Nutley adopts corrective plan to address school district's $7 million deficit

Nutley school officials adopted a corrective action plan on Wednesday night to right the district's finances after a $7 million deficit was confirmed last month, and outlined two years worth of poor decisions, and budgetary oversight within its business office over the past two school years.

The projected shortfall from key line items comes to $7.243 million, with $2.122 million in additional unforeseen expenditures, according to a copy of the plan. Health Benefits costs marked the largest budgetary shortfall, accounting for $2.930 million, followed by $1.190 million for “unrestricted miscellaneous expenditures,” the document shows. All while revenues were "artificially inflated," the district stated.

Meanwhile, expected revenues from rents and leases exceeded what is currently projected by more than two-fold this school year. Fines and forfeits together accounted for a near half-million-dollar overstatement. In the 2022-23 budget, unrestricted miscellaneous revenues had been off by more than half-a-million-dollars alone.

An audit report completed Feb. 7 showed district coffers had fallen from just over $9 million to $2.2 million over a year's time by June 30, 2023, officials stated Wednesday. Officials confirmed the deficit on March 13. However, it took years of "unreliable revenue and expense assumptions" alongside rising costs in "healthcare, special education, and transportation that are affecting educational systems over the past decade," the district stated, along with citing increased payroll costs through staff expansions.

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School officials placed Assistant Superintendent of Business David DiPisa on administrative leave, and are currently reviewing candidates to fill DiPisa's role on an interim basis. An FAQ released alongside the plan says disruptions to only the district's internal operations are expected to take place over the remainder of the current school year, some changes to extracurricular and academic programs may be necessary beginning in the fall semester.

As of Wednesday, the district stated it had not been assigned a monitor from the NJ Department of Education, but expects an advance on state aid to bolster its coffers while the budget is balanced through an exhaustive list of cost saving efforts. The department did not immediately respond to questions about the matter, but as of Thursday afternoon, a representative said he was researching answers to NorthJersey.com's inquiries.

Part of the district's plan to temper its finances includes outside accountants, who will review bills, transfers, secretary reports and the budget each month moving forward.

To limit rising costs, the district will “assess all service providers and collective bargaining agreements for efficiencies” by reviewing options with staff labor unions, and shift some of its special education staff to outside contractors, which would reduce costs on benefits, payroll taxes, and retirement plans, as well as consider privatizing its transportation services.

This article originally appeared on NorthJersey.com: Nutley NJ adopts plan to address school district's $7M deficit