Holmdel unveils 2025–26 ‘not to exceed’ budget; board approves township shared‑service agreements

Holmdel Township School District officials on Wednesday presented a preliminary “not to exceed” 2025–26 general fund budget of $72,039,105 and the Board of Education approved two shared‑service agreements with the Township related to roadway work and maintenance funding.

The budget presentation, delivered by Dr. Cascone and Business Administrator Debbie Donnelly, outlined revenue and cost drivers behind the district’s proposal and explained the “not to exceed” designation that allows the budget to be lowered before final adoption but not increased. Donnelly said the district will submit the preliminary budget to the county office and scheduled the public hearing for April 30.

The “nut graf”: District leaders said sharply rising transportation and employee benefit costs, higher out‑of‑district special‑education tuition and a decline in one‑time federal pandemic funding left the district with limited options. To balance the preliminary budget the administration is using banked levy capacity and the full 2% local tax levy increase allowed under state law; Donnelly told the board the average effect for a home with an assessed value of about $1 million would be roughly $612.94 annually.

Most important facts and immediate detail

- Budget total and status: Donnelly presented a general fund total of $72,039,105 and described it as a “preliminary or not to exceed” budget that will be reviewed by the county office of the New Jersey Department of Education before a final public hearing on April 30. Dr. Cascone said the “not to exceed” language means the budget can be reduced before adoption but cannot increase.

- Revenue mix and levy: Donnelly said roughly 90% of district revenue is local property tax and described a tax levy increase that uses the full 2% local cap plus banked cap and a health benefit levy adjustment to reach the proposed levy increase (the administration cited a total levy increase figure of about $3.7 million for 2025–26).

- Use of one‑time and restricted funds: The presentation said the district will apply about $1.3 million of banked levy capacity this year (a use‑or‑lose percentage banked from prior years) and draw on restricted township maintenance funds tied to a shared‑service agreement. Administration and board members emphasized that banked cap will not be available in full next year and projected a possible roughly $2 million deficit for 2026–27 if no new revenues or cost reductions are found.

- Cost drivers: Dr. Cascone and Donnelly identified three principal cost pressures: (1) transportation (multi‑year route renewals and vendor rate increases, described as substantial spikes beginning in 2022–23), (2) employee benefits and health insurance (the district moved to a private plan but budgeted a 14% assumed increase for part of the year), and (3) out‑of‑district tuition for special‑education placements (Donnelly said those costs are up about 23% and the number of placements is rising). They also said the end of American Rescue Plan (ARP) funding removes a prior revenue stream used for some programs.

- Fund balance and reserves: Donnelly showed a multi‑year decline in fund balance and reserves, saying that if no surplus materializes for 2024–25 the district’s unassigned fund balance could fall to approximately $259,000 at June 30. She and Dr. Cascone said prior years’ balances and reserves have been used to absorb unexpected increases — for example, a prior transportation contract increase that required $2 million of internal adjustments in the middle of a year.

Programs and investments retained or added

The presenters said the budget preserves several instructional and student supports while making the hard choices needed to balance revenue and expense: continued courtesy busing (addressed below), a digital curriculum management system (Atlas), a unified district communications platform (ParentSquare), expanded dual‑enrollment offerings, an aquaponics lab at the high school supported with partner funding, updated Chromebooks for ninth grade, and new adaptive instructional platforms (Waggle and Freckle) in math and ELA. Donnelly said discretionary spending is a very small share of the total budget.

Township shared services and condition on courtesy busing

The board approved two township shared‑service agreements presented as separate action items: one for assistance on a Crawford’s Corner Road project and a second agreement providing maintenance funding for district facilities. Dr. Cascone said the township committee approved a maintenance agreement that includes approximately $600,000 directed to school maintenance; he also said a provision in the agreement requires the district to continue courtesy busing for the life of that contract. Board members thanked the township for the support and said the funding materially reduced the immediate number of positions that would otherwise have been cut this year.

Board response and next steps

Board members asked detailed questions about drivers, potential next steps and community impact. Several members said the district will likely face another difficult budget year in 2026–27, noting that banked cap will be largely exhausted and that state aid may not increase. Suggestions raised by board members and staff for future revenue or cost changes included expanded preschool tuition, sponsorships and naming rights, facility rental fees, and continued pursuit of grant funding. Multiple board members emphasized that the largest categories of controllable cost at the local level are salaries and benefits and urged planning now for longer‑term options rather than short‑term measures.

Votes at the meeting

The board approved two separate shared‑service agreements by roll call. The minutes show the motions passed on a roll‑call voice vote with board members recorded in the transcript as voting yes. The board then approved action items 3–6 together by roll call.

Ending

Administrators will submit the preliminary budget to the county office and prepare for the April 30 final public hearing and adoption. Dr. Cascone and Donnelly asked the community to remain engaged as the district refines the proposal; the board signaled it will continue reviewing cost and revenue options for 2026–27, including possible changes to staffing and non‑recurring revenue strategies.

Quotes (from meeting speakers)

"This preliminary or 'not to exceed' budget will be submitted... and the final public hearing for the budget will be on April 30," said Dr. Cascone during the presentation.

"We are allowed a 2% increase, and that's the $1.2 million," Business Administrator Debbie Donnelly said when describing the levy components.

"We had to find $2,000,000 within an existing budget," Dr. Cascone said of a prior unanticipated transportation increase that the district absorbed.

Sections

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