by Davy James, Staff Writer
The Township Council is looking for ways to cut the budget in order to avoid deferring $1.3 million in pension payments for township employees and police and fire workers.
If the township does defer the payment, it would have to pay the money off over a 15-year span beginning in 2012.
Interest on the deferred pension would be about 8.5 percent and would add an estimated $90,000 per year on top of whatever the pension contribution would be for any of those given years.
The council doesn’t have the option of choosing how much of the pension payments to defer. State law requires municipalities to defer half the pension payment, or none of it and pay the full amount.
”There are certain things that we need to do in this process,” said Mayor Frank Gambatese. “One of the most important decisions is to make a determination on the pension deferrals. If we don’t do it then it changes the entire process.”
If the council decides against the deferral, then $1.3 million would need to be cut from the budget, which could mean laying off between 20 to 30 municipal employees.
The proposed budget cuts spending by $1.5 million from last year’s $49.5 million spending plan. Overall, the proposed budget would be 3.4 percent less than last year, but there would a 4-cent tax rate increase. Homeowners could see an $87 increase in municipal taxes this year under the proposed budget, however township officials stress that the budget will undergo further changes before it’s adopted, which is expected to be done by the end of May.
The owner of a home valued at the township average of $194,400 paid $1,215 in municipal taxes last year.
During its meeting on Tuesday afternoon, the council went line by line through a list of appropriations for the various township departments, made recommendations for further cuts and raised questions regarding line items that were unclear.
”At this point, the cuts we’ve made have a small impact,” Mayor Gambatese said. “We need to make some more cuts and see what we come up with. But the deferral has to be addressed. If we defer, then we’ll be OK for this year.”
The final decision on whether or not to defer the pension payments needs to be made by April 30 in order to present the request to the New Jersey Local Finance Board. Last week the council reluctantly decided to apply for the deferral, with Councilman Joseph Camarota casting the lone vote against it. But the council can still decide against the deferrals regardless of filing the application.
The final decision on the deferrals is expected to be made at the next council meeting on Tuesday.

