Following on a proposal from three weeks ago to increase and maintain the borough’s annual contribution to the school district — in exchange for a new school district fiscal policies — City Hall is drafting a memorandum for assembly and school board members to discuss when the elected officials meet in a budget work session April 27.

“We are going to generate a memorandum of understanding for discussion that each body is able to evaluate prior to the work session,” Borough Manager Mason Villarma said March 20.

The work session between school board members, district administrators, assembly members and borough officials is set for 6 p.m. April 27 in Room 101 at Evergreen Elementary School.

The meeting is open to the public.

The discussion will cover the school district’s 2026-2027 budget “as well as other points of interest,” according to the meeting notice on the borough website.

The assembly and school board met in a joint work session on March 5, at which borough officials outlined their proposal to increase and stabilize the borough’s annual contribution to the school district operating budget.

In exchange for “making every attempt” to fund the district at the maximum amount allowed under state law, which would be an increase from this year, Villarma asked the school district to revise its policy on the size of its operating reserve account to better protect against fluctuating state funding.

City Hall also proposed that the district amend its policy for its major maintenance reserves, which is a separate account from its operating reserves.

The maintenance fund balance is about $850,000. The operating reserves account is projected to end the fiscal year on June 30 with close to $1 million, though the district’s budget for the 2026-2027 school year projects drawing more than $700,000 from the operating reserves to balance the budget.

The district gets about 30% of its revenue from the borough and more than 60% from the state, and has been drawing on reserves in recent years to balance revenues with spending.

In a third proposal for the district to amend its policies, the borough asked that the district adopt a policy of submitting its major maintenance work list by Oct. 1 each year, to better allow the borough to plan ahead for each year’s spending. The borough owns the buildings and is responsible for major maintenance, repairs and rebuilds.

The school board went into executive session at the end of its monthly meeting March 16 to discuss “matters that might have an immediate impact on finances,” though the motion to go into a closed-door session did not specifically state the topic was the borough’s proposed deal.

The next school board meeting is scheduled for April 20, a week before the joint budget discussion with the assembly.

The school board must submit its budget and funding request to the assembly by May 1.