TOWNSHIP OF DENVILLE MUNICIPAL COUNCIL BUDGET WORKSHOP FEBRUARY 11, 2012

Transcription

1 TOWNSHIP OF DENVILLE MUNICIPAL COUNCIL BUDGET WORKSHOP FEBRUARY 11, 2012 The Meeting was called to order by President Kuser at 9:36 a.m. The Salute to the Flag was recited, followed by the reading of the Open Public Meetings Act by Township Clerk Donna Costello. ROLL CALL: FITZPATRICK, GABEL, GOLINSKI, SCOLLANS, SMITH, KUSER ALSO IN ATTENDANCE: MAYOR ANDES, ADMINISTRATOR WARD, CFMO GUARINO AND FIRE CHIEF SHARPLES. ABSENT: LYDEN. OPEN PUBLIC PORTION: No one wished to be heard. CLOSE PUBLIC PORTION. DENVILLE FIRE DEPARTMENT BUDGET DISCUSSION President Kuser called Fire Chief Sharples forward to present the Department budget. Administrator Ward explained that this budget is virtually a flat budget, noting that all of the gasoline line items have been taken out of the individual departmental operating budgets and put into a utility line. He said that the basic focus of today s budget is on capital items such as the replacement of the Chief s vehicle. Mr. Ward noted that Administration is not yet ready to discuss the Valley View Firehouse although a number has been put into the budget. Chief Sharples went through the Capital items that the Department is requesting, explaining the need for each item, the cost and the expected lifespan. Chief Sharples, at the request of the Township Clerk, introduced Asst. Chief Bill Covert and Asst. Chief Rich Yobs. Chief Sharples then commented on the request for a new command vehicle for the Chief. He explained that the current car is a 2003 Ford Excursion with 96,450 miles on the odometer and has had several mechanical issues over the past year. The Chief said that they would like to replace this vehicle and take it completely off-line to be added to the next Township auction of vehicles. He noted that they are looking to down-size and perhaps get a Tahoe and $60,000 should be enough to purchase and outfit the vehicle. Chief Sharples advised that the vehicle is on the Fire Department Replacement Schedule for this year. He noted that the next vehicle on that list is the Valley View ambulance in It was determined that the vehicle is not scheduled for replacement until 2019, but the Main St. ambulance is due in Councilwoman Smith asked about the Argo ATV vehicle for $30,000, which is not projected for a specific year. Mr. Ward explained a little about this type of vehicle and how it could have been used during the October snow storm. He said that the Fire Department agreed to put off the purchase to an undetermined year. Mr. Sharples advised that he is exploring other means of financing this vehicle.

2 Page 2 Councilwoman Smith asked if the Council is supporting what the Fire Dept. is asking for. Mr. Ward said that the Council will look at the Capital Budget and get a feel for what can be approved. Mrs. Smith noted that the Chief s vehicle can be amortized because it has a longer life span than a police car. Mr. Kuser interjected that it is a $3,000 cost. There was a discussion concerning the outfitting of the vehicle and Mr. Ward advised that the $60,000 cost includes the outfitting. GENERAL BUDGET DISCUSSION Administrator Ward called the Council s attention to a memorandum that he, the Mayor and CFO put together yesterday. He said that it was ed to the Council members. He noted that they came up with four (4) line-items that the Council may consider reviewing. A copy of Mr. Ward s memorandum is attached hereto. 1. APPROPRIATION LINE ITEM: Police S/W & Health Insurance O/E POTENTIAL REDUCTION: $11,286 or $19,642 Mr. Ward explained that these figures represent a saving through a late hire to fill the vacancy in the Police Dept. He further explained that the larger saving would be realized if we hired a not-yet-certified officer. Mr. Ward noted that the down side of this would be that the full salary would have to be budgeted in 2013, creating a disproportionate increase in that line item. Mr. Ward noted that they have come up with an exact number as to what $1 to the average taxpayer is and that is $7, Mr. Ward advised that in order to reduce the tax rate by $10, the budget would have to be reduced by $73, Councilman Gabel asked what the trend has been over the last four years with regard to the tax rate. Administrator Ward replied that last year the budget was flat and the three previous years there were increases. President Kuser noted that 2007 and 2008 were fairly substantial increases. CFO Guarino referred the Council to page 8 in their budget books and advised that it provides the tax rate for each year. Councilwoman Smith asked for a ten-year graph depicting tax rates. 2. APPROPRIATION LINE ITEM: Roads, Parks, Recycling S/W & Health Insurance O/E POTENTIAL REDUCTION: $7,785 OR $15,420 Mr. Ward explained that these figures represent an April 1, 2012 start for a new full-time Apprentice or, eliminating an Apprentice position and hiring two seasonal employees at a rate of $10.25 per hour without benefits. He further explained that a full-time Apprentice in 2013 would have an adverse affect on those line items, whereas, there would be no impact on the 2013 budget by hiring two seasonal employees.

3 Page 3 Councilwoman Smith commented that the Council had previously had discussions with the DPW Superintendent regarding Apprentices versus seasonal. She said that the feeling, at that time, was that the Apprentice program would give us a pool from which to draw future employees. Mayor Andes interjected that that is not correct, the seasonal employees make up the pool and the Apprentice position is the lowest starting salary that we were able to negotiate a few years ago. Mr. Ward noted that the position of Apprentice is for two years, at which time they are automatically bumped up to truck driver, according to the contract. There was additional discussion concerning seasonal employees and the various ways that they have been used, including snow plowing. Mr. Ward explained that supervisory employees, some of whom have an hourly rate of over $80, were being used for snow plowing, so using the seasonal employees represented a significant saving. President Kuser thanked the Mayor and Administrator for correcting that situation. 3. APPROPRIATION LINE ITEM: Utilities - Gasoline & Diesel O/E POTENTIAL REDUCTION: $10,000 TO $15,000 Mr. Ward explained the extraordinary circumstances in 2011 (unusual amount of snowplowing, Hurricane Irene and damaging snow storm in October), which resulted in an expenditure that equated to an amount $42,344 greater than that which was budgeted. Mr. Ward noted that more than a $30,000 increase in the fuel budget is being proposed for 2012 but added that, due to the mild winter and three (3) take-home vehicles being eliminated, it is anticipated that the proposed budget for fuel may be reduced by $10,000 to $15,000 without a negative impact. President Kuser noted that the Administrator has given a recommendation on #3 and asked if he can do so for numbers 1 and 2 as well. He asked if Mr. Ward checked with the Chief to be sure that he definitely needs another officer. Mr. Ward replied, in conferring with the Mayor, for #1 they recommend the lower amount of $11,286. He said that can be changed at the last moment if we cannot hire a certified officer. Councilwoman Smith gave a detailed explanation of the effect on next year s budget if we take out this $11,286. She said that it does not make sense to her because it may result in having to make transfers to remain under the 2% cap. Mrs. Smith asked where the money will come from if we do not have funds in other line items that we can transfer. Her strong recommendation was not to cut the $11,286. President Kuser commented that these will all be wait and see items until we see where the budget falls. Mr. Kuser asked if there were any suggestions on item #2. Mr. Ward commented on the rebates no longer going out from the State and advised that the Governor s Aide told Mr. Andes and himself that we can safely budget the amount we did last year. It was noted, however, that the State cut the aid to municipalities drastically at the last minute last year.

4 Page 4 President Kuser asked Mr. Ward if there is any information on the Energy Tax reimbursement. CFO Guarino advised that it is all part of this whole scenario and it all comes under COMTRA (Consolidated Municipal Tax Relief Aid). He said that it was 1.8 last year and they are saying that it will be the same this year. Mr. Guarino advised that we will get our figures from the State on February 22 nd. He added that everything we take out of salaries this year will have a 12 month effect in the coming year. Mr. Ward noted that there are possibly two police officers who will retire this year and that will have a balancing effect. Mrs. Smith spoke at length about how she feels the budget should be handled for this year, in order that we do not have a negative effect on next year s budget. Councilman Scollans agreed that making it tougher for next year is probably not a good choice. He said that using best management practices should be the approach to our budget. #4 REVENUE LINE ITEM: SURPLUS ANTICIPATED POTENTIAL INCREASE: $25,000 TO $50,000 Mr. Ward commented that the reason Denville has had a stable tax rate over the years is due to their conservative approach to surplus anticipation. He spoke about the amount of anticipated revenue for 2011 and how there was a short fall due to various catastrophic events during the year. Mr. Ward advised that, after careful consideration by the Auditor, CFO and himself, they feel confident that the same amount of revenue can be regenerated in 2012 as was regenerated in He said that they feel that the proposed $2,322, will allow the anticipation of up to $50, in additional revenue as Surplus Anticipated in the 2012 budget, without detriment to next year s budget. Mr. Guarino stated that the big thing is to keep us afloat in our Fund Balance at a good, healthy level. He said that, as long as the Council budgets below the $2.4 million, and should we regenerate over that, we will be in good shape for future budgets. Mr. Guarino reminded everyone that, when you cut, it is a rolling effect that will be felt in several years to come. Councilwoman Smith spoke at length about the possibility of increased tax appeals and residents protesting their taxes. She said that the budget, as originally presented was very tight and we could make these changes but she does not think it would be a wise thing to do. Councilman Scollans agreed that tax appeals will be more prevalent. Mr. Guarino noted that the Auditor recommended that another $217,000 be added to the reserve fund for tax appeals, bringing that fund to $475, There was a discussion concerning tax appeals and the ramifications of losing a very large appeal. Mrs. Smith asked how a business is assessed and Mr. Guarino explained the process. President Kuser commented on the fact that, although we have a $19 million budget, we are conservative and responsible in our spending.

5 Page 5 Mr. Kuser noted that Mr. Ward has presented these options in the face of a $78.55 tax increase; he asked if there is anything that the Council can do to bring that figure down. Mr. Ward replied that these four options are their suggestions, if the Council wants to make conservative adjustments to the budget that would not have long term impacts. Mayor Andes noted that not much would be accomplished by cutting little bits from small line items, but they felt that they should give the Council some direction as to where we can look for cuts. He said that these for options are the avenues that we can follow because he knows there is a comfort level that the Council would like to reach for the tax rate on the average house. Mayor Andes asked that the Council be conservative in its approach and he strongly recommended that the Council focus on the options that have been presented. Councilman Golinski asked what amount we have requested that FEMA reimburse the town for damages from Hurricane Irene. Mr. Ward replied that the first phase application was finalized this week for $240,000 and, if FEMA approves it, we will be eligible for 75% of that amount. Mr. Kuser interjected that we would, most likely, receive it in 2013 but definitely not this year. Mr. Golinski asked how we have fared with FEMA in the past. Mr. Ward replied that we have done pretty well. He added that, for a storm in 2010, FEMA reduced the reimbursement due to their own budgetary problems and the funds were not received by the Township until 16 months later. Mr. Golinski said that he feels we should have a reasonable assumption that we will get something. Mr. Ward replied that $180,000, based on the first phase of the application, would be the maximum, being 75% of the total request. Mr. Golinski stated that it would give us room to increase option #4 from a potential increase of $25,000 to $50,000 to a potential $80,000 to $100,000. Mr. Ward replied that the only thing wrong with that is that the FEMA money is a one time revenue source and is not a certainty. Councilman Scollans commented that he does not believe in spending, or counting on, money that we do not have. Mr. Golinski noted that there is money that we do have in our bank account now, and he would push as hard as possible to use the $50,000 or even the $75,000 to get an even $10 reduction in the tax rate. Mr. Kuser asked how much $50 would bring the tax rate down. He was advised that it would be $7.00. Councilman Fitzpatrick stated that he does appreciate Administration giving the Council options to cut. He said that, to him, $78 per household is too much of an increase for people right now. Mr. Fitzpatrick noted that he wants to get this rate down to under $65. He said that people can understand $35 because of the storm but will not understand an increase of more than double that amount. Mr. Fitzpatrick commented that he will cut where Administration suggests first, before he tells them where to cut. Mr. Guarino noted that, in making any cuts, the Council must take into consideration the

6 Page 6 future ramifications of the cuts. President Kuser commented that Mr. Scollans expressed it correctly, these cuts are just deferred. He said that, if the Council wants to cut, they need to know that they will have to start looking at employees because that is the only place there is to cut. Mr. Kuser noted that we need the Police for safety, we need the DPW to take care of catch basins and sewers and we have all learned the lesson that, if you cut too much things start falling apart. He said that, if the Council wants to get creative and start to cut, they need to look at the employee base. Mr. Fitzpatrick replied that he has options that are not employee-based and he can talk about them if Mr. Kuser wants to get into super detail Mr. Kuser asked him to explain. Mr. Fitzpatrick stated that we obviously need a firehouse but we should make a commitment to budget $900,000 instead of $950,000 and make it work. He noted that there is $50,000 right there. He was reminded that it is not in the budget, it is Capital and only requires 5% down. Mr. Fitzpatrick went on to say that he loves the idea of an LED on Town Hall, but we don t need it this year. Mayor Andes interjected that these are Capital items and he believes that the Township will be receiving a donation from Rotary for that project. Mr. Ward explained that the $950,000 for the firehouse is a conservative figure and may come in under $900,000. There was a discussion concerning what items in the Capital budget should be considered for deletion and the impact it would, or wouldn t have on the tax rate. Councilman Golinski thanked the Mayor, Administrator and CFO for doing a great job on the budget. Mr. Ward passed on kudos to Kathy Bowditch and the Council applauded her good work. Mr. Golinski praised the format and said that it is easy to understand and he feels like he s getting the straight scoop. He asked how the Council can get closer to a lower rate without rehashing everything over and over again. Mr. Golinski noted that he does have an opinion on some individual items. Mr. Ward advised that he had spoken to Mr. Kuser regarding Monday night s budget meeting and they agreed that the meeting will not be necessary. He explained that a lot of what can, or can t, be done with the budget depends on how much State aid is afforded the municipality. Mr. Kuser noted that it is now 11 a.m. and suggested that the meeting continue for another half hour and let the Council get as much done as possible without the State number. Councilman Golinski noted the following items for consideration as possible cuts: The LED sign - serious concern unless it is very heavily funded by donations. Mayor Andes again noted that he expects the Rotary to very involved to donate a major portion of the cost. President Kuser interjected that the sign idea evolved from his feeling that better communication with the residents is needed. He mentioned such things as free flu shots and events that are being held as some of the things that

7 Page 7 would be posted on the sign. Mr. Kuser assured the other Council members that he will not be offended if they choose not to spend the money, it was simply an idea that crossed his mind. Mayor Andes suggested that the Council take a wait and see approach and develop a check list to determine what will be in and what will be out of the budget. Councilman Golinski agreed that a check list would be a great idea to keep track of all the small items as it will help everyone to be ready to make final decisions. Councilman Gabel advised that he has attended two School Board meetings and the subject of this messaging sign has come up both times. He suggested that the PTA s be contacted because they were very interested in putting messaging out there as well. Mr. Gabel noted that, if we were willing to put school information on there, they would also be willing to contribute to the cost of the sign. Mr. Kuser agreed that this would be their idea of shared services. Councilwoman Smith commented that she would rather use the $17,000 to improve our internet. Administrator Ward advised that he has had discussions with the Mayor and John Ciardi regarding updates to our computer system. He added that Councilman Gabel has a specific interest in this as well and has offered to be of assistance. Mr. Ward noted that Mr. Gabel will be doing a tour of town hall and will be discussing this with Mr. Ciardi. Mr. Golinski added the pay station parking meter to his list. He asked if it is correct that Administration thinks that we should have the direction we plan to go with parking before we invest in that. Administrator Ward replied that is correct. He added that the $77, down payment money that is in the budget will be incorporated into a bond ordinance which is a separate approval from the budget. Mr. Golinski asked if there is something set aside for a plan for the North Shore retaining wall. Mr. Ward advised that there are sufficient funds to bring that to a conclusion. There was a brief discussion concerning the Gardner Field bathrooms. It was noted that there is a claim in to FEMA since they were damaged by the hurricane. President Kuser asked what percentage of increase we are currently looking at. Mr. Ward replied that, with the storm impact, it is 5.2%. There was a discussion regarding the comparison of the total budget from 2009 to 2012 and the affect that moving the Library to a separate line item had on the total budget. The amount attributed to the storms in 2011 was also covered. Mr. Kuser asked Mr. Guarino what the tax increase is. Mrs. Smith replied that it is a 2.35% increase. Mr. Kuser noted that it is outside of the cap because the events that occurred were beyond our control: the hurricane, snow storm, etc. Mr. Guarino added that we have items such as health insurance at $79,000, which is

8 Page 8 outside the cap. He said that last year the cost was $1.3 million and this year it is $1.30 million. Mr. Guarino advised that the debt service is $89,000. Mr. Guarino noted that the pension went down over $180, Councilman Scollans gave kudos to the financial team for the fine job they have done. Councilman Gabel stated that he has been brought up to speed very quickly and understands the financial situation of the Township quite well. He thanked everyone for helping him with that. Mr. Gabel suggested that a citizens survey would be helpful to ensure that the residents leave our facilities with the feeling that the employees have been courteous, helpful and are working on their behalf. Councilwoman Smith spoke about the budget increasing because of increased costs throughout the municipality. She said that her philosophy is to have the budget go up a little each year, rather than fluctuate and have it flat one year and take a big jump the next. Mrs. Smith stated that she is more in support of the original budget as presented and does not want to use more surplus. President Kuser suggested that the Council plan on not getting the State aid and party if we do get it. Mayor Andes noted that our expenses are lower than they were last year but we don t want to repeat history. He said that we anticipated too much revenue and it was not regenerated so we don t want to go down that road again. The Mayor stated that we want to put ourselves on solid ground and move forward. He said that last year s flat tax rate was great but did not leave the Township much wiggle room when the emergencies hit. Mayor Andes commented that we are paying the price this year for the joy of a flat tax last year. President Kuser noted, for the record, that the meeting scheduled for Monday, February 13 th is being cancelled. He urged all of the Council members to attend Tuesday night s sewer assessment meeting. Administrator Ward said that he will make himself available to all Council members for any questions they may have. He said that there was a very good meeting with all of the players involved with the sewer assessments and they reviewed every question that was raised at the October sewer meeting and made adjustments where appropriate. Mr. Ward advised that the report will be presented to the Council for approval on Tuesday night. He said that the Board feels it has followed the most fair and equitable way to distribute the cost. Mr. Kuser noted that it is consistent with other projects in town and with the law. Mr. Guarino noted an error in the Summary section of the budget and advised that he will provide an updated sheet to the Council. MOTION TO ADJOURN: MOVED BY MEMBER SMITH, SECONDED BY MEMBER GABEL AYES: UNANIMOUS

9 Page 9 MEETING ADJOURNED AT 11:32 A.M. Respectfully submitted by: Kathleen A. Costello Deputy Township Clerk