55 °F Ocean City, US
November 5, 2024

20 years later, Ocean City High School will finally be paid off

Huge debt service payments for school gone from next year’s budget

OCEAN CITY – Ocean City High School will finally be paid off this school year.

Twenty years ago, in 2002, the district took out a bond to pay for the construction of a school on Atlantic Avenue to be built across the street from the old high school.

The district paid just more than $40 million for the new OCHS that opened in 2004. And now, in 2022, the last installment is being paid.

That little detail is one of the interesting facets of the proposed 2022-23 Ocean City School District budget. 

When district Business Administrator Tim Kelley provided a budget update before the Feb. 23 Ocean City Board of Education meeting, he was able to show debt service in next year’s school budget dropped dramatically.

That, he said, was due to no more bond payments being owed on OCHS. 

“This current year we’re in, 2021-22, is the last year of debt payments for the high school,” Kelley said last week. “When we finish this school year, the high school will be paid off.”

It took years for the community to rally behind paying for a new high school, despite the old high school being outdated, overcrowded and cramped.

Twenty years ago, the district borrowed $28,539,000 to put toward the school’s construction costs. One of the reasons the school construction referendum passed in Ocean City, after having gone down to defeat earlier, is that the state announced there was substantial grant money available to offset the cost of new school construction. For the $40 million project, the state kicked in $11,518,970 via a New Jersey Schools Development grant.

Similar to mortgages on homes, each year the district was paying off principal and interest.

Kelley said on average, the district paid $2,250,000 in debt service each year, money that was included in each year’s budget. The district refunded (or refinanced) in 2016, which brought the annual payment to about $2 million even for the remaining years. In his 2022-23 budget presentation, he noted the district saved $412,710 because of refunded savings from the past two years.

In the proposed budget for next year, debt service is budgeted at $329,670 compared to this year’s budget of $2,311,020. That is a decrease of nearly $2 million ($1,981,350) or 85.73 percent.

“Debt service going into next school year will only be for a bond approved for improvements to Primary School a few years back,” Kelley said. “That is only outstanding debt the school district will have going into next year.”

The business administrator noted that the reduction in debt service payment should be the driving force behind what happens to the tax rate for the new given.

Kelley said last week that the proposed budget is still being finalized and was awaiting Gov. Phil Murphy’s 2022 budget address, which was scheduled for Tuesday, March 8. From that, the district will be able to get its figures for state aid for the coming academic year.

Kelley said there is the general state aid coming to the district and the School Choice aid, that has been substantial because of the large number of School Choice students the Ocean City district receives.

Once those numbers are in, the district will complete a proposed budget and present it to the school board at 6:30 p.m. March 23, just before the regular school board meeting. Once the district has a full budget and proposed state aid figures, it can determine the amount to be raised by taxes.

The total general fund budget for the current 2021-22 school year is $42,544,000.

Budget presentation

During Kelley’s budget presentation Feb. 23, he outlined the proposed budgets for the 2022-23 school year in various departments.

As noted above, the debt service budget is dropping nearly $2 million for the coming year. The biggest increase, in raw numbers, in the 2022-23 budget is proposed for personnel.

Personnel shows a proposed increase of $1,080,693, or 3.21 percent, to $34,793,541. This budget includes salaries, medical and dental insurance, employer contributions to Social Security and Medicare, workers’ compensation, tuition reimbursement and pension contributions. Kelley said the biggest increase in the personnel budget is due to insurance increases.

Budgets (not including personnel) proposed for other departments:

– The Ocean City High School budget is a quarter-percent down for 2022-23 at $678,018, a difference of $1,721.

– The Intermediate School budget is down even less (0.02 percent) at $178,129.

– The Primary School budget is dead even at $134,319.

– The Special Education budget is up 7.4 percent at $413,837, compared to $385,337 for the current school year, or an increase of $28,500 all attributed to purchased services.

– The Support Services budget is proposed at $161,878, an increase of $3,000 or just below 2 percent.

– The proposed Athletic Budget is down $53,000, from $323,610 this year to $270,610 next academic year. Kelley explained the Athletic Budget is not actually losing that much money. The school has hired its own trainer for 2022-23 and the cost of that trainer has moved from the Athletic Budget to Personnel.

– Co/Extra Curricular activities budget is even at $54,144.

– The Facility Budget is down a hair (0.1 percent) at $1,287,943.

– The Utility/Insurance budget is down 0.16 percent to $1,713,106, a drop of $2,681.

– Transportation is up $6,515 or 0.51 percent at $1,285,891.

– Technology is up $1,277 to $966,472.

– District Administration is proposed at $439,065, down slightly by $1,635.

Tuition rates

Ocean City is a School Choice district and is the receiving district for a number of districts including Upper Township, Sea Isle City and Longport. Kelley presented the tuitions for the different grades and special services. The tuition rates for 2022-23 have been approved by the school board:

– Kindergarten, $12,555, up $100 from $12,455 this year.

– Grades one to five, $15,250, up $500 (the largest of any tuition increase) from $14,750.

– Grades six to eight, flat at $16,250.

– Grades nine to 12, up $100 to $16,365;

– Learning/language disabilities, flat at $20,000;

– Behavioral disabilities, flat at $33,000;

– Multiple disabilities, flat at $33,000;

– Preschool disabilities, flat at $20,000.

By DAVID NAHAN/Sentinel staff

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