School District Still Would Have Lost Aid Without Surplus

Even if the school district did not have excess surplus, it would have lost about $500,000 in state aid for the 2009-10 school year.

The Board of Education's Finance Committee reviewed the surplus information and the loss of state aid following questions that came up during the June 14 school board meeting. The questions were if the state's figures on the district's surplus were correct and if district officials should have appealed the removal of the aid.

School officials learned in February they would lose the last payment of their current state aid funding that was slightly more than $1 million to make up a state budget gap. School officials decided to freeze discretionary spending as a result.

The spreadsheet provided by the state in February states Millburn has a total surplus of $5.1 million, but $2.9 million of that amount is considered excess surplus. The excess surplus is the money school officials are expected to roll back into their budget within two years. Another $2 million is reserved for capital projects. School officials also have an emergency reserve of $700,000, which is not part of the excess surplus. State officials added the $700,000 into the capital reserve.

Jeff Waters, Finance Committee chairman, said the different categories add up to the $5.1 million, which had been mentioned in a newspaper article. But it's incorrect to characterize as excess surplus. Capital reserves and emergency reserves are included in the number

State officials' numbers were correct and the basis for the calculation has been mischaracterized, he said. "We don't like it, but it's right," he said.

And about half of the money lost can be attributed to the excess surplus, Waters said. The district still would have lost about $500,000 if it had no reserves. He cited how the Livingston School District had half as much excess surplus and lost nearly as much aid as Millburn.