Prelim 2013 Budget Shows $95 Increase Per $100,000 Assessed for Garwood Residents

Finance Chair Sara Todisco presented the preliminary 2013 municipal budget to council and residents at a budget meeting last week.

The budget calls for a tax increase of $95 per $100,000 in home assessment, or 9.5 tax points, which equates to a 3.31 percent increase.

"Although I know we all do not like to see a tax increase, in order to maintain services at their current level and take on additions of the Athletic Field Complex, borough newsletter, and funding to upgrade our borough website, we were able to control the tax increase to $95 per $100,000 assessed household or 3.31 percent," said Todisco. "I would like to note, we started with a budget with a $220 per home assessed at $100,000 tax increase (more than double of what we have now), reduced it to $153, and again made a couple cuts and financing changes to come to our final product."

Todisco pointed to several costs that are out of the borough's control, including: "an $62,000 increase in health care costs, a $60,000 increase in our payment to the RVSA, an increase of $76,000 in Police salaries and wages due to contractual agreements, and an increase of $21,000 in pension for the Police."

Todisco said the proposed budget also includes a down payment for a new dump truck for the DPW, which council will discuss in the coming meetings.

The proposed budget also includes a new system for paying out benefits to retiring police Capt. James Pipala. "His payout totals about $90,000, paid out over 2 years or $45,000 a year for 2013 and 2014," said Todisco. "Our auditor suggested we do a Special Emergency Appropriation to spread the $90,000 over 5 years using a note. Since he did not earn all $90,000 in one year, it is reasonable to allow the taxpayer time to pay it and it is a tool Trenton has given municipalities to help ease the impact of payouts such as this one."

Councilman Jim Mathieu was the only council member to voice objections to the budget, arguing that he had too little time to review the budget (members received it two days before the meeting) and that the borough has "done nothing" to stem costs. Mathieu also said he felt the money that council could have spent purchasing a dump truck has already been spent on the Athletic Field Complex (which he opposed), and that council should give more consideration to struggling taxpayers and the borough's increasing debt.

"I’ve seen where movie goes and I know how it ends," said Mathieu. "Go take a look at all the 'For Sale' signs and ask those people where they are going."

"I know $95 is heavy," responded Todisco. "I know it is. It's hard to do...and I wish it was much lower, I really, really do. But if we, as residents of this town, want to keep our services here, this is what we are paying for them. If we want to outsource, we very well can. I want to hear from residents what they want. I talk to plenty of people in this town, but I know it's not everyone. My door is always open. What will help mitigate costs is redevelopment, and I know some progress is being made there."

Todisco also added that all borough department heads were instructed to decrease their budgets by two percent, and some even went beyond that, including Chief Bruce Underhill, who reduced the police budget by 2.6 percent.

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Below, Todisco's full budget address, given at the borough's budget meeting last week:

I’d like to welcome the Mayor, my fellow Councilpeople, and the residents to the presentation of the 2013 municipal budget. This year we faced a unique change to our committee. It originally consisted of myself, Councilman Petruzzelli, and Councilman DeFilippo and with the resignation of Councilman DeFilippo, the Mayor rose to the challenge and joined our committee in its final stages to work on the budget in a bipartisan manner.  The Finance Committee, the Borough Administrator, the Chief Financial Officer, the auditors, and the department heads, put many hours into this process.         

Although I know we all do not like to see a tax increase, in order to maintain services at their current level and take on additions of the Athletic Field Complex, borough newsletter, and funding to upgrade our borough website, we were able to control the tax increase to $95 per $100,000 assessed household or 3.31%. I would like to note, we started with a budget with a $220 per home assessed at $100,000 tax increase (more than double of what we have now), reduced it to $153, and again made a couple cuts and financing changes to come to our final product.

We faced difficult increases this year that result from areas outside our control, either from outside forces such as the Rahway Valley Sewage Authority, or from natural increases stemming from maintaining our own independent services. Some of the hits include: an $62,000 increase in health care costs, a $60,000 increase in our payment to the RVSA, an increase of $76,000 in Police salaries and wages due to contractual agreements, and an increase of $21,000 in pension for the Police. We did not receive any additional support from the state; our state aid remained the same from last year at $89,379.

These additions outside of our control that I just mentioned do not really change the level of service we provide our residents, but instead does the important job of paying the borough’s bills. Important to note, although the salaries for Police has gone up $76,000 in this year’s budget, this does not mean we have added another officer, instead it reflects compensation for the increase in experience of our officers. However, additions of the Athletic Field Complex, newsletter, and funding for upgrades to the borough website can actually be seen by the residents. Also, this budget includes approximately $5,000 in down payment money for a new dump truck for the DPW to replace one that is 30 years old. Again, the residents can see clear benefit from their money. The purchase of a dump truck is something we will discuss soon as a Council. So for the $95 per home assessed at $100,000 (a tax increase less than last year’s), it is important that the residents of Garwood see where their money goes—to keep strong, independent services in this community, such as Police, DPW, and Fire, and to fund new additions that will add value to our borough.

A final item I would like to address in regards to “financing changes” we made to ease the tax burden is how we are funding the retirement payout for the Police Captain for his unused sick time. His payout totals about $90,000, paid out over 2 years or $45,000 a year for 2013 and 2014. Our auditor suggested we do a Special Emergency Appropriation to spread the $90,000 over 5 years using a note. Since he did not earn all $90,000 in one year, it is reasonable to allow the taxpayer time to pay it and it is a tool Trenton has given municipalities to help ease the impact of payouts such as this one. It is particularly useful for Garwood to use this tool now, since we can predict one other substantial payout on the horizon when the Chief retires, although the Chief’s would not be as large as this one. After that retirement, the staff left with retirement payouts amount to about $15,000 or less, which are easier to fund in one year. The Finance Committee unanimously supports this and encourages the Council to take what I’ve just said into consideration when it comes time to vote on this Special Emergency Appropriation.

A couple final notes. We will have visual representation of the budget, like a pie chart, on March 12th at the introduction of the budget. Also, it is important to note that $18,768 is a tax point in Garwood, which means it only takes an increase of $18,768 to move the budget up $10. Something that will help will offset the tax burden would be redevelopment. I hear there are some things in the works and I sincerely hope it works out.

To close, I would just like to say there was much time and effort put into this budget by everyone. I want to personally thank my committee, the Borough Administrator, the CFO, the auditors, and all of the department heads for their hard work in making a solid 2013 budget. The Committee supports and approves this budget.