Final 2012 New Providence Municipal Budget Adds 2.2 Percent Tax Hike

New Providence residents with an average assessed home at $282,000 will see an increase of $58, or 2.2 percent, in their municipal tax bill this year following Borough Council’s unanimous adoption of the $17.6 million Municipal Budget Monday night.

Council President Michael Gennaro outlined the budget that includes an increase of about $287,000 in the tax levy, totaling $11.351 million, as well as revenues the borough is receiving, shared services with neighboring communities and numerous capital projects.

“Really the first goal is to always look at what’s essential in terms of services for the town, how do we provide them and let’s try to maintain them. I’m pleased to say we were able to do that this year without making any cuts,” Gennaro said. “We obviously want to continue to seek out efficiencies to contain our operating costs and our overhead, and we’d like to keep the tax increase within affordable limits. We also have the goal of seeking, wherever we can, to get grants to help fund operations and our capital improvements.”

Three components make up taxes in New Providence: municipal tax (controlled by the council), school tax (controlled by the Board of Education), and county tax (controlled by the Freeholders), Gennaro said.

Breakdown of New Providence Tax Bill

Taxes from the past 13-year period were compared to the 2012 budget, Gennaro said, and the average annual increase in municipal taxes was $75 for the average assessed home in New Providence. Municipal taxes went from $1,674 in 1999 to $2,647 today.

Gennaro said the borough always compares taxes to neighboring communities each year. New Providence is second this year on the per capita cost for the municipal tax, $909 out of eight communities.

“Our neighbor [is at] $882," Gennaro said. "We don’t like to put the names next to the other towns because some of them as you can see are a little bit high and there may be reasons for that beyond their control."

Key savings for the borough stems from the reorganization of some borough departments, allowing for the reduction of one fulltime staff member through attrition, saving $85,000 in salary and benefits, Gennaro said. In addition, the borough will see new revenues through a Shared Services agreement with Summit for Waste Water Services ($100,000), from Lucent Waste Water Agreement ($38,000), and the reverse electricity auction (28 percent savings, or $60,000 annually).

Gennaro said the borough made a number of technology enhancements at the Municipal Center to provide more efficient services to residents and to facilitate the reduction of staff that has occurred in the borough.

“One of the things you’ll notice is we’ve enhanced our website and provided more visibility and transparency for borough-related activities. All of the borough council agendas, with link documents, are available on the website and we’re video recording all of our council meetings,” Gennaro explained. “Also, we’ve upgraded our servers and our network, [which] has enabled us to launch digital council packets so now we don’t have to have borough employees spend 400 hours per year copying these papers … so it is quite a good savings in terms of copying costs and time.”

“We also have tax payments that can be made by the borough’s website. It’s convenient for the residents and it also frees up time here in borough hall so employees can do other things,” he said. “Then we also adopted online payments for parking permits, leaf collection permits and tax payments, as well as recreation programs.”

The borough will also see savings and revenue through a number of new Shared Service agreements with neighboring municipalities. Those shared services and projected savings include:

• Board of Health Services with Westfield ($24,000)
• Extension of Union County Solid Waste Agreement ($40,000)
• Department of Public Works shares brine machine with Summit, yielding a cost savings through sharing and labors hours saved, and through fewer snow plowing events
• Board of Education — technology services, school resource office and office space in the Municipal Center
• Shared Waste Water Operation with Summit ($100,000)
• Shared Court Operation with Berkeley Heights ($24,000)

Key increases in the budget include an $80,000 hike in Health Insurance premiums despite employee head count being down; $155,000 for snow removal and other public works services; $175,000 increase in debt service payments; $45,000 increase in legal fees for significant tax appeals and labor union negotiations; a $52,000 increase in salary for union and non-union employees; and a $117,000 reduction in the surplus.

At the same time, the borough plans to make a number of investments in the community, Gennaro said. With the way debt service payments are right now, Gennaro thinks council can swing these expenses without causing too much of an increase to the tax rate.

“It’s very important in the town that you think ahead. You can’t budget just on a one-year cycle because if you do, you get yourself into trouble. You invariably underestimate something that should have been accounted for in later years and you finally get to a year where it comes due and there’s a huge increase and that’s not fair to the tax payers to do that,” he explained. “So what we’re trying to do and what we are doing is we’re making investments in the town, in our infrastructure in particular.”

Those investments include road-resurfacing projects ($175,000), continuing to clean and line sewers ($200,000), invest in public safety equipment ($172,000) and recreation capital improvements ($229,000).

Other projects include $295,000 for DPW vehicles, $70,500 for computers and networking, $50,000 for the Rescue Squad and $100,000 for Municipal Center improvements and equipment. Gennaro said the borough hopes to purchase a new bus for the Senior Citizens Center.

The budget also includes $820,000 to purchase a new fire truck. Mayor J. Brooke Hern said the borough applied for a federal grant to fund the purchase, but the borough was turned down.  

The capital projects are $2,111,500 in total and the borough plans to put 5 percent down for each, totally $105,575. The remaining debt would be $2,005,925.

“There’s a lot that has to be done here every year to keep this town functioning and this council is aware of it and making the investments to get it done,” Gennaro said.

Municipal Tax Comparison

(includes Library tax)

13 Year Impact on Average Assessed Value Home

Avg. Assessed Value

$282,000

2012 Tax

$2,647

1999 Tax

$1,674

13 Year Tax Increase

$973

13 Year Avg. Annual Increase

$75

1 Year Impact on Average Assessed Value Home

Avg. Assessed Value

$282,000

2012 Tax

$2,647

2011 Tax

$2,589

1 Year Tax Increase

$58

Capital Projects 2012

Project Total

5% Down

Debt

Street Overlay Program

$175,000

$8,750

$166,250

Waste Water

$200,000

$10,000

$190,000

Computers & Networking

$70,500

$3,525

$66,975

Recreation

$229,000

$11,450

$217,550

Rescue Squad

$50,000

$2,500

$47,500

Fire Department

$820,000

$41,000

$779,000

Police/Emergency Management

$172,000

$8,600

$163,400

Fleet - DPW Vehicles

$295,000

$14,750

$280,250

Municipal Center Improvements & Equipment

$100,000

$5,000

$95,000

$2,111,500

$105,575

$2,005,925