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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.

Nick J. May 21, 2012 at 02:34 AM
Larry Fink is up to his old tricks and Mayor Impreveduto called him out on it. He co-chairs the Finance Committee for at past three years and decides to vote no on the budget this year without trying to resolve his questions with the CEO Andy Katz??? Come on Larry, you were politically granstanding and got caught....nice job Mayor. As stated in the article, back just 3 months ago we were faced with a $2.5 - 3.0 million deficit with a plan to sell land to close the gap....well guess what, taxes got raised half as much and no land was sold. Yes there are one shot revenues to close the gap, but what should the Town do, not sell the liquor license? Not accept FEMA money? Great job by Mr. Ponisi and the rest of the TC Committee....keep up the good work.
john cohn July 23, 2012 at 01:52 AM
lol!! Larry Fink loves to yell cut, cut, cut but if they cut anymore we will be driving on dirt roads and living in a jungle ..roads are going to hell what isnt cracked or over patched has a foot of dirt and leaves in the gutters .there is brush over growth blocking a lot of streets and corners cut the DPW anymore and ill be living in the woods and forced to ride a horse .. its a joke
barbara July 23, 2012 at 07:18 PM
The roads and over growth are unprecedented for Holmdel! Not the same bucolic place that it once was. What a shame!
Jim Rogers July 24, 2012 at 10:43 PM
What did the storm actually cost the township? Wernt fire and first aid out for 3 consecutive days running calls and helping residents. Did they recieve their part of the fema payout yet or was it used to help cut the deficiet? Are the orginazations going to be reimbursed for what they had to lay out for the storms? i hope so..... Please somebody inform me on this one?
bud July 25, 2012 at 12:01 AM
There cannot be any significant property tax relief until we lower the school budget and the county budget, which together represent 85% of every tax dollar. Schools Supt. Barbara Duncan has shown the way with a 20% salary decrease. We have to implement 2% per year cuts in school and county taxes or we will never get anywhere!
Carol Beckenstein August 02, 2012 at 12:15 AM
Larry Fink does not grandstand. He is a statesman. Do not criticize him for trying to save us from this outrageous tax increase!!!

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