259-Unit Housing Project, Financial Impacts To Chatham Schools Debated

CHATHAM, NJ — Discussions and disagreements were sparked after comments were made about the financial gain the Chatham School District might receive from the borough following the construction of a 259-unit housing project.

Local resident Bill Heap spoke before the council, expressing his concerns about the borough's and school district's negotiations over Payment in Lieu of Taxes (PILOT) funds regarding the River Road housing project.

In his comment, Heap asked the board why they were "even entertaining these discussions at all," claiming that the school board already receives sufficient funding.

"The school district has their own method of raising money… They get what they ask for. They get two-thirds of the pie and residents in town provide families with children in the district a very generous education subsidy," Heap said.

In the December board of education meeting, BOE President Jill Weber refuted the claims made by Heap, calling them a misunderstanding, and in need of clarification.

Heap, claimed that the PILOT fund negotiations had recently come "out of hibernation," a fact that Weber strongly refuted.

According to Weber, the discussions between the board and the borough regarding the PILOT funds have been in the works for more than a year and were something that the borough council was aware of.

The River Road Redevelopment Project, approved by the borough last year, calls for the construction of 259 units, which has some residents concerned about the impact on the school district.

"Time and time again, the borough council had told the residents and promised them that they would not negatively impact the school district and that they would work with the school district and share some of that Payment in Lieu of Taxes. It can come in many forms, and that still has to be discussed," Weber said.

While talks are ongoing, Weber believes they will have a more concrete conversation in the new year. The goal of sharing a portion of the PILOT funds is to offset potential future expenses that may arise as a result of the increased housing units.

According to the board, because the budget can only be increased by two percent per year, it is critical to make financial decisions ahead of time in order to account for that buffer.

"That's the reason that we're entering into these conversations, because as we talk about full-day kindergarten, as we talk about losing mental health money, that is one small factor in our budget. That's what we have been trying to meet with the borough council so that we can factor these numbers in," Weber said.

In his comment, Heap mentioned that with enrollment trends declining, that should provide some relief to the school district's budget, adding to his confusion as to why they needed money from the PILOT program.

Read more: School Enrollment Continues To Decline, Chatham Superintendent Says

"I don't think it's unreasonable to expect that a lower student population should take a little bit of pressure off their insatiable appetite for money," Heap said.

In response, Weber stated that a large portion of the budget goes toward paying salaries and benefits, meaning that enrollment trends have little to no effect on potential budget changes.

"We have insatiable expenses. We have a two percent cap, and our expenses exceed ten percent… If you have a two percent cap and your health benefits go north of ten percent, obviously that math does not work and that money has to come from somewhere," Weber said.

The board anticipates that more information about the budget and the negotiations with the borough will be made public in January or early in the new year.