Tinton Falls advised to revisit budget

Tinton Falls advised to revisit budget
Finance director projects $500K revenue decline
BY KENNY WALTER Staff Writer

TINTON FALLS — The Borough Council may reconsider their introduced budget that kept the tax rate steady.

On May 5, the council introduced a $21.8 million spending plan that calls for a $10.6 million tax levy.

However, with revenues dropping, the council was urged to consider raising the tax rate up to the maximum 4-percent increase at the June 16 council meeting.

The state has not yet reviewed the budget, pushing a vote back to the next council meeting.

Borough Finance Director Stephen Pfeffer and Freehold-based auditor Bob Allison lead a lengthy discussion on the impact of the economic climate on the borough at the meeting.

Pfeffer explained that the recession was slow to affect Tinton Falls, and revenues were actually up as recently as early 2009.

"We had a very good last quarter in 2008 and were able to rebuild surplus almost to the amount of the prior year," Pfeffer said.

"[During] 2008 the borough was outside of the recession that was happening nationally," he added. "Our rate of collection was higher than the year before.

"For the first two or three months, it appeared our revenues were still going to be strong," he continued. "Municipal court fees were looking good, the hotel tax was looking relatively stable."

However, as summer approached, the revenues seemed to take a nosedive.

"In the last month, the revenues have deteriorated to the point where I decided to take a further look at the budget," Pfeffer said, "to see where we can cut expenses and reduce some of those revenue line items accordingly."

Pfeffer explained that he was able to come up with some reductions, but they may not be enough.

"We were able to come up with about $190,000 on reductions," he said. "We took that money from interest on investments and from hotel tax fees.

"We still have revenue shortfalls in at least three revenue line items," he continued, "that being from the court, the uniform construction code and interest on investments."

Pfeffer was not positive how much revenues would go down in 2009, but expects it to be around $500,000.

"I believe that in the line items I've really been focusing on, my guess is it could be around a half a million dollars," he said.

Pfeffer explained that the drop in revenues from those line items would have an adverse effect on not only this year's budget, but future budgets as well.

"Those shortfalls would have a tremendous impact on the borough going into 2010," he said. "They would basically reduce our surplus, reduce the amount of revenue we can carry into next year's budget. It would be well below where we are today as far as an overall budget."

One counter measure that Pfeffer urged the council to consider would be to raise the tax levy up to the mandated maximum increase of 4 percent.

"If the council were to go to the max allowed by law on the tax levy, it would it would add approximately $860,000," Pfeffer said, "and we would reduce other items by an offsetting amount.

"It would give us more flexibility on the levy cap next year," he continued. "It would be a huge impact on the 2010 budget."

Allison said that the adverse effect of the economy has gone as far as to put up job cuts for public vote.

"I urge you to consider everything in managing your town not only for this year but also next year so that next year you're not in a bind," he said. "Some towns in South Jersey are putting [laying off] cops out to referendum."

Pfeffer said some of the biggest revenue losses have been from the uniform construction code fees.

In 2008, the borough collected approximately $800,000 in these fees. Thus far this year the same department has generated just $135,000 and is on pace to finish below the expected $400,000.

Generating $400,000 this year might end up being a pipedream, he said.

"I don't see where anything is close enough to break even on the $400,000 on that line item," he said.

The council members seemed to agree that they couldn't afford to have this year's budget have a detrimental effect on the future.

"We have to look at what we do in this budget doesn't have a negative impact next year," Mayor-elect Michael Skudera said. "So basically if we don't do anything now, we will have a very tough time next year."

"We've seen other towns doing furloughs and laying off people," outgoing Councilman Paul Ford said. "It's a tough decision. A decision this council may have to face one day.

"The decision now, if you want to be held harmless this year and not make any staff reductions, I don't know how you cannot go to the max," Ford added.

Councilman Andy Mayer said that instead of raising the tax levy, the council might need to take a look at cutting expenses first.

"We don't want to tax people when it's unnecessary, we want to know why we are taxing," Mayer said.

"This should be a wake up call for us to where we should really seriously look at cutting expenses. I hate to say let's just increase the taxes," Mayer added.

Pfeffer admitted that it is currently an expense cutting proposal from the Public Works Department that may save the borough up to $700,000.

He said that while he didn't expect the council to make immediate decisions, these are items they should look at.

"It's too hard to predict at this point where it is all going to go," he said. "We wanted to give the council a better picture of where we are today."

The vote on the budget is currently scheduled for the July 7 meeting, when the newly elected mayor and council members will have been sworn in.

Contact Kenny Walter at

kwalter@gmnews.com.


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