The $28.5-million cash influx frees the borough to make necessary improvements, but keeping taxes flat is the result of years of work, Mayor Jeffrey Kasko says.
By Matt Skoufalos
A little more than a week after introducing its 2015 municipal budget, Haddonfield Mayor Jeffrey Kasko received notification that the borough accounts were $28.5 million richer.
The big payoff marked the consummation of the Haddonfield water and sewer infrastructure sale to New Jersey American Water of Voorhees, and although the deal didn’t have a significant bearing on current-year figures, those dollars will have quite an impact on the financial flexibility of the borough in the near future.
“It’s going to be put in a trust account to pay off the [nearly $16 million in]debt for the water and sewer of the borough,” Kasko said.
By retiring early that debt (on which $1.36 million in servicing fees will be paid in 2015 alone), Haddonfield frees up operating revenues for other projects, from roadway improvements to tax relief, Kasko said.
“Because that debt service principal and interest is going to start going down next year, it frees up money in that section of the budget,” the mayor said. “That’s the big effect.
“As we pay down principal and interest payments, those line items go down so we can spend it on [other needs].”
Flat taxes, flat aid
Even without those additional funds, taxes are staying flat in Haddonfield for 2015.
The $16.25-million municipal budget, of which $10.13 million will be raised through local property taxes, levies 48.7 cents per $100 of assessed value, or $2,393 for a home at the borough median valuation of $491,359.
The local levy, which accounts for about 16 percent of the total tax bill, was identical to year-ago levels, despite a $2.2-million loss in ratables and state aid figures that have remained flat for five consecutive years.
Without grant aid, the 2015 budget is up $914,204, or 6 percent over the $15.32-million 2014 budget, and raises almost $20,000 fewer dollars ($19,386).
Because Haddonfield enjoys a 99-percent tax collection rate and “very healthy” revenues, “we’re able to adequately fund—in fact, increase—spending on capital improvements, and we’re able to live within our means,” Kasko said.
“We have a responsible budget,” he said. “[Residents] are getting an increase from the school board; they’re getting an increase from the county. To the extent that we can offset that by having a zero [increase]I think is a great thing.”
To keep taxes flat, Haddonfield will draw on $1.7 million in surplus funds in 2015, identical to what was used in the 2014 budget, while keeping the general fund balance at a robust $5.4 million.
Kasko also credits cost-saving moves made in the past half-decade with having a cumulative impact on the bottom line. Outsourcing trash collection and sharing court services with Audubon has “saved us as well,” he said.
The utility sale also added $346,586 to the $7.784 million (48 percent of the 2015 budget) allocated for employee salary, benefit, and pension payments.
“We had to absorb some costs that were on that budget that were applicable to people who work in Borough Hall,” Kasko said.
“Part of their time was allocated towards the water and sewer budget; we no longer have that if we have that water and sewer utility.”
In 2015, Haddonfield also expects to negotiate successfully new contracts with its police and public works employees, which Kasko said could bring “modest increases” in wages that are typically extended to non-union workers in Borough Hall.
“Other than that, we’re fairly constant,” he said. “We’re not adding new employees, with the exception of one part-timer, because we’re not adding new services and programs.”
The influx of cash from the sale of the local water and sewer system will also be directly reflected in the 2015 capital budget, which dedicates $1.4 million in cash—not bonding—for roadway design and reconstruction.
That’s up 41 percent from $830,000 in 2014, which Kasko called, “a pretty significant jump for one year.
“It’s not going to fix everything right away, but it’s going to get us closer to getting everything done instead of delaying and underfunding [such projects],” he said.
(In September 2014, Haddonfield Commissioner John Moscatelli presented a “life-cycle analysis” of roads in the borough wherein he calculated some $18.5 million could be needed to bring local roadways in the worst condition up to snuff in the next five years alone.)
Cash will fund the 2015 roadway projects, but other capital issues outlined in the 2015 budget will be funded by grants and bonding. Among the former: repairs to the Interfaith Caregivers Building (which Kasko said will be covered by a Community Development Block Grant) and the replacement of a public works vehicle (covered by a recycling grant). The replacement of a borough wood chipper will be covered by debt service, as will a new heating and sprinkler system for Borough Hall.
“You’ve got $1.4 million in cash, $115,000 in grants, and only $60,000 or $70,000 in bonded debt,” Kasko said.
With responsibility for the water and sewer utility no longer in the hands of the borough, Haddonfield residents will have to wait for the new owners of their infrastructure to fix it up, a process Kasko said has already begun with repairs to some Grove Street pump stations in advance of a larger county roadway improvement.
“They already have an outline of where improvements and pipe replacements have to be done over the next few years,” the mayor said.
The second reading (and anticipated adoption) of the 2015 Haddonfield municipal budget will be Tuesday, June 9, at the borough commissioners meeting.