A preliminary version of the 2012 Plainsboro municipal budget totals $25.58 million — an increase of 7.8 percent, or $1.87 million, over last year’s budget.
Using an average home value of $387,800 the increase in municipal taxes to Plainsboro residents would be around $77. The budget amount reflects an increase in the municipal tax rate of just under two cents, to .3688, according to the numbers presented at the February 22 Township Committee meeting by Business Administrator Robert O. Sheehan.
The 2012 budget benefits from the township’s program for entities to make payments in lieu of taxes (PILOT). Merwick Medical Care and Rehab Center pay $330,000; St. Joseph’s Seminary will pay $70,000; the new medical arts pavilion will pay $365,000; and the hospital group, University Medical Center of Princeton at Plainsboro, will pay a community impact fee of $133,477.
The budget assumes that state aid would remain constant at $1.6 million, and just ahead of the meeting Township CFO Greg Mayers found out from the state that this should be the case as there will be no reductions.
Plainsboro’s tax base has remained stable, increasing a small percentage — $3 million — over the 2011 level. But Sheehan made it clear that further progress is ahead given the national economy.
“Good things are about to come but they’re not quite here yet. We have a medical office building that will arrive this year, and we have most importantly the Novo Nordisk project, but we’re mindful of the timing as we prepare this budget and try to pull together an understanding of how to budget this year with next year in mind. Beyond next year we hope things will get better,” he said.
Revenue from the new Novo Nordisk headquarters on Scudders Mill Road will not come to the township in 2012 and likely not in time for the 2013 budget.
One key Sheehan outlined will be how Plainsboro uses its surplus. The preliminary budget he presented uses $5,110,000 in surplus which would allow the township to retain three percent of its net operating revenue going forward. The three percent, Sheehan says, is the level Plainsboro has been at for several years.
On the revenue side the township is in “pretty decent shape.” Sheehan said some of the Plainsboro’s revenues were surprisingly strong, including interest on investments, which totaled $102,976, and uniform commercial code (UCC) fees, which accounted for $558,445 in revenue. Sheehan expects both figures to be anomalies.
“We wouldn’t recommend getting to used to the UCC fees from various projects going on, although it has been very helpful. And we will probably be falling back down to earth on the interest on investments this year,” he said.
Meanwhile Sheehan said the rise of hotel tax revenue to $52,739 indicated a positive as that has been “a problem” in recent years. Fees and permits and municipal court revenues also combined to help Plainsboro reign in another $76,000.
Sheehan says that the gradual reduction of the township’s employee-related expenses such as salary, pension, health insurance, and fringe benefits — which account for 52.6 percent of the township’s budget — will make a significant difference this year. The number dropped for the third year in a row as in 2011 those expenses comprised 56 percent of the budget.
Legislation was just passed for Plainsboro to participate in the state health benefits plan for both current and retired employees beginning June 1, a move that Sheehan says will bring substantial savings — approximately $168,000. In comparison the 2011 budget health insurance costs increased $126,000. Employees will contribute a total of nearly $130,000 for health insurance premiums this year now that they share the premium costs with the township. The contributions will increase in each of the next three years.
In the budget pension cost would increase by just $1,123. Sheehan says the township was pleased with that increase as last year pension increase totaled $240,590.
The township’s most prominent expense in the 2012 budget is debt service which increased by $750,000 over 2011.
“In large part it reflects our commitment to new facilities, to improve facilities and be diligent in maintaining roads. That’s something we have placed a priority on in recent years,” Sheehan said.
He asked the township committee to recall the research on debt service the township collected when it was planning the financing of the Plainsboro Public Library and the redevelopment of the old library.
“True to the goal of never having more than a two cent increase based on debt service, we’ve reached the apex of that increase this year. The last two years have been pretty strong increases, maxing out our range. It will begin to slowly reduce in the coming years and then, with some debt retired, it will drop as years go on,” he said.
Sheehan said it was important to note that the debt service number is “artificially inflated” through the township’s obligations outlined in the redevelopment plan with Princeton Healthcare Systems.
“We have to finance an infrastructure project related to that, and we worked with them to finance the new park being constructed near the hospital. That is a debt of $8 million that will be retired over 15 years at $550,000 a year, so that pumps our debt service number up,” Sheehan said.
Mayor Peter Cantu noted that the amount would therefore inflate the overall budget by $550,000, and he believes it was required in submitting the project for it to be recognized as a redevelopment project “The expenses offset. It’s a a tradeoff, but it’s one that probably made sense because of our ability to finance well. We don’t like to see those numbers but it is what it is,” Cantu said.
Plainsboro’s increased 2012 budget will provide the following resources to the community:
– The summer camp fees for 50 additional children will be paid for.
– One additional police officer, at a cost of $75,000.
– An annual payment to the Plainsboro Rescue Squad of $60,000.
– Expansion of contract services for the department of public works: $70,000 for snow clearing and $49,600 for grass cutting.
– Financial support for the Plainsboro Public Library in the amount of $74,793.
– The opening of the new Recreation and Cultural Center adjacent to the municipal offices, as well as an expansion of township programs, for $35,000.
