2016 TOWNSHIP OF ROCKAWAY MUNICIPAL BUDGET GREGORY POFF II, BUSINESS ADMINISTRATOR LISA PALMIERI, CHIEF FINANCIAL OFFICER

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1 2016 TOWNSHIP OF ROCKAWAY MUNICIPAL BUDGET GREGORY POFF II, BUSINESS ADMINISTRATOR LISA PALMIERI, CHIEF FINANCIAL OFFICER

2 Budget Process June 2015 Chief Financial Officer begins salary and wage analysis September 2015 Business Administrator and Chief Financial Officer discuss preliminary budget document October 2015 Department Managers directed to prepare and submit budget proposals November 2015 Business Administrator and Chief Financial Officer hold annual, public Department Budget Hearings 2

3 Budget Process January 29, 2016 Draft municipal budget transmitted to Township Council March 9 & 14, 2016 Township Council scheduled public budget work sessions March 18, 2016* Municipal introduction and approval of the budget April 22, 2016* Municipal adoption of the budget * Or the next regularly scheduled meeting of the governing body 3

4 Property Taxing Entities County District School Regional School Municipal Library 4

5 Laws affecting the municipal budget: The appropriations cap law prohibits municipalities from increasing their final appropriations by more than 2.5% unless action is taken by the governing body to increase their final appropriations The property tax levy cap law establishes a formula that limits increases in the municipal amount to be raised by taxation to 2% of the previous year s amount to be raised by taxation 5

6 The Township is within both the permitted appropriations and tax levy caps Changes in health insurance law (P.L. 2011, c. 78) increase the share of health benefit premiums paid by public employees This change results in health benefit cost savings to the Township of $400,000 in

7 2016 Budget Summary The proposed 2016 budget calls for appropriations of $40,268,576. This represents a 1.9% increase or $759,297 from the adopted 2015 budget. One tax point equals $357,925 In order to reduce taxes by one tax point you would need to increase revenues by $357,925 or reduce appropriations by $357,925 7

8 $3,700,000 Township Net Valuation Taxable (Assessed Value) $3,500,000 $3,300,000 Thousands $3,100,000 $2,900,000 $2,700,000 $2,500, * Assessed Value $2,902,84 $2,904,27 $2,895,54 $2,885,70 $2,829,94 $3,601,73 $3,601,39 $3,568,97 $3,555,71 $3,579,25 * Revaluation 8

9 Sources of Revenue Fund Balance Other Miscellaneous State Aid Delinquent Taxes Library Tax Property Tax 9

10 State Aid Actually two revenue replacement programs originally collected by local government up until the early 1980s The Township will receive $1.8 million from the State down from $2.5 million received in Fund Balance Our fund balance as of December 31, 2015 was $5,689,523 Fund balance is generated by cancelling previous year budget reserves and collecting revenues in excess of anticipated amounts $3,907,556 of fund balance is anticipated to support the 2016 municipal budget 10

11 Revenues As A Percentage Of The Total Budget 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Delinquent tax receipts 2% 2% 2% 2% 2% 2% 2% 2% 2% Surplus funds 14% 13% 13% 13% 12% 12% 11% 10% 10% Miscellaneous revenues 16% 18% 13% 12% 11% 11% 10% 12% 11% Current property taxes 68% 67% 72% 73% 74% 75% 77% 76% 77% 11

12 Appropriations Summary Significant dollar increases are seen in the following appropriations: 1. Debt service 2. Accumulated sick and vacation 3. Statutory expenditures (pensions & social security) 4. Snow removal 5. Insurance The increases in these five appropriations account for 96% of the total increase in the proposed 2016 budget. 12

13 Uses of Appropriations 13

14 Significant changes in appropriations Deferred charges decreased $100,000 as the tax revaluation obligation has been satisfied Utilities decreased $60,880 due to the recently low cost of oil Total salaries and wages decreased $42,252 The library appropriation decreased $7,340 as required by law to provide one third of a mill per each dollar of assessed value Human resources other expenses are increased $40,000 to for personnel management software 14

15 Significant changes in appropriations Code enforcement other expenses to increase $11,000 for Per Diem inspectors in order to meet the demand for inspections Snow removal other expenses to increase $115,000 to cover a 19% rise in rock salt Recycling other expenses to increase $25,000 due to a change in a County contract Condominium reimbursement expenses to increase $44,040 to satisfy statutory obligations Health services other expenses to increase $80,000 for gypsy moth suppression 15

16 Cumulative cost saving measures: Reduced the municipal workforce 13% Implemented a process of annual reassessment Obtained a municipal bond rating of Aa1 from Moody s Investor Services, Inc. upgraded from a Aa2 rating Modified labor agreements to eliminate accumulated time payouts for new hires Eliminated the Township s obligation to pay for retiree health benefits for new hires Reset minimum salaries for new hires and established salary ranges Generated additional revenue through new shared service agreements 16

17 The Bottom Line Adopted Proposed Change % Appropriations $ $ $ % Miscellaneous revenues $ $ $ % Anticipated fund balance $ $ $ (0.050) -1.3% Net valuation taxable $ 3,555 $ 3,579 $ % Municipal Tax rate per $100 $ $ $ % Municipal Average home tax bill $ 2,570 $ 2,617 $ % Total Tax rate per $100 $ $ $ % Total Average home tax bill $ 9,177 $ 9,251 $ % Note: All amounts above in millions of dollars, except tax rate and tax bill 17