>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: