2013 Municipal Budget Passed by Council
Posted: April 26, 2013
The township council unanimously passed the 2013 municipal budget at last night’s township council meeting.
The meeting marked the final budget hearing that will be conducted by Township Manager John Lovell who is planning to retire as of next spring.
Lovell delivered the following message to the council prior to the budget vote.
Tonight marks the final budget hearing that I will conduct as a township manager.
I have been involved in the municipal budget processes since 1976. Throughout my years of service, I have promoted the theme that you must not limit your focus to the current year as today’s policy decisions will have impacts for many years to come.
The 2013 municipal budget process started with a draft document prepared by the administration.
Four critical questions were posed to the council when it undertook its review in February.
1. Will this action compound (increase) Randolph’s budget challenges in 2014 and beyond?
2. How does the value of the reduction compare with the expectations placed on the township by the public?
3. If this expenditure is deferred for a year, can and will the organization catch up in the future?
4. Will this decision make Randolph a stronger community five years from now?
Chief Financial Officer Michael Soccio will be retiring next winter several weeks in advance of my departure. I would be remiss if I did not thank him publicly for the amazing effort he places into the budget process each year.
In the last several days, Standard and Poors completed its periodic review of Randolph’s financial standing. I am pleased to announce this evening that Randolph’s AAA rating has been re-affirmed for 2013.
Of more than 550 municipalities in NJ, only 18 share Randolph’s financial stature:
- Bernards Township
- Hopewell Township
- Mendham Township
- Mountain Lakes
- New Providence
- West Windsor
- Woodcliff Lake
As of last September, there were only 213 municipalities across all of the United States with AAA ratings.
The township council achieved this rating by making the right decisions over many years, most notably with regards to ensuring adequate revenues to sustain Randolph in the eyes of the financial experts. You have achieved this recognition at a time when several of our neighbors have seen their S&P ratings slip and another neighbor has been assigned a negative outlook.
The 2013 municipal budget follows a Randolph tradition of falling below state-mandated caps. The budget is $19,012.00 below the 2% tax levy cap and $204,704.00 below the 1977 appropriation cap calculation for municipal budget appropriations.
The municipal budget and capital improvement program totals $28,433,914.00. The water and sewer fund appropriations will total $7,186,137.00 for a combined budget total of $35,620,051.
The 2013 municipal budget is increasing by a total of $685,826 or 2.47% over the prior year. Three appropriations contributed substantially to this increase.
- Health Insurance Premiums
Insurance premiums continue to rise at a pace in excess of inflation. Additional pressure was placed on premiums by the national health care laws enacted in 2010. Randolph gains competitive access for health insurance through the North Jersey Municipal Employee Benefits Fund representing twenty municipalities.
- Reserve for Uncollected Taxes
The reserve for uncollected taxes is tied to both the rate of tax collections achieved in the past year as well as the amount of taxes to be collected in support of 2013 municipal, school and county operations. Adjustments to 2013 assessments as a result of tax appeals and the resulting credit against 2013 taxes impacts the overall collection rate and, in turn, depletes the reserve.
- Capital Improvement Program
Every year the township is faced with major infrastructure projects, as well as the need to replace equipment. Careful consideration goes into each decision before an investment is undertaken. A significant emphasis has been placed on improving Randolph’s municipal road system.
The township maintains independent financial records for the water fund and sewer fund. Both functions are supported by customer billings and do not require property tax revenues to meet financial obligations. The combined appropriation of $7,186,137.00 is 2.92% lower than the 2012 budget.
Randolph has experienced a period of years in which many revenue categories have either remained stagnant or have been reduced due to the recessionary economy. The 2012 year marked the third time (2010 was the first) in which the town’s ratable base actually contracted in size. The township is beginning to see signs of an economic recovery with stabilizing property values and approved development projects under construction. As a result of these signs, the township anticipates revenue performance to strengthen during the 2013 year and beyond.
The municipal tax rate (includes the library and open space/park development tax) necessary to support the municipal organization, including the reserve for uncollected taxes, is increasing by 3.69% for the 2013 year. The increase of .025 cents will generate $725,752.00 in additional taxes, allowing Randolph to meet its obligations. The impact on the average assessed residential structure ($335,800.00 with an estimated market value of $493,170.00) is $84.25 for the year, or approximately $7.00 per month.
The township council struggled with the issue of raising taxes this year. Ultimately, the council placed a high priority on long-term fiscal stability, investing in Randolph’s infrastructure and ensuring that we, the council and employees, maintain the excellent service levels that help define the quality of life for 25,000 citizens.
One may ask, how do Randolph municipal taxes compare? There are 39 municipalities in Morris County. Randolph in 2012 had the 7th lowest per capita tax in Morris.
Standard and Poors has assigned a AAA rating to five municipalities in Morris County. The 2012 per capita municipal taxes for those municipalities, ranked from the lowest to highest, are:
- Randolph at $680
- Madison at $774
- Montville at $779
- Mendham Twp. at $1,077
- Mountain Lakes at $1,264
The average per capita municipal tax for Morris County in 2012 was $939.
I would not justify this year’s tax increase through this comparison, but I do believe that one can reasonably surmise that the Randolph council placed tremendous significance on the budget process and reluctantly embraced a tax increase for 2013.
In closing, we continue to be guided by our mission statement:
“The Randolph Township municipal organization strives to make the Township of Randolph the best it can be by providing effective governance, enhanced customer services and excellent community facilities.”
It is my hope that you will support the 2013 budget with a unanimous vote.