Solution Proposed for Budget Error
City officials came up with a plan Monday to address the inadvertent $1.7 million budget shortfall caused by a typo in the official FY 2009 budget document that auditors submitted to the state.
As explained by City Administrator Marc Dashield, the anticipated payment in lieu of taxes from the Allen Young Apartments was supposed to be $184,266.20, but the insertion of an extra number erroneously stated it as $1,847,266.20 in anticipated revenues.
The recommended adjustments are to increase the $2.3 million anticipated surplus in the introduced budget to $3,131,000, for a difference of $831,000. In addition, the amount held in reserve for uncollected taxes would go from $3,929,000 in the introduced budget to a new recommended amount of $3,097,000, a decrease of $832,000.
Together, the modified amounts would produce the needed $1,663,000 to avoid a tax increase to cover the deficit.
The proposal was made at a council budget session with a citizen advisory committee following the regular City Council meeting in Municipal Court Monday.
The administration, council and committee members went over details of the proposal several times to make sure all understood it. However, there were still some caveats.
The plan must pass muster with the state Division of Local Government Services, for one thing. Former City Councilman and Union County Freeholder Adrian Mapp, now running for the Third Ward seat in the November general election, reminded the council that there is a formula by which the city must set aside a reserve for uncollected taxes. And Councilman Rashid Burney, who heads the governing body’s Finance Committee, said, “This is a proposal from the administration,” one that the governing body could accept or not.
To gain further understanding of the implications and possible solutions, the council asked the administration to have the city’s auditing firm on hand for Thursday’s budget session. That meeting is expected to be from 7:30 to 10 p.m. in City Hall, 515 Watchung Ave.
Burney has posted a budget schedule on his web site with the goal of budget adoption by Dec. 1. He also has a perspective on the error that is instructive. Click here to see it.
The gross error is not unprecedented. A while back, the school district managed to forget the $1.8 million cost of a charter school, which of course then had to be made up. There was consternation all around, but the district survived. And so might the city.
--Bernice Paglia
As explained by City Administrator Marc Dashield, the anticipated payment in lieu of taxes from the Allen Young Apartments was supposed to be $184,266.20, but the insertion of an extra number erroneously stated it as $1,847,266.20 in anticipated revenues.
The recommended adjustments are to increase the $2.3 million anticipated surplus in the introduced budget to $3,131,000, for a difference of $831,000. In addition, the amount held in reserve for uncollected taxes would go from $3,929,000 in the introduced budget to a new recommended amount of $3,097,000, a decrease of $832,000.
Together, the modified amounts would produce the needed $1,663,000 to avoid a tax increase to cover the deficit.
The proposal was made at a council budget session with a citizen advisory committee following the regular City Council meeting in Municipal Court Monday.
The administration, council and committee members went over details of the proposal several times to make sure all understood it. However, there were still some caveats.
The plan must pass muster with the state Division of Local Government Services, for one thing. Former City Councilman and Union County Freeholder Adrian Mapp, now running for the Third Ward seat in the November general election, reminded the council that there is a formula by which the city must set aside a reserve for uncollected taxes. And Councilman Rashid Burney, who heads the governing body’s Finance Committee, said, “This is a proposal from the administration,” one that the governing body could accept or not.
To gain further understanding of the implications and possible solutions, the council asked the administration to have the city’s auditing firm on hand for Thursday’s budget session. That meeting is expected to be from 7:30 to 10 p.m. in City Hall, 515 Watchung Ave.
Burney has posted a budget schedule on his web site with the goal of budget adoption by Dec. 1. He also has a perspective on the error that is instructive. Click here to see it.
The gross error is not unprecedented. A while back, the school district managed to forget the $1.8 million cost of a charter school, which of course then had to be made up. There was consternation all around, but the district survived. And so might the city.
--Bernice Paglia
posted by Bernice at 11:00 PM
0 Comments:
Post a Comment
<< Home