Frequently Asked Questions
Cresskill Public Schools leaders worked quickly to finalize information and share it with the public before the Jan. 25th bond referendum to Restore Cresskill Schools. These frequently asked questions, and their answers, outlined the referendum process and projects.
FAQs will not be updated, but will remain on this page for reference.
What is a Bond Referendum?
A bond referendum is a vote by the public to determine if the school district can sell bonds to generate up-front funding for capital improvement projects. Bonds are bought back over time with interest, similar to the way a homeowner might pay back a loan for kitchen renovations or bathroom additions. Bond funding cannot be used for everyday operating expenses such as salaries or supplies. School districts use this funding avenue because it spreads out significant expenses, enabling taxpayers to share the impact as they move into and out of the area. But equally important is the state aid that is only available when voters approve a bond referendum. In Cresskill, this will cover about 34% of the costs that remain after FEMA’s much larger contribution.
What will the federal government contribute?
President Joe Biden issued a disaster declaration after Hurricane Ida, so Cresskill’s schools qualify for some reimbursement of restoration costs. School district officials have had multiple meetings with representatives of the Federal Emergency Management Agency (FEMA) to understand and leverage this funding source. At this time, FEMA funding is expected to reimburse the district for 75% of the costs to Restore Cresskill Schools. There are a few qualifiers, with two of those critically important to decision-making at this stage. First, FEMA will reimburse costs related to restoration only; Cresskill would give up that funding if it did more than repair and refurbish what existed before the flood. Second, FEMA will reimburse costs when the projects are complete; Cresskill must find up-front funding to complete the work.
What will the state government contribute?
The State of New Jersey routinely helps local school districts pay for capital improvements such as the ones needed in Cresskill. However, that special form of state aid is only available if voters approve a bond referendum. Think of it as a matching state grant for local voter commitment. The state is expected to contribute 34% of the project costs that remain after FEMA’s much larger contribution. That aid is provided year by year, as if the state is helping to make the bond payments. Revenue collected from across New Jersey builds the pot of money this state aid comes from, so a school bond referendum is the only way to bring some of that back to Cresskill.
What will local taxpayers contribute?
After the FEMA reimbursement and the state aid, the local share of restoration costs is estimated at $3,574,428. That local amount –16.5% of the total restoration costs – would be paid by Cresskill property taxes. Taxes are based on a property’s assessed value (not the market value that someone might sell a house for), and in Cresskill, the average home is currently assessed at $708,860. Look up your assessment here.
What will insurance companies contribute?
What other sources were explored?
In the 3+ months since the storm, school officials explored numerous avenues for funding including private donations and government aid. Most of those reached a dead-end for one or more reasons. For example, the federal government’s response to coronavirus-related needs including funding known as ESSER, or the Elementary and Secondary School Emergency Relief Fund, which can be used to pay for air handling systems, such as Cresskill needs. Previous ESSER funding has already been committed on pandemic-related purchases, and the district’s most recent allocation was $1.1 million – a far cry from more than $21.6 million in project costs. That has been earmarked to address learning loss and mental health needs directly tied to the pandemic. Some of it has been earmarked for renovations of the District Media Centers including at MS/HS, and those will continue with ESSER funding as part of the flood-forced restoration.
Another source that was fully explored was the Bergen County Improvement Authority, a county-driven function that oversees public sector improvement projects. That avenue would take longer than a bond referendum, and the school district would turn over building ownership and become an operator only.
What happened to the funding that was approved with a bond referendum in 2018?
Cresskill voters showed their support for the schools in 2018 by approving a $12.5 million bond referendum that allowed the district to maintain its high standard of educational success by building an 8-classroom extension at Bryan School. Our community has always been proud of our small class sizes, and the passing of that referendum allowed for elementary class sizes in the high-20s to return to a much more reasonable high-teens level. It kept our class sizes competitive with other Bergen County schools.
That work was completed with the funds generated by the sale of bonds. By New Jersey law, bond funding can only be used for the projects outlined on the ballot and in supporting paperwork. It cannot be used for anything else, even if the project costs were lower than expected. None of the 2018 bond referendum money is available for the needs Cresskill faces today.
Why can’t the district draw on its savings for some of these costs?
A school district’s annual operating budget pays for day-to-day school operations, including salaries, supplies, equipment, and routine maintenance, while its capital reserve account is used for non-daily needs in the district. That capital reserve account could be comparable to someone’s savings account or “rainy day fund.” Cresskill’s Board of Education has been working to build the district’s capital reserve, always weighing that goal against the annual budget’s need for pressing education-related expenses. A large portion of that was earmarked this year for a new air conditioning component at the High School.
The capital reserve account carries less than $1 million at this time. Maintaining that amount, rather than draining the account as a token toward much more daunting costs, is a Board of Education decision. But because state aid will be a percentage of bond costs, the district would give up that 34% share of costs for every dollar it commits from existing funds without borrowing.
Why can’t Gov. Murphy sign a waiver to speed the process of starting restoration work?
There have been repeated calls for the State of New Jersey, specifically Gov. Phil Murphy, to sign a “waiver” to let Cresskill Public Schools start restoration work right away. We looked into this, and we know of no waiver or any other kind of paperwork he could sign to make that happen. Public school districts cannot sign contracts for work or purchases until funding to pay the bill is secured. That law exists to protect taxpayers. If voters approve the bond referendum, that would give the district a source of funding for restoration work. It is the district’s intent to do everything legally possible to be ready to sign paperwork 20 days after voter approval. (That 20-day delay is another example of legal protection. It provides time for someone to challenge vote results before action is taken.)
What’s the downside to waiting to search for more funding?
The longer our school district chases after potential — but not guaranteed — funding, the more time will go by with students learning via computers instead of in classrooms and further delaying the reopening of the schools. The most realistic funding sources have been thoroughly explored and, in fact, the district continues to work with elected representatives at the state and federal levels to intercede on Cresskill’s behalf. It continues to pursue the full value of its insurance policies.
The downside is the march of time, and the delay that would impact hundreds of students this school year and beyond. A bond referendum puts Cresskill’s future in the hands of Cresskill voters on Jan. 25.
Steps Toward Restoration
Can we use this as an opportunity to improve, not just restore?
Why can’t the univents and other mechanical equipment be positioned higher?
Are there any silver linings to this situation?
Future of Cresskill
What is the potential for the timeline to allow a Fall 2022 re-opening?
The district and its professional consultants are advancing on every possible and legal angle to start acting as soon as there is permission to do so. We understand that the timeline is critical and no minute can be sacrificed. Legalities – such as the 20-day wait after a vote – are out of the district’s control. Supply chain issues are also out of its control. However, the information we have from advisers who work in the school construction field gives us strong confidence in the ability to welcome students for classes in Fall 2022 if voters approve up-front funding on Jan. 25th.
How can Cresskill sign work contracts and order supplies as soon as possible?
Why not build a new school where flooding is not a risk?
What can be done to reduce the risk of a repeat event?
How will the district address concerns of potential damage from future rainstorms?
The site of Cresskill MS/HS is in a federally designated flood plain, which means the area is subject to the collection of rainwater during heavy storms. Even during the notable storms of Hurricanes Sandy and Floyd, water did not enter the school building. However, we are working with FEMA to take necessary steps to mitigate, or reduce, the potential for a repeat of the damage caused in September. The $21.6 million estimate for restoration does not include mitigation efforts.
What if the bond referendum doesn’t pass?
Cresskill Schools must repair the massive damage from Hurricane Ida in order to return our middle and high school students to their building. FEMA will reimburse for up to 75% of the restoration work that could cost $21.6 million. A special kind of state funding is available for school districts where local voters approve bond referendum. For Cresskill, that state aid would pay about 34% of the costs that remain after FEMA’s reimbursement. If the bond referendum does not pass, Cresskill would not be eligible for that $1.8 million.
A “no” vote would prevent up-front funding, which would slow down the process of getting students back into their building and away from their current remote/hybrid learning situation. If a referendum is approved, work contracts could be awarded by the end of February and renovations could begin in March. We are working diligently toward the target of getting students back into school by Fall 2022.
The Board of Education took action to reserve March 8, 2022, for a second chance to ask the community for funding to restore Cresskill Schools. This is just a precautionary measure. That vote date must be reserved 60 days in advance to remain as a second-chance option. The next available date that the state allows for a bond referendum vote is Sept. 27th, 2022.
What happens if project costs end up being lower than estimates?
The district will only issue debt (long term bonds) for the amounts needed to repair/restore the building. There will be no additional tax impact until those long term bonds are issued. If the district doesn’t spend the total amount that is issued, the difference will be returned to the taxpayers in the form of tax relief.
What happens if project costs end up being higher than estimates?
WHY DO ESTIMATED COSTS SEEM SO HIGH, SUCH AS $400,000 FOR A SCIENCE CLASSROOM?
Cresskill is in an unusual situation. Other school districts spend a year or more determining exact needs and researching costs, but Cresskill is on a much faster track. Because of that, the estimates for project costs are on the high side. The district wants to be sure that even with a speedy pace, there will be enough funds to complete the restoration work.
Project cost estimates include work at the rates paid for unionized labor – which is a State of New Jersey requirement. They include a contingency in case the pre-referendum estimates are lower than what it actually takes to get the job done.
Additional reasons costs are much higher for a public entity such as a school than they would be for a regular business or homeowner:
- NJ has extensive regulations for businesses to do work for schools. The businesses incur these costs and pass them along.
- Schools require very large amounts of insurance to be provided by the contractors. Again this amount is passed along.
- With the time frame to get CMS/CHS opened by September and the exhaustive amount of work to be completed by them, contractors will need to hire more employees to get the job done quickly. This cost is again passed along.
Please read the additional FAQs about what happens if project costs are higher or lower than estimates.
How will the district use the $21.6 million and when will I need to pay more taxes?
The district will NOT borrow all $21.6 million right away. The first step would be to issue short-term bonds, rather than make a large commitment, so Cresskill can take advantage of FEMA’s reimbursement of 75% of costs. The short-term bonds can be renewed year by year, up to 5 years, until the district knows the actual total costs and has received the full FEMA reimbursement. The issuance of short-term notes does NOT create any additional tax levies (called debt service) like the issuance of long-term bonds. Short term notes require annual interest payments, which are made from the district’s current operating budget, funded by normal property taxes and state aid. The additional tax levy, or debt service, will not be billed to the taxpayers/homeowners until long-term bonds are issued, which may not occur for several years.