Borough to introduce $6.08M budget Monday
By Sean Ruppert, Staff Writer
HIGHTSTOWN The Borough Council has done an about-face on deferring its pension costs, unanimously agreeing to put off $159,000 of its contribution only days after rejecting the idea 5-1 in an informal vote.
The move came Monday after the council was told the state could negatively consider the fact Hightstown did not defer its pension contribution when reviewing the borough’s extraordinary aid application.
Last year, the borough received $200,000 in extraordinary aid and plans to apply for aid again this year as it faces down the equivalent of another double-digit tax increase.
With the council set to introduce a 2009 budget Monday one day before the state’s deadline the decision cuts the proposed tax rate increase down to the equivalent of 15.6 cents under the 2008 property valuation from where it previously stood at an increase of 23 cents.
With the pension deferral, the budget now totals about $6.08 million, up from $6.04 million in 2008.
The latest tax rate figure equates to an approximate tax rate of 76 cents per $100 of assessed property value under the current valuation. That means a homeowner assessed at the borough average of $270,500 would pay about $2,055 in municipal property taxes, approximately $147 more than the bill in 2008.
The deferral program signed into law by Gov. Jon Corzine on March 18 would allow the borough to save about $159,000 from the budget in 2009 by halving its payment into the Public Employees Retirement System and the Police and Firemen’s Retirement System for this year only.
The borough then would have to make up the deferred amount along with its regular pension payments over the next 15 years, with interest.
Borough Administrator Candace Gallagher previously had recommended against deferring the pension payments. She changed her recommendation Monday after reading Local Finance Notice 2009-7 from the state Department of Community Affairs, which contained guidelines about the deferral. She said Monday that the notice implies passing on the deferral will negatively impact the extraordinary aid applications, which are due April 15.
The notice states the pension deferral is designed to reduce property tax increases. It goes on to state, “given that extraordinary aid is intended to reduce the impact of property tax increases, applicants for this program will have their pension deferral taken into account when the Director considers need for aid.”
”We will have a better shot at extraordinary aid if we accept the aid that the state thinks it is giving us,” she said.
Councilman Dave Schneider agreed.
”Their view is that this is a gift,” Mr. Schneider said. “If we say ‘We don’t want your gift,’ then they are likely to hold it against us.”
Mr. Schneider was the lone member of the council to support the deferral idea during the council’s previous informal vote March 19. However, the rest of the council affirmed this view Monday.
In addition, the council said it hoped to shave another penny or two from the tax rate through adjustments in the borough’s emergency medical services contract with Robbinsville. Mayor Bob Pattern said Monday that Robbinsville was set to present several options for EMS that could save the borough money, including having the squad stationed, at least some of the time, in Robbinsville.
Hightstown pays Robbinsville about $208,000 per year to cover the borough during days and most nights. It received $26,319 in reimbursements in 2008 for an annual net cost of $181,724 for ambulance coverage. The service is supplemented by the borough’s volunteer EMS squad three nights a week.
The council also discussed the idea of hard billing those who use the EMS, but took no formal action. Hard billing means billing customers whose insurance does not cover the full cost.
The council also settled on a plan advocated by Chief Financial Officer George Lang to use part of the water and sewer system’s surplus for the water and sewer operating budget. The idea was strongly opposed by Councilman Jeff Bond. He argued the surplus mostly generated through one-time connection fees from new development in Meadow Lakes and Enchantment should be used for future infrastructure improvements to the system.
However, the rest of the council ended up siding with Mr. Lang using about $200,000 of the $550,937 water-sewer surplus.

