Summit Council Introduces First Tax-Decrease Budget in Recent Memory

April 2, 2014 at 8:49 AM

SUMMIT, NJ—Summit taxpayers, for the first time in recent memory, in 2014 will see a $14.78 decrease in the municipal portion of their property tax bill if the municipal budget introduced on Tuesday is adopted after its May 6 public hearing.

According to common council finance chairman Mike McTernan, the proposed $47,316,053 spending plan will mean a 0.38 percent drop in taxes for municipal purposes.

McTernan was quick to point out, however, that the property tax bill received by Hilltop City homeowners is composed of three sections—a municipal purposes tax, a tax in support of the city’s schools and a tax to support Summit’s share of Union County government costs.

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The school budget, recently approved by the city’s board of school estimate, will result in a school-year increase in taxes for education of about 0.25 percent, the council finance chairman said. However, since the school tax bill includes levies for the second half of this calendar year and the first half of next year, the increase actually will amount to about 1.06 percent.

Union County’s budget, although not yet finalized, is expected to increase by 10.6 percent this year, resulting in about $1.5 million more coming out of the city in support of county expenses.

Getting back to the city budget, McTernan said decreases in employee healthcare and pension costs helped rein in the city’s bottom line this year.

In his overview of the proposed spending plan, city administrator Christopher Cotter noted that city appropriations are up .51 percent for 2014.

He added that the parking utility surplus would increase by $50,000, bringing it to $250,000; grants of $4,400 would be offset by appropriations, and an assistant administrator position would be added this year at a cost of $60,000.

Cotter said the assistant position, which was contemplated before he became administrator, would bring in someone who could more easily move along advances in technology and human resources projects.

Other highlights of the municipal budget pointed out by the administrator were at $100,000 reduction in municipal surplus, a $40,000 reduction in appropriations for Social Security and reductions in general city hall employee pension costs and police and fire pension costs amounting to about $246,000.

He also noted that salaries and wages take up about 47 percent of the proposed budget and employee benefits about 21 percent.

The parking utility budget, also introduced on Tuesday, includes a revenue increase of 7.4  percent and an increase in expenditures of 9.6 percent.

Cotter pointed out that new parking pay stations and increased bank fees from PNC Bank were two of the reasons for the increase in expenditures. He added that the parking utility soon will seek requests for proposals for new banking services.

The city’s sewer utility budget also was introduced on Tuesday, with a $106,000 expenditure for the city’s share of the Millburn Crossing project, which affects Millburn and South Orange in addition to Summit.

The administrator added, however, that New Providence will pay a portion of the Millburn Crossing tab because it shares some of Summit’s excess sewer capacity.

Cotter added, however, that Summit will see almost no increase in its user fees as a member of the Joint Meeting Sewerage Authority of Union and Essex Counties.

Second Ward Councilman Richard Madden, noting the decrease in city taxes and the slight increase in the school budget, said Union County was “vastly overspending” and its expenses needed to be brought under control. He added that $36 million will be going from Summit taxpayers to the county this year.

All the good work that Summit did in reining in its budget was being negated by the county and the state equalization formula, which he calls a “redistribution formula,” according to Second Ward Councilman Patrick Hurley.

First Ward Councilman Albert Dill, Jr. said Hilltop City taxpayers need more ways to find out what is really going on in the county because Summit is leaving things out it its budget that could benefit the city because “we are getting clobbered by the county.”

McTernan noted Summit only gets back 10 cents for every dollar it sends to the county. He echoed Dill’s comments that county expenditures prohibit the city from doing many things it would like to do.

Mayor Ellen Dickson said Summit residents should press the legislature to explore dissolving of county government, at least in the northern portion of the state, and urge that a “hard” 2 percent “cap” be put on county spending.

Speaking of the “cap,” the council on Tuesday also introduced an ordinance to establish a “cap bank.”

McTernan explained that the term “cap bank” really is a misnomer, since the city is not really “banking” any money.

Under state law, he noted, there is a cap, in addition to the 2% cap on property tax increases, which limits spending to the lower of 2 percent or the cost of living adjustment, applied to most of the previous year’s appropriations. This year’s cost of living adjustment is 0.5 percent.

Under the cap bank law, municipalities, when authorized by ordinance, can appropriate the difference between their actual final appropriation and a 3.5 percent percentage rate, as an exception to the cap, in either of the next two succeeding years.

McTernan explained that the difference between the appropriations cap and the 3.5 percent level can be used by the city in case of emergencies. Expenditure of the difference, he said, would not be appropriated unless specifically authorized in a separate measure.

In another action on Tuesday, the governing body authorized execution of temporary easements with three property owners whose properties border the Salt Brook so the brook stabilization project can proceed.

Dickson also announced the appointment of Deb McCann, who currently serves on the library board of trustees, to take over the seat of Edgar Mokuvos on the board of education when his term ends in May. McCann is employed by Dun and Bradstreet.

The mayor also announced reappointment of Celia Colbert, who currently serves as board of education vice president. Colbert, former vice president of corporate strategic markets for Merck & Co. Inc., is expected to take over as board president in May.

In other items, the council heard a presentation by student volunteers to the Summit Free Market program, operated since its inception by students out of the Summit Transfer Station. Residents may bring items they no longer need to the free market and others may choose the free items from the market.

Volunteers introduced Tuesday were Claire Harrison, Jamie Macpherson, Phoebe Rhinehart, Oscar Dawson, Nick Lalicato and Serena Thomas. Harrison noted the major goal of the group this coming year is to work for a permanent building for the free market.

Summit Conservancy members David Naidu and Judy Madelbaum also told the council of their newly-formed group, whose goals are to promote environmental education, sustainability and trail maintenance.

Naidu added that the non-profit group has applied for federal 501(c)(3) status and will be helping the free market raise funds for its permanent facility.

Christine Truhe of Bonds of Courage also asked the council to help celebrate the 10th anniversary of the founding of the group, whose mission is to support American troops serving oversees and their families through offering compassion and working on such causes as housing for homeless veterans and suicide prevention.

She said the group recently expanded its reach and now is headquartered in the National Guard Armory in Westfield, although it was founded in Summit and depends greatly on city residents for support and providing its members.


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