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How The Budget Deficit Was Shrunk

On Friday, Township Administrator Andy Katz gave more details about how the township budget deficit was reduced from $2.5 million to $1.8 million.

The significant $700,000 deficit reduction announced by Holmdel Mayor Patrick Impreveduto at a meeting attended by 200 residents Thursday was mostly achieved by applying unanticipated miscellaneous revenues from a prior year to this current budget, said Township Administrator Andy Katz.

Thanks to hours of looking under "all these pebbles" for solutions, said Mayor Patrick Impreveduto, the Township Committee was able to cancel an unpopular vote to authorize a sale of land at preserved Cross Farm and a voter referendum to raise taxes over the two percent cap.

“You see what you have in excess funds from the prior year – where you took in more revenue than you had anticipated,” Katz explained. “It’s commonly referred to as surplus.” On a balance sheet, it shows up as “miscellaneous revenue not anticipated.”

Examples are excess court fees, small grants, or the $153,000 FEMA payment from a 2010 expenditure. The township’s financial team identified the savings after they finished the annual financial statement in early February.

The $700,000 figure does not include the discovery of a $400,000 debt owed to the township by the Board of Education for a joint project improving Roggy Field, said Katz. "We found a rock," said Impreveduto. Holmdel Township Chief Financial Officer Jeanette Larrison discovered the missing payment after a comprehensive analysis, said Katz. It is believed volunteer efforts to raise funds fell short and the money was not raised, he said, and per the agreement, the Board of Education would be responsible for making up the payment.

[Late Friday, the president of the Holmdel Board of Education disputed they owed that much to the township, and issued a detailed statement clarifying the board's obligation to the improvements at Roggy Field. Read the press release here.]

Katz said the township may choose to use the anticipated BOE payment in its three to five year plan, which will also consider the impact of a developing Alcatel-Lucent. “What we are trying to do is move to a point where we are sustaining. We are not doing this just to fix 2012, but also 2013 and beyond,” he said.

The township administrator said he has not yet made his final recommendation to the Township Committee on closing the $1.8 million budget gap in the township's $20 million budget, to be introduced in March. The township is still waiting on certified state aid figures and allocation of energy receipt tax, among other pieces of information. Final adoption is typically in April or May.

Although the governing body passed legislation on Feb. 23 authorizing the sale of wooded lots on Plum Lane, Katz said the property would only be sold if necessary.

Bill Hennigan February 25, 2012 at 01:10 PM
After reading the BOE responnse to the "discovery" of $400,000 debt owed to the township, I ask all residents to join me in requesting a joint township committee and BOE press release to explain this issue in full. Since taxpayers ultimately pay the bills, this $400,000 may just now be missing from our other pocket!
Concerned Citizen February 25, 2012 at 06:40 PM
Shouldn't they have looked for "miscellaneous surplus" and moved all the rocks and pebbles FIRST before they tried to sell land and raise taxes? I think I speak for all of us, we have to live within our budgets. If we can't pay our bills, we can't go to our employer and demand more money from them, we have to make cuts. I think I speak for many, our individual pockets are empty, so balance the budget with the money you have and stop looking for more.
Fact Check February 25, 2012 at 07:26 PM
There was never going to be a referendum as the States mandatory deadline for publication was 2/22 and no ad was ordered beforehand. Im not aware of any mandatory resolution passed either at the TC level. Also, no property was ever going to be sold for 2012 budget since Trenton does not allow it to be included in the budget unless there is a contract - which is impossible to do before the state mandated budget introduction deadline of March 9th (March 22 for Holmdel due to meeting schedule). Meaning this whole exercise pitting folks against each other was an exercise that is up to residents to judge. Also impossible is to include one time miscellaneous revenues from 2010. You can't legally include non recurring revenue. You can include higher court revenues or other items of revenue that are regularly happening (permit fees as an example) that can be foreseen to remain the same in 2012 but not one time FEMA grants. You can't budget hopes and dreams-you can only budget facts. Bottom line? There was never going to be a cap referendum and there was never going to be a property sale for 2012. 2013 is not clear but 2012, no question about it based on the law and regulations of the State of New Jersey.
Steve Strickland February 25, 2012 at 11:57 PM
Barbara Garrity's letter (also on Patch) mostly explains it. The TC and BoE agreed to renovate Roggy Field and its track with funding split between the TC, the BoE and private fundraising---with any shortfall in the private fundraising split equally between the TC and BoE. The BoE paid essentially all of its initial share. The project came in under budget, but the private fundraising failed to meet its target. The TC rolled its share and the net shortfall (private fundraising - underbudget savings) into a 20 year bond (that also included other items). The BoE was supposed to pay its share of the net shortfall, but evidently the TC never asked them and/or never provided final accounting of the project. Now they are. But it remains to be seen if the BoE will squeeze this out of the current year's existing budget (which won't cost taxpayers more) or add it to this year's budget or next year's budget (which will). They could also end up paying their share of the bond service payments (over the 20 years) instead of all up front---which would bury the cost in future budgets and not help much with the current municipal shortfall. BTW, renovating Roggy was one of the best and most cost-effective things the town has ever done, recreation-wise (IMHO).
resident February 26, 2012 at 01:37 PM
I think President Obama should consider selling Yellowstone Park to help with the deficit.

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