SOUTH ORANGE, NJ — Getting an earlier start this year than in previous years, the South Orange Board of Trustees introduced the 2018 municipal budget at its March 26 meeting.
With a vote of 6-0, the BOT approved the introduction of the budget, which comes in at $37,142,670.57 — $1,236,298.08 more than the 2017 municipal budget of $35,906,381.49. South Orange residents will see a tax increase of approximately 1.9 percent; the average homeowner, with a property assessed at $581,000, will pay $91.43 more annually in property taxes.
“At this point, we feel pretty comfortable with the budget,” Trustee Stephen Schnall, who chairs the Finance Committee, said at the meeting. “We have a cap at 2 percent, which we have been able to stay below again this year. It was challenging. There were, as we have had in the past few years, some deferred payments due to tax appeals, and that forced us to allocate some monies there. We also have put money aside for a capital budget, which we will not be introducing today or voting on — probably that will be in a few more weeks.”
Village President Sheena Collum agreed that, while the budget increased to address costs, it is fiscally sound and the lowest the village could go.
“We are hitting a time right now where we are doing a lot of infrastructure and capital improvements to our buildings,” Collum said. “So if anyone wanted to see a zero percent increase, it’s not going to happen.
“We’re not using any banked cap, but we need to put aside money for our capital improvements,” Collum continued, saying that the village has to improve the Baird Center, tennis courts, water system and police building. Also, the village is looking for a contractor to upgrade the South Orange Public Library and create space in the building for municipal services.
According to Collum, the village probably has more than $20 million in deferred maintenance costs, and the longer the village waits to fix these issues, the more expensive they become.
“At the same time, we have entered into more shared service agreements. We have aggressively sought out grants. We have capitalized our redevelopment projects and also not done a single long-term tax abatement with any of the projects in the past couple of years,” Collum said. “We are also looking at efficiencies with our police department, changing our table of organization, saving significant money on overtime costs. We are right now talking about a consolidated fire department with the township of Maplewood, which would yield up to $1.6 million in savings.”
“We feel it is a good budget and one of the main things obviously that we are trying to do is make sure we don’t lose any services. We’ve allocated enough money for a number of projects that this board has discussed that are important to us,” Schnall said. “I think we’re in pretty good shape.”
Trustee Deborah Davis Ford also reminded audience members that the majority of their taxes go to the schools, not the municipality; only 27 percent of property taxes go to the municipality. Nevertheless, Davis Ford stressed the importance of having a good public school system. Additionally, she noted that the major cost drivers in the budget each year are health benefits and pensions, something over which the board has little control.
While most municipal governments in New Jersey introduce their budgets in March and April, South Orange had typically introduced its budget a few months later, which was allowed due its type of village government. However, this year the administration and the Finance Committee worked to get the budget out earlier, giving the village more time to tweak it if necessary.
“We are actually still in March and one of the things that the Finance Committee has endeavored to do this year was not to wait. For those of you who remember, we have been passing the budget much later in the year,” Schnall said, noting that last year’s budget was passed in late summer.
He credited former village administrator Barry Lewis Jr. with completing so much of the necessary prep work before leaving to take a position in Livingston.
According to Schnall, the Finance Committee will also request that the Citizens Budget Advisory Committee take a look at the budget and provide feedback. A public hearing will be held on the budget at the April 23 BOT meeting at South Orange Performing Arts Center.
The BOT also passed Ordinance No. 2018-11 on first reading, which allows the village to exceed the 2-percent tax increase cap, should the need arise. Banked cap is often seen as a rainy day fund. The vote came in at 4-2, with trustees Howard Levison and Mark Rosner voting against the measure. These votes were unsurprising as the two have opposed prior ordinances to establish banked cap in prior years’ budget discussions. In fact, the board rejected the ordinance to establish banked cap in June 2017.
“I strongly disagree with passing this ordinance. I don’t believe in capping. I believe we can manage our budget properly,” Levison, who is known on the board for his fiscal restraint, said at a board meeting on June 12, 2017. “If we need to, we can always have emergency appropriations.”
Though she voted against establishing banked cap last year as a tie-breaker, this year Collum seemed to support it, asking the board to just vote on it and avoid an argument.
“I’m going to ask for no drama on this,” Collum said. “We go through this every single year. It is not the intention of the governing body to go beyond the 2 percent, but this is a model ordinance that allows us, if need be, to go above the 2 percent. Last time, we voted it down because we strongly believe that we can keep our budget in check below the 2 percent, but municipalities give themselves the flexibility in the event of an emergency appropriations, etc., that allows them to go above that.”
A second reading of this ordinance for final passage and a public hearing will take place at the board’s April 23 meeting.
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