Amid an unpromising report from the tax assessor and campaign tactics during the last stretch before the municipal election, the West Windsor Township Council met one last time to discuss ways to reduce the 2009 municipal budget in preparation for its introduction on Monday, May 18.##M:[more]##
Before discussing the details of the budget, however, Tax Assessor Steve Benner warned the council that “added assessments are declining, and we don’t have much new construction to add to the pipeline” in terms of increasing the township’s tax base in 2009.
Normally, four years into the revaluation cycle, as the township is now, the tax assessor’s office receives on average, fewer than two dozen assessment appeals. This year, his office has already received 111 residential appeals, up from 38 last year, mostly due to the reduction in the housing market.
“If the market does not soon stabilize, we are going to have to reduce the assessments,” he said, adding that there will probably be more appeals next year.
On the commercial side, his office has already received 17 new assessment appeals — six of which are coming on the heels of settlements worked out last year. Benner said the commercial property owners are coming back with lower rents, tighter lending requirements, and other factors, and are looking to reduce their assessments.
In 2008 the township saw revenue from 812 new construction permits, but that number has been reduced nearly in half to 481 this year, Benner said. “We anticipate that added assessments are going to be less than in 2008,” Benner added. Benner said, however, he is optimistic that the market will bottom out this year.
“Unfortunately, there is no light at the end of the tunnel right now,” Councilman George Borek said.
Councilwoman Diane Ciccone asked Benner whether there was any chance the township would win the appeals, but Benner said it was premature for him to make an estimation as to how the township will fare. But, “property values have declined; we have to recognize that,” he said.
The specific budget discussion itself turned heated as Business Administrator Chris Marion and Chief Financial Officer Joanne Louth took the hot seat to discuss the list of amendments individual council members had proposed to the budget since the budget workshop sessions.
The list included an increase of $10,”500 allotted for the Greening of West Windsor environmental fair, from $2,”500 to $13,”000 (although the council earlier applied for grants to help fund the fair).
The township also received word that it had received two grants from the state Department of Environmental Protection (see story page 19) for remediation efforts at the township’s compost site, which added to the revenue area. The township also received a letter that its Clean Communities grant also was increased from $3,”560.16 to $45,”440.30, Marion reported.
The new draft budget stands at $36.514 million, an increase from the originally proposed $36.390 million budget. Louth, however, emphasized that there was no change in the municipal tax rate of 33.1 cents.
The debate began, however, when the council was reviewing the line item for the Planning Board’s consultants, which increased to $70,”000 this year, up from $48,”000 in last year’s budget. Last year, the township actually spent $54,”000 in consultants’ fees for the Planning Board.
Councilwoman Heidi Kleinman had asked for an explanation of the line item, which she was provided by Marion sometime before the meeting. She explained during the meeting that she was told that there would be four major ordinances or projects the Planning Board would be working on in 2009, including the update of the farmland preservation element in the Master Plan, the creation of a historic district including 50 properties in the Grovers Mill area, and a specific zoning ordinance dealing with the Berrien City neighborhood.
When Councilwoman Linda Geevers questioned the necessity for all of that work to be done immediately this year, Kleinman said she found value in working on a historic district ordinance for the Grovers Mill area, especially in light of the recently completed dredging of Grovers Mill Pond.
Still, Geevers called for a reduction in the budget, specifically to a zero percent tax increase.
Marion and Louth told the council, however, that in order for the budget to be reduced down to a zero percent increase, the council had to make $1,”067,”000 in cuts, and overtime costs, which had been questioned, were already down by $30,”000, Marion said.
Louth said it would be hard to make cuts in the operating budgets of each department across the board because the township is already four months into the year.
Councilwoman Diane Ciccone asked the two township staff members if they could present a draft budget with a zero percent increase, just so that council could see what it looks like, and make decisions from there.
Marion said he would be willing to look at it so long as council members gave him parameters. That’s when Council President Charles Morgan, a mayoral candidate at the time, said, “I’ve heard three council people give you parameters, and I’ve seen no accommodation on all three requests,” Morgan said.
In addition to the zero percent increase by Ciccone and Geevers, Morgan was referring to his own proposal. Throughout the budget discussions, Morgan has taken issue with the township’s AAA bond rating, which he claims has ended up costing the township more money than it saves. Morgan has been adamantly proposing to reduce the township’s surplus by $2.45 million, which he claims will lower the tax rate in this year’s budget by 4 cents.
Marion said that he has met with each council member who had questions and suggestions about the budget, and “to say people are getting ignored is actually inaccurate.”
Morgan first blasted Marion and Louth for using “inaccurate numbers” in their response to his proposal — a response he says was commissioned by the mayor specifically to discredit his proposal in light of the campaign (See election story on cover). “I believe you’ve given no attention to my math,” he said, adding that “I think we could do a 4 percent decrease, and I sure as heck think the zero percent increase is doable.”
Ciccone, however, said she knows that Marion has been working on the budget, and working on her suggestion to cut the budget down to a zero percent increase. “I know that’s not something they can get to overnight. I’m confident that they will give that to me.”
Morgan then brought up his proposal that a nonprofit foundation be formed to raise money for township projects to help offset the burden to the taxpayers.
His argument is that many large companies, like Prudential, where he used to work, donate money through United Way, and essentially make it mandatory that their employees contribute in upwards of two to three percent of their salaries. They have the option of seeing which local charities are open for donations, and says he was surprised to see that no West Windsor organization was listed through United Way.
After the meeting, Morgan explained that he had once donated a significant amount of money to the Princeton Senior Resource Center, but did not see anything listed for a West Windsor Senior Resource Center, which could have gone to helping pay for work being done at the senior center.
“Every dollar I contributed was matched 100 percent by the Prudential Foundation,” he said. “If 100 executives give $1,”000 a year, and each of their companies match 100 percent, “that’s $200,”000 in taxes we don’t have to pay — that’s just one example,” he explained. “People would give money for open space. If we can get the equivalent of three pennies on the tax rate, we could reduce the tax bill by 10 percent.”
And, executives are “going to put it where their homes are, so we ought to make it easy for them to bring it to West Windsor,” he added.
When Morgan brought this up during the meeting, Louth said that it was illegal and that the township could not anticipate a revenue source in a municipal budget based on speculation as to how much would be raised. It is not allowed by municipal tax law, she said.
Township Attorney Michael Herbert also said that a municipality “really cannot set up a nonprofit to run governmental operations. What you can do is set up a nonprofit corporation with appropriate oversight to consider contributions to volunteer organizations,” but not for governmental operations because the Division of Local Finance did not allow it, he added.
Louth and Herbert also said that any changes to the open space tax would have to be authorized through a referendum.
After the meeting, Morgan said there was a legal ruling that allowed one city to open up a 501c3 nonprofit foundation to collect money to help pay for a private bus service that was failing. “The IRS ruled that was a legitimate charity that was lessening the burdens of government,” he said. “The city avoided going to the taxpayers and asking them to subsidize the bus service.”
With regard to a referendum to change the open space tax, Morgan said he would wager the effort and was confident it would win.
As a result of the heated discussion during the meeting, Ciccone asked for a legal opinion on the matter to be submitted before discussions on the matter could go any further.
Geevers said she did not “see how we can make a decision on the budget based on a 501c3. It’s very speculative, and Joanne said we have to count on revenue coming in. You’re assuming all these organizations are going to raise this money and hand it over to the township?” she added.
Morgan suggested that money be put into the budget to hire a full-time executive director to run the 501c3 foundation, with the employee’s first task being to recover the costs associated with his or her salary. After the meeting, Morgan explained that even raising $200,”000 would be enough to cover the person’s salary and give maybe a little more than $100,”000 to lessen the burden on taxpayers.
Still, the council voted 5-0 to have Herbert come back with a memo with his legal opinion on the matter.
In the meantime, Geevers asked Marion and Louth to continue working on a budget proposal with a zero percent increase, perhaps with a draft that shows the budget without cuts in township staff and one without cuts to township staff.
Ciccone said she wanted to see the zero percent increase with no furloughs and no cuts in staff, but would be supportive of a draft that dipped a little further into the surplus.
Louth warned against dipping too far into the surplus during a recession, saying that the township might not be able to generate enough funds to replenish it, resulting in a lower balance to begin with when it comes to the 2010 budgeting process. She advised the council to look at more long-term financial planning.
“It’s council’s job to move the budget along,” she said. “It’s my job to caution you.”
Councilman George Borek said he did not see such a problem with the proposed budget. “In West Windsor, from what I’ve seen, the people here are diligent,” he said. “If this was Jersey City, I’d say there’s waste.”
“At the end of the day, what services do we get? We get good services,” he added. “Is a penny going to make a difference in our lives? Absolutely not. Can we tweak it and get it down to a number we can deal with? Yeah. But I don’t see the waste here.”
