off the tuition bill for the 2012-13 school year.

Grossi said the audit will likely lead to a lower tuition rate for the 2012-13 school year. Tuition, he said, would be discussed at the finance committee meeting, held prior to the February school board meeting.

The addition of 51 School Choice students to the district will save all of the districts money, he noted.

At the Jan. 25 Ocean City school board meeting, the board voted to move school elections to November. Grossi said the 2012-13 school budget is due nonetheless by March 5 at the Cape May County Executive Superintendent’s office for approval.

The public hearing is still scheduled for March 28. By law, if the school election is moved to November, the public is not required to approve it if the budget stays within the two percent cap.

Grossi said the state has not spelled out how this affects the spring budget process.

The Upper Township school board will decide whether to move the school elections at a special meeting on Feb. 14.


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