O'port budget on hold pending state review

O'port budget on hold pending state review
$6.8M plan calls for 1.9-cent tax rate hike
BY KENNY WALTER Staff Writer

OCEANPORT — The Borough Council held a public hearing on the municipal budget May 21 but was unable to adopt the spending plan due to a delay at the state level.

"The state hasn't had time to look at our budget, so we are not at liberty to vote on the budget," explained Councilman Joseph Irace, who made a presentation on the budget.

The borough's proposed $6.8 million spending plan calls for a $4,867,949 tax levy, an increase of 6.67 percent from last year.

If approved, the budget would result in a property tax increase of 1.9 cents per $100 of property valuation, to 35.9 cents per $100.

Irace said borough officials did the best they could to keep taxes down.

"While none of us want to see taxes increase, when we sat down as a committee, we knew this was going to be a tough year. While we're up, we're not happy about being up; we are comfortable we've done the best we can with the hand we are dealt."

Irace broke down how the impact of the increases will affect homeowners.

"A home that's accessed at $575,000 will see a municipal tax increase of $109.25 [per year]," Irace said. "A home accessed at $500,000 will see a $95 increase.

"And a home accessed at $750,000 will see an increase of $142.50," he added.

Irace acknowledged that Oceanport residents are paying high taxes, but said that most of the tax bill is due to the county and the schools.

"Only 24.1 percent of that tax bill is what this municipal body does," Irace said. "Most of what you see in your tax bill, almost 57 percent, is from the schools and 20 or so percent is from the county."

Irace went over the three main factors that led to the 1.9-cent tax rate increase.

"One, you see decreased revenue from investment income. That's down over $100,000," he said, "and that's due to lower interest rates.

"Permit and application fees are down almost $10,000," he added. "Obviously similar reasons: less building, less permit fees, less revenue to the borough.

"Thirdly, an additional loss of state aid: we lost an additional $17,500 this year. That's on top of $131,000 and change that we lost last year."

The borough will receive $682,399 in state aid this year.

Irace discussed some of the line items that increased in this year's budget over last year.

"Insurance last year was $800,000 and this year it's $900,000," Irace said. "Utilities are up; that's no different than the rest of us. Police salaries are up from $1.6 million to $1.7 million."

Irace added that there are ongoing talks with the police department about salaries, but he did not comment on any specifics.

"We are in negotiations with the police right now, so those are not final numbers," Irace explained.

Only one resident, who did not want to be named, spoke at the meeting.

The resident's main concern was that there are too many police officers in Oceanport and said that cutting some loose might be a way to lower the budget.

"I think it's been a joke for so many years that Oceanport has too many cops," the resident said. "I just think we have to do something. If that is a third of the budget, it seems a little ridiculous to me."

The largest 2009 appropriations in the $6,771,451 spending plan include: $130,000 in emergency authorizations in 2008, which is a one-time expense; and $646,500 in group health insurance, which increased by 13.4 percent.

Irace said at the April 16 council meeting that the $130,000 in emergency authorizations was necessary due to planning and legal fees, including a builder's remedy lawsuit filed in 2005 by Oceanport Holdings LLC of Red Bank, which sought the right to build a housing complex to help satisfy the borough's 183-unit affordable housing obligation set by the state Council on Affordable Housing (COAH).

Irace explained that those who build the budget have very little flexibility in creating it.

"You really have control over 5 percent of the budget," Irace said. "The rest of it is mandated and built in with salaries and other factors we need to take care of.

"I have a list of about 150 unfunded mandates that the state has put on us that we are responsible for paying that come out of your property taxes," Irace added.

There were some services and sections of the budget that decrease in the proposed budget.

"The salaries are actually down in the borough," Irace said. "They are down 2.3 percent. So, we've actually reduced salaries of our union workers.

"To reduce our operating expenses 5.7 percent in this economy, I think we've done a good job," he added.

He also said that this has been done without any layoffs or any talk about furloughs.

The borough was $189,752 above the state-mandated 4 percent cap on year-toyear increases in the tax levy.

"Our options to make up for the $189,752 were either to raise taxes or go to Trenton and ask for a tax waiver," said Irace. "State officials said that they would not grant a tax waiver if we did not try a pension deferral first."

With a pension deferral, the borough is required to repay the deferred amount over a 15-year period beginning in April 2012. The amount to be repaid will vary depending upon pension system earnings on the amount deferred. In addition, the borough has the option of paying off the obligation at any time.

"We expect to pay the deferred amount much sooner [than 2012]," said Irace.

As for the school tax deferral, in accordance with state regulations, a town may defer up to 50 percent of the school tax levy not requisitioned by a school district. As of Dec. 31, 2008, the amount of school taxes available for deferral by Oceanport was $2,131,506. As of Dec. 31, 2004, the previous year in which school taxes were deferred by the borough, the amount of school taxes available for deferral was $1,937,491 and the percentage of school taxes deferred was 23.12 percent.

The borough's average deferred school tax percentage over the past five years was 22.17 percent.

The budget vote is scheduled for the June 4 meeting.

Staff writer Kathy Chang contributed to this story.

Contact Kenny Walter at

kwalter@gmnews.com.


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