Proposed Budget: Taxes to rise by $172 on average Chatham Borough home

CHATHAM BOROUGH, NJ - Highlighting cost-saving achievements through shared services and lamenting multiyear revenue decline, the Chatham Borough Council presented its municipal budget at its Feb. 27 meeting.

The council proposed a seven percent increase in the tax levy, which will allow the borough to collect $8,078,374, up from $7,578,339 last year. The property tax increase on the average Chatham Borough home, assessed at $658,500, will be $172. The borough remains under the two percent tax levy cap. Cap exclusions include pension, capital improvement and debt service increases and new ratable adjustments to the tax levy.

The total proposed budget coming in at $13,424,938 is down 1.5 percent from 2011. The tax rate will increase by 7 percent, going from .367 in 2011 to .393 in 2012. State aid remains flat since 2010 at $572,099.

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The borough saved money over the past couple of years through 13 shared services programs with other municipalities. “We don’t have much left to share,” said Council President James Lonergan. “Revenues are going down fairly dramatically,” he said, pointing to a steady decline since 2008. The borough’s revenue sources include taxes, water, sewer and parking fees. The borough’s revenues dropped 24 percent since peaking in 2008 when it  generated $7.2 million. The borough projects revenues at $5.3 million for 2012.

The council took measures to increase water and sewage bills for 2012, which are calculated on a usage basis. Sewer rates will increase 13 percent from $3.05 per cubic to $3.45. The water rate will rise 8 percent from $3.58 per cubic to $3.86. One of the more dramatic revenue declines has been the sewer, which fell from $1.3 million in 2008 to $900,000 in 2012.

Noting that the wet previous summer negatively impacted water and sewer usage, Lonergan made assurances that the increase in these bills was “not to make up from last year.” He explained that it was a revenue stream, along with taxes, that the borough used to balance the budget.

Councilman James Collander said that going forward, these bills must have a steady upward trajectory to continue the level of service provided by the borough. “We offer a high level of service. We can continue this but it comes at an ever-increasing price,” he said, adding that it’s “not going to be one or two percent.”

Successful property value reassessments by residents also hurt the borough’s revenue stream, Lonergan said. Borough Administrator Robert Falzarano said that the borough lost $136,000 in tax revenues from appeals last year.

Lonergan noted that the borough is built out and does not have large properties to redevelop to increase revenue. Borough property valuations dipped into the negative for the first time in 2011. Mayor Bruce Harris said that the council is currently looking into selling a couple of “small developable properties.”

“We have to get revenue streams into our town,” said Lonergan. “We don’t have assessed properties going up. We don’t have that luxury. At some point, we have to come up with answers.”

After its introduction on March 12, the municipal budget will be advertised on April 12. It is scheduled for adoption at the April 23 meeting. 

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