NEW BRUNSWICK, NJ—The City Council introduced an $84 million budget prepared by the administration on March 18, one that will increase the average homeowner's tax bill by $147 for the 2015 year.
The decision to raise taxes come on the heels of a similarly significant hike in the rates the same people pay for water and sewer service, and just four months after Mayor James Cahill faced no opposition in his campaign for re-election to an unprecedented seventh term.
Of the $84 million spending plan, the city anticipates raising just over $31 million for municipal purposes through standard taxes on real estate. In 2014, the city raised $28.8 million using the same method.
The 2015 budget also includes a much smaller surplus as compared to last year, just $900,000 versus $2.05 million realized in the 2014 year.
Business Administrator Thomas Loughlin said that the city's base of taxable properties, known as "ratables," increased "for the first time in a long time."
Still, the $27.8 million increase in the valuation of taxable properties was not enough to offset other increases in spending, which included the hiring of 15 additional police officers, at the department's recommendation.
Loughlin told the Council, "All of our operations will be fully funded. There will be no layoffs, reductions in workforce."
As the budget was being introduced by the City Council at their March 18 meeting, Council President Kevin Egan attempted to explain his understanding of the budget.
"I could speak a little bit on it," said Egan, an official with the International Brotherhood of Electrical Workers and one of four appointed members on the Middlesex County Board of Taxation.
"I know that there's going to be a tax ratio… a .125 increase in the tax ratio," Egan told the crowd.
"We're looking at a 12.5 cent increase, not percent," Business Administrator Thomas Loughlin corrected. The city's Finance Director mentioned that the increase was "about 5%."
"There's a lot of numbers on it, I can tell you that much," said Egan, who said that the budget would have a $147 impact on the tax bill of the average New Brunswick homeowner, someone whose property is valued at $118,000.
According to the spending side of the budget, most departments will see little changes in their funding.
However, the Planning Department will lose roughly a third of its funding for salaries and wages, and the Division of Street Services will see a nearly 20% decrease in the same category.
The largest item in the budget is, as usual, salaries and wages for the city's police department.
The total this year comes to more than $16.5 million, not including $1.46 million for civilian employees of the department.
"A major factor in the growth of the budget is we had a COPS hiring grant that was in its last year of implementation last year," said Loughlin during his explanation of the budget to the Council.
"We were able to take $831,000 worth of police salaries against this grant. The grant has expired," Loughlin said.
The $20 million grant was awarded to New Brunswick by the federal Department of Justice for at least the second year in a row in September 2011, just days after a New Brunswick police officer shot and killed an unarmed man.
The grant funded the salaries of seven additional officers, mostly those who had been laid off from other departments, over the next three years.
Despite the loss of the grant, the city still anticipates hiring another 15 police officers in 2015, both to offset attrition and to "grow" the size of the 143-member force, something NBPD leadership is pushing for, according to Loughlin.
As we reported, the agency hired 11 officers in 2015, becoming somewhat more diverse.
COPS is just one of many police-related grants that did not find their way into the initial version of the 2015 budget.
New Brunswick Today identified at least ten public safety grants from 2014 totalling $396,829 that were not anticipated in the budget. Only one new law enforcement grant appears in the budget, a curious $10,000 revenue listed as "NBPD Drug Detection – Johnson & Johnson."
While some of the grants may still be approved before the year is out, one big question remanining is whether Rutgers will step up and fill a $130,000 hole currently in the budget where they previously funded a joint walking/bicyle patrol in the 5th and 6th Wards of the city.
Rutgers officials did not immediately respond to questions about line item's absence from the city budget, or the future of the patrols.
In September, a university spokesperson told New Brunswick Today, "The purpose of the Neighborhood Police Team (NPT) is to increase interaction among residents of the 5th and 6th wards, NBPD and RUPD to improve the safety and security of everyone who lives and works in those communities."
Loughlin described the 2015 budget as fairly routine, with no change in the amount of state aid for many years in a row.
"We're dealing with the same things as we always are: increases in pension bills, and health benefits to our employees and our retirees."
The city expects to spend $13.5 million on health benefits, and an analysis of its "compensated absence liability" shows the city owes workers more than $15.9 million for unused sick and vacation days.
The city is also budgeting $8.5 million in contributions to Social Security and various pension funds.
Loughlin also mentioned that the end of the city's red light camera enforcement program will adversely affect the budget. State legislators decided not to renew the controversial statewide trial run upon its expiration in December.
"The Redflex [red light camera] revenue is gone," Loughlin said. "That could have been anywhere from $300,000 to $500,000 per year. That's not likely to return anytime soon."
Though the city will see a slight decrease in their share of "maintenance fees" for 25 Kirkpatrick Street, the building that houses the city's municipal court, Division of Inspections, and its police, planning, and health departments, the rent will be increasing at the privately-owned structure.
The changes will result in a net loss of nearly $400,000 from the city budget, which would go directly into the pockets of KMS Development Partners, a company formerly known as Keating. The building is also home to the Middlesex County Prosecutor's Office.
On the other hand, Loughlin said some $539,270 in federal money to reimburse the city for its expenses inccurred during Hurricane Sandy finally came through.
"We finally have gotten a commitment to receive our final FEMA money that was due us from Hurricane Sandy," said Loughlin.
The city also expects to reap $2.9 million in court fines and costs in 2015, as well as $1.1 million in fees and permits.
The New Brunswick Parking Authority will chip in slightly more to the city coffers under the new budget, increasing their annual "Payment in Lieu of Taxes," or PILOT, to $4.5 million, up from $4.15 million in 2014.
The city expects to earn more than $10 million in additional PILOT payments, mostly from real estate developers who received lucrative tax exemptions lasting 30 years.
Another chunk of PILOT money comes from the largest landowner in the city, Rutgers University, who will chip in $700,000 for at least the twentieth year in a row.
The biggest taxpayer in New Brunswick is healthcare giant Johnson & Johnson, which has had its world headquarters in New Brunswick since the 1880's.
As of 2013, the company owned a total of $74.5 million worth of real estate in the Hub City, including a private parking garage and 12-story corporate campus in the heart of downtown.
Based on that assessment, their tax bill would be $1.836 million tax bill at the new, increased rates.
Verizon New Jersey comes in a distant second-place, with $31.5 million in taxable real estate, followed by an office building rented by Johnson & Johnson and Rutan Realty, the owners of the Hyatt Regency Hotel.
"I think we have a pretty aggressive capital program," Loughlin said, which includes things like re-paving city streets and improving infrastructure of the city's water and sanitary sewer systems.
Loughlin also cited an upgrade of the city's 9-1-1 system, a new traffic signal at the intersection of Commercial Avenue and Suydam Street, and the purchase of new garbage trucks and street sweepers.
It appropriates about nearly $5.4 million for street and sidewalk improvements, $3.5 million to make improvements to public buildings, almost $3.3 million for "vehicle replacement" and just over $3 million to "safety, office, and other equipment," all over the next six years.
While the capital budget anticipates $2.65 million in spending on improving sewer utilities, it only plans to spend $968,000 on improvements to the city's aging water utility facilities.
The improvements to public buildings include funding for upgrades to Memorial Stadium, home of the city's high school football team, as well as several track and field teams.
The New Brunswick Board of Education will chip in $1.03 million towards that cause, splitting the project costs 50-50 with the city government.
The budget is not yet available for download on the city's website, but it is available in the City Clerk's Office during business hours.
The budget will be up for a final hearing and vote at the May 6 City Council meeting, scheduled for 6:30pm on the top floor of City Hall, at 78 Bayard Street.