T.F. budget calls for lower tax bills

T.F. budget calls for lower tax bills
CFO cites increased revenues, open space funds
BY KENNY WALTER Staff Writer

TINTON FALLS — The clock on the Borough Council’s review process for the 2010 municipal budget officially began to tick last week as they were presented with the mayor’s budget.

Tinton Falls Mayor Michael Skudera presented each member of council present at the June 1 council meeting with a copy of the budget and made a statement on how difficult it was for this budget.

“I am proposing a budget that will result in a net decrease in municipal property taxes despite a nearly $400,000 loss in state aid, an increase in county fees for shared services, extraordinary snow removal/storm damage expenses, and pre-existing contractual obligations increasing salaries by 4.5 percent this year,” Skudera said.

“Left untouched, these fixed increases in expenses and other reductions in revenues due to current economic conditions would have resulted in nearly a 10 percent increase in municipal taxes.”

Skudera explained that because of the referendum cutting the open space tax approved by voters in 2009, residents would see a decrease in their net municipal taxes.

“Under this proposal, the municipal purposes tax [rate] would increase 1.26 cents,” he said. “This represents an increase of $16 for the year for the average homeowner with a property assessed at $337,013.

“This increase, however, will be offset by the reduction in the open space tax going into effect this year,” he added. “Accordingly, the average Tinton Falls homeowners’ property tax bill will decrease by $9 for the year.”

The $22.05 million budget calls for a 39.26-cent tax rate per $100 of assessed valuation and an $11.77 million tax levy.

Tinton Falls Director of Finance Stephen Pfeffer explained the challenge of creating the budget.

“On the state aid, that was extremely challenging because when we went with the numbers we had from the prior year, we had no cap issues, we were in good shape,” he said. “When we found out how much we lost, that put us over the levy cap.”

Pfeffer said that in past years, the state aid lost would not affect the 4 percent statemandated cap on increases in the municipal tax levy.

“This was an automatic cap adjustment for state, and unlike prior years, they weren’t allowing that this year,” he said.

Pfeffer said that because of that, the borough had to look at cutting expenses.

“We had to start refiguring the budget at that point,” he said. “We went back to all the departments and we floated some concession type ideas out there to the employees.”

Skudera explained some of the cuts.

“My proposal includes decreases in departmental operating expenses by as much as 20 percent, cuts in salaries and benefits of top management, and downsizing of the borough’s work force through attrition,” he said.

“Further, employee contracts were re-negotiated six months ahead of schedule to include increased health benefits contributions of 2.5 percent, retiree health benefits contributions and other caps.

“Overall, these new contracts contain the lowest net wage increases in the borough in the last 20 years,” he added.

Skudera said the cuts would not affect borough services.

Pfeffer said one of the things the borough avoided was to raise the anticipated revenue figures.

“We basically stayed away from the revenue side,” he said. “The mayor did not want to fix this by just increasing the anticipated revenue and make it just go away.”

Skudera explained further.

“This budget does not artificially raise revenue forecasts to balance the budget; in fact, it conservatively anticipates even less revenue,” he said.

Pfeffer listed some of the other ways the borough was able to save money.

“The employees agreed to contribute 2.5 percent of their salaries, so there was a change for that, and there was a minor debt service adjustment for some excess funds in our account,” he said. “We left the revenue side alone.”

Pfeffer said that despite the overall decrease, the budget actually is close to going over the levy cap.

“Believe it or not, I am close because of the way the levy cap works — it’s a strange bird — and because their reimbursements that come in against debt service for things like open space,” he said. “Those kinds of adjustments from a year-to-year basis can make a big difference for the cap.

“We are very close to the levy cap; we are at about a $4,000 difference. Really, we were kind of locked in.”

On more than one occasion in 2009, Pfeffer warned the council that revenues were taking a hit, but he said that the borough actually ended up having a good year.

“We ended up in 2009 having a very good year on the revenue side,” he said. “The revenues picked up in the latter part of the year, especially in the Uniform Construction Code [fees].”

He also credited the council for dropping the anticipated revenue in the 2009 budget as a driving force in building up a $3.2 million surplus.

“The council in 2009, before we adopted the budget, had brought down the miscellaneous revenue amount by about $800,000,” Pfeffer explained. “That really was the stimulus that made the surplus what it was. That was huge.”

Pfeffer credited many different people in the borough for helping with the budget.

“This budget really was a partnership between the administration, the council and the employees,” he said. “The employees made some major concessions that will not only help in 2010 but will have a long-term impact.”

According to Pfeffer the borough saved money by not replacing three police officers who retired, a foreman in public works, and a part-time worker in the municipal court.

The budget will now be reviewed by the council and placed on the agenda for introduction at a future meeting. After the council introduces the budget, it will be sent to the state for review and then will be adopted by the council.
Contact Kenny Walter at
kwalter@gmnews.com.