Tag Archives: budget

City Council, tax appeals

Almost $1 million in PILOTs in 2012 budget

5 Comments

The $49-million municipal budget anticipates almost $1 million of revenue from various PILOT (Payment In Lieu of Taxes) agreements, including the first from one of the Park Square properties.

The total $961,000 in PILOT revenue is up from the $783,000 in the 2011 budget and breaks down as follows:

* Lower Essex St – Denholz Management (Rahway Plaza Apartments) – $366,000
* Landmark – $150,000
* Parking Authority (River Place) — $170,000
* Rosegate — $25,000
* Senior citizen housing — $250,000

Landmark, which broke ground on the Irving Street side of Park Square (2 Park Square) in 2006, appealed its assessment in Tax Court, getting it reduced from $6.05 million to $4.077 million.
The Main Street side (1 Park Square) is assessed at $8.965 million.

The PILOT agreement had the developer paying taxes on the assessed value of the parcels as they previously existed. Landmark will begin paying 20 percent of its assessment this year, which will rise 20 percent each year until it reaches 100 percent (which would be 2016).

River Place was constructed on property owned by the Parking Authority, which receives an annual payment from the development’s owner and splits it roughly in half with the city.

The city budget also anticipates $660,000 in revenue from red light camera fines. About $1 million was realized in the Transitional Year budget, which covered the six months of July-December 2011.

The amount to be raised by taxes in the budget is $33.455 million. The proposed municipal tax rate for 2012 is 2.287 (per $100 of assessed value), so the average assessed home ($133,000) would see municipal taxes of $3,042, compared with $3,046 estimated last year. (Remember, municipal taxes make up only a portion of your overall property tax bill; the others being schools and county). Presented to City Council by the administration in February, the municipal budget will be up for a public hearing and vote at the March 12 meeting.

_uacct = “UA-2976232-1”;
urchinTracker();

hotels, motels

New hotel finally breaks ground off Routes 1/9

15 Comments

A new hotel just off Routes 1&9 finally broke ground last month.

A four-story, 93-unit Candlewood Suites gained approval from the Planning Board in March 2009, which was later changed to become a Home2 Suites by Hilton extended stay hotel. Originally, the plan was to construct a Sleep Inn just off Routes 1&9 at the corner of East Milton Avenue and Lennington Street.

The vacant 4.4-acre site was acquired in June 2008 for $2.35 million and currently pays about $6,000 in property taxes as two parcels (Block 338, Lots 3.01 and 3.02).

The city continues to see increased revenues from the local hotel tax enacted almost a decade ago. About $55,000 was realized in the transitional year 2011 budget, covering July to October 2011. Pro-rated, that would be about $110,000, compared to $103,000 in Fiscal Year 2011, $99,000 in 2010, $58,000 in 2009 and $36,000 in 2008, according to municipal budget documents.

The state imposes a 5-percent hotel tax and municipalities are allowed to impose an additional levy of their own of as much as 3 percent. The hotel tax was created during the McGreevey administration in 2003 and Rahway enacted the local tax effective Nov. 1, 2003.

_uacct = “UA-2976232-1”;
urchinTracker();

City Council, tax appeals, taxes

Another look at Merck’s tax appeal settlement

5 Comments
The city’s tax appeal settlement with Merck & Co. added approximately $400 to the average home over three years, according to my estimate. Merck & Co’s tax appeal settlement that was approved a year ago cut the property tax bill for the pharmaceutical giant by at least $4.5 million over three years, reducing its overall tax assessment in Rahway by $82 million, or more than 26 percent.

The appeal affected the tax years 2010-2012 and my estimate includes some assumptions based on 2011 tax rates for 2012. The biggest hit looks like 2011 (see the end of this post). My estimate doesn’t include some other costs the city might have incurred, such as appraisals, litigation and borrowing, only an attempt to quantify how much the new assessments affected the average home.

Overall, the city’s valuation dipped from $1.549 billion to $1.486 billion in 2011 and $1.467 billion in 2012 as a result of the settlement, according to the letter sent to residents last year, explaining the settlement.

As part of the settlement, Merck withdrew its appeal in 2009 and received a cash refund of overpayment of taxes that year of $1.6 million. All told, that’s at least $4.5 million, based on 2011 tax rates, that had to be made up somewhere on the tax rolls.
Some explanation of how I arrived at this estimate: The average home in Rahway is assessed at $133,000. Every $13.30 in municipal taxes on the average home generates about $149,000 in tax revenue. Feel free to check my work in this Excel file; the key figures also are listed below (tax rates can be found on the city’s website). For 2012, I used the 2011 tax rate since the county and schools have not set their tax rate, while the municipal tax rate has only just been proposed.

Merck’s overall assessment was reduced from $312,368,300 to:
– $280,878,500 for 2010 (-$31,489,800)
– $249,699,700 for 2011 (-$31,178,800)

– $230,000,000 for 2012 (-$19,699,700)

Merck’s property tax bill shrank approximately:
– $1,614,797 in 2010 [$144 for average home]
– $1,797,458 in 2011 [$161 for average home]
– $1,135,688 in 2012 [$101 for average home]

_uacct = “UA-2976232-1”;
urchinTracker();

City Council, taxes

Council introduces municipal budget

2 Comments

Municipal taxes are expected to eclipse $3,000 for the average assessed home ($133,000) this year, according to the $49-million budget introduced by City Council on Monday night. The municipal budget makes up about 38 percent of the overall tax bill, which also is made up of the school and county taxes.

The municipal tax levy — the amount to be raised by taxes — is proposed at $33.455 million, down slightly from the $34.118 million estimated for all of 2011, which was split between the second half of the 2011 fiscal year budget and a 2011 transitional year budget. The proposed municipal tax rate for 2012 is 2.287 (per $100 of assessed value), so the average assessed home ($133,000) would see municipal taxes of $3,042, compared with $3,046 estimated last year.

The city’s net valuation dropped from $1.489 billion to $1.462 billion, a decline of $27 million or almost 2 percent, due primarily to Merck’s tax appeal. City Financial Officer Frank Ruggiero told council members that $1.5 million of a $3-million settlement with the Union County Utilities Authority will be used as revenue this year, offsetting the loss of about $1 million in tax revenue this year due to the multi-year tax appeal settlement with Merck. He said the city also plans to become more aggressive in its debt reduction in the 2012 budget.

The City Council introduced the 2012 municipal budget by a 7-0 vote, with two members absent. Final adoption and a public hearing is scheduled for the March 12 regular meeting.

The City Council in November approved a transitional year budget covering July-December 2011, as it moved from a fiscal year budget (July to June) to a calendar year budget this year. Municipal taxes were about $1,522 for the average home for the six-month transitional year budget, and about $2,416 in the last fiscal year budget.

_uacct = “UA-2976232-1”;
urchinTracker();

City Council

Poll results: Reduce mayor and Council salaries

Leave a comment

More than a third of voters in our latest poll agreed that City Council should reduce the mayor’s salary, with another quarter adding that salaries for City Council members should be cut as well.

The City Council is scheduled to vote on a salary ordinance tomorrow night that would reduce the mayor’s salary by 68 percent, to $20,809.

Should the City Council reduce the mayor’s salary?* Yes. 34 percent (44/128 votes)
* Yes, but they should all be cut, including Council members. 23 percent (30/128)
* Not only cut, but salaries for all elected officials, and then some, should be cut. 17 percent (23/128)
* No. 12 percent, (16/128)
* No; you get what you pay for; they should be paid something to attract worthy candidates. 7 percent (10/128)
* Times are tough, make cuts wherever you can. 3 percent (5/128)

There were a total 128 votes cast in the latest poll and there was as smattering of votes both for and against that I received via email, which I’m not sure if they actually went to the site and clicked on the poll.

I always like to offer more than a yes/no question in the poll, and I realized too late (after I’d posted it and some votes had already come in) that I should’ve had another option, something like, “No, it reeks of political retribution,” since that’s what the mayor is claiming. Perhaps that would’ve gotten some more votes for the no group, or least another option, compared to the three “Yes” options. Either way, about three quarters of the votes favored a reduction in some way, and 40 percent wanted to cut all salaries, not just the mayor’s. In all, 20 percent of votes said don’t cut the mayor’s salary.

Remember this is a simple poll that, if you have enough time to waste, can be manipulated. It’s not exactly scientific.

_uacct = “UA-2976232-1”;
urchinTracker();

City Council

New poll: Should the mayor’s salary be reduced?

22 Comments

Since it’s a slow, holiday week, and it’s been too long since we had a poll up on the blog, what better time to unveil a new poll question? Completely unscientific, of course.

The City Council introduced a salary ordinance this month that would reduce the mayor’s salary from $65,000 to less than $21,000, a cut of 68 percent. City Council members are paid $8,043, with the Council President earning slightly more, at $9,676. Both are considered part-time positions.

Should the City Council reduce the mayor’s salary?
* Yes.
* Yes, but they should all be cut, including Council members.
* Not only cut, but salaries for all elected officials, and then some, should be cut.
* Times are tough, make cuts wherever you can.
* No; you get what you pay for; they should be paid something to attract worthy candidates.
* No.

_uacct = “UA-2976232-1”;
urchinTracker();

City Council

City Council moves to slash mayor’s salary

9 Comments

The City Council introduced a salary ordinance Monday night that would slash the mayor’s salary by 68 percent, drawing a 5-minute rebuke from Mayor Rick Proctor in which he called the move an abuse of legislative power and political retribution.

The ordinance (O-38-11), which will be up for a final vote and public hearing at the Dec. 12 meeting, would set an annual salary for the mayor’s position of $20,809 — a 68-percent reduction from $65,000. The salary ordinance passed 8-0 (one absent) and would take effect Jan. 1. City Council members, who received a roughly 2 percent increase in the previous salary ordinance adopted in September, would remain at the same pay level of $8,043 in the new ordinance ($9,676 for the council president).

“This isn’t about Rahway. This is about a political falling out and an abuse of legislative power. This is a personal vendetta, not public policy. This is not about Rahway, this is about vindictiveness. Am I bitter? Yeah, I am. I’m human,” said Proctor, adding that he took a $50,000 pay cut to run for mayor.

Proctor said $50,000 could be saved if City Council members cut their salary by 68 percent. He rattled off figures indicating that from 2005 to 2011, certain department heads saw their salaries rise as much as 30 to 40 percent. During the same six-year period, the mayor said City Council increased its own salary by 18 percent. “That’s preposterous, and sends a very clear message to the public that you’re either going to sleep through this recession or feel entitled to inflict economic pain to insulate yourself from sacrifices,” said Proctor. “I’m certain that the public will recognize that this ordinance stinks of retribution,” he said.

“Every day the people of Rahway suffering from economic hardship and the only solution you can come up with is to pick my pocket,” said Proctor. “That is inspired leadership.”

The mayor has been at odds with the City Council, as well as City Administrator and Redevelopment Director Peter Pelissier, since at least the summer, when the governing body rejected his bid to add staff within his office, and claimed he tried to have his wife hired as health officer.

_uacct = “UA-2976232-1”;
urchinTracker();

City Council, taxes

Council adopts transitional budget

3 Comments

The City Council last month adopted a transition year municipal budget, covering July to December 2011, as the city moves from a fiscal year (July-June) to a calendar year (January-December).

The increase in the municipal portion of the tax bill for the two quarters ending in August and November are expected to be about $18 compared with the same two quarters in the previous year, Chief Financial Officer Frank Ruggiero told council members at the Oct. 11 meeting. The upcoming February and May quarters likely will see an $18 increase from the previous year as well, he said.

The average home in Rahway, assessed at $133,000, will pay approximately $1,522 in municipal taxes for the half-year, according to Ruggiero. In the last full year budget (July 2010-June 2011), municipal taxes for the average home were about $2,416 (Remember, municipal taxes make up about a quarter of your overall property bill, with county taxes comprising about another quarter and school taxes making up about half). The transitional year budget totals $23.396 million, with a tax levy of $16.326 million. The total state Fiscal Year 2011 budget is $44.91 million, with a tax levy of $31.166 million.

Some line-items in the budget show jumps of 50 percent, Ruggiero said, as a result of some departments being more seasonal. For example, the Recreation Department has more expenses during July and August while the Department of Public Works might have more expenses during the fall relate to leaf pickup. Ruggiero said he expects the city to go for an accelerated tax sale sometime in the late spring of 2012, as the state doesn’t allow a tax sale for a transitional year.

The City Council voted 8-0-1 to adopt the budget, which included the Special Improvement District (SID) budget and SID properties. The lone abstention was by 6th Ward Councilman Samson Steinman, who said he abstained to avoid any appearance of a conflict of interest since he’s executive director of the Union County Performing Arts Center (UCPAC) and sits on the board of the Arts District, which now receives SID funds.

_uacct = “UA-2976232-1”;
urchinTracker();