The 2012 Holmdel Township Budget: How Tax Dollars Will Be Spent
Township Committeeman Joseph Ponisi presented highlights of the 2012 spending plan Thursday.
Editor's Note: With Holmdel Township tax bills out this week, we are re-running this article from the Township Committee's budget presentation on May 18, 2012.
In February, Holmdel Township was wrestling with how to close a "monster" budget gap that was said to be as high as $3 million.
But at the May 17 meeting, most of the township officials appeared relieved to present a budget that required just $1.2 million more to be raised through taxation.
The Holmdel municipal tax rate would increase 3.2 cents, to 34.3 cents per $100 of assessed valuation. Township Committeeman Joseph Ponisi said that while that was higher than the tax hike from the year before, when the municipal portion of the tax rate rose by 1.9 cents, he asked the 50 residents assembled in Town Hall to put it in context.
"Remember, the $1.2 million is very, very different than the number, when we were sitting with a $2.5 million deficit, to $3 million deficit, looking to sell land and having a proposition to raise taxes," said Ponisi, a finance professional who joined the Township Committee just three months ago.
"That is not the case here. there is no land sale in the budget, nor are we going for referendum [to raise taxes above the statutory 2% cap.]
The budget was adopted in a 4 to 1 vote. Committeeman Larry Fink, who serves on the Budget and Finance Committee with Ponisi, voted no because he said the spending plan is too reliant on one-time revenue sources, and expenses are too high. (See attached document.) He talked about curtailing the work week, furloughs, and containing overtime on the Dept. of Public Works staff. "I think there are things we can still do," he said.
In Ponisi's presentation Thursday night about the budget, he said that state aid came in steady at last year's amount of $1.999 million, and there was pending legislation in Trenton that might result in more money coming in -- but none that could be counted on now.
He spoke about how Holmdel's tax base -- the assessed valuation of property values -- declined by $3.5 million, and how important it was in a town so dependent on property taxes to pay careful attention to the future development of the potentially large Alcatel-Lucent property tax ratable.
In the new budget, the largest increases in spending is $1.5 million in debt service, to pay off bonds; the capital improvement fund, up by $60,000; gasoline, up by $35,000 and road repair / maintenance up by $42,000.
The largest decreases in spending include a $175,000 savings by transferring township health services to the county health department. The current fund is not going to be supporting the sewer utility fund deficit to $174,000. And there was $88,000 in savings from snow removal.
On the revenue side, he said there were some one-time gifts included in the budget: $300,000 in Tropical Storm Irene reimbursements from The Federal Emergency Management Act (FEMA); $300,000 anticipated from the sale of a 10-year old liquor license to sole bidder Best Market; and a $700,000 sale of the former police barracks, which does not have a budgetary impact because money was owed on the property. "But when you retire debt, your debt service numbers will go down because of that," he said.
Incorporated into the budget is a Board of Ed repayment for the High School Roggy Field of $290,000, which includes interest and principal, past due to the township. Township attorney and school board business administrator are continuing to discuss the exact amount, the mayor said.
There is also $536,000 due from a sewer utility fund, Ponisi said.
"This is what happens when you have a fresh set of eyes look at documents that have been outstanding for a number of years," said Ponisi. "We were able to identify $300,000 of interfund payables that were due to the current fund from prior year subsidies, that the current fund actually subsidized the sewer fund and a $236,000 subsidy from last year that is being reimbursed this year."
Ponisi pointed out a deficiency in the township's 2.5% open space tax, first approved by the voters in 1998. "This tax is not producing enough revenue to support the amount of purchases that we made of open space that we made several years ago," he said. "In the past two years, out of our regular property tax, $401,000 is being paid from the current fund to subsidize the open space tax.
"We all love our open space, but I think we're at a point now where the general fund is funding the operations of that, which was supposed to be funded by the open space tax, which is not sufficient any more."
The announcement of the tax rate increase, typically offered at the introduction of the budget, came instead of the night of the public hearing and vote. Several residents had prepared by reading the budget, available from the township website.
Resident Tony Cooper expressed his displeasure with the fact they would be paying higher taxes for a budget that calls for enhanced road repair program, and that the township should have negotiated lower police department salaries for top officers, and higher health insurance contributions for employees. "I ask you reject the 2012 budget," he said, and called for township officials to slash spending.
Resident Michael Rauchwerk pointed out that the budget is too dependent on one-off revenue injections. Except for the FEMA reimbursement and liquor license, "There is no increase in revenue other that the tax increase," he said. Scott Goldstein of Holmdel said the budget was not sustainable, and asked township officials to set goals to reduce the amount spent on gasoline. "Let's live within our budget," he said.
Kim Weigand thanked officials for their long hours and offered to share information she gathered on state resources that might fund open space maintenance.