Fingers Pointed As Parsippany Faces Fines For Late Budget

Update: The special meeting, which includes a public hearing on the budget, will take palce at 5 p.m. Monday. The council will introduce the budget, according to parsippany.net.

PARSIPPANY, NJ — Parsippany's process of completing a budget has been filled with months of disagreements. But the state raised the stakes by warning township officials they could face fines for their late budget.

Mayor Michael Soriano and Township Council President Michael dePierro pointed fingers about who put the township in position for fines. In a July 15 letter, the New Jersey Department of Community Affairs warned Soriano and the council that failure to submit an introduced budget by July 30 would subject them to personal penalties of $25 per day until submission.

"While some delay is understandable, the fact that your municipality has not introduced a budget within the time frame authorized by the Division compromises the municipality's fiscal integrity," wrote Jacquelyn A. Suárez, director of the Division of Local Government Services within the DCA.

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Soriano submitted a budget to council days later at July 20's Township Council meeting. Councilmembers must formally introduce the budget after the administration submits it. The council is currently reviewing the budget.

That gave the council 10 days to review the budget before the state's deadline. After the deadline passed, Suárez sent a follow-up letter, requiring officials to appear before the Local Finance Board on Aug. 11 to provide testimony on the delay of the budget.

Township Council will hold a special meeting at 5 p.m. Monday to introduce the budget and hold a public hearing about it.

"The Township Council just received the budget," dePierro said. "The administration had been working on it for seven months. They wanted the Township Council to pass it in one week. We need time to review the budget ourselves and make changes that we feel are necessary."

Soriano contested that the council has had enough time to review the budget and introduce it.

"For months (the council) delayed this process instead of working collaboratively to help the people of our community," Soriano told Patch. "This all could’ve been avoided months ago. They cannot hide behind their council dais any longer. Perhaps the pain they feel in their own wallets will finally get them to act and introduce this budget so we can get back to working for the people of Parsippany.”

The township has an estimated $9 million revenue shortfall, presenting the challenge of dealing with the immediate crisis without overburdening taxpayers in the future. Failure to close the budget gap could produce a 14.6 percent tax increase for 2021, dePierro warned.

Soriano's administration originally proposed that the township take out a $5 million loan. But the administration and council reached an agreement June 1 to reduce the loan to $2.3 million. The township is in position to fully pay it off once it receives federal COVID-relief funds in 2022. Read more: Emergency Loan Proposal Slashed More Than 50% In Parsippany

Soriano proposed an additional measure Tuesday in authorizing the cancelation of unexpended balances and unused reserves, worth $1.1 million.

"Without this, the 2.15 percent budget increase we are proposing will not be possible, and deep cuts will have to happen," Soriano said.

But the resolution failed, with three no votes and one yes vote — Council Vice President Loretta Gragnani was absent, because her husband tested positive for COVID-19, dePierro said.

Councilmember Paul Carifi Jr. provided the only "yes" vote, saying constituents have urged local government not to raise taxes this year as they deal with the coronavirus crisis.

"I know there’s going to be a crisis again next year," Carifi said. "But to ask our residents, to overburden them with an increase above what’s already been proposed, I just in my heart can’t say that to people that have lost their jobs."

But other councilmembers argued that the cancelation would kick issues to future years, when they anticipate further difficult budgeting processes.

"I can appreciate that people are struggling, but I think it’s about the future of the town and how we can move forward," said Councilmember Janice McCarthy. "We have a $9 million structural deficit, so we not only have to address the issues that we face this year. We also have to begin to address that $9 million."

Soriano's budget features a 2.15 percent tax increase. The budget also includes the $2.3 million loan that the administration and council agreed to take, along with $2.7 million allocated from the American Rescue Plan — a federal COVID relief package signed into law March 12.

The township avoided utility-surplus transfers to offset budgetary shortfalls, opting instead to explore canceling appropriation reserves and treating township utilities as self-sustaining entities. The change would ensure utilities are both responsible for their own budget status and transparent in the township budgeting in the future, the administration said.

"This budget is balanced, fiscally responsible, and meets both the Council and the Department of Community Affairs requirements," said Business Administrator Fred Carr. "At the end of the day, it's our duty as township administrators to continue providing the services that our residents depend on while keeping costs down. This budget meets every one of those requirements."

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