Government

Taxes To Increase 3.5% In Berkeley Heights

April 12, 2014 at 7:00 AM

BERKELEY HEIGHTS, NJ - An ordinance to exceed the Municipal Budget appropriation limits was introduced at the township council meeting last week.  The proposed budget increase amounts to $456,412.18 which equates to a 3.5% increase. 

Council President Jeanne Kingsley stated that the budget was the most well presented budget.  "We did a great job of zero based budgeting.  The bottom line is there will be an increase," said Kingsley.

The factors involved with the tax increase include:

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  • Severe weather and the snow removal and salt.  The costs were $100,000 higher than last year.
  • Adding bulk pick-up. (The council promised to put it back in, and it will cost the tax payers money to do that.)
  • Litigation expenses are up. 

"Litigation is costing us more," said Kingsley. "It is hard to anticipate and hard to budget for.  At the end of the day, if someone litigates us, we have to defend the town and defend ourselves."

"The budget for years, we have been cutting," said Mayor Joe Bruno. "Our increase last year was a 1.75% increase. Our problem is not in spending too much money, our problem is that our revenues have decreased.  We have mandatory costs that have increased. Net result is an average increase of $79 on a house assessed at $307,000.  This is not a tremendous amount," said Bruno.  

"This budget is as bare bones as it can get.  Giving the residents services they ask for and what we need to provide. I am comfortable where the budget is," said Bruno.

"Zero based budget defines the methodology that we use," said Councilman Kevin Hall. "We've squeezed all of the juice in the expense side." He stated that they continue to work on the operating side addressing strategic initiatives. "We have a well executed Capital plan that addresses intermediate capital needs; the flooding issue, the streams and rivers, maintenance budget, purchasing more efficiently [QPA will speak to this point]," said Hall. "We are working together as a group."

The state allows the use of "Banked Cap" funds to increase the budget beyond the 2 percent tax levy cap. "Banked Cap" funds accumulate when the municipality does not reach the 2 percent tax levy increase cap. Over the past few years the municipality has banked funds for future use. The "Banked Cap" can be lost if not used.  

The Calendar Year 2014 Budget Public Hearing will be on April 22.  

Councilman Tom Pirone went through the eight measures that go into the township's credit rating. If the measures are not getting worse or getting better, the council is making fiscally sound decisions said Pirone.

The first measure is the General Fund Balance as a percentage of operating revenue.  "Or a description of how much the town is living paycheck to paycheck," said Pirone.  In 2010, there were only six days of cushion.  Last year, the township had build it up to four weeks, said Pirone.  Currently, the township has almost six weeks or 10.3% of their yearly revenue in the bank.

The next measure is the Unrestricted Fund Balance as a percentage of Fund Balance which is almost identical because over 90% of it is available for any bill the township needs to pay said Pirone.

The next two, Debt Burden, measures how heavy the township's debt weighs on the town's ability to continue providing services.  "Our debt has decreased by over $500,000.  We've paid down 3% of town debt," said Pirone. The Debt Burden compares debt to the total ratable value of the town.  

The next measure is Debt Service as a percentage of expenditures. Debt payments have increased $73,000 per year or 4%. "This is because the Council has taken on the strategic initiative to replace aging physical plant equipment and vehicles that were long neglected without a plan to handle their eventual replacement.," said Pirone.  The council has no control of the last two measures which are relatively unchanged from last year. 

These measures are components set forth by credit agencies generally accepted by all said Pirone.

 

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