Tag Archives: budget

5% water rate hike coming in 2012

Water rates are likely to increase by 5 percent starting Jan. 1, 2012 to help close a nearly $1.2-million deficit in the city’s water utility. The base rate would rise from $29.64 to $31.12 per thousand cubic feet. A typical residential meter (5/8 inches) would see an increase from $32.60 to $34.23 in the base rate.

The City Council introduced an ordinance (O-30-11) at its Oct. 11 meeting which is scheduled for a public hearing and final adoption on Nov. 14. Also on tap for the Nov. 14 City Council meeting is a public hearing and final adoption of at the Oct. 11 meeting, the governing body adopted the city budget, which this year is a transitional budget as the city goes from a calendar year (Jan-Dec) to a fiscal year (July-June). More on the transitional year budget in an upcoming blog post. [CORRECTION: The public hearing and final adoption of the transitional year budget occurred at the Oct. 11 council meeting; there will not be a public hearing on the budget at the Nov. 14 meeting, only a public hearing on the new water rate ordinance.]

The city purchased additional water for a variety of reasons, according to Chief Financial Officer Frank Ruggiero, including construction and dilution (the heavy snowfall led to a need to dilute water because of the salt). In total, the city spent about $450,000, of which $217,000 was funded through an emergency appropriation and raised in the budget during the transitional year, he said.

The last increase in water rates occurred in 2009, he said, and the proposed rate hike will generate about $231,000 annually.
The water utility carried a prior year operating deficit of $322,000, which needs to be raised in the transitional year. The $217,000 and $322,000 [total: $539,000], plus the amount needed to balance the water utility budget “due to lack of water rent revenue,” Ruggiero said, will require the Current Fund to supplement the utility’s budget by $1.145 million.
The water utility in 2010 ran an operating deficit of about $170,000, with total appropriations of $5.355 million (Page 8 of .pdf of city’s ’11 budget). The proposed 2011 transitional budget (scheduled for adoption Nov. 14) lists appropriations of $5.467 million for the water utility, projecting an operating deficit of about $5,000.
Several council members at the October meeting asked about the possibility of limiting any rate hike to 2 percent in 2012, or revisiting the issue annually. City Administrator and Redevelopment Director Peter Pelissier recommended the increase be 5 percent for three years but if the City Council would prefer an annual analysis, “that makes sense.” In that case, he preferred to see the rate hike higher this year, “but I know people are struggling,” he said.
In the late ’90s, the city hired United Water to manage its water utility for 20 years. Pelissier said the savings to the city over that time are estimated to be $32 million. The city still owns and maintains the facility, he said, paying a fee to United Water to manage it. The fee now is at its highest point but by 2014 will drop below $1 million, he said. The city will realize that drop in the operating budget, Pelissier said, adding that water utility surpluses in the past have gone back into the city budget.
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Readers who live near the border of Colonia/Woodbridge might be interested in this bit of news from Woodbridge Patch: “Woodbridge Buys Land Development Rights of Colonia Country Club.” Here’s MyCentralJersey.com’s take on the same story.

City officials now openly at odds

If you thought last month’s disagreement over the mayor’s request for two support staff might be a rare public spat, now it’s just open warfare among the administration and City Council — despite the fact that all members of the same political party (Democrat). Monday’s public meeting brought more allegations, complaints and condemnations, a day after reports about the city’s lack of a full-time health officer.

Continue reading City officials now openly at odds

Council rejects mayor’s request for two staff

The City Council on Monday night rebuffed Mayor Rick Proctor’s move to add two positions to his office, a proposal that wasn’t supported by his own business administrator.

The mayor had sought a full-time executive secretary with a salary range of $45,000-$55,000 and a part-time chief of staff with a salary of $45,000. The two positions were removed from the salary ordinance (which sets the range for a variety of titles within the city) during the governing body’s pre-meeting conference and later voted unanimously to introduce the measure at its regular meeting. A public hearing and final approval will be held during the council’s Sept. 12 regular meeting.

City Administrator and Redevelopment Director Peter Pelissier told council members Monday night that he was not in favor of the two positions “in light of the fact that we’re trying to control taxes and spending.” He did not understand the need for a chief of staff, though he “understood somewhat” the secretary’s position, adding that the mayor could be accommodate with existing staff. “It’s not in our best interest to move a secretary from another department to the mayor’s office,” Pelissier said.

If $100,000 is added to the city budget, Pelissier said it would be better spent hiring firefighters and making promotions, as has been debated in the past, though there’s a question whether even that is sustainable. Last month, representatives of Firemen’s Mutual Benevolent Association (FMBA) Local 33 appeared before the City Council to increase staffing levels. Several council members expressed a desire to hire two firefighters over two administrative posts.

Whether there is $100,000 available in the budget remains to be seen, as planning on the 2012 budget moves ahead this fall. City Attorney Louis Rainone reminded council members that the ordinance merely authorizes the city to pay these salaries. Whether there are funds available, that decision comes when the budget is deliberated.

The executive secretary post has been vacant for five or six years and Proctor said the previous mayor at one time or another had a chief of staff or executive secretary during his tenure. A chief of staff is a more of a policy aide and with all that’s going on with economic development and the Arts District, “there’s a lot to get a handle on,” he said, adding that there have been a few items he hasn’t been able to implement since taking office. Existing staff could be moved from another office to fill the executive secretary post, so it’s not necessarily adding a position but just result in some bumping, he said.

The chief of staff would be new but Proctor said he has the duty to spend money responsibly, and as needs of the city evolve, he must respond appropriately. A chief of staff would help to move the city forward more effectively. The position more focused on policy development and planning while a city administrator handles day-to-day operations and assists in the planning the budget and other business functions.

There were no objections raised, according to Proctor, when he discussed it with the administrator on Friday. He was “very disappointed that City Council members did not seek additional information” on the positions before removing them from the ordinance. “It felt like the whole thing was a little orchestrated,” Proctor said in a telephone interview Tuesday. The mayor said he’s been evaluating city operations and has attempted to change the “business as usual attitude,” but when he tries to implement changes, he gets “a lot of pushback.”

Second Ward Councilman Michael Cox asked what impact there might be if the measure was tabled. Pelissier said most management employees are expecting a 2-percent salary increase (unless it’s been adjusted for specific reasons), and if the ordinance were table, approval would not come until October, with payment retroactive to July.

The motion to remove the positions and vote on the ordinance was made by 6th Ward Councilman Samson Steinman and seconded by 5th Ward Councilwoman Jennifer Wenson-Maier. The ordinance was introduced unanimously. The ordinance set a rate of $65,000 for the mayor; $110,000-$163,344 for the city administrator, and $8,043 for council members ($9,676 for council president). The council’s rate represents an increase from $7,740 ($303, or 4 percent).

During the public portion of the meeting, representatives of FMBA Local 33 lobbied for hiring three firefighters and promoting two others.

Proctor said the need exists and he will continue to press to improve outreach, and though he wasn’t sure what form it would take, he would continue to push for the position. “Hopefully with the business administrator and City Council’s cooperation.”

In general, it’s uncommon for an administration to disagree so publicly, especially when they’re all from the same party (in this case, Democrats). Even for the City Council, it’s been rare to see members break from the administration or voice much dissent on most issues in recent years.

Asked how he would describe his relationship with the city administrator, Proctor said: “Developing.” Proctor took office in January, reappointing Pelissier to another four-year term following many years as administrator to former Mayor James Kennedy, who did not seek re-election last year.

Merck tax appeal adds $66 to municipal tax bill

A tax appeal settlement with the city’s largest taxpayer, Merck & Co., will cost the average taxpayer another $66 this year, on top of what was expected to be a $146 municipal tax hike for the average Rahway home. The City Council approved the settlement by a 6-0-1 vote during its meeting last week.

Continue reading Merck tax appeal adds $66 to municipal tax bill

City Council vote on budget Monday

After holding a public hearing on the municipal budget last month, the City Council is expected to vote on the spending plan at its meeting on Monday at 7 p.m.

The 2011 budget, which runs through June, is $44.9 million, with approximately $31.1 million (up from $29.7 million last year) coming from property taxes. The governing body held a public hearing on the budget at its January meeting but tabled approval of the spending plan until the February meeting. The overall budget is up about 1.3 percent from last year while last year’s budget was up about 4.5 percent.

The average home, assessed at $133,000, paid roughly $2,280 in municipal taxes last year, and that total is expected to rise by about 6 percent, according to City Administrator and Redevelopment Director Peter Pelissier. A 6-percent increase would bump last year’s average municipal taxes paid by about $136, for a total of almost $2,416.

Municipal taxes generally make up about a quarter of the overall tax bill, with another quarter from county taxes and half from school taxes.

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In case you missed it, the Merck-Schering-Plough merger, announced almost two years ago, looks like it will mean some of Merck’s Rahway employees, as well as some in Summit and Union, will be moved to Kenilworth eventually. The firm plans to convert its Kenilworth campus into a research center focused on biologics, according to this Star-Ledger report last month. Some 580 manufacturing jobs will be lost while another 900 employees in marketing, HR and legal will move to the headquarters in Whitehouse Station.

Hearing on 2011 municipal budget tonight

City Council tonight will hold a public hearing on the 2011 municipal budget during its regular meeting tonight at 7 p.m.

The $44.9-million budget will raise approximately $31.1 million from property taxes. Officials tout that appropriations have increased only 1.3 percent over last year while being below the state-mandated caps, though the exact impact of the budget on the average assessed home is unclear.

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Sunday’s Star-Ledger had this story that examines Rahway’s redevelopment efforts over the years and the state of downtown. I’m not sure I would call the 50-unit St. Georges Avenue apartment complex that went up in flames this month a “symbolic achievement” as much as other downtown projects, like the 222-unit Carriage City Plaza or 159-unit Park Square (which didn’t even warrant a mention in the piece). What did everyone else think?

City’s assessed value up $25 million

The city’s assessed value rose by $25.3 million this year, up about 1.67 percent to $1.546 billion. That translates into roughly $1.2 million in property tax revenue. The bulk of the increase came from Carriage City Plaza Properties (CCP), assessed at around $19 million, and paying $978,000 in property taxes.

[12/12 update: Got an email from a rep at Silcon saying the Carriage City Plaza project is responsible for the entire additional $1.2 million in property tax revenue; $978,000 from Carriage City Properties + property taxes paid by individual unit owners. Trying to get some clarification from the city tax office, probably come Monday].

[12/15 CLARIFICATION: According to the city tax office, Carriage City Properties and the individual condo units — both sold and unsold — were assessed at a combined $24,146,600 ($5,414,500 for sold units + $18,732,100 for CCP portions and unsold units) and paid property taxes of approximately $1,182,941.94 ($265,256.36 sold units + $917,685.58 CCP and unsold units.]

During a discussion on the municipal budget at last month’s City Council meeting, and a question about potential future revenues, City Administrator and Redevelopment Director Peter Pelissier told the council two significant projects should provide future revenue. The city tax assessor is in the process of adding the assessment for Park Square, which begins its Payment In Lieu Of Taxes (PILOT) this year, he said, and Renaissance at Rahway, which is scheduled to be completed in about 12 months.

City taxes are expected to remain about the same thanks in part to $1.6 million in sewer utility surplus plugged in as revenue. The $41.3-million municipal budget is up about 4.5 percent, with the amount raised from taxes up 3.5 percent, to $29.7 million. The average assessed home ($133,000) paid about $2,276 in municipal property taxes last year, and Chief Financial Officer Frank Ruggiero expects roughly the same amount next year. He described a recent nj.com story about the budget wildly inaccurate and residents can expect tax bills for the first two quarters to be similar to the last two quarters.

A public hearing and final approval on the budget is scheduled for Monday during the City Council’s regular meeting.

Hotel tax revenue spikes

The city realized about $22,000 more than originally budgeted for hotel tax revenues in the $42-million municipal budget that was passed last month.

The city collected $58,000 in hotel tax revenue, about 61 percent more than the $36,000 originally planned in the 2009 budget, which ends June 30. Sixth Ward Councilman Samson Steinman confirmed the increase with the city administration during last month’s public hearing on the budget. He attributed the boost in revenue from about three months of operation by Hotel Indigo at SkyView, as well as the new Best Western on Paterson Street, off Routes 1&9.

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.

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