NEW PROVIDENCE, NJ – Councilman Michael Gennaro gave a power point presentation regarding the 2017 municipal budget at the Monday, April 3 council meeting.
Gennaro pointed out that the municipal budget only represents less than 22 percent of the total tax bill. The county taxes take up a similar portion. The largest portion of the tax bill, approximately 56 percent, is allocated to the Board of Education. The 2017 estimated property taxes for an average borough home valued at $282,000 total $13,478.
Compared to last year borough residents will see a total property tax increase of 1.42 percent or approximately $189 for the average home valued at $282,000. The municipal tax increase for the average home amounts to approximately $36, county tax increase to $88 and board of education tax increase to $67. Gennaro noted that New Providence property taxes are among the lowest when compared to peer Union County municipalities. The New Providence property taxes include the sewer and garbage collection fees while in many other towns there is a separate bill for these services.
Gennaro explained that the borough objective is to maintain essential services - such as roads, sewers, snow plowing, garbage collection etc. – while keeping the tax increases “within affordable limits.” The borough is continuously seeking out efficiencies “to contain operating costs and overhead” as well as exploring grant opportunities to fund operations and capital improvements. The 2017 budget also provides the foundation for the budgets over the next five years.
One way to reduce costs to borough tax payers are via shared service agreements. The borough will continue a shared service agreement with Westfield for Board of Health services with annual savings of $24,000. New Providence will also continue to provide municipal court services to Berkeley Heights. The agreement provides the borough with $90,000 in revenue. New Providence also shares a dispatch center with Summit and Millburn. The Department of Public Works (DPW) has an equipment sharing agreement which reduces costs.
New Providence will also continue its shared services agreement with Summit for wastewater services. This provides the borough with $185,000 in revenue. The borough also receives revenue through the Lucent Waste Water agreement. Additionally, the borough is saving money through the participation of the reverse electricity and natural gas auctions. The Union County Solid Waste agreement provides the borough with $40,000 annual savings.
The borough has planned capital projects in 2017 totaling approximately $2.9 million. The largest expenses are related to community activities and recreation as well as to public works projects. The borough will continue to invest in recreation improvements, such as Oakwood Park, Grove Terrace as well as the Ping Wang Property remediation. The DPW and police vehicles will be upgraded within normal turnover. The 2017 road paving projects include Southgate Road, Elkwood Avenue and Central Avenue. The borough is also investing in sidewalk repairs and installations. Moreover, the borough will continue to implement energy efficiency upgrades and enhance its tennis courts and fitness trails among other programs.
“We like tax increases to be as predictable as possible,” Gennaro said, but noted that the borough cannot control insurance and pension benefit costs. It is also impossible to predict weather related expenses. For example, this year the borough did not spent all the money set aside for snow removal.
Gennaro said that the borough hopes that the recent slew of commercial property tax appeals will come to an end. In the past few years the borough has spent millions of dollars returning collected taxes because of reductions as well as legal costs related to tax appeals. The borough had sold a property and used all profits of that sale for tax appeal expenses.
Gennaro noted that the borough has appropriated funds for new tax maps in this year’s budget. He expects that the borough has to undergo a property tax re-evaluation within the next three years.
The budget “doesn’t come together easily,” Gennaro said and expressed his gratitude to department heads, borough administrator, retiring CFO Kenneth DeRoberts as well as to the members of the Finance Committee and the council, all who helped formulate the 2017 budget.