Financing to Save Money

State Aid is the Key to This Plan

The average person might try to avoid debt because a purchase ends up costing more money. The opposite is true for public school districts in New Jersey. They strategically plan to borrow because bond financing qualifies for state financial aid through a program that helps districts maintain and improve their schools.

For Marlboro, the state has committed up to $2.1 million towards the costs of expanding air conditioning to Asher Holmes and Robertsville Elementary Schools.

That special kind of state financial aid is the key to MTPS’s financially prudent plan to complete the A/C expansion.

How Can A/C be Added Without an Added Tax?

Professional architects and engineers have estimated the costs of adding air conditioning capabilities to the existing HVAC systems at two schools. State law prohibits a district from paying more in actual costs than what the ballot showed, so estimates include professional fees, permit costs, and a cushion in case of inflation.

Expanding air conditioning at Asher Holmes and Robertsville:

Estimated costs = $5,345,031
State aid would contribute up to $2,138,012
Remaining costs would be paid for by Capital Reserve.

MTPS will dedicate Capital Reserve to pay the local share. State aid would provide the remainder, only if voters give permission for bonds to be sold. The school district would sell bonds and pay back that debt with no change to the tax rate for these projects.

Capital Reserve is Like a Savings Account

Public school districts can set aside funds over several years for large-scale projects, like a homeowner might do when anticipating a roof replacement or furnace replacement. Called Capital Reserve, it can only be used for facility repairs and upgrades – not salaries or other everyday expenses.

MTPS has planned to use Capital Reserve funds to finish adding air conditioning to the two schools that do not have it. By using voter-approved bond funding to complete that goal, the district would capture up to $2.1 million in state aid.

How Can We Make Use of Existing Taxes?

This proposal was crafted specifically to make use of taxes that Marlboro residents have already paid or will pay to their school district, Monmouth County and the State of New Jersey.

School – Unspent funds collected over the past few years were designated for capital projects.
County – Taxes already paid to Monmouth County will cover the costs of asking voters to approve the plan as part of the November 4th General Election. MTPS will not have to pay fees to hold a special election.
State – The plan hinges on the financial aid the State of NJ provides to school districts only when bond funding is used. This comes from money collected across the state (including Marlboro residents!) and the plan seeks to bring some of that tax money back to Marlboro.

Make Use of Existing Taxes: School taxes are already paid for and saved up. COUNTY taxes were already paid to cover election costs. STATE taxes are paid for by every NJ taxpayer (only shared with districts that sell bonds) and grant/programs used for other schools. FEDERAL funding was used for other schools.

This is not a new approach

For Marlboro Elementary School, the district successfully applied for state grants that contributed $828,000 toward the total costs of almost $1.6 million.
At Asher and Robertsville, a state-sponsored energy savings improvement program provided the financing needed to install air conditioners in large spaces such as gyms, main offices and multi-use rooms.
For the A/C expansion for Defino and Dugan schools, MTPS used $868,000 in federal funding related to pandemic recovery to reduce the local share of costs totaling nearly $2.9 million.

What if voters say no?

Without bond funding, MTPS would continue its plan to expand air conditioning to Asher and Robertsville. Without the advantage of state aid, that would take longer so more local money can be earmarked for the full cost.

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