Board of Education Approves Transfer of $5M Surplus for 2012-13

The Board of Education approved the transfer of $5 million dollars in surplus funds for the 2012-13 school year at its June 28 meeting. The money, if the projection proves true, will be split between emergency reserve funds for capital projects and building maintenance and relief for property tax payers.

Superintendent LeRoy Seitz said the Parsippany-Troy Hills school budget may produce a surplus of $5 million at the end of the next school year. The news took some board members by surprise.

"To say that I was stunned... is an understatement," member Michael Strumolo told Patch. "I would like to have an independent auditor come in and explain how we got this surplus."

According to the superintendent, an audit is already underway.

"The auditor is an outside, independent auditor and he will be presenting to the board on Thursday night," Seitz told Patch.

He added that any talk of a surplus is only a projection at the present time.

"However, we feel very confident that it is a good projection," Seitz noted.

As to a reason for the surplus, he explained that in any school year, the district never spends every dollar budgeted and does not make any decisions that push the budget into the red.

"Every year there is going to be 2 to 3 percent we don't spend, and that's good management," he said.

Under the plan approved by the board, any projected surplus will be distributed as follows:

$1.5 million into capital reserve (for critical building projects)

$500,000 into maintenance reserve (for upkeep of the district's aging school buildings)

"If we do that, the money can not be spent without the board's authorization," he said. "It can only be spent to do a capital project or to help maintain the schools."

The remaining funds, now projected to be about $3 million, would go to property tax relief in the 2012-13 school year budget.

"The monkey wrench that has been thrown into this whole process," said Seitz, is the new bill where employees will contribute to health benefit costs, so we may generate more surplus simply because of that one item."

Under S. 2937, the legislation recently signed into law, public workers must pay between 3 percent and 35 percent of their health insurance premium--the amount paid is based on income.

"With the new bill, these groups may end up contributing additional money," Seitz told Patch, "but it is not certain since under the new bill, our teachers and secretaries will have the option of selecting less costly health care plans."

He said this means the actual savings that may be realized is "unknown at this time."

Should the district generate unexpected additional revenue again or receive savings on expenses in the next school year, Seitz said more funds may end up in the two reserve accounts if the board agrees. He said Parsippany-Troy Hills schools may see revenue should additional state aid for education appear.

"If we do generate additional surplus, by law, anything above the 2 percent cap on surplus must be used for tax relief," he said.

Board member Gary Martin said he supports the plan.

"I believe it is the people's money," he said, giving a thumbs-up to the tax relief. "The $2 million for the reserve accounts is good because there is always maintenance needed on these old schools buildings."

Member Anthony Mancuso agreed.

"With 17 buildings to be responsible for and the cuts we made to the  maintenance budget," he said, "I think it is wise for us to split this money as suggested and put some back into the reserve accounts for any capitol project that may arise, with the rest going to tax relief."

The Board of Education will meet and hear independent auditor Raymond Sarinelli of Nisivoccia's assessment of the projected school budget Thursday at 7:00 p.m. at 292 Parsippany Rd. The public is welcome.