BELMAR, NJ — After being peppered with questions by the public for two hours, the Belmar Council has approved a $16.62 million budget that includes a $1.4 million increase in municipal taxes.
Although the municipal tax levy is rising 21.7 percent, the average taxpayer will see an average 8 percent spike in overall property taxes when school and county taxes are factored in. That translates into a $35 per month tax increase on a home assessed at $500,000 — or about $420 more for the year, according to officials.
After eight consecutive years with no increase in the municipal tax rate, the nearly 30 individuals who questioned the council during the May 21 public hearing wanted to know why that rate soared from $6.64 million in 2018 to $8.08 million under the current spending plan.
In response, borough officials painted this sobering financial picture for the some 100 people attending the hearing: Belmar has been relying on one-time revenue sources and borough reserves to balance the budget, as it struggles with how to pay down a $36 million debt, replace aging equipment and infrastructure, pay legal and other professional fees associated with lawsuits and projects from previous years, and meet contractual pay hikes for municipal employees.
In addition, the borough continues to receive unexpected bills incurred during the previous administration that were not recorded in the official ledger, according to officials.
To view Belmar’s approved 2019 budget, click here.
In breaking down the $1.4 million increase, borough auditor Robert Allison said Belmar is $500,000 short on the revenue side, compared to last year, with another $900,000 million needed as follows: $100,000 more for paying interest on the borough’s $36 million debt, $125,000 for capital expenses; $100,000 for increased police pension costs, $350,000 for salaries and wages, and $250,000 for professional services.
Specifically, contractual increases in police salaries accounted for nearly one-half of the overall 6.7 percent increase in salaries and wages — from $5.07 million to $5.42 million. In terms of professional services, there is a jump from $125,500 to $350,500 in legal costs associated with lawsuits filed in previous years and another $75,000 hike in engineering expenses to $125,000 for overseeing new projects and “closing out” completed projects.
The “structural imbalance” has been created because the borough “does not take in enough regular revenue to meet our annual expenses,” Allison said.
Over the past several years, the borough has used $5 million in one-time revenue sources to keep the tax rate flat, specifically using insurance proceeds and governmental awards, including Federal Emergency Management Agency funding, he said.
Those types of funds should have been used over time, coupled with smaller tax increases over the last five to six years, he said. “If we raised taxes 2 to 2½ percent per year, it would have been very digestible and we wouldn’t have this kind of increase.”
Since the Republican Party took control of the governing body in January, Mayor Mark Walsifer said his administration has been working to find ways to cut spending and raise revenues, as well as pay down the borough’s debt through permanent financing. It has also been dealing with the problematic issue of not knowing when the borough will be hit with another unaccounted expense from the past two years.
As a result, the borough is undergoing a forensic audit of the borough finances, including a thorough review of major projects approved under the previous administration, including decisions made “with a blink and a nod,” change orders and engineering flaws, according to Business Administrator Edward Kirschenbaum. Those projects include the Lake Como outfall pipe project, construction of the Taylor Pavilion at Fifth Avenue and 10th Avenue safety pavilion, and the state-funded Streetscapes project along Main Street.
“We’re looking at everything. We’ve inherited this,” Kirschenbaum said when the council was asked whether it’s a question of incompetence or malfeasance on the part of the previous administration. “We have to figure out. Was it incompetence, was it for political favor, what was it for. Was it illegal? In fairness, we’re going a forensic audit to see where we’re at … and (we) will hold people accountable.”
Councilman James McCracken voiced his support for the in-depth audit of the previous administration’s financial practices. “I am absolutely angry that Belmar is in this situation,” he said. “With all the things that have happened in the past, every day or week something comes up that we even can’t get our arms around. It’s so incomprehensible the way things were handled. I’m committed, as I believe my colleagues are, that if people were committing crimes, they should be held accountable.”
In its unanimous approval of the budget, the borough council’s remaining members also expressed their displeasure with having to put through a spending plan that raises taxes, including GOPers Patricia Wann and Thomas Carvelli, and the last remaining Democrat — Council President Thomas Brennan
“No one up here is happy with the situation we’re faced with … No one is angrier than I am. I feel a certain sense of responsibility,” he said, referring to the fact that he has been a member of the governing body since the Democrats held the majority, led by former Mayor Matthew Doherty and then Brian Magovern when Doherty left last April to join the Murphy administration as executive director of the Casino Reinvestment Development Authority.
“I was more than happy to go along with the no tax increase gravy train. Who doesn’t like no new taxes. It sounded great. In hindsight, it is what it is,” he said. “This is the right thing to do for the town and unfortunately it’s the situation we’re in.”
Walsifer, who was the sole Republican on the previous borough council, again reiterated how borough officials have combed over the budget since he became mayor five months ago — trying to identify “where to save money, cut money. “We going to work with the professionals to make sure this doesn’t ever happen again. We have a lot of revenue sources other towns don’t have.”
As a result, the borough will explore ways to “have people who come into town pay for some of those services so the taxpayers don’t have to.”
Reached after the meeting, former Mayor Doherty rebuffed the claims against his administration. “The 21.7 percent tax increase is directly attributable to the gross financial mismanagement of Belmar finances by the current administration. They clearly do not know how to manage the town budget and now taxpayers are going to suffer,” he said. “While they try to run away from their responsibility by blaming others, they cannot escape the reality of how they are punishing taxpayers in Belmar. A tax increase of this magnitude should be put to the voters for approval.”
Although he did not address specific claims related to the operation of his administration, he called them “excuses (by the current administration) for the excessive tax increase— “again trying to avoid responsibility.”
In reviewing the approved budget, Doherty said there is no need for a tax increase, citing areas where anticipated revenues have been set lower, compared to what was realized in the previous years. “If I was there, there would be no tax increase in Belmar.”
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