NO BUDGETS

Perth Extension To Oct. 13


(Reprinted from Oct. 6, 2010 Amboy Beacon) PERTH AMBOY — The municipal portion of the local property-tax bill is expected to remain the same until the end of 2010 as a result of City Council action scheduled to be taken next week.

A public hearing on Amendments to the Transition Year 2010 Budget, used to bridge the gap between the Fiscal Year 2009-10 Budget and the Calendar Year

2011 Budget, will be held on Wednesday, Oct. 13, at 7 p.m. at City Hall, High Street.

The Resolution to adopt the Amendments and schedule the hearing was moved by Councilman William Petrick, seconded by Councilman Kenneth Gonzalez and adopted 4-0. Council President Kenneth Balut was absent.

Interim Business Administrator Gregory Fehrenbach explained that the Amendments would result in “no changes to revenues except to include numbers for grants, which are figures unavailable to us earlier.”

The overall size of the six-month TY 2010 Budget, which covers the period from July 1 through Dec. 31, 2010, totals $39,518,509, which is $262,517 larger than half of the FY 2009-10 Budget ($39,017,575).

The amended TY 2010 Budget is $1,238,417 higher than the previously-adopted TY 2010 Budget of $38,280,092.

The Amount To Be Raised By Taxes is $27,607,153 over six months, exactly one-half of the Amount To Be Raised By Taxes over one year for FY 2009-10 ($55,214,306).

Fehrenbach took a slightly-longer than an hour to go-over the spending plan in some detail.

“We made corrections to our estimates, adding grants that we’ve received since our previous numbers, but the tax-levy is fixed.” he said.

Rather than simply halving line-item accounts, the TY 2010 Budget as it was developed includes substantial increases for such things as the Reserve For Uncollected Taxes — from $998,726 for FY 2009-10 to $2,321,906 for TY 2010 — and the Reserve For Tax Appeals — from $185,000 for FY 2009-10 to $1,000,000 for TY 2010.

Apparently, the city is anticipating future difficulty in tax-collections because of the sputtering national economy, even-though the Tax-Collection Rate for FY 2009-10 was a healthy 94.8-percent.

General Liability Insurance for TY 2010 is $745,000 for six months, compared to $735,000 for a full year in FY 2009-10, and Workers Compensation Insurance for TY 2010 is $1,749,895 for six months, compared to $2,365,000 for a full year in FY 2009-10.

On the other hand, Urban Enterprise Zone (UEZ) — $484,624 in FY 2009-10 — was lowered to $15,000 in the unamended TY 2010, but now is increased to $517,099.

Emergency Management — $102,300 for Salaries & Wages and $6,500 for Other Expenses, or a total of $108,800, in FY 2009-10 — is zeroed-out in TY 2010.

Fehrenbach explained that the TY 2010 “is not simply a one-year budget cut-in-half” because it reflects expenses as they are incurred during certain times of the year.

“For example, there are no contributions to the pension system because those payments are made in April, but most of the general liability insurance payments are included because these are made during the last half,” he noted.

A transition budget “has no policy-initiatives” and “a capital budget that’s really of-no-consequence,” Fehrenbach said.

In these ways, he likened a transition budget to “two temporary

(three-month) budgets rolled-together.”

The big policy debates will come later, after what Fehrenbach called “a little relief for a short time.

“We want to get this (TY 2010) Budget behind us so that we can start working-on the Calendar Year 2011 Budget,” he said. “There will be challenges, and it’s not going to be easy. A two-percent cap is extremely-limiting.”

In an attempt to head-off a projected financial crisis down-the-road, the previous Council voted unanimously on May 26 to enact an Ordinance authorizing reversion from a Fiscal Year (July 1-June 30) Budget to a Calendar Year (Jan. 1-Dec. 31) Budget.

In reverting to Calendar Year budgeting from Fiscal Year budgeting, Perth Amboy followed the lead of neighboring South Amboy, which was the first munic ipality in the state to revert from Fiscal Year budgeting to Calendar Year budgeting in 2009 under a new state law giving municipalities which were mandated to change from Calendar Year budgeting to Fiscal Year budgeting — like Perth Amboy and South Amboy — the option of going-back to Fiscal Year budgeting.

Fehrenbach pointed out that one of the good things about reverting from Fiscal Year budgeting to Calendar Year budgeting will mean “a single tax-bill, instead of two, three or four.”

Also, “had the city not done-so, we would be facing an immediate shortfall of $5.2 million, due primarily to cutbacks in state aid, including Energy Receipts and Extraordinary Aid,” he said. “This way, the city can collect 24 months of state aid in 18 months.”

Getting philosophical, Fehrenbach spoke of “the continued discrimination in local government between public-safety and non-public-safety employees.

“Fifteen or 20 years ago, there was no division between them,” he said.

“In 1977, binding-arbitration created a group of prima-donnas and others.

That discrimination was continued by the Legislature, but you don’t have any control over that — that’s the design the Legislature has created.”

“That’s one of the most-important things we need to look-at,” Councilman Joel Pabon Sr. said. “I’m glad that it’s been brought-up. Someone needs to look at that to kind-of level it out.”

“With negotiated agreements for more time-off, you’ve lost the ability to provide services,” Fehrenbach said. “That’s where part of the problem exists. Once it’s gone, it’s essentially out-the-door.”

“If the money’s not there, how are we going to pay-for services?” Pabon noted. “That’s the bottom-line.”