March 31, 2015

Referendum Costs versus Operating Costs

A referendum is essentially a question put to voters by the Board of Education that, if approved, allows the

Board to borrow money to finance capital projects. The vote is separate from the vote on the annual operating

budget and the costs associated with it also remain separate from the operating budget. In calendar year 2014,

54 school districts in New Jersey proposed referenda and 44 of those proposals were approved. The total

spending approved was $704 million. The process for bonding is the same in all cases. After a referendum is

approved, the school district calls for bonds and secures the lowest interest-rate bond available. The payments,

or debt service, to pay off the bond are not included in a school district’s operating budget.

One of the reasons Boards of Education propose referenda is that it is difficult, if not impossible, to finance

certain capital projects from the operating budget. The financing available through a referendum leads to

greater flexibility in the operating budget because it reduces or eliminates the need to steer operating money

toward significant capital expenses.

School District Offices

In the current referendum, a portion of the existing middle school auditorium would be converted into district

office spaces. The occupants of those spaces would be the superintendent, assistant superintendent, business

administrator, and other staff who form our payroll, transportation, business, and human resources departments.

Additionally, other district personnel who currently work in sub-standard spaces, such as converted storage

closets or the attic of the special services house located in front of the high school, would relocate to the middle

school property. Board of Education members do not have office space in the district and would not have office

space as a result of the referendum. All of our Board members work full-time, either inside or outside of their

homes, and volunteer their time almost entirely in the evening to serve on the Board.

Referendum Dates

In New Jersey, local Boards of Education may propose a referendum on dates established on an annual basis.

Those dates occur in September, December, January, and March. Additionally, school districts may propose a

referendum in either April or November, depending on when their School Board elections occur. The Board of

Education of the School District of the Chathams has not held discussions on a future referendum.

SCHOOL DISTRICT OF THE CHATHAMS _________________________________________________________________ 58 Meyersville Road Dr. Michael LaSusa Chatham, New Jersey 07928 Superintendent of Schools (973) 457-2501 mlasusa@chatham-nj.org