Striking a compromise

Council agrees on 2017 budget funding with compromise on surplus, roads


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  • Photo by Linda Smith Hancharick Councilman Tim Wagner discusses ways to work the budget down to a zero increase for taxpayers with Bob Casey, standing at the podium. From left, Councilwoman Ada Erik, Councilman Mike Hensley, Wagner and Mayor Bettina Bieri.



“Our auditor, CFO, expert budget consultant and administrator all strongly urged the governing body not to utilize more funds from surplus.”
Mayor Bettina Bieri

BY LINDA SMITH HANCHARICK

By the end of the night Wednesday, the township council had come to an agreement on the 2017 municipal budget, a budget that will not raise taxes for West Milford taxpayers. How did they get there? They compromised on road funding and surplus.

Getting there, though, was contentious at times.

No to using more surplusThe last hurdle in this $33 million municipal budget came down to $224,000. That’s how much money was needed to get to a zero increase, something Councilmen Tim Wagner, Lou Signorino and Pete McGuinness were adamant about from the start.

Signorino started the discussion by motioning to move the $224,000 from the town’s surplus funds. That resulted in a 3-3 tie vote from his council colleagues. Mayor Bettina Bieri was the tie breaking vote. She voted no.

“The governing body had a few options to accomplish our mutual goal of a zero tax increase, but further diminishing our surplus by $224,000 was not the most fiscally prudent option,” said Bieri to th e Messenger. “Our auditor, CFO, expert budget consultant and administrator all strongly urged the governing body not to utilize more funds from surplus.”

Surplus is keyThe council is taking $2.8 million out of surplus for the 2017 budget, which is normal operating procedure. The township’s experts, including auditor Chuck Ferraioli, Chief Financial Officer Ellen Mageean and budget consultant Bob Casey, have cautioned the governing body that a decreased surplus could affect the municipality’s bond rating, which in turn could cost them more in interest on existing debt and new debt.

McGuinness pointed out that even with the $224,000 coming from surplus, the township would still have $1.1 million left. A financial professional himself, McGuinness said even if the township went from a AA+ rating to a AA, the borrowing rate may not change.

Bieri said an increase of one eighth or one quarter of a percent over the life of a bond would cost the township an additional $250,000 or $500,000 respectively. This would defeat the purpose of moving the road funding to the operating budget instead of bonding for it, making it a “pay-as-you-go” expenditure, she added.

Long-term planning for roads fundingThe council added $274,000 to the operating budget this year to fund road improvement and plans to do it each year to avoid borrowing the money and paying the bond cost and interest on it. This was something the entire council agreed to do.

Councilman Michael Hensley made the motion to remove the $274,000 for the roads from the operating budget to bring the budget to the zero increase.

“The whole purpose to move the roads to the capital budget is to save money in the long term,” said Signorino. “I want to see the roads portion stay in the operating budget. It’s the responsible thing to do.”

“To say we might lose our rating, that’s silly,” he added.

Wagner suggested the administration go back to the budget and find the additional money to cut, something administrators have already tried.

A compromise is metAnd then Wagner suggested a compromise. Take half the money out of surplus and half from the roads. Hensley amended his motion to take $112,000 from the road funding in the operating budget and $112,000 from surplus.

Taxpayers will have the same tax rate as they did in 2016, the surplus will remain healthy and the operating budget will contain $162,000 for roads.

The motion passed unanimously.

Hensley was pleased with the outcome and the process.

“I think this is an exercise in good government.”

There will be public hearing for this budget on June 7, followed by its adoption, barring any last minute changes.

The township council meeting begins at 6:30 p.m. at town hall, 1480 Union Valley Road, West Milford.

Tell us your thoughts at westmilfordmessenger.com.


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