Cohen, Township Attorney
Magnotti, Township Clerk
Mrs. Magnotti said, ?Let the record
show that Mayor Felter and Administrator James Leach are present. Also present is Patricia Dale, Deputy Clerk;
Bill Eagen, Chief Financial Officer; and Chuck Ferraioli, Township Auditor.
Council President Yocum asked everyone to rise for the Pledge of
Notice of Presiding
Council President Yocum said,
?This Budget meeting for March 12, 2008, commencing at 6:00 p.m. has been
properly noticed in accordance with the Open Public Meetings Act by notice to
the official newspapers of the Township on March 6, 2008.?
Municipal Budget Overview
Ferraioli said that he would like to
remind everyone that just because the Governor has proposed something it does
not mean that it is final. The cuts in
State Aid still have to go through the Assembly and Senate. Ferraioli said he is optimistic that if the
State Aid is not reinstated, maybe there will be a reduction in the pension
rate increases. Ferraioli said that the
numbers on the Annual Debt Statement include State Aid at the reduced level and
hopefully that money will be reinstated.
At the end of 2007, the Township had an outstanding Net Debt of
$14,725,298.85. That is divided by the
equalized valuation or the true real estate value average for the last 3 years
of $2,951,145,093 for a net debt at the end of 2007 of 0.50%. That is compared to last year where the town
was at .56%. Ferraioli said the town is
well under the debt limit.
Ferraioli said that later in the
year he may come back to the Council to speak about permanent financing and
selling bonds. Interest rates are being
cut so rates on bonds are going down.
Ferraioli said that right now the opposite is happening. The interest rates on notes are going down. Ferraioli said that by the end of the year,
if the rates on long term bonds go under 4 percent, he will come to speak about
long term financing.
stated that this year there was an operating deficit in the water utility of
$30,134.69. They started the year off
with $1,496,641.51 in water surplus, $244,847.18 was used in 2007 operations
and they ended the year with $1,251,794.33.
Ferraioli said that the surplus is more than adequate to balance this
year?s budget but they don?t want this to turn into a trend. Ferraioli said a rate increase is not needed
Ferraioli said the sewer user base
is relatively small but the sewer surplus increased this year. They started out with $52,591.48 and ended
the year with $87,382.82.
explained the 2007 Current Fund and the Surplus for 2007. Ferraioli said that for the year the
Township generated $2,124,577 in surplus and ended the year with surplus of
$2,731,261. Ferraioli said that
Jefferson is one of the few towns that actually generated surplus this year.
commented that there are many foreclosures and people in financial
distress. Birmingham asked Ferraioli if
he is seeing towns underbudgeting as far as reserve for uncollected taxes. Ferraioli said he will be addressing that
issue shortly. This is the first year
of the cap funded tax levy, which is 4 percent and includes the reserve for
told the Council that the Explanatory Statement regarding the expenditure Cap
is, in his opinion, outdated. In the
Budget as presented now, the town is over the cap by $149,784 but some cuts
will be made to bring that in the cap.
Ferraioli reviewed the Anticipated Revenues and said his only concern is
the interest on investments. Last year
$300,000 was budgeted and $318,000 was realized. If rates continue to decline, this might be a hard number, so if
State Aid is reinstated, they may want to consider reducing this number a
little. Ferraioli reviewed Sheet 5,
Miscellaneous Revenues and stated that this is the reduction in State Aid. It shows a reduction of $233,000. Ferraioli told the Council that there is a
Resolution on the League of Municipalities website asking for the State Aid to
be reinstated. Ferraioli said that they
are telling towns that have a 20% increase in their levy to apply for extraordinary
stated that the Total General Revenues for 2007 were $22,532,184 and the Total
General Appropriations were $22,532,184.
On Sheet 29 there is the number for Reserve for Uncollected Taxes, which
was $1,596,943 for 2007. For 2008, $1,621,943
is being budgeted. Ferraioli explained
that this is a very important item because in any one year, 100 percent of the
tax levy will not be collected but the town must have enough money to operate
the town and the pay the school and county their levies. Ferraioli explained that there is a new cap
on the tax levy. According to this, if
they are over the cap levy they have to ask for a waiver. One of the things considered is the reserve
for uncollected taxes. Ferraioli
explained that the formula does not take into consideration things like
increased foreclosures or hard financial times. Applying for the waiver will force them to lower the reserve for
uncollected taxes to $1,119,784 and Ferraioli said he is more comfortable with
the reserve at $1,621,943 because that will help build surplus.
commented that a major expense for the town is the Library. There is a bill in the Assembly right now
that states if a library has surplus at the end of a fiscal year, they may
return it to the municipality to reduce costs.
Sanchelli said he telephoned an Assemblyman to say the wording should be
changed and state that they should be required to return the money. The library will cost over $1 million this
said that two years ago the town did a revaluation and if a major commercial
property does an appeal and is successful, the town still has to pay the
schools based on the old levy.
Birmingham asked if this would still come out of the fund. Ferraioli said that the cap levy law was put
into effect without the advice and consent of the Department of Community
Affairs. It was put together with the
intent to cut real estate taxes not taking into consideration tax appeals or
the increase in the library. Ferraioli
said that library can go up based on the equalized valuation but if it goes
over 4 percent, the town has to eat that in the 4 percent levy.
said the tax point this year is $324,243 versus last year of $323,436. The assessed value is actually down. A tax point for the average home assessed at
$369,000 would be $36.90. The
preliminary tax rate for the garbage, the town, open space and recreation,
would be $17,597,191 or .543 tax points versus last year?s levy of $15,779,840
or .488 tax points. This is an increase
of $1,817,350, which comes out to be a 5.5 tax point increase or 11.24%. Ferraioli said that under the new levy cap
the tax rate is $422,084 over the levy cap.
There are a couple choices and the first one is to go through and make
as many cuts as possible to reduce the number.
The second choice is to leave it as it is and go for a levy cap waiver
but to go for the entire amount would be a tough argument. Ferraioli encouraged the Council to make
whatever cuts they had planned with the Administration. Ferraioli said that the town should not
bother about extraordinary aid.
of the Board of Education stated that the School Budget received an additional
20 percent in State Aid this year. This
works out to an additional $2 million to $2.6 million. Sanchelli said he would like to say it is
nice to have a School Board that is doing a fabulous job of keeping the taxes
said he would like to get a general number from the Council members as to where
they would like to be. Sanchelli said
no one is comfortable with a 5.5 point tax increase but they may have to pick
through the budget again. Merz said she
feels they need to cut some more.
Birmingham said he definitely feels they need to cut some more and hopes
the State will give out the same Aid they had last year or the pension relief
money. Yocum said he spoke to Leach and
Eagen this afternoon to get a general idea about where they were. Yocum said it is a very difficult year and
it will probably be a very difficult next year too. During every budget meeting when they speak about capital, they
always ask if there are things they can phase over a time period. Yocum asked if the time has come to pull
money out of the capital budget and change the fiscal year timing for the
budget. Merz commented that in many of
the operating budgets there was excess and the money got transferred or wasn?t
used. Merz suggested asking for a 15
percent reduction in the operating budget across the board. Leach said that Eagen has gone over the
budget and proposed cuts and he has a very significant amount of money that is
going to be proposed tonight. Yocum
said he would like to revisit a hiatus on some of the capital projects for as
many months as possible. Ferraioli said
many towns are coming to him before they begin a capital project and they ask
him what it will cost for the next 5 years.
Ferraioli said he can do this with the whole capital plan not just
individual projects. Ferraioli advised
next year one of the pensions will be at 100 percent. Ferraioli said his concern is that for most towns the largest
revenue is surplus. The only thing
generating surplus is the reserve for uncollected taxes and that is coming
under attack by the State. The town is
in the Highlands and the ratable base is not increasing. Ferraioli stated that the Governor?s answer
is to merge services, however, it may not be the cost savings that everyone is
being told it will be. Birmingham said
that they are hoping with the redevelopment and the waivers to the Highlands Commission,
that some commercial ratables will be generated down the road.
Council adjourned for recess at 7:14 p.m. and reconvened at 7:27 p.m. Sanchelli did not return to the meeting.
told the Council that the budget is still a work in progress and he believes he
can get to the $400,000 number. Eagen
said he was able to save a large amount through the health insurance being that
the changes in the State plan were not made available until almost
February. Eagen said on the Health Benefit
opt out they can save almost $34,000; dental $15,000; hospitalization $60,000;
retirees almost $80,000; optical $1,500; drug reimbursement $1,000. Eagen said in the sick time conversion
account for the police, they will save $36,000. LOSAP there is $20,000 in savings; salary adjustment account
$25,000. Eagen explained that the rest
of the savings are small amounts that will add up. Eagen said that things he mentioned do not impact any specific
programs cuts or personnel. To go
further there will be an impact in services and/or personnel. Leach said that with these cuts the
percentage increase is 11.2. Yocum said
if they need to they can jump a little into surplus. Yocum said if they took $150,000 out of surplus and $350,000 out
of operating, what overall percentage reduction would have to come out of
operating. Eagen said the only
departments that are significantly up are utilities and the DPW because of
fuel, electricity and repair costs.
Eagen said he was going to look at taking 5 percent off all the
operating accounts and come up with a dollar amount. Yocum said if they can bring this down to about 8 percent, it
drops the tax on an assessed home from 202 to 149 and that shows a 25%
reduction in the impact to a homeowner.
Salary & Wage
Merz asked if there is enough money
to cover the salary adjustments for 2006 and 2007 for the unsettled union. Leach said that the contract expired at the
end of 2005. Eagen explained the
reduction in the Salary Adjustment account from $85,000 to $60,000 as the place
where merit raises would come from and various other settlements. Eagen said that some of the variables in the
Salary and Wage account are overtime and seasonal/part time help. Eagen said the other thing he wanted to
discuss was substitute bus drivers.
Last year this account went over by $30,000 so this year?s budget the
spending was put at $30,000. Eagen said
this could be cut in half but it may have an impact on the level of
service. Merz said they just lost an
employee and Leach said they hired another 2 part time drivers. Merz asked how that impacts the salary
account. Eagen said they are part time,
on call. Leach said unless they make
cuts in service to the Dial-A-Ride program, which they do not want to do, this
is covering the runs they made last year.
Yocum said that they are not really looking to take $10,000 out of this
type of account. Perhaps some of the
over time money can come out. Yocum
said that the Administration has always done a good job prioritizing. Yocum suggested giving the Administration
another week to come back to the Council at another Budget meeting. Leach commented that by the end of the year
he expected two full time employees may be leaving and they will not be replaced
with full time employees.
Authorize Bill Payment to Ledgewood Transmission
Motion: Yocum, second Merz
President Hardy Absent
opened the meeting up to the public for questions or comments. Lary Wasserman the Chairman of the Utility
Advisory Board came forward. Wasserman
said he was happy to hear that the Water Utility is doing fine because from the
numbers the Board had been working with they thought that they were facing a 30
percent rate increase. Wasserman said
the UAB would like to suggest that since there has not been a raise in the
water rate for a few years, perhaps the rate should increase a small percent
each year rather than let it slide and then be faced with a 15 or 20 percent
said he thought that there might have been a discussion of the septic tank
fees. Leach said that people do not
have to get their septic tank pumped for two more years and it is only $5.00 a
then said that he is a retired reserve naval officer and he thinks if the town
hires retired military personnel they may not have to provide health plans.
said that if they can get to some numbers that they are comfortable with, his
goal would be to Introduce the Budget on April 9. The Budget hearing would then be in May and then they would wait
for State aid figures and Adopt the Budget in June. Eagen said they could then Introduce their Bond Ordinances in May
and Adopt in June and that will line them up for their Note sale in July.
suggested that the April 9 meeting start time be changed to 6:00 p.m. so they
can have a budget meeting. The Budget
can then be Introduced on May 7 with the Public Hearing in June and Adoption in
July. Eagen said he would like to do
the Capital Ordinances? Introduction in May and Adoption in June.
Adjournment at 8:12
Motion: Birmingham, second Yocum
President Hardy Absent
Dated: March 12, 2008
Lydia Magnotti, Township Clerk Brooke
Hardy, Council Vice President