Thanks to debt refinancing and additional revenues, Haddon Township commissioners have proposed a zero-percent increase for the $12.57-million 2015 municipal budget.
By Matt Skoufalos
After approving an infrastructure bond in October 2014, Haddon Township taxpayers will be footing the bill for some $40 million in school upgrades for the next 30 years. As a direct result, 2015 school taxes are up some $281 per household, on average.
Perhaps making that investment somewhat more palatable, however, is the fact that Haddon Township commissioners have kept the municipal taxes flat for the next year.
At $0.637 per $100 of assessed value (or $1,428 for a property assessed at the township average of $224,150), local use tax will remain flat over year-ago levels, even though the $12.57-million 2015 budget is up $264,000 from the $12.068-million 2014 budget.
“Our schools are very important, but we have to pay for it,” said Paul Dougherty, Haddon Township Commissioner of Revenue and Finance. “We know our state aid’s not going up. There’s nothing else we can do other than keep it flat.
“Is it going to make it more palatable? I don’t know,” he said. “But the municipality will look at us and say we held the line.”
Haddon Township CFO Jack Bruno said that local leaders were able to keep the budget flat through debt refinancing and, as has been typical in many local communities, a prudent draw-down of its financial reserves.
“There’s two main objectives that the commissioners conveyed to me: they want to have good service and do it as cheaply as possible,” Bruno said.
“I think for the average taxpayer, you’re looking at over $1,400 per year in municipal services out of a $12.5 million budget; that goes pretty well.”
Surplus spending, increased construction fees
The township will spend $990,000 of its surplus in 2014, down from $1.2 million in 2014, leaving $921,717 in a surplus that has dwindled from $2.036 million in 2013.
The projected increase of some $234,000 in local revenues and a high tax collection rate allowed for the increased use of funds, Dougherty said.
“Our expenses did go up, but the revenue generated is more than the surplus we’re using,” Dougherty said.
“I think the $2-million [surplus]was too much, but we’re very high on the tax collection because we do the expedited tax sale, so we don’t have any loss of tax revenue.”
Total general revenues in the 2015 budget were up $500,000, or 4 percent, climbing from $12.068 million in 2014 to $12.569 million.
Among those added revenues was a $90,000 increase in construction code fees (up 36 percent from $160,000 in 2014 to $250,000 in 2015), which Bruno said was related to the volume of construction activity, and a $201,000 New Jersey Department of Transportation municipal aid grant for the repaving of Mansion Avenue.
Offsetting those revenues were increased salary and wage costs (up 45 percent, from $193,475 in 2014 to $357,518 in 2015) and other expenses (up 22 percent from $544,356 in 2014 to $697,141 in 2015).
Some of those increases represent “union contracts in various stages,” Bruno said; at least $161,200 of that cost will be absorbed by a “safe and secure communities” grant that funded the hiring of four new police officers.
The budget also includes an additional $60,000 for legal services (up 23 percent, from $204,500 in 2014 to $264,500 in 2015), as the township anticipates “active litigation” costs defending its affordable figures in a suit brought by Fair Share Housing, Bruno said.
“It’s still ongoing,” he said.
Wages up, debt refinancing
Employee retirement contributions are also up 39 percent, from $154,581 in 2014 to $253,395 in 2015, offsetting a $142,025 cash deficit from the state pension fund, Bruno said.
“We’re required by law to appropriate and pay those pension amounts by April 1 of every year,” he said. “They fluctuate.”
Haddon Township also has budgeted some $65,000 to cover the bonding of $2.375 million in capital projects: $870,000 for roads, $200,000 in storm drainage and improvements to the municipal facility, and some $185,000 in vehicle costs.
Setting aside the $65,000 doesn’t necessarily mean that the township will incur that debt, Bruno said.
“Throughout the course of the year, they’ll determine whether they’re viable projects or not,” he said. “I don’t think there’s additional bonding yet in our thought process.”
However, the refinancing of its existing debt is what allows Haddon Township to fund capital expenditures, Bruno said.
The 2015 Haddon Township budget allows for $1.721 million in debt service, down 3 percent from $1.768 in 2014. It also allocates $792,550 in principal payments, up 1 percent from $785,000 in 2014, while interest payments are down 11 percent, from $353,000 in 2014 to $314,000 in 2015.
“About 20 percent of everybody’s dollar goes to their municipal taxes,” Dougherty said.
“We’re responsible for our 20 percent, and I can say that [Commissioner] Randy [Teague], [Commissioner] John [Foley], and I are proud of it.”