Grants help level taxes in Sea Bright

BY KENNY WALTER
Staff Writer

SEA BRIGHT — Despite millions of dollars spent on costs related to superstorm Sandy, the Borough Council has introduced a budget with a modest tax rate increase.

During its May 21 meeting, the council moved ahead with an $8.07 million budget that represents an increase over last year’s $5.3 million spending plan.

If the 2013 budget is adopted, the tax levy would decrease from $3.9 million to $3.4 million. However, the tax rate would increase from 76.6 cents to 77.5 cents per $100 of assessed valuation.

“There is not a cushion in this budget. It is basically the same budget as last year,” Sea Bright Chief Financial Officer Michael Bascom said at the May 16 budget workshop meeting that preceded the introduction of the spending plan.

“If you just compare the budget from this year to last year, it looks like a huge increase. It looks like a 47 percent increase,” he said. “That 47 percent increase is about $2.5 million, and $2.4 million of it is directly related to storm expenses.”

Bascom said the budget calls for a tax rate increase of less than a penny, but this translates to a decrease in taxes for property owners.

“If you took the average house from last year to this year, which decreased in value as a result of the storms, the corresponding [tax] decrease is about $253.”

Helping to offset expenses is a $1.2 million Community Disaster Loan (CDL) awarded by the U.S. Department of Housing and Urban Development (HUD), and a $1.07 million Essential Services Grant awarded by the Federal Emergency Management Agency (FEMA). Bascom said the HUD and FEMA funding would help offset the nearly $70 million in tax ratable losses attributed to the Oct. 29 superstorm.

He said the Essential Services Grant is projected funding, which the borough has yet to be awarded.

“This is not solid yet. We do not know for a fact we are receiving this,” he said. “It can’t be used to offset the tax rate or offset the loss of ratables.

“I’m very confident that the state will review our budget and agree the amount we asked for is reasonable and will fund it at that level.”

The grant could be used to pay for police, fire, garbage disposal, lifesaving activities and the sanitary sewer system, Bascom said.

The borough is only eligible for CDL funds of up to 25 percent of the operating budget, an amount inadequate to meet the borough’s needs in the face of a significant budget gap related to the storm, he said.

“We demonstrated a projected loss of over $6 million that we had hoped would be available to us under the loan program,” Bascom said.

“Unfortunately, as a result of the caps on the program, we are limited. You’ll see towns around us whose damage was not as extensive as Sea Bright’s damage [that] qualified for more money than [Sea Bright],” he said.

However, it is unlikely the borough would have to repay the funds, he said.

“We do not have to repay that loan, so long as we demonstrate over the course of five years that we actually need that money,” Bascom said.

The outside funding allows the borough to retain any surplus in the budget for capital projects related to the storm.

“This allows us to not utilize our surplus,” Bascom said. “It allows us to try to rebuild and try to get a little bit on our feet each year.”

The federal funds come with some restrictions on the budget.

“In order to qualify for these funds, we are very restrictive to what we can have in this budget and what we can’t have,” Bascom said.

“We can’t build in salary increases outside of what is contractual,” he added. “We can’t establish new services.”

Despite the loss of ratables, Bascom said he does not expect the tax collection rate to fall below 94 percent.

The public hearing on the 2013 spending plan is scheduled for June 18 at Borough Hall.

Contact Kenny Walter at [email protected].