Borough Adopts Municipal Budget for 2011

The Mayor and Council adopted the 2011 municipal budget at their public meeting on Monday night. For the average home assessed at $414,000, the increase in municipal taxes will be $108. This is four dollars lower than the initial budget introduced on Feb. 28.

Borough Auditor Gary Higgins gave a presentation during the meeting on an amendment to the budget which reflected some last minute changes required by the state of New Jersey.

Legislation recently passed that requires municipalities across the state to list their libraries as a separate line item on the tax bill.

"This bill passed and it said the library comes out of your budget and creates a separate tax bill," said Higgins. "It is no longer in your budget."

Councilman Diego Robalino expressed concern that when residents will read the new tax bill they will think they are being charged an additional tax.

"The state did require a separate description of what happened and we did make a disclosure for the reader on the budget," said Higgins. "It will be the same thing on their tax bill explaining the change does not reflect an increase, that it was embedded and now it is broken out."

Mayor Ann Subrizi pointed out that the library will now be listed on the tax bill similar to the separate listing for the Board of Education.

Higgins explained the amendment to the borough's budget addressed several issues including the need to advertise transfers of more than 10 percent with any one line item in the budget and the need for a downpayment on capital projects.

For New Milford to be in compliance, $13,000 needed to be cut from the budget. The line item concerning the DPW's road work was cut by $13,000 which came from the salaries and benefits column due to a retirement.

"I think what you are telling me, for John Q. Public's purpose, the bottom line number doesn’t change," said Council President Keith Bachmann. "We got lucky that we found out about the retirement in the road department."

The council adopted both the amendment and the budget on Monday night. The council also authorized the borough to get a tax anticipation note for $1 million to help cover upcoming bills until the higher tax rate kicks in with the August tax bills.

"You are living for the first six to seven months of the year on one half of last year’s tax levy and you have less cash surplus than the prior year," said Higgins. "You’ll have trouble paying the bills because there is not enough cash flow and you have a big pension payment due April 1."

Both Higgins and Borough Administrator Christine Demiris said seeking this kind of "bridge loan" was common and that the borough had done it in past years.

The borough will seek a $1 million tax anticipation note at a rate of one to 1.25 percent which will amount to a payment of about $12,000 in interest. In prior years, the borough sought a tax anticipation note for $2.5 million to $3 million.

"You don’t want to hold your vendors up and shuffle cash around between line items, you don’t want to do that," said Higgins.

There was no comment from the public on either the budget or the amendment. 

The last major financial decision the mayor and council made on Monday was the adoption of a new ordinance for 2011 that allows the borough to exceed the municipal budget appropriations limits and also established a "cap bank."

"What this permits you to do, when the COLA is less than 3.5 percent, this year it was two percent, you are permitted to increase your appropriations," said Higgins. "It has no effect on tax levy cap and is highly recommended by Trenton because it puts you in a position to be ahead of the cap and retain a higher cap base for the future."

Editor's Note: A correction was made to reflect that the passage of the budget was not unanimous as Councilwoman Randi Duffie voted against it, according to Borough Administrator Christine Demiris.