HIGHTSTOWN: Surplus use nixed along with request for more police

Potential tax rate hike stands at 24 cents

By Sean Ruppert, Staff Writer
   HIGHTSTOWN — Borough Councilman Dave Schneider has presented a plan for a zero-tax-increase budget but has found little support for a key provision in it from the rest of the council.
   As budget meetings progressed this week, the borough was facing a shortfall of about $510,000, the equivalent of an approximate 24-cent hike in the tax rate under last year’s property valuation.
   The Borough Council officially began its budget discussions Feb. 24 with a shortfall of more than $600,000 — equal to an approximate tax hike of 28 cents. That number was reduced Tuesday when Police Chief James Eufemia presented a revised budget that cut about $84,000 from his original request. The biggest cut was the elimination of two additional officers. The chief also cut a request for three new police vehicles, which comes out of the borough’s separate capital budget.
   The total proposed police-related expenditures now stand at $1.76 million[vmo: d-check: ], up from about $1.6 million budgeted for 2008.
   The proposed Fire Department budget also was cut at a Feb. 26 budget meeting by about $5,000 from $39,300 to $34,070 — for an overall budget reduction of about $90,000 from the initial proposed financial blueprint.
   Mr. Schneider’s plan, unveiled Feb. 26, involved cutting $154,660 from the amount budgeted for more than 80 line items and using $459,240 of the borough’s $550,940 water and sewer surplus as revenue. He presented his ideas before Chief Eufemia submitted his revised budget.
   ”I believe that the cuts I have made are within reason,” he said.
   Mr. Schneider received a mix of opposition and support from his fellow council members on his proposed cuts. However, no one spoke in favor of the idea of using the water and sewer surplus in the municipal budget. Councilman Jeff Bond spoke the most strongly against that idea.
   ”It is criminal,” Mr. Bond said. “I would be one to fight this one to until the cows come home. You are robbing Peter to pay Paul, and that’s all we’re doing.”
   The water and sewer surplus was created through the collection of connection fees, which are a one-time fee paid by owners of newly constructed buildings when they first hook into the water system, Councilman Bond explained. The money is supposed to be used for infrastructure improvements to the systems, he said.
   Mr. Bond said the surplus was much higher than normal this year because of some new development, including an expansion at Meadow Lakes, saying it is unlikely it could be regenerated. He added the borough would have to use bonds for any future water and sewer improvements, which would cost taxpayers more in the end than using surplus.
   ”I think you did an excellent job with all of these cuts until you got to the biggie,” Mr. Bond said. “You are basically taking money away from the water and sewer ratepayers and putting it into the budget.”
   Mr. Schneider defended his plan, saying the borough’s planned application for extraordinary aid from the state might be negatively affected by the fact Hightstown has so much water and sewer surplus. He added that spending the money this year would make extraordinary aid unnecessary this year and improve the borough’s odds of getting it next year.
   George Lang, the borough’s chief financial officer, disputed this notion, saying he didn’t believe the water and sewer surplus would affect the extraordinary aid application.
   The borough received $200,000 in extraordinary state aid for 2008, which allowed it to reduce a potential 24-cent tax hike to 15 cents per $100 of assessed value.
   Mr. Schneider’s proposed cuts would largely bring line items down toward their actual 2008 spending figures.
   Mr. Lang and Borough Administrator Candace Gallagher also expressed some displeasure with some of those suggested cuts. Ms. Gallagher said borough departments already are run very efficiently, coming in under budget and creating municipal surplus that can be used to offset tax increases in the following year. She said Mr. Schneider’s proposed cuts could greatly reduce the surplus generated throughout the year or even cause the borough to run a deficit, which would result in an even more dramatic tax increase in years to come.
   ”Our department heads do not waste money,” Ms. Gallagher said.
   Councilman Mike Theokas said the borough needs to focus on more substantive cuts.
   ”We need to differentiate between money budgeted and money spent,” Mr. Theokas said. “We aren’t looking for a one-year deal here. We are looking to set up a foundation for future budgets.”
   He called Mr. Schneider’s plan “voodoo” and “magic-trick” economics.
   Mayor Bob Patten, however, complimented Mr. Schneider on his efforts and urged the council to be creative.
   ”These are extraordinary times; we are talking about surviving here,” he said. “Keep thinking out of the box. Dave is thinking out of the box. Find what we can get along without for this year.”
   The council will meet again to discuss the budget March 17 and March 19.