>Just an FYI to readers that thought that there may be a special meeting of the Middletown Township Committee this afternoon at 5 pm, the meeting has been cancelled.
Category Archives: Budget
>Middletown is one step closer to finalizing it’s 8+ months over due budget.
It looks like the Township’s hearing in front of the Department of Community Affairs Local Finance Board has been rescheduled for August 26th, two weeks after the original date was cancelled for the lack of a quorum on the part of the LFB.
According to the LFB website Middeltown will be participating in two meetings that day, one a teleconference that will deal with the Townships plan to bond $955,000 in order to finance tax appeals and the second to decide whether or not Middletown can exceed the State mandated 4% cap on property tax increases. It seems that Middletown is asking the LFB to approve an additional $2.68M over the 4% spending cap.
Now I am not exactly sure how this works but I figure there could be two ways in which to figure it out.
Last year, Middletown raised $40M from property taxes, if the amount raised by taxes exceeds the 4%cap ($41.6M) by only $2.68M, then the resulting increase to the municipal tax rate will be 10.7% (3.17% below the initially proposed tax rate) which would bring the amount raised through taxes to $44.28M ($1.27M less than what was originally proposed).
The other way to look at it would be, if the municipal budget for 2010 exceeds the cap by 4% over the 2009 budget which was $61.8M, the increase would bring the budget to $64.27M. And if then Middletown gets the approval to exceed this by $2.68M above the cap, the budget would be $66.95M, which amounts to an 8.33% tax increase. If this turns out to be the case then who knows what the amount raised by taxes will be. It will depend on what is cut and what is bonded for.
Is your head hurting yet?
The bottom line on all of this however happens to be that given the current economic environment and Governor Christie’s desire to control spending, it would seem unlikely that the LFB would agree to exceed the 4% cap by such a large margin anyway. Therefore the Local Finance Board will do for Middletown what Gerry Scharfenberger and those in the majority have been unwilling to do, reduce spending, by ordering Middletown to do so, which in turned would lower the proposed 13.87% tax hike to some more manageable number.
Where will an additional $2M in spending cuts come from is anyone guess, but I wouldn’t be surprised if the township eyed the use of furloughs or additional layoffs (it was announced that 4 new police officers have recently been hired) along with reducing the budget surplus further from the proposed $4M target for the year in order to make it happen.
We’ll all just have to wait and see what the LFB dictates to Middletown.
There is no way to put a good face on a 13.9% increase on the $64,979,576 municipal budget.
As one citizen said to Mayor Scharfenberger and the Republican majority of Pamela Brightbill, Anthony Fiore and Steve Massell, “The Republican majority owns this budget.”
That may be only partly true. Governor Christie’s actions at the State level heavily contributed to the 13.9% increase in municipal spending. First, there was the loss of $1,564,911 state aid. The anticipated pain for 2011 is that loss is then built in for future budgets.
In the “unanticipated outcomes” category Governor Christie’s threats to future pension rules, caused 23 Middletown Township employees to choose retirement in 2010 in order to be covered by the existing, more favorable pension benefits.
Another “unanticipated outcome” is the $760,000 needed to pay retiring employees sick leave and vacation day payouts. Ouch!
Not too many people remember when the Republican majority couldn’t find the funds to pay 2009 pension contribution. The temporary CFO Roth negotiated a settlement with the local Finance Board in Trenton whereby Middletown would pay 1/12 of the pension contribution in 2009 and the remaining 11 payments to be paid over the next eleven years @ 4% interest.
The budget introduced on Monday, June 23, — halfway through the fiscal year – indicated the pension increase in this budget required $1,800,000 to fund the pension increase. Healthcare costs, and two borrowings from prior year’s salary increase. The current freeze on salaries is too little, too late to pay last year’s unpaid medical bills caused. CFO Anthony Trasente to budget another $1 million to cover this year’s health costs.
All the signs were there of an out-of-control fiscal plan in the late 2008 and in full bloom in 2009. The Republican majority should have clamped down on negotiated settlements with the several unions. In this 2010 budget the township committee is faced with an increase of $1,400,000 for the As Everett Dirkson once said, “A million here, a million there pretty soon we’re talking real money.”
The only legitimate cost was the $900,000 for this post winter’s unanticipated heavy snows and and rainstorm costs which amounted to almost a million – $900,000.
But what about the massive amounts of brush and tree limbs still littering Middletown streets? As a retiring Public Works employee, a 40 year employee said, “We used to have all the brush cleaned up by March. But they laid off one public works employee and eliminated all over time. So the public works employees come in at 6:00 AM and leave by 3:30 PM.” He said the situation is made worse as residents add their own tree and shrubbery trimming adding volumes to the existing mess of brush and tree limbs.
The reserve for uncollected taxes is at a perilous low of $500,000.
Mayor Sharfenberger prides himself on being on Governor Christie’s transition team, but it must be embarrassing to them both that Middletown with 22 square miles, and 60,000 residents has the highest municipal tax rate of 13.9%. How does that fit with Christie’s proposed 2 1/2% cap? If the cap is passed by the 2010 legislature how will Middletown face a 2011 budget?
The only “big ticket” reduction would be layoffs of personnel. To date layoffs have been limited to low-salaried secretaries and aides. No voluntary freeze of higher level salaries were made this year.
As someone once said, “One time budget solutions are just a hole in your next years’ budget.”
Currently, salaries cost $25,572,304 each year. Health benefits and insurance add another $9,292,880. A serious reduction in force would reduce both these categories.
Remember, Middletown provides lifetime health benefits to retiring employees. That means double the health benefits for each position in which a person retires. No town can afford that. Freehold Township passed a resolution in December 2009 stating there would be no lifetime health benefits for all new hires. Middletown needs to do the same.
The formula for funding the libraries is dictated by State Law and costs Middletown taxpayers $3,986,437 per year. Only legislative action can modify this formula.
To add final insult to the injury of a 13.9% increase in the municipal tax spending is the proposal of CFO Nick Trasente to accelerate tax sales against homeowners which could generate a one-time solution of $2,750,000. Again, a hole in the 2011 budget.
A one-time transfer of $365,000 from the sewerage authority may indicate they are over charging and that rate could be lowered in the future. Also health benefits for this authority needs to be examined.
Mr. Trasente said there are a number of one-time revenue sources; approximately:
- $500,000 serial bonds
- $200,000 from payment of a capital bond
- $202,000 increase from the revaluation
- $365,000 sewer authority surplus
Total – $1,267,000
However these funds will not be available for the 2011. It avoids the reality that this approximate $1,267,000 will cause the 2011 budget to increase by this amount unless spending is cut, (and there is the specter of a 2 1/2 % constitutional cap.)
Mayor Sharfenberger at this budge introduction attempted to deflect the deadening reality of a 13.9% increase in the municipal budget and the financial pain being delivered to Middletown’s homeowners, by pointing to the Board of Education budget which consumes 62% of the overall budget, a common percent in many towns. In Middletown there are 17 schools and approximately 10,000 students the percent increase of the Board of Education’s budget was a tight 2.6 per cent increase in school taxes. A quality education for all of Middletown’s children is reflected in that percent.
CFO Nick Trasente, in his report, said this budget maintains all current programs and township events.
The question becomes what programs would you, the taxpayer, eliminate to lower the 13.9% increase.
Public Information Officer Cindy Herrschaft announced the introduced budget would be on the township website the next morning. Several suggestions from the audience asked whether citizens could add their remarks and suggestions.
Committeeman Sean Byrnes acknowledged the hard work under difficult pressures, that CFO Trasente had on compiling this budget. While Byrnes was the lone “no” vote on the passage of this budget, he iterated once more the need for a finance committee composed of members of the township committee and private citizens to advise the committee early in the process. He gave a 10 pt. list of ideas and times that he introduced them to anticipate the budget process earlier.
Two of the casualties of Middletown’s budget disaster is the bonding of $3 million to dredge Shadow Lake.
The other is the diverting of the bond funds to the West Front St. Park, and a further promise to turf the Ranger field instead. It almost seemed like a done deal until Middletown budget introduction painted a black – 13.9% — picture.
A reasonable question of CFO Trasente – is what has happened to those bonds.
The public budget hearing is scheduled for July 19, 2010 at town hall.
Only 16 or 17 people attended the introduction of the budget. That is sad. Each citizen is impacted by the actions of the township committee. Each homeowner will be financially impacted in 2010. The re-val is anticipated to generate 202,000 – that’s your money. 13.9% increase in spending will come from your pocket.
Inform yourself. Ask questions. Review the budget online. Suggest other cuts to bring down $64,979,576 of municipal spending.
And be prepared for reduced services too!!
One of the more interesting pieces of information to come out of last Monday nights Middletown Township Committee meeting was the fact that the Middletown can’t pay its bills.
Resolution No.09-263 which passed unanimously, authorized the borrowing of approx. $1.5 million to pay the interest on a $10 million Tax Anticipation Note.
This emergency appropriation needed to be made because funds were not made available to pay the interest on the note in the 2009 township budget that was passed in August.
This just goes to show you what another fine mess the Middletown GOP has gotten us into. The GOP majority members couldn’t negotiate in good faith with Democratic members on the committee to come up with a budget that was responsible and would not have included a 9 % tax increase, instead they turned over the budget to the State and succumbed to pressure to put off pension payments and reduce surpluses to get an approval for a 5.2% increase while in the process they forgot that appropriate money for the interest on the $10 million Tax Anticipation Note.
I bring this up because it Looks like the Feds are going to have problems servicing debt payments on their bills soon.
Below is the resolution:
Last week Middletown special financial consultant Bob Roth re-introduced the FY 2009 budget to the Township Committee. The budget, which seems as though it was put together by the use of smoke and a mirror will be voted on and approved tonight.
The budget relays on 1 shot gimmicks such as reducing the surplus reserve for uncollected taxes and deferring a portion of the townships pension obligation, so instead of a 9.2% tax increase that was proposed back in April the new tax increase to the municipal rate will be 5.8%, and we have the State to thank for it.
After months of telling the public how hard and how tirelessly they were working on the budget, meeting department heads over and over again to ensure that their budgets fell in line with township priorities, the Republicans on the Township Committee lead by Mayor Brightbill and Deputy Mayor Scharfenberger left the decision making to the state because they could not find any budget cuts or savings themselves!
The junior Committeeman, Republican Tony ”the Fibber” Fiore went as far as saying that the only area in the budget left open to the Committee in which to cut costs, was emergency services and to lay-off or furlough police officers and staff.
What a stupid thing to say!!
How could you possible say that the only place left in the budget in which to cut costs would be to trim the police department? Fiore’s statement from the dais last week was not only a head shaker, but also an outrageously gross attempt to place blame on others for the Republican’s failures to produce a budget that was inline with the realities of the day.
There were and are numerous areas and line items throughout the FY 2009 budget that could have been cut or trimmed in order to lessen the financial impact on residents if the Republicans truly wished.
Fiore, for all of his efforts and work that he put into the budget could not even implement any of his infamous ideas from the 8-point plan that he introduced back on February 2nd. Other than the suspension of the township committee’s yearly stipend, none of his ideas listed below were worthy enough for consideration:
1. Suspend the entire Township Committee’s salaries.
2. Freeze all non-essential hiring not required by law.
3. Freeze all union and non-union salaries.
4. Evaluate all non-essential, non-revenue generating programs for elimination.
5. Seek out additional shared service arrangements.
6. Sell surplus township property and assets.
7. Eliminate all non-essential Township subscriptions and dues payments.
8. Eliminate all conference and travel expenses unless required by law for continuing education requirements.
Now, how can someone have the nerve to sit in front of others and say with a straight face that the only remaining area in the budget in which to cut or reduce would be police manpower? Were the other 7 out of 8 recommendations that Tony Fiore proposed deemed to essential by his fellow Republicans and therefore taken off the table?
I have a several budget savings ideas, in no particular order, that I would like to recommend to Tony Fiore and his Republican colleagues to consider before the next time they infer that the only option left open to the Township Committee is to cut the budget by reducing the size of Middletown’s police force:
1. Privatize the Cultural Arts Center or change its mission to allow for-profit organizations to rent and utilize the building.
2. Reduce the number of township supplied employee cars.
3. Reduce the operating hours for the Kanes lane recycling facility.
4. Privatize a portion of public works.
5. Fund Middletown Matters by sell advertisments instead of by tax payer dollars.
6. Consolidating purchases, printing and advertising.
Based on the horrible outcome of this year’s budget process to the residents of Middletown, it is essential that the Township Committee establish a Budget/Finance Committee that would interact with township personnel well before the end of the calendar year and make specific recommendations to the Township Committee on budget matters. To leave important budget issues up to the State, like was done with this years budget, is irresponsible.
And to suggest that the only option left to the Committee to reduce spending is to lay-off township police officers, is just plain stupid.
Now that the proposed FY 2009 Middletown budget has be amended and re-introduced to residents by former CFO Bob Roth, who the township committee hired on May 18 as a consultant, to assist the township as it prepared its 2009 budget after Township CFO Richard Wright went on sick leave, comes word that Richard Wright has officially handed in his resignation.
Wright developed a mystery illness shortly after informing the Township Committee that he had made a clerical error which resulted in a $2.4 million hole in the budget back in early May, after it was introduced on April 20th and has been on sick leave ever since.
In earlier posts on the Middletown budget, I had stated that Richard Wright would never come back to work because in actuality the man was not sick and that in fact he had been fired.
The Republicans that control the township committee made a face saving deal with Wright, they constructed a story that had Wright coming down with some serious and somewhat chronic condition, which prohibited him from performing his duties as CFO and a had him take time off as sick leave, until a sufficiant about of time had passed (several weeks and the township budget re-presented) in which then would hand in his resignation.
The one thing that I have to say about this situations is this, for once the republicans in charges, in my opinion did something right and did not throw the man under the bus. From all accounts Richard Wright was a decent and likable guy who did a good and capable job. However, what got him in trouble with his bosses at times was his honesty at answering questions, he was too honest and clearly not practiced enough in the political ways of the Middeltown GOP.
After all this I hope that he lands on his feet and I wish him well in his future endeavors.
You can read the official version of his resignation HERE from the Asbury Park Press.
Last night Middletown re-introduced the FY 2009 budget and to summed up in very plain and simple language, it is a MESS !!
Contrary to previous reports Bob Roth really did not find any hidden monies, when he presented the budget to the local finance board in Trenton, the state told Middletown that they could reduce the amount of reserve for unpaid taxes to the state mandated minimum which saved the township $1.2M.
Next week there will be another ordinance to be voted on by the township committee that will take another reserve fund, that has been laying around since 2006, and put it into the budget for another $399k 1 shot revenue gimmick .
The “tireless ” hunting for savings that the Majority search for resulted in a few minor reductions and few increases in line items throughout.
I have to hand it to Bob Roth, after over 20 years of being CFO, he really knows his stuff. the man had explanations for everything that was brought up, but overall there were no real cost savings in this budget, just the 1 shot use of surpluses that were moved into the budget.
The bottom line is this, even after the use of the surpluses it did not save the township from a significant tax increase of 5.8%. And by deferring payment of half of Middletown’s pension obligations of $600K, which was a requirement by the state to qualify for the cap wavier, it will cost Middletown an additional 4% interest over the next 12 years on that deferral.