Budget meeting goes bust

West Milford. Lacking a quorum of members Monday night, the Township Council could not act to adopt the proposed $35.2 million municipal budget.

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With half of the Township Council members absent for Monday night’s special budget meeting, the governing body could not adopt the proposed $35.2 million spending plan.

Members Lou Signorino, Andie Pegel, and Council President Peter McGuinness, did not attend the special meeting due to prior work commitments, Mayor Michele Dale said Tuesday.

Without a quorum of four members, the panel could not take formal action on the proposed budget and will now likely place it on the agenda for the next meeting on July 10, Dale said.

Signorino and McGuinness previously favored using the current $1 million in surplus to fill an estimated $800,000 budget hole that would otherwise raise the local municipal tax by about $100 for the owner of a home assessed at around $246,000.

During the last meeting, Acting Administrator and Budget Consultant Bob Casey warned the councilmen that using up the surplus to fill the hole would likely cause a much larger increase next year, and that the council voted in March to keep at least $1 million in the surplus fund.

Dale also cautioned the council during that meeting that using the surplus would likely lead to a drop in the township’s bond rating, which would make it more expensive to borrow money in the future.

Signorino eventually withdrew a motion to use the surplus funds after Pegel said she did not have enough information on the consequences of the move to vote on it.

Councilwomen Ada Erik and Marilyn Lichtenberg both opposed using the surplus while Councilwoman Patricia Gerst expressed her support.

If the vote was taken with a tied outcome of 3-3, Dale would have cast the deciding vote, and she also opposes using those funds.

In a memo to the council from Casey Monday, the acting administrator and budget consultant said that using the surplus this year may lead to a tax increase of $209 for the owner of an average home next year because there were no spending cuts to offset using the $1 million.

“Assuming the 2020 budget is essentially the same as 2019 with fixed cost increases managed within the basic existing budget structure, and assuming that the surplus regeneration estimate made by Councilmember McGuiness is correct, there would be approximately $1,641,000 less in surplus available to be applied resulting in a potential tax increase of $2,312,605,” Casey’s memo said. “In reality, either the revenue budget must grow to reflect the standard reoccurring operational costs to sustain long term fiscal stability or there must be dramatic appropriation reductions.”

Dale also created a spreadsheet showing what would happen to the interest rates charged to the municipality if the bond rating dropped due to spending the available surplus.

Dale’s estimate showed between $412,000 - $1.6 million more in estimated costs depending on how low the bond rating dropped from AA+ to A.

During a previous meeting, Casey said that not having the surplus for available cash on hand could cause a drop in the rating.

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