FY 2008 Budget News
Facing a projected tax increase of 8.7 percent, the city is asking for $2.9 million in extraordinary state aid.
The application cites a litany of woes, ranging from a botched tax lien sale to “escalating crime” and the second-highest number of homicides in Union County. The uncertain housing market, smaller revenues from “payment in lieu of taxes” agreements and inherited management problems were among other issues blamed for the increase.
The City Council did not discuss the state aid application at Monday’s meeting, but did see a slide show on the administration’s proposed budget. City Administrator Marc Dashield said this year’s budget was affected by factors that he called “a perfect storm” of rising fixed costs and the need to reduce expenses to keep the tax levy below a 4 percent cap.
Pensions, police and fire salaries and insurance added up to a $4.4 million increase that clashed with the 4 percent cap, he said.
The City Council is expected to introduce the budget Wednesday, after which the governing body can hold its own deliberations and make changes before budget adoption. Council members will receive the detailed budget books this week and have also agreed to meet from 7 to 9 p.m. on Oct. 2, 9, 16 and 23 in City Hall Library for budget talks.
The state aid application is due in Trenton by Sept. 28 and results should be known by November, Dashield said.
A request for extraordinary state aid does not mean a municipality will receive the amount sought. The city asked for $2.9 million in the 2006 fiscal year and got $500,000. Dashield said the average over the past several years was $600,000, although the figures for 2004 through 2007 in the report come out to an average aid amount of $737,500.
For those who haven’t followed budgets before, the city operates on a fiscal year that begins July 1 and runs to June 30. For the first three months, the city can use a quarter of the prior year’s budget to run things. If no budget is struck by then, the city can appropriate amounts monthly equal to one-twelfth of the past year’s budget until the new budget is passed. Sometimes this process goes on until many months into the fiscal year, and then the savings are less because salaries and expenses have already been paid out.
Dashield said Monday he is looking for adoption by November.
Regarding the tax sale fiasco, the report describes it thusly:
“The City of Plainfield had the unfortunate circumstance with the FY2007Tax sale that is a one time occurrence. There was no permanent Tax Collector appointed until May 2007 and the Acting Tax Collector had scheduled and geared up for the Tax Sale to take place the first week of June 2007 which the new Tax Collector started preparing for when the first legal notice appeared in the local newspaper with errors requiring the legal notice to be published in its entirety and prepare for the Tax sale to take place on June 21, 2007. Two (2) things occurred negatively that effected the City’s financial position. First do to software problems the delinquent notices for the May 1st could not go out since the tax sale had not taken place and did not occur until July, 2007 and secondly by having the tax sale on June 21, 2007 the lien holder were not in a position to pay the subsequent taxes since the tax sale certificates did not go out until July 2007. These two (2) problems created a tax collection rate that went from 95.66% down to 93.32% affecting both surplus and requiring a substantial increase in the Reserve for Uncollected Taxes in the FY 2008 budget creating an extraordinary tax problem.”
The city plans to hold a tax lien sale in November to make sure that the taxes are collected as in past years and to see that delinquent notices go out every quarter, the report said.
Redevelopment is still a key element in the city’s strategy to improve its fiscal situation and abandoned properties are being targeted for demolition and private redevelopment to produce new ratables.
The aid request also mentions ways the city has “leveraged” administrative expenses, such as by shared services agreements, seeking grants and partnering with the Union County Improvement Authority to reduce administrative and professional costs associated with redevelopment.
The City Council’s regular meeting will be 8 p.m. Wednesday in Municipal Court, 325 Watchung Ave.
--Bernice Paglia
The application cites a litany of woes, ranging from a botched tax lien sale to “escalating crime” and the second-highest number of homicides in Union County. The uncertain housing market, smaller revenues from “payment in lieu of taxes” agreements and inherited management problems were among other issues blamed for the increase.
The City Council did not discuss the state aid application at Monday’s meeting, but did see a slide show on the administration’s proposed budget. City Administrator Marc Dashield said this year’s budget was affected by factors that he called “a perfect storm” of rising fixed costs and the need to reduce expenses to keep the tax levy below a 4 percent cap.
Pensions, police and fire salaries and insurance added up to a $4.4 million increase that clashed with the 4 percent cap, he said.
The City Council is expected to introduce the budget Wednesday, after which the governing body can hold its own deliberations and make changes before budget adoption. Council members will receive the detailed budget books this week and have also agreed to meet from 7 to 9 p.m. on Oct. 2, 9, 16 and 23 in City Hall Library for budget talks.
The state aid application is due in Trenton by Sept. 28 and results should be known by November, Dashield said.
A request for extraordinary state aid does not mean a municipality will receive the amount sought. The city asked for $2.9 million in the 2006 fiscal year and got $500,000. Dashield said the average over the past several years was $600,000, although the figures for 2004 through 2007 in the report come out to an average aid amount of $737,500.
For those who haven’t followed budgets before, the city operates on a fiscal year that begins July 1 and runs to June 30. For the first three months, the city can use a quarter of the prior year’s budget to run things. If no budget is struck by then, the city can appropriate amounts monthly equal to one-twelfth of the past year’s budget until the new budget is passed. Sometimes this process goes on until many months into the fiscal year, and then the savings are less because salaries and expenses have already been paid out.
Dashield said Monday he is looking for adoption by November.
Regarding the tax sale fiasco, the report describes it thusly:
“The City of Plainfield had the unfortunate circumstance with the FY2007Tax sale that is a one time occurrence. There was no permanent Tax Collector appointed until May 2007 and the Acting Tax Collector had scheduled and geared up for the Tax Sale to take place the first week of June 2007 which the new Tax Collector started preparing for when the first legal notice appeared in the local newspaper with errors requiring the legal notice to be published in its entirety and prepare for the Tax sale to take place on June 21, 2007. Two (2) things occurred negatively that effected the City’s financial position. First do to software problems the delinquent notices for the May 1st could not go out since the tax sale had not taken place and did not occur until July, 2007 and secondly by having the tax sale on June 21, 2007 the lien holder were not in a position to pay the subsequent taxes since the tax sale certificates did not go out until July 2007. These two (2) problems created a tax collection rate that went from 95.66% down to 93.32% affecting both surplus and requiring a substantial increase in the Reserve for Uncollected Taxes in the FY 2008 budget creating an extraordinary tax problem.”
The city plans to hold a tax lien sale in November to make sure that the taxes are collected as in past years and to see that delinquent notices go out every quarter, the report said.
Redevelopment is still a key element in the city’s strategy to improve its fiscal situation and abandoned properties are being targeted for demolition and private redevelopment to produce new ratables.
The aid request also mentions ways the city has “leveraged” administrative expenses, such as by shared services agreements, seeking grants and partnering with the Union County Improvement Authority to reduce administrative and professional costs associated with redevelopment.
The City Council’s regular meeting will be 8 p.m. Wednesday in Municipal Court, 325 Watchung Ave.
--Bernice Paglia
posted by Bernice at 10:47 PM
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