Despite Contract Obligations, Budget Increases Limited
Montville finds saves money while also honoring existing contracts with teachers.
The Montville Township Board of Education made the somewhat controversial decision earlier this month to outsources the district's custodial needs to Tennessee-based GCA services.
The district's contract with the custodial service company, which begins in late December, calls for the removal of 37 current full-time employees to be replaced with GCA staff and is expected to save the district more than $300,000 this year and about $617,000 on next year's budget.
The decision is just one of many recent moves by the Board of Education to try and pair down its budget, which has been seeing reduced increases over the past four school years, despite rising salary and benefit commitments to its staff.
"It goes up a little less every year," Business Administrator Jim Tevis said of the general fund budget for the district. "It's been going up a lot less. It will probably go up less next year with the 2-percent cap."
Tevis said that this year's general fund budget of approximately $64,149,000 is roughly half a percent higher than the 2009-10 general fund budget, which was $63,869,000.
"Even though we still have an increase, it was small compared to years past," he said.
Looking back at the last seven school years, the general fund budget has increased by as much as nearly 8 percent in the past, going from about $53,643,000 in 2005-06 to about 57,234,000 in 2006-07.
The district has seen its budget increase less in each year since, with increases of 3.7 percent, 6 percent, and .9 percent in the 2007-08, 2008-09 and 2009-10 school years, respectively.
Where the declining increases become a problem, according to Tevis, is when the amount doesn't sync up with contractual increases in salary and benefits to faculty and staff in the district.
"The biggest piece of our budget is salary and benefits," he said. "It makes up roughly 65 percent of our budget."
Tevis said that, from a percentage standpoint, the district had to find a way to bridge the gap between its general fund budget increase of less-than-a-half-a percent and its contractual obligation to district teachers, who were promised overall increases of 4.2 percent district wide to the current salary and benefit structure.
"We had teacher contract increases of 4.2 percent negotiated years ago, " Tevis said. "We had to cut the budget in other areas to make up for that contractual liability. "
Tevis also pointed to the district's loss of $3.2 million in state aid as a reason for some of the cuts the district has made in recent months.
"We lost a big chunk of our revenue with that," he said.
The teachers' current contract with the district, which was established roughly two years ago in November 2008, expires at the end of the school year. The board has already begun negotiations with the teacher's union, which is headed by Tony Varuolo.
According to the State Department of Education's District Report Card, the average salary for a Montville teacher in the 2008-09 school year was $51,565, almost $8,000 less than the state average of $59,545, with an average of eight years experience. Statewide, faculty experience was at nine years.
Comparatively, the average salary for a member of the district administration in 2008-09 was $121,650 with 28 years experience, compared to a statewide average of $114,950 with 21 years experience.
Besides cuts in areas like school activates and custodial services, the district could potentially see savings in Gov. Chris Christie's proposed cap on superintendent salaries, which would limit the amount that superintendents in the state are eligible to make based on district size, a move that Montville Superintendent Dr. Paul Fried has questioned.
"People may choose to leave the state or retire at a time when superintendents need to be maintaining their positions," he said. "If you are at the highest percent of a position and there is not much financial incentive to continue to work, a lot of superintendents that could stabilize districts may say 'It's not worth it for me to continue.'"
The proposed superintendent salary caps as currently outlined by the governor could be in place as of Feb. 7, 2011.
In the meantime, however, Tevis has said that the board will continue to look for areas where the board can save money, especially in the coming weeks.
"This is not an easy decision," Tevis said at the Nov 16 board meeting where the decision to outsource custodians was made. "We lost every penny of state aid, $3.2 million, and … almost another $1 million from the township. Things are going to get worse."
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