Buy Local
Jefferson Township
Jefferson Township, N.J. • 1033 Weldon Rd, Lake Hopatcong NJ.
Copyright © 2015 Jefferson Township, N.J. • All Rights Reserved.
Town Council  
Print this page Print this page Email this page Email this page

Page Navigation

Back To Meeting Schedules

Roll Call
Roll Call

Present                                     Absent

                  Mrs. Merz

                  Mr. Sanchelli

                  Mr. Birmingham                                    Vice President Hardy

                  President Yocum                                    Larry Cohen, Township Attorney

                        Lydia 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.

 

Salute to the Flag

Council President Yocum asked everyone to rise for the Pledge of Allegiance.

 

Notice of Presiding Officer

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.?

 

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.

 

Water Utility

            Ferraioli 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 this year.

 

Sewer Utility

            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.

 

Township Surplus

            Ferraioli 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.

 

            Birmingham 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 uncollected taxes.

 

            Ferraioli 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 aid.

 

            Ferraioli 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.

 

            Sanchelli 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 year. 

 

            Birmingham 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.

 

            Ferraioli 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.

 

            Cherny 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 down.

 

            Yocum 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.

 

Recess

            The Council adjourned for recess at 7:14 p.m. and reconvened at 7:27 p.m.  Sanchelli did not return to the meeting.

 

            Eagen 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.

 

New Business

Authorize Bill Payment to Ledgewood Transmission

Motion:  Yocum, second Merz

                        Mrs. Merz                            Aye

            Mr. Sanchelli               Absent

                        Mr. Birmingham                Aye

            Vice President Hardy               Absent

                        President Yocum                   Aye

 

Miscellaneous/Public Portion

            Yocum 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 raise.

 

            Wasserman 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 tank.

 

            Wasserman 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.

 

            Eagen 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.

 

            Yocum 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 p.m.

Motion:  Birmingham, second Yocum

                        Mrs. Merz                            Aye

            Mr. Sanchelli               Absent

                        Mr. Birmingham                Aye

            Vice President Hardy               Absent

                        President Yocum                   Aye

 

Dated:  March 12, 2008

 

Attested:                                                         Approved:

 

 

 

 

_________________________                _______________________________

Lydia Magnotti, Township Clerk                     Brooke Hardy, Council Vice President

 


Powered by Cit-e-Net