First efforts put borough budget hike close to 7%

Rising insurance costs a large part of projected increase.

By: Jennifer Potash
   Princeton Borough officials released a preliminary municipal budget for 2003 Wednesday that represents a nearly 7-percent increase over the previous year’s spending plan.
   The first draft of the $19.7 million budget suggests a 5- to 8-cent increase in the municipal tax rate would be necessary, according to Borough Councilman Roger Martindell, chairman of the council’s Finance Committee.
   By the time the budget is ready for adoption, Mr. Martindell said, he expects the council will have cut that projected increase in half.
   The greatest added expenses stem from salary and wage increases, many the result of contracts with union personnel, and big jumps in insurance costs, said Borough Administrator Robert Bruschi.
   The insurance costs, for health, liability and workers’ compensation, are going up by $540,000, Mr. Bruschi said.
   The borough also took a hit in revenue — about $200,000 less — from the closure of the Spring Street Park & Shop lot for environmental remediation and to accommodate the Princeton Public Library and municipal garage construction projects, Mr. Bruschi said. The borough also lost $200,000 in income from investments, he said.
   The borough did gain an additional $100,000 from a new payment-in-lieu-of-taxes agreement with Princeton University and $300,000 from a corrected sewer rates billing error, Mr. Bruschi said.
   Another major revenue source is construction building fees — mostly from Princeton University, Mr. Bruschi said.
   Municipal aid from the state is flat, but the borough did get an additional $70,000 from the state from the energy receipts tax. The borough will receive $1.3 million from the state, he said.
   Unlike many municipalities around the state, the borough’s budget increase falls within the state’s 1-percent spending cap, Mr. Bruschi said.
   Several big-ticket items, such as police salaries and wages and the sewer system fees, are excluded from the cap, Mr. Bruschi said. Also, the state allows municipalities to "bank" remainders if the past two budgets did not exceed the cap, Mr. Bruschi said.
   "I know it sounds like funny math, but that’s what it is," he said.
   Other potential sources of revenue include investing unspent portions of the $13.5 million bond for the garage project, Mr. Martindell said.
   "Even a little bit of $13.5 million is a fair amount of money," he said.
   The borough could dip into its surplus funds, but will do so very cautiously, Mr. Martindell said.
   A preliminary review indicated the borough has a $1 million surplus fund, which should mean between $350,000 and $400,000 could be made available for use in 2003, Mr. Bruschi said.
   "We’ve worked hard to build the surplus for a bump-in-the-road year and this may be one of those years," Mr. Bruschi said.
   On the expenditure side, the borough will try to renegotiate contracts with insurance providers or seek new carriers to lower those costs, Mr. Martindell said.
   Mr. Bruschi said $140,000 already has been cut from budget proposals.
   Other reductions the Borough Council could make include canceling old bond ordinances with unspent funds, about $150,000, and negotiating with the Police Department over wages, another $70,000, he said.
   Another recommendation is to go to permanent financing on other debt, which would save $300,000, Mr. Bruschi said.
   Mr. Martindell said personnel layoffs and program cuts are not under consideration.
   The usual suspects — road repair and debt payments — are two of the largest budget items at $602,993 and $1.2 million, respectively.
   The borough has received, but not reviewed, the joint municipal agency budgets, Mr. Martindell said.
   The Borough Council is expected to introduce a budget by mid-March, Mr. Martindell said.