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Town budget has 2.94-cent increase

 

by Lauren Bucci, Gazette Staff Writer

 

HAMMONTON—Council introduced and passed first reading of its 2014 General and Utility Budget at this month’s regular meeting of town council on April 14.
According to town CFO Rob Scharle, the proposed budget would increase $175,000 from last year, resulting in a 2.94-cent increase for the taxpayers of the town.
“The current fund right now is basically $175,000 more than it was last year…This budget, as proposed, has a 2.94-cent tax increase,” Scharle said.
The 2.94-cent increase will be for property tax and there will be no increase to water and sewer rates, Mayor Stephen DiDonato said after the meeting.
Rising health care costs and acquired debt service are the two primary reasons for the increase, according to Scharle.
“Two primary reasons for that, one is health care, our health insurance increased $228,000 this year, roughly a 14.04 percent increase….also your debt service, that increased from $62,370. That’s a total of $290,000 increase when the total budget is only going up $175 [thousand],” Scharle said.
Scharle noted that the debt service increase was largely due to the Green Acres project at the Boyer Avenue site.
“Basically the debt service increase was due to [the] Green Acres project that you accomplished over there on Boyer Avenue and that represents a majority of the debt service increase,” Scharle said.
According to Scharle the budget is very tight from both a revenue and appropriations standpoint.
“I have to say it’s a really tight budget, you have a really tight budget here from a revenue standpoint and an appropriations standpoint,” Scharle said.
The town did see a decrease in pension costs due to a revaluation ordered by the governor according to Scharle.
“Pension went down a little bit… we received relief…the governor ordered a new evaluation of that and when that reval came in, roughly two weeks ago, we received a little bit of relief,” Scharle said.
The town has also seen a decrease in its surplus account according to Scharle.
“Outside that fund balance you have $41,000 less in surplus this year than you had available to utilize last year in this year’s budget,” Scharle said.
Scharle attributed the decrease in surplus and increase in taxes to increased healthcare costs and insufficient state funding.
“If you look at 2006 to now we’ve lost $500,000 in state aid, now the last four years it’s been stable, it’s been consistent, but with rising healthcare costs as I just mentioned and just alluded to, the state’s not keeping up with their share to us as far as what we need to run our town. So what happens is, we have to use surplus, we have to raise taxes to keep up with those increased costs,” Scharle said.
The utility fund went up approximately $95,000 mostly due to debt service, according to Scharle.
“For the utility fund, the utilities funds basically only went up about $95,000. Most of that is debt service,” Scharle said.
The town also had the option of establishing an increased appropriation cap, which would allow the town to bank $262,000 in cap bank room, not in money spent, for a two-year period, according to Scharle.
“Right now you’d have the ability to increase that [appropriation cap] for two years down the line if you needed it. Do you have to use it? No, you don’t have to, but, however, you have one opportunity to bank $262,000 in cap room, not in money spent,” Scharle said.
Without establishing the cap bank, the town would have $535,000 of appropriation cap room from the 2013 bank, according to Scharle.
“So next year you have from the 2013 bank, you have $535,000,” Scharle said.
Councilman Edward Wuillermin originally made a motion to establish the appropriation cap bank, seconded by Councilman Paul Esposito, but later rescinded the motion, along with Esposito, feeling it could wait to be addressed next year.
“Being fiscally conservative, we have been trying to put a rein in on the amount of spending that we would allow ourselves and future councils to enjoy so to speak, but I’m just concerned that we don’t put ourselves in a box. But, if there is enough there, potentially, going forward to get us through next year’s budget and to make that decision next year for the following year and still have that opportunity… I would consider rescinding that motion if Paul [Esposito] would make that second, and address the issue next year,” Wuillermin said.
The May 19 meeting of mayor and council will include the public budget hearing and Councilman Dan Bachalis feels it is important to discuss the budget in detail and ensure the public is aware of what is happening. The May 19 meeting was originally scheduled for May 20 but was changed during the April 14 meeting to May 19.
“I think we need to have a really, a much more detailed discussion of this to make sure everybody in the public understands,” Bachalis said.
Council passed the second reading of an ordinance establishing an energy and natural gas aggregation program. The ordinance allows the town to explore the different firms that handle aggregation programs, but does not establish a specific entity or guarantee the town will move forward.
“This ordinance only gives us the ability to look at different firms that are approved by DCA and the pilot program, interview those firms and have a series of other public meetings and forums to explain all the details of what would be involved should the town decide to go forward… but no decision is being made tonight as to whether we’re going to select a particular entity or whether we’re even going to participate in the program,” Wuillermin said.
Should the town move forward with the aggregation, it will be an “opt-out” program meaning any resident purchasing their electric from Atlantic City Electric would automatically be changed over to purchasing from the third party supplier chosen by the town with the option of opting out, according to DiDonato.
“It’s an ‘opt-out’ program… If you’re buying your electric from Atlantic [City] Electric, you’d be a part of the program,” DiDonato said.
Hammonton resident Bud Paynter went before council to express his concerns about third-party aggregation.
“You have a lot of senior citizens in the town, myself included, a lot of times the paperwork and the opting in and opting out are very confusing and my concern is that if this is only for one year....there’s going to be this continuation of opting in, opting out. I think it’s going to be a very confusing process for a lot of people,” Paynter said.
He also expressed that he felt Atlantic City Electric provided adequate service and deserved the opportunity to supply the town’s electric.
“I feel that we get our service from Atlantic [City] Electric which usually is pretty good, they deserve the opportunity to have our purchase of power from them,” Paynter said.
DiDonato reported that some more facts were needed before determining whether or not this type of program was beneficial for the town and its residents.
“We’re going to need to get more facts, I think even those up here have a lot of questions, just in the closed session council was very split…I think we all have a lot of questions to answer, we don’t know if it’s a good or a bad program at this point,” DiDonato said.
Councilman Thomas Gribbin wanted to clear up some confusion surrounding the program and stated that it was purely for the benefit of the residents, not the town municipal government.
“This is a program that is for the residents, not a program that the town would enter into for any type of benefit to the town municipal government itself,” Gribbin said.
Interim Public Works Manager/Business Administrator Jerome Barberio requested that the administration committee be given the responsibility of choosing a consultant for the town.
“I’d like to request to mayor that the admin committee be charged with picking an aggregation consultant based on the NJ DCA fee procurement program vendor list,” Barberio said.
Wuillermin stated that he would like the process of choosing a consultant to be more publicly-vetted.
“I would like to have that to be a publicly-vetted process, I’d like to have all the vendors make a presentation and I would like to make sure we explore all the advantages to the consumers of our town,” Wuillermin said.
It was decided that the administration committee would be responsible for setting up that process and would report back to council at the Special Meeting of mayor and council to be held on April 28.
“Let’s send it to admin… and we’ll report back on the 28th of April,” DiDonato said.
Town solicitor Brian Howell reported to council that a notice was received about an appeal filed by the applicants for the Wawa Food Market and Fuel Station, which was denied by the town’s zoning board.
“We received notice… the application of the Super Wawa there at [Route] 54 and [Route] 30 that application was denied. They have now filed an appeal and we need to respond to that,” Howell said.
According to Howell, the legal defense would have to be taxpayer-funded.
“That kind of legal defense would not be covered by insurance,” Howell said.
Council authorized planning and zoning board attorney Michael Malinksy to handle the defense for an estimate not to exceed $5,000 upon Howell’s recommendation.
“We need to defend that lawsuit… my recommendation would be to have the planning and zoning attorney Mr. Malinsky handle that defense. I conferred with him, he indicates that his estimate would be not to exceed $5,000… if all goes according to plan I have no doubt that he’ll stay within that budget,” Howell said.
Gribbin recused himself on the matter.
The town authorized the Feast of Our Lady of Mt. Carmel procession, carnival and fireworks to be held July 14 to July 19. Fireworks are scheduled for July 16 with a rain date of July 19, according to the agenda.
Also passed was a resolution supporting the Open Government Records Act at all levels of government which calls for “all levels of government to maintain transparency in order to demonstrate the openness and honesty of its transactions.”