Embedded Files
The district’s Long-Range Facilities Plan and the decision to pursue a bond referendum are part of LRHSD’s well-thought-out strategy to funding our schools’ needs in the most efficient way possible. This strategy helps us reduce the impact to our community and continue our commitment to fiscal responsibility while addressing some of our most immediate needs.
School facilities need consistent updates, and we dedicate funding every year in our annual operating budget to make repairs and enhancements. Additionally, the LRHSD facilities and maintenance teams do an outstanding job of and take great pride in maintaining our facilities. When larger-scale updates are needed, school districts strategically position those updates and other maintenance needs into one bond referendum. A voter-approved bond referendum opens the door to specific state aid; without it, the district’s regular budget would have to absorb 100% of the costs.
State Aid
The LRHSD and many of our sending districts have felt the burden of drastic cuts in annual state aid as a result of the S-2 school-funding “reform” bill. The voter-approved bond referendum enables the district to take advantage of a separate pot of funding available from the state.
All New Jersey taxpayers contribute to this pool of school improvement funds. In the case of LRHSD, state aid covers about one-third of the cost of approved projects.
Districts must be proactive to leverage this type of state aid; it is not automatically allocated like annual state funding. Without a voter-approved bond referendum, this funding would have been left on the table for other districts that pursue bond borrowing.
Zero Tax Impact
Achieving a zero tax impact relies on a thoughtfully narrowed list of projects, specific state aid to cover about one-third of the costs, and continuing the current tax rate after paying off current debt.
LRHSD and its architectural firm worked carefully to identify projects that qualified for the most state aid possible. LRHSD’s project costs are estimated at $66,628,944. State aid will contribute $24,431,777, which reduces the local share to $42,197,167.
With the pay-off of existing debt, LRHSD will make district-wide improvements while keeping the property tax rate level, based on the average assessed home in all eight Lenape District communities.
What if project costs are higher or lower than estimates?
THE ANSWER: WE'RE PREPARED!
There are measures built into the referendum process to ensure projects stay within the approved cost estimates. The district cannot spend more than the amount that voters authorized and cannot spend the bond money on anything other than referendum projects.
There is significant state oversight of referendum projects, including a requirement that contingency costs are included as a percentage of the total amount. Those funds are held by the district to cover unexpected costs arising from conditions that can’t be seen readily and other unforeseen issues that routinely arise under any construction project. Our budget includes a contingency of about 10% of the total project costs; the state Department of Education requires no less than 5%. Another assurance for the public is that school districts must conduct a public bidding process to find the lowest responsible bidder for construction projects. Whenever contractors are on site, a construction management company provides another layer of oversight and quality control.
Funding that comes through a voter-approved bond can be used only for the projects voters approved. If actual costs are lower than estimates, that money is used to reduce the debt and, ultimately, to reduce taxes. It cannot be used for projects outside of the referendum or used for day-to-day operating costs like salaries and supplies.
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