Point Boro GOP Says They're Not Using Too Much Surplus
Republican council members defend use of most of surplus to avoid higher tax increase
The veteran Republican members of Point Borough Council say they have left enough money in surplus for next year and have adopted a sound budget.
Councilmembers Bob Sabosik and Toni DePaola are refuting Democratic Councilmember Chris Leitner's opinion that too much of the surplus was used in the municipal budget adopted on Tuesday night, which may lead to a higher than necessary tax increase next year.
"We went over this budget with a fine tooth comb," DePaola said. "It's a sound budget. And I believe the town is left with enough surplus. That comes from tax dollars and the best way to use it is to give it back to the people. It seems silly to raise taxes even more when we're sitting on that money."
Sabosik said the new budget uses $1.2 million out of a total surplus of $1.364 million, which leaves $164,000.
Sabosik and DePaola both said that auditors from Hutchins, Farrell, Meyer & Allison, the new municipal auditor, said the town can anticipate generating about $1 million in surplus next year, based on expectations that the current tax rate of 96.7 percent will remain stable or even improve.
Leitner was the only no vote against the budget at the meeting on Tuesday night, when there was almost no discussion of the budget and no questions from any residents. The special budget meeting at Borough Hall lasted barely 20 minutes. Councilman John Wisniewski was absent.
Sabosik and DePaola said in separate telepone interviews on Thursday that they are confident there will be enough revenue generated next year to avert the need for a tax increase any higher than what would be needed otherwise.
Sabosik said, "The surplus is from money left over from the previous year. It should be used to help lower the tax rate. I disagree with Councilman Leitner's opinion that we used too much out of surplus. It's taxpayers' money. It should not be hoarded.
"I firmly believe that this is a conservative budget to keep taxes down as much as possible for our residents," Sabosik said. "I'm sorry Mr. Leitner disagrees."
Municipal surplus can also serve as a savings account to help pay for emergencies. When asked if the Borough will have enough surplus to cover an emergency, Sabosik said he believes it will, but that the council can also vote for an emergency appropriation or bond issue if it needs more funds.
"There are other ways to do it," he said.
When asked about how the town will cover costs for emergencies, such as a winter with heavy snowfalls, Sabosik said costs to handle plowing for a winter emergency would be mostly reimbursed by Federal Emergency Management Agency (FEMA) funds.
DePaola noted that unlike last year, this year the budget does not use school-deferred taxes, which meant that the Borough made temporary use of school tax revenue before it had to pay it to the school district. The town collects taxes for the school district and Ocean County, as well as for the town.
"Last year, we had to use school-deferred taxes to keep taxes lower. But this year we had surplus we were able to use," she said.
For example, after the tough winter of December 2010 into 2011, FEMA reimbursed about $86,000 to the Borough, he said.
The budget just adopted calls for the municipal tax bill on a home assessed at $300,000, which is the average Borough assessment for a home, is increasing from $1,146 to $1,212. The total municipal budget is decreasing from $18.4 million to $18.3 million.
The amount to be raised by local taxes is increasing from $12.5 million to nearly $13.2 million.That amount is only for municipal taxes and does not includes taxes for the local school district or for Ocean County government.
The Borough's tax collection rate has increased from 95.50 percent to 96.74 percent.
The budget will increase the municipal tax rate by 2.22 cents, compared to 2.16 cents as called for in the budget when it was introduced on July 2.
Leitner said after the meeting that he voted no because he is concerned about the majority on council using about $1.2 million of a total of about $1.3 million in surplus. He said the problem with using nearly all of the surplus is that if the Borough generates less surplus than expected next year, it will likely mean a larger tax increase.
"If you come up short the following year, then you have to raise taxes more than you would have to otherwise," Leitner said.
Regarding other aspects of the Borough's financial situation, DePaola said the council continues to look for ways to save money, including working with the local unions.
"The unions have been very forthcoming, taking smaller raises and paying more into their medical and pension benefits," DePaola said.
For example, she said, the local police union has agreed to a two percent raise over the next two years, along with revised starting salaries and salary increase steps. She said some details have to be finalized with the new, pending police contract before she can discuss the remainder of the terms.