Minutes: March 4, 2010*
Township Council Budget Work Session
The Special Work Session Meeting of the Township Council of the Township of Vernon was convened at 4:14 p.m. on Thursday, March 4, 2010 in the Vernon Municipal Center, 21 Church Street, Vernon, New Jersey with Mayor Sally Rinker presiding.
Statement of Compliance
In accordance with the Open Public Meetings Act, N.J.S.A. 10: 4-7, adequate notice of this meeting was provided to the New Jersey Herald newspaper on February 24, 2010 and such notice was posted on the bulletin board in the Municipal Building.
Roll Call of Members
Present were Council Members Michael Pier, Valerie Seufert, Harry Shortway and Mayor Sally Rinker. Council Member Richard Carson was absent.
Also present were Acting Manager/Municipal Clerk Robin Kline, Deputy Manager Brian Palaia and Township Attorney John Ursin.
Salute to the Flag
The Mayor led the assemblage in the salute to the flag.
Mayor Rinker opened the meeting for public comment.
Seeing no one from the public wishing to speak, Mayor Rinker closed the public portion of the meeting.
Discussion of the Municipal Budget
Bill Zuckerman, Vernon Township Chief Financial Officer
Robert Benecke, Consultant
Howard Vex, Vernon Township Labor Attorney
Robert Oliver, Financial Advisory Committee
Thomas McClachrie, Financial Advisory Committee
Kerrie Scott, Principal Fiscal Analist
Acting Manager/Municipal Clerk Robin Kline stated the Manager’s Office and Finance Office worked diligently and very aggressively on preparing the 2010 Municipal Budget, which is both reasonable and responsible. The Township is looking to introduce the Official Municipal Budget at the first meeting in April using April 22nd as the safety date. The adoption of the Municipal Budget will be in May or by the first meeting in June. Governor Christie has been taking very aggressive steps in addressing the budget concerns in New Jersey. It is anticipated that by March 16th the Township will understand the impact of the Governor’s changes on the Township Budget. The unknown will be the State Aid figure. In Vernon Township for 2009 the State Aid was about $2.8 million.
Ms. Kline asked that the Township re-convene a special work session meeting on Thursday, March 18th at 4:00 p.m. so everyone can fully understand what the Governor’s budget message means to Vernon Township. The Council was in agreement with the special meeting as long as the Governor is going to be speaking about State Aid on March 16th. Ms. Kline stated she is obligated under State law to present a budget to the Council by March 19th.
Ms. Kline thanked Bill Zuckerman, Chief Financial Officer, Brian Palaia, Deputy Manager and Kerrie Scott, Principal Fiscal Analist for their diligence, patience and work on this budget. The budget team met with each Municipal Department Head several times to review and reduce the operating expenses for each department. Additionally, the Vernon Township Financial Advisory Committee also convened two special meetings with the Department Heads to review the needs and what each department requires to operate within their budgets.
Ms. Kline reported the Township is within the State mandated appropriations cap of 2.5% and the tax levy cap of 4%. There are five key items that have increased significantly in 2010. They are Health Care, Pension Funding, Municipal Services Act, collective bargaining unit increases and the sewer project. Brian Palaia and the Township Attorney put together a new Municipal Services Act contract that will benefit the Township moving forward.
Property tax collections are down. There has been a decrease in interest income. The Township is also experiencing a decrease in local revenues such as construction code fees and Land Use Board fees since construction is down. There is an increase in the reserve for uncollected property taxes. The State aid figures for 2010 are unknown at this time.
Analysis of Budget
Robert Benecke provided an explanation of the budget analysis he prepared and reviewed the budget that Ms. Kline and her team put together. The proposed 2010 Annual Municipal Budget, although a working document is proposed at $22,523,089.00. The 2009 Municipal Budget was adopted at $21,986,224.00. That is an increase of $536,865.00 or 2.4% in 2010. The Revenues used to offset and thereby avoid levying property taxes are being reduced by $371,557.00. The reserve for unpaid taxes is increasing by $279,953.00. The full pension costs are included in 2010 at an increase of $565,659.00 over the 2009 Budget.
Although the budget has significant increases, Ms. Kline and the budget team cut $1.5 million in operating expenses to bring the budget in line with the State mandated caps and to keep property taxes stable.
To assure property taxes are as stable as possible, the administration has moved to cut $1.5 million from the 2010 operating budget. The Budget is increasing $536,865.00 and the Township is losing $371,557.00 in anticipated revenue; a total impact of $908,442.00 on taxes. Ms. Kline indicated that every tax point is about $280,000.00.
The 2010 budget impact of $846,524.00 equals a three point tax increase. Because the Township took a breather from pension cost increases in 2009 the tax rate increase would be about one point if the Township chooses not to reduce taxes in 2009 by taking the pension deferral.
A Budget Summary was provided to the Council including a preliminary estimate of the impact of the 2010 Budget on the property tax. Preliminary calculations on the 2010 appropriations and tax levy cap have been done, and the Budget is within both caps.
Snow and Ice Emergency of 2008
The Township did not adopt an Emergency Appropriation for the ice storm which occurred in 2008. All expenditures were funded from the 2008 budget.
Mayor Rinker opened the meeting for public comment.
Robert Oliver, Financial Advisory Committee, stated the main goal of having the Financial Advisory Committee is to develop a 3-5 year projected position of the Township. The Financial Advisory Committee wanted to factor in salaries and benefits, contractual obligations and potential binding guarantees. They would also like to look at all costs including salaries and compare that with other New Jersey municipalities as well as national averages to determine if the Township is paying the market rate for these items. The Financial Advisory Committee would like to plan bi-monthly presentations to the Council.
The Council thanked the Financial Advisory Committee members, Robert Oliver and Thomas McClachrie for their advice and expertise. Acting Manager/Municipal Clerk Robin Kline commended the Municipal Department Heads for stepping up and looking at what needs to be done to make the Municipal Budget work for the taxpayers of Vernon Township.
Dan Kadish, Vernon resident, commended the Financial Advisory Committee for coming back. Mr. Kadish questioned why the Township continues to allow longevity in the union contracts. Mr. Kadish also stated if there is a lot of fat on the new assessments, with tax appeals, the Township’s revenue will be far less. John Ursin reminded Mr. Kadish the County Tax Board sets the rates.
Gary Martinsen, Vernon resident, commented that the budget information that is available to the public is great. Mr. Martinsen stated the Town Council of Bloomfield just voted to reverse the raises for the administrative employees in the Township. Ms. Kline stated Vernon Township has given no raises to the employees not covered by a bargaining unit contract. Council Member Seufert stated that the Township issued raises to the administrative group for retros for 2008 and 2009 however the Council did not approve retro raises for 2010.
Chief Roy Wherry, Vernon Township Chief of Police, addressed the police manpower issues and reviewed municipal comparisons and surveys. Chief Wherry stated that Vernon Township has not hired any Police Officers in five years. He added that last year Vernon’s Police Department lost two officers who have not been replaced. However, the work load has increased including domestic violence calls. Chief Wherry further stated he wants to continue to provide the best service but cannot afford to lose any Police Officers. If a Vernon resident is waiting for assistance in a critical situation a delay of even minutes could prove to be a tragedy.
Vincent Speziale, Department of Public Works Employee, also speaking on behalf of Mark Izzo and Bob Oakley. Mr. Speziale read a statement about the possibility of being laid off. In the past five years the property taxes in Vernon have been continuously raised, and yet services have been cut and compromised. Mr. Speziale let the Council know that the public voted for the new Council in hopes for a change for the better, and added this Council is doing a great job. Most of the DPW workers reside in Vernon, have children attending Vernon schools, have family that travel on Township roadways, and yet could be laid off by the Town in which they reside. DPW employees and now Police Officers, the very employees that are dedicated to the overall public safety of this Township and every one of it’s residents, by laying off employees from these two departments, this will compromise and negatively affect the services and safety of this Township.
Seeing no one else from the public wishing to speak, Mayor Rinker closed the public portion of the meeting.
The Township Council thanked everyone for participating.
There being no further items of business to be conducted on the Special Work Session Meeting agenda, Council Member Harry Shortway made a motion for adjournment. Motion seconded by Council Member Michael Pier with all members voting in favor.
The Special Work Session Meeting of the Township Council of the Township of Vernon was adjourned at 5:44 p.m.
Minutes approved: April 22, 2010