S.R. residents speak on surcharge, tax increase

By Jennifer micale

SOUTH RIVER — While a 15-point tax increase is substantial, borough officials say it’s still better than 32.

Last week, the Borough Council held a public hearing on its $9.47 million budget for the year 2000. As currently conceived, it will raise the tax rate 15 cents to $1.14 per $100 of assessed real estate, a $118.50 increase for the owner of a home assesed at $79,000.

The increase does not take into account approximately $63,000 in funds restored to the fire department and library budgets. While borough officials originally allocated less than their requested amounts, library and fire officials countered last month that they would not be able to function without adequate funding. With this in mind, the council restored their aid — a measure which may add another 2 cents to the tax rate.

The public hearing on the amendments and the budget’s final adoption will not take place until the summer, when the state allocates extraordinary aid. The borough has requested $700,000 in such aid to offset the budget, council President David Sliker explained. Until officials receive the final word on aid, the budget will be in a "holding pattern" pending final adoption.

Last summer’s record heat attributed to approximately 5 cents of the 15-cent rise, which led to $1.1 million in emergency appropriations and decreased the electric utility surplus usually applied to the budget. Miscellaneous revenue was also down, while borough officials anticipated a spending increase of 2.67 percent over 1999. According to Sliker, the spending increase is minimal, deriving from inflation and contractual obligations.

To cut the budget down, borough officials have severely cut discretionary overtime, and have not included the replacement of four public works employees in this year’s budget. Sliker said that the borough’s new deputy director of public works will re-evaluate the department for improved efficiency before replacing the employees, who are retiring at different times during the year.

Additionally, residents will feel the effects of an 18-percent surcharge on their electric bill, intended to recoup some of the surplus lost during the year. Only effective for 12 months, the surcharge will bring approximately $700,000 back to the borough. According to borough officials, this surcharge would have brought an additional 17.5-point tax increase if not enacted.

"The rates the residents can control," Sliker said. "They have no control over their taxes."

Former Councilman John Krenzel disagreed, alleging that officials were "playing with the weather" when it comes to the electric utility. If the use doesn’t meet expectations, the borough could be in for more financial problems later on.

"My problem is the hopes, the shoulds, the gambles," he said.

According to Business Administrator Charles Kolakowski, at least one gamble has been removed. The borough now has caps on its summer electricity rates, preventing a repeat of last summer’s skyrocketing rates. However, the caps come "at a substantial cost," he noted.

Resident Raymond Eppinger also questioned the road ahead, saying that 10 of the 15 points in the increase came from sources other than last year’s heat wave. Next year, the borough may have to consider replacing the four public works employees and deal with less tax revenue once again.

"We’re not out of the woods yet," he said. "Are we doing all that we can to solve the problems now?"

At their reorganization meeting last week, the South River School District also made its feelings known about the surcharge, directing Superintendent of Schools Dr. John Ambrogi to write a letter to the mayor and council. With the school budget already passed, the district would have to furnish $40,000 for the surcharge.

"Naturally, with a tight budget, unexpected costs have to come from within the budget and will adversely effect the quality of education that we are able to provide to students," Ambrogi stated.

The superintendent also noted the municipal government’s use of school facilities for the year. With 396 events scheduled, from council meetings to tennis lessons, the borough uses the facility approximately 26 weeks a year.

"We have provided these facilities at no charge and in the spirit of cooperation," Ambrogi wrote. "Now, we need your cooperation in reducing the electric rate hike for the Board of Education facilities."

At the May 3 budget hearing, however, borough officials asked for suggestions from those critical of the budget on what they could cut. Although they received none, Sliker did point out that the 1993 tax rate at $1.17 per $100 of assessed real estate was higher than the one proposed.