LIVINGSTON, NJ - The Livingston Town Council gathered to discuss the new budget on Mon., May 14 at the weekly Town Council session. There were many people in attendance who were concerned with the new budget and what they believed to be shortfalls.

Resident Larry Kohn had many doubts over the proposed plan. Kohn said that in prior years he has had other inquiries into the Council proceedings on the budget with the general results being “I didn't receive any answers.”

“The budget preparation process was a farce with the public being excluded,” contended Kohn. “The department head meetings were like listening to an Italian Opera with no program or knowledge of the language, I got the flavor with absolutely no substance.”

Sign Up for E-News

According to Kohn, Mayor Rudy Fernandez “failed to create a situation that would allow the public to follow the discussion” and did not provide any documents used in the hearings about the budget that he had asked the Mayor to disclose. Kohn contended that the previous meetings on the 2013 budget did not discuss many key issues, such as: “tax appeals, salaries, capital projects, revenue data, cost allocations, reserve for uncollected data, Manager recommendations, and other important budgetary aspects,” theorizing that “either you (the Town Council) didn't discuss these items or they occurred in secret meetings that excluded the public.  The Budget Advisory Committee, first appointed with great fanfare because of the expertise they would bring to the process, was MIA.”

Mr. Kohn provided with letters asking for such information, the first dating back to January 2, 2013, which asked for more disclosure.

Kohn went on to ridicule the Township Attorney for not allowing the public to review all the documents elected officials relied upon to reach their decisions, which would be a violation of state regulations, which states that “no later than seven days prior to the public hearing on the budget, each local unit shall make available to the public, such supporting documents that provides appropriate detail covering the makeup of any revenue or appropriation.”

According to a letter sent to Kohn by Township Clerk Glenn Turtletaub, Kohn sent an OPRA request on Apr. 10. Turtletaub responded on Apr. 26, stating that the information requested by Kohn would not be sent to him “on advice of Counsel this material is ‘advisory, consultive and deliberative’ until adoption of the Budget and cannot be provided to you at this time.” Kohn did not receive the information requested in the allotted time period, which as stated should be no later than seven days prior to the public hearing.

Kohn also failed to see the sustainability in the proposed solution of accelerated tax sales, which negates future tax revenues. He contended that the entire budget presentation was a “propaganda piece designed to place all the blame on (the) East Orange (Water Commission).” The Mayor respectfully disagreed with Mr. Kohn's analysis.

Kohn was also concerned with bond ordinance number 14, 2013 for $3 million with an item for $100,000 entitled “improvements,” where $50,000 was unaccounted for and 50 percent was allocated to Monmouth Court. The Council was unable to answer for the allocation of the other $50,000. Kohn's final remarks were “we never get answers.”

Township Manager Michele Meade gave a presentation with three parts that focused on operations (town services), tax delinquency and tax appeals. She indicated that local revenues have increased from 2005 from 1.8 percent of total revenues to 5.5 percent, with the biggest increase coming from cellular antenna leases. She also said that net revenues after inflation increased by $500,000 and that inter-local revenue had increased as well by 22%.

Meade said that total revenue has seen a decrease, which is mainly due to tax delinquency, and not operations spending. The collection rate has decreased to 97.5 percent, which is the lowest it has been in 15 years. Overall, she said that the total operations budget has been reduced by 14.6 percent costing Livingston residents an average of $19.92 per home per year.      

Meade contended that the tax revenue decrease is mostly due to a large delinquency from the East Orange Water Commission, which owes $2.4 million to Livingston making up about half of the total tax delinquency for the entire township. She said they have been in delinquent status since 2009 and that in 2010, the water commission was legally prohibited from a tax lien sale and a tax appeal was not officially filed until 2011. According to Meade, this “shortfall in tax collection” has caused the loss in total surplus.

Meade also contended that the tax rate increase would have only been .81 percent instead of the 4.95 percent increase, which will come to an average increase of $140.25 for Livingston residents, blaming a total cost of $1.23 million caused by the Commission's tax delinquency. She added that although this large delinquency has caused issues, services provided by the township have not been cut.

Meade said that tax appeals have also been a “problem for the past 4 years.” Total costs for state tax appeal refunds for 2012 were $2.4 million. County tax appeals are also “problematic,” costing upwards of $600,000.

Meade explained that this shortcoming in revenue will need to be paid for and she put forth several options. The unlikely options included paying from available surplus funds, issuing a short-term debt, or more budget appropriations. The most prominent option put forth was to begin an accelerated tax sale of liens, with a “one time” collection of two years of delinquent taxes in one year instead. This plan will cause a decrease in uncollected taxes by $1.8 million, according to the presentation. However, this is only a one-time plan, which has the goal of diminishing the interest owed but will no doubt lower revenue for the following year.

It is projected that “the average home owner will pay .75 percent more” in tax rates because of the smaller tax base that will be caused in the following year.

According to Meade's presentation, the total increase of 4.95 percent in taxes will mostly come from the tax delinquency, causing 4.1 percent of the increase, with operations causing .81 percent, and tax appeals causing the remaining .71 percent increase. The projected average monthly cost for municipal taxes will be $216.86, the 7th biggest expense for the average Livingston resident, which is about as much money spent on food away from home according to the presentation.

The 2013 budget complies with the township's policies, in that “revenues are sustainable, surplus is 2 percent of total revenues, new revenues are anticipated, utility funds are self-supporting, (there are) sufficient maintenance funds, and (a) 6-year capital plan,” according to the final slide of the presentation. Meade stressed the point that the budget will provide enough funds for all services provided by the township, implying there will be no cuts in town services.

Other residents who were concerned with the new budget made public comments and inquiries as well.

Resident Margaret Rieger was displeased with the budget, and stressed that in these “hard times” it is “cruel” to use an accelerated tax collection program to solve revenue problems.

Another citizen was concerned with the allocation of $2 million for a new DPW building, and asked to “please put that away, maybe for a project in the future.” Mayor Fernandez responded “if we do this, we are a long way from seeing something like that.”

Other residents expressed concern over the collection of the tax owed by the East Orange Water Commission, to which the Mayor replied “they need to pay up.”

Councilman Al Anthony expressed similar concern over the tax delinquency problems and plans on making adjustments to avoid such problems in the future. He voted yes on the budget.

Councilman Michael Silverman said he was as frustrated as anyone else with tax increases and stated, “We are all Livingston residents, and we all want to keep our expenses down.” Silverman also stressed the importance that “services remain high in Livingston” before voting yes on the budget.

Councilwoman Deborah Shapiro objected to some of the items in the budget including worker's salary raises being 2 percent, which was 1 percent higher than she would have preferred, as well as a $30,000 increase in the library budget. She called for more transparency in the budget before voting no.

Deputy Mayor Michael Rieber contended that in order to lower taxes, cuts to services would have had to be made, which in the long run would have cost residents more. As for the East Orange Water Commission's tax delinquency, he stated “We are fighting East Orange, we want our money and we are fighting for it.” He voted yes.

Mayor Rudy Fernandez remarked that the Council was diligent in its budget proceedings. He stressed the importance of maintaining services, stating “service reductions imply layoffs,” which was something he would not want to result.

Regarding Councilwoman Shapiro's comments, Mayor Fernandez discussed that in past years, town workers' salaries had seen only “.5, .75, or 1 percent” increases, and the new raise made a difference of $6 per homeowner, “something I'm glad to pay,” he remarked, and then voted yes on the budget.