DONNA FAULKENBERRY, CURT STOLLEN, SPOTSWOOD BOARD OF EDUCATION and BOROUGH

OF SPOTSWOODv.

BOROUGH COUNCIL OF THE BOROUGH OF HELMETTA, BOROUGH OF HELMETTA PLANNING

BOARD and KAPLAN AT HELMETTA L.L.C.

DOCKET NO. MID-L-6185-11

1) Helmetta was previously a send and receive district. In 2008-2009 paid $11,785 per student.2) As a result of legislation, Spotswood and Helmetta are combined into a consolidated school district.3)Equalized value formula is utilized based on assessed property values, which results in 78/22 split for the most current year.

1)Kaplan group purchases property for redevelopment project, age restricted housing.2) As a result of economic downturn, attempts to move under conversion statute for non age restricted housing. Helmetta Planning/Zoning Board denies application with assistance from Spotswood and case is appealed.3) Proposed settlement is reached for 200 non- age restricted one and two bedroom units.4) Currently pending before the Board is Whispering Woods to approve settlement.5) All zoning is in place to proceed.

1) Last year, Borough of Spotswood and Spotswood BOE joined forces and filed suit.2) Completely novel legal theories advanced. One municipality has never stopped another municipality from development based on impact on schools. 3) Successful in early going because of numerous procedural errors by Helmetta Board.4) Have successfully delayed construction for a year.5) Only chance of success might be with the NJ Supreme Court.

1) Mayor Martin approached Spotswood months ago to discuss settlement. Talks were unsuccessful. Kaplan stepped in and talks progressed.2) Final proposal was presented last week. Helmetta Board is set to vote on July 2nd.3) Most observers consider it likely that Board, despite almost universal opposition to project, will vote to approve it, causing lengthy litigation to commence and offer to be withdrawn or changed unfavorably4) Spotswood has reviewed offer and finds it advisable to consider accepting after community hearing.

1) From PILOT payment of $275,000, Spotswood BOE will receive half after payment to County. Minimum of $130,000 per year for 22 years = $2,860,000.2) Per student cost calculated by adding the total amount of Spotswood and Helmetta students(1,198+291) and dividing it into the tax levy. $13,254,758/1489 = $8,901.78.3) Spotswood share of the PILOT will pay for almost 15 students.4) If PILOT goes up, after taking into account County’s portion, Spotswood gets half of all of it until it has paid for 19 students.

5) For every student from 20 on, Kaplan pays the per pupil cost according to the formula.

6) Kaplan will execute and record a memorandum of the details of the settlement agreement, including the payment agreement by Kaplan to Spotswood BOE, along with Release of the lawsuit agreeing to the terms. Agreement will run with property if sold or transferred

7) Kaplan will provide title search of property to confirm no existing mortgages, judgments, etc.

8) Helmetta will amend the redevelopment agreement to memorialize Spotswood’s share of the PILOT payment.

1) Any guarantees? What if Kaplan goes bankrupt? The title is clear.Kaplan’s long business record and the filing of the memorandum that agreement runs with the property. Upon any transfer of property, a Bankruptcy Court could always void any agreement. Worst case is it goes on tax rolls. If assessed at $15.5 million it would generate approximately $199K in school taxes, which would cover about 22 children. However, if influx of children is greater than 22 children no mechanism for getting more money, unlike with Kaplan proposal.

2) How many students are going to be generated? Spotswood expert says 66, Kaplan’s and Helmetta says 20-26. No one can predict, but Kaplan is wagering a lot of money and are confident their numbers are right.

PROS CONS

1) Minimum Revenue stream of $2.8 Million.2) Kaplan to pay per pupil cost of every student over 20.3) Unlikely success of litigation.4) Better than if it is on tax rolls

1) Uncertainty of number of children and costs of special needs children.2) Concern if Kaplan went bankrupt

HOWEVER, EVERYONE AGREES IT IS IMPORTANT TO EDUCATE THE PUBLIC, ANSWER ANY AND ALL

QUESTIONS, ELICIT FEEDBACK AND ACT IN AN OPEN AND HONEST MANNER AS TO WHAT IS BEST FOR THE TAXPAYERS OF THE BOROUGH AND THE CHILDREN

WHO WILL BE ATTENDING OUR SCHOOLS