| View previous topic :: View next topic |
| Author |
Message |
Guest
|
 Posted: Wed, Mar 16 2011, 2:17 pm EDT Post subject: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
 |
|
This year's municipal budget was the main agenda item at Monday’s Cranbury Township Committee meeting, which drew about 20 residents in the large group room at the Cranbury School. The work session, which came two weeks before the official public hearing, featured a slideshow created and presented by Mayor Winthrop Cody on how else the township could lay out next year's finances.
The crux of Mayor Cody’s presentation was two alternate budget suggestions he had crafted, neither of which would require the already-introduced tax increase from 37.5 to 39.5 cents per $100 of assessed home value. Mayor Cody said he preferred his second budget alternative, which, according to his figures, would leave the township with a greater year-end surplus than the budget proposal that has been introduced. The major difference in this plan is that it wouldn’t include an optional bond debt repayment of around $500,000. This bond has a variable interest rate that is now at 1.5 percent but which will change at the end of the summer.
Township Administrator Denise Marabello said that putting off that debt repayment might not be a good plan for Cranbury going forward.
http://eastwindsor.patch.com/articles/cranbury-mayor-suggests-other-budget-options |
|
| Back to top |
|
 |
Guest
|
| Posted: Wed, Mar 16 2011, 5:07 pm EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| So to be clear, we are raising taxes specifically to pay off debt early. If we didn't accelerate this debt payoff we would have no need for a tax increase at all and would be able to take less out of the surplus. |
|
| Back to top |
|
|
Guest
|
| Posted: Wed, Mar 16 2011, 6:05 pm EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| Guest wrote: | | So to be clear, we are raising taxes specifically to pay off debt early. If we didn't accelerate this debt payoff we would have no need for a tax increase at all and would be able to take less out of the surplus. |
From my understanding the increase is to keep the surplus up and pay down some debt. |
|
| Back to top |
|
|
Guest
|
| Posted: Wed, Mar 16 2011, 8:01 pm EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| Guest wrote: | | Guest wrote: | | So to be clear, we are raising taxes specifically to pay off debt early. If we didn't accelerate this debt payoff we would have no need for a tax increase at all and would be able to take less out of the surplus. |
From my understanding the increase is to keep the surplus up and pay down some debt. |
But that's not consistent with what was reported in the article or the presentation by the Mayor. The TC majority is proposing paying off $500,000 in debt early. The tax increase will generate $320,000 in additional revenue. Which means 100% of the tax increase is going toward debt payment plus an additional $180,000 from the surplus.
So if you remove the elective early payoff of the debt you completely eliminate the need for the tax increase and take less out fo the surplus. |
|
| Back to top |
|
|
Guest
|
| Posted: Wed, Mar 16 2011, 8:20 pm EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| Guest wrote: | | Guest wrote: | | Guest wrote: | | So to be clear, we are raising taxes specifically to pay off debt early. If we didn't accelerate this debt payoff we would have no need for a tax increase at all and would be able to take less out of the surplus. |
From my understanding the increase is to keep the surplus up and pay down some debt. |
But that's not consistent with what was reported in the article or the presentation by the Mayor. The TC majority is proposing paying off $500,000 in debt early. The tax increase will generate $320,000 in additional revenue. Which means 100% of the tax increase is going toward debt payment plus an additional $180,000 from the surplus.
So if you remove the elective early payoff of the debt you completely eliminate the need for the tax increase and take less out fo the surplus. |
That's not correct. It was stated numerous times at the meeting that the $500k is a state aid number which may not come in the Mayor in his numbers also assumed we'd get 800k returned to surplus next year that is 1.3 million of assumptions he used. In fact one TC member said he was concerned about such high assumptions being used when we only had 1.9 million to be used for tax rate offset not the 4.9 million the Mayor showed.
The Mayor and TC are making an assumption on the $500k coming in from the state. However, there is a key difference.
The Mayor is acting as though the money is guaranteed to come in and therefore is borrowing $500k from our surplus with the hope that the state aid comes in and replenishes it to reduce a tax increase. In other words he's using money we do not yet have and have no commitment on to reduce our tax rate. He's using a credit card approach.
The other 4 are saying if it does come in then let's set it aside for debt repayment or set it aside to pay part of the cost of the Dam.
That was not in the article, but was stated numerous times at the meeting. In other words lets not spend money we do not have because they are concerned about the surplus burn rate.
All 4 said if there is no state aid there is no debt repayment or set aside, under the Mayor's scenario we're in trouble if that $500k does not come in. It was explained by 3 of the members that the number had to be shown for debt repayment for the budget introduction, but could be used for the Dam.
The Mayor also did not show the decline in rateables and how the town's assessed value was declining.
Yes, it's nice that the Mayor presented options with zero taxes. However, we have 2 dems and 2 reps who seem to be on the same page concerning the surplus and concern. |
|
| Back to top |
|
|
Guest
|
| Posted: Wed, Mar 16 2011, 8:48 pm EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| Guest wrote: | | Guest wrote: | | Guest wrote: | | Guest wrote: | | So to be clear, we are raising taxes specifically to pay off debt early. If we didn't accelerate this debt payoff we would have no need for a tax increase at all and would be able to take less out of the surplus. |
From my understanding the increase is to keep the surplus up and pay down some debt. |
But that's not consistent with what was reported in the article or the presentation by the Mayor. The TC majority is proposing paying off $500,000 in debt early. The tax increase will generate $320,000 in additional revenue. Which means 100% of the tax increase is going toward debt payment plus an additional $180,000 from the surplus.
So if you remove the elective early payoff of the debt you completely eliminate the need for the tax increase and take less out fo the surplus. |
That's not correct. It was stated numerous times at the meeting that the $500k is a state aid number which may not come in the Mayor in his numbers also assumed we'd get 800k returned to surplus next year that is 1.3 million of assumptions he used. In fact one TC member said he was concerned about such high assumptions being used when we only had 1.9 million to be used for tax rate offset not the 4.9 million the Mayor showed.
The Mayor and TC are making an assumption on the $500k coming in from the state. However, there is a key difference.
The Mayor is acting as though the money is guaranteed to come in and therefore is borrowing $500k from our surplus with the hope that the state aid comes in and replenishes it to reduce a tax increase. In other words he's using money we do not yet have and have no commitment on to reduce our tax rate. He's using a credit card approach.
The other 4 are saying if it does come in then let's set it aside for debt repayment or set it aside to pay part of the cost of the Dam.
That was not in the article, but was stated numerous times at the meeting. In other words lets not spend money we do not have because they are concerned about the surplus burn rate.
All 4 said if there is no state aid there is no debt repayment or set aside, under the Mayor's scenario we're in trouble if that $500k does not come in. It was explained by 3 of the members that the number had to be shown for debt repayment for the budget introduction, but could be used for the Dam.
The Mayor also did not show the decline in rateables and how the town's assessed value was declining.
Yes, it's nice that the Mayor presented options with zero taxes. However, we have 2 dems and 2 reps who seem to be on the same page concerning the surplus and concern. |
Nothing in this reply actually contradicts or makes "incorrect" the previous post. If the tax increase generates $320,000 and the debt pay down is $500,000, then the tax increase is 100% going toward the optional debt pay down plus an additional $180,000 from the surplus is needed.
When you cut through all the noise, all you are adding is that the $500,000 in state aid is not guaranteed. So what is the timing? It would seem unworkable state-wide if the Governor doesn’t release state figures on funding local townships until after it is too late to change the budgets. What about Townships whose budgets will exceed the increase cap without the state funding and would require a local override votes? Why can’t the rest of the TC members commit to using the state aid if it comes through to eliminate the tax increase and only do the increase if it doesn’t? |
|
| Back to top |
|
|
Guest
|
| Posted: Wed, Mar 16 2011, 9:04 pm EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| Guest wrote: | | Guest wrote: | | Guest wrote: | | Guest wrote: | | Guest wrote: | | So to be clear, we are raising taxes specifically to pay off debt early. If we didn't accelerate this debt payoff we would have no need for a tax increase at all and would be able to take less out of the surplus. |
From my understanding the increase is to keep the surplus up and pay down some debt. |
But that's not consistent with what was reported in the article or the presentation by the Mayor. The TC majority is proposing paying off $500,000 in debt early. The tax increase will generate $320,000 in additional revenue. Which means 100% of the tax increase is going toward debt payment plus an additional $180,000 from the surplus.
So if you remove the elective early payoff of the debt you completely eliminate the need for the tax increase and take less out fo the surplus. |
That's not correct. It was stated numerous times at the meeting that the $500k is a state aid number which may not come in the Mayor in his numbers also assumed we'd get 800k returned to surplus next year that is 1.3 million of assumptions he used. In fact one TC member said he was concerned about such high assumptions being used when we only had 1.9 million to be used for tax rate offset not the 4.9 million the Mayor showed.
The Mayor and TC are making an assumption on the $500k coming in from the state. However, there is a key difference.
The Mayor is acting as though the money is guaranteed to come in and therefore is borrowing $500k from our surplus with the hope that the state aid comes in and replenishes it to reduce a tax increase. In other words he's using money we do not yet have and have no commitment on to reduce our tax rate. He's using a credit card approach.
The other 4 are saying if it does come in then let's set it aside for debt repayment or set it aside to pay part of the cost of the Dam.
That was not in the article, but was stated numerous times at the meeting. In other words lets not spend money we do not have because they are concerned about the surplus burn rate.
All 4 said if there is no state aid there is no debt repayment or set aside, under the Mayor's scenario we're in trouble if that $500k does not come in. It was explained by 3 of the members that the number had to be shown for debt repayment for the budget introduction, but could be used for the Dam.
The Mayor also did not show the decline in rateables and how the town's assessed value was declining.
Yes, it's nice that the Mayor presented options with zero taxes. However, we have 2 dems and 2 reps who seem to be on the same page concerning the surplus and concern. |
Nothing in this reply actually contradicts or makes "incorrect" the previous post. If the tax increase generates $320,000 and the debt pay down is $500,000, then the tax increase is 100% going toward the optional debt pay down plus an additional $180,000 from the surplus is needed.
When you cut through all the noise, all you are adding is that the $500,000 in state aid is not guaranteed. So what is the timing? It would seem unworkable state-wide if the Governor doesn’t release state figures on funding local townships until after it is too late to change the budgets. What about Townships whose budgets will exceed the increase cap without the state funding and would require a local override votes? Why can’t the rest of the TC members commit to using the state aid if it comes through to eliminate the tax increase and only do the increase if it doesn’t? |
Not all towns are on the same budget cycle. The state aid does not come and likely will not be verified until summer as was discussed at the TC meeting.
If the Mayor gets his way then we stand to lose 500k from surplus if state aid does not come through. So yes, the 4 others are saying we can't afford that gamble because our surplus will be $500k less in the Mayor's scenario if we lose. The only basis for the Mayor's argument that we're getting state aid is a press conference.
If the other TC members get their way then if it comes in we will bond for 500k less money on the Dam as that seemed to be the way they were leaning Monday night. However, since the Dam cost is unknown they can't project the cost other than at a min it will be 1.2 million. If the state aid does not come in then there is no debt repayment or offset for the Dam. That is a huge difference. |
|
| Back to top |
|
|
Guest
|
| Posted: Wed, Mar 16 2011, 9:48 pm EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| If the only issue is timing and uncertainty of state aid and not a desire to use incremental taxes to pay down debt early, then they should forget about the debt paydown and pledge to use the state aid, should it come, to put into the decifit with the express process they would use it to offset subsequent tax years. |
|
| Back to top |
|
|
Guest
|
| Posted: Thu, Mar 17 2011, 9:39 am EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| Only one poster mentioned this is variable rate debt. Does anyone know what the rate is based and the structure of this debt? |
|
| Back to top |
|
|
fiscal wisdom
Guest
|
| Posted: Thu, Mar 17 2011, 10:12 am EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
Mayor's job is to bring about consensus. This sounds like grandstanding to me. Hm...election year...wants to be able to say he did not vote to increase taxes.
I agree with the other committeemen that the budget should be based on certainties and not on "what-if's". Clearly, it is not a partisan issue, it is a fiscal conservatism issue. We should not hedge our bets.
Denise Marabello is an expert in municipal finance and has more years of experience than any member of committee. She is also a tax payer in Cranbury. Her professional advice should be taken seriously by all of us. |
|
| Back to top |
|
|
Guest
|
| Posted: Thu, Mar 17 2011, 10:35 am EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| fiscal wisdom wrote: | Mayor's job is to bring about consensus. This sounds like grandstanding to me. Hm...election year...wants to be able to say he did not vote to increase taxes.
I agree with the other committeemen that the budget should be based on certainties and not on "what-if's". Clearly, it is not a partisan issue, it is a fiscal conservatism issue. We should not hedge our bets.
Denise Marabello is an expert in municipal finance and has more years of experience than any member of committee. She is also a tax payer in Cranbury. Her professional advice should be taken seriously by all of us. |
None of that explains why we need to pre-pay off debt by using some combination of surplus, tax increase and state aid.
I understand the logic of not counting on the state aid so if the budget without it couldn't cover core expenses that would make sense. What keeps getting danced around and not directly answered is that the tax increase and some surplus is being used to pay off this debt early, not cover essential expenses. They say the tax increase is because we can't count on the state aid, but the issue isn't where the money is coming from but what it's being used to pay for. And that's the early debt payment, no matter which way you slice it. If they didn't make the early debt payment, there would be no need to raise taxes whether we got the state aid or not. |
|
| Back to top |
|
|
Guest
|
| Posted: Thu, Mar 17 2011, 10:54 am EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| Guest wrote: | | fiscal wisdom wrote: | Mayor's job is to bring about consensus. This sounds like grandstanding to me. Hm...election year...wants to be able to say he did not vote to increase taxes.
I agree with the other committeemen that the budget should be based on certainties and not on "what-if's". Clearly, it is not a partisan issue, it is a fiscal conservatism issue. We should not hedge our bets.
Denise Marabello is an expert in municipal finance and has more years of experience than any member of committee. She is also a tax payer in Cranbury. Her professional advice should be taken seriously by all of us. |
None of that explains why we need to pre-pay off debt by using some combination of surplus, tax increase and state aid.
I understand the logic of not counting on the state aid so if the budget without it couldn't cover core expenses that would make sense. What keeps getting danced around and not directly answered is that the tax increase and some surplus is being used to pay off this debt early, not cover essential expenses. They say the tax increase is because we can't count on the state aid, but the issue isn't where the money is coming from but what it's being used to pay for. And that's the early debt payment, no matter which way you slice it. If they didn't make the early debt payment, there would be no need to raise taxes whether we got the state aid or not. |
Here is the issue the mistake being made is everything is being combined into one as though the money is all here today and that is not the case.
1) The first issue is what is the state aid. The 4 on the TC say right now until there is something in writing it is zero so the budget which has to be introduced has to account for this. The Mayor feels it is 500k based on comments he heard.
Therefore 4 TC members say we need to raise taxes 320K to cover the costs today if state aid does not come in without reducing our surplus to dangerous levels. The Mayor feels we should gamble that it does and if he's wrong the surplus is down $500k.
2) The second issue is now what if the taxes are raised and state aid comes in which won't be known until after the budget is adopted. The TC is saying if that happens then we allocate the cost to the Dam or we pay off the debt so that when we assume the Dam costs we're in a better financial position. The TC is not saying raise costs to pay off the debt. If the state aid does not come in then there is no debt repayment and no 500k hit to surplus. Since the money comes in and goes out. The only change is that the money the town spends now to pay for the debt is reduced. Keep in mind $500k on a 1.2 minimum project is a good payment.
Now, could the TC take the $500k and put it into surplus thus growing surplus $500k yes. However, then there are still expenses the town is paying interest on and bonding for and that too affects our bond rating.
3) If you are really this concerned call any of the 4 TC members and talk to them. You know the Mayor's view so talk to the other 4. |
|
| Back to top |
|
|
fiscal wisdom
Guest
|
| Posted: Thu, Mar 17 2011, 12:55 pm EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
The key phrase in the post above is "the mayor feels we should gamble."
That is a gamble to be taken with our municipal budget, our debt, and our credit rating. |
|
| Back to top |
|
|
Guest
|
| Posted: Fri, Mar 18 2011, 8:55 pm EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| Talking to the committee members who campaigned on reducing taxes who have changed their tune seems a waste of time. It seems they really just want to build the kitty so when someones pet project comes along like a world class library, baseball field, rebound wall, or skate park or ice rink that the money will be available. There is really no reason that we should have the highest surplus to budget ratio around. When we are at 45% and Rumson is at 36% and no town is even close we are doing something wrong. |
|
| Back to top |
|
|
Guest
|
| Posted: Fri, Mar 18 2011, 9:16 pm EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
| Guest wrote: | | Talking to the committee members who campaigned on reducing taxes who have changed their tune seems a waste of time. It seems they really just want to build the kitty so when someones pet project comes along like a world class library, baseball field, rebound wall, or skate park or ice rink that the money will be available. There is really no reason that we should have the highest surplus to budget ratio around. When we are at 45% and Rumson is at 36% and no town is even close we are doing something wrong. |
I don't mean for this to sound as mean spirited as it will come across, but I think you are being paranoid. You may rightly believe the surplus is too big, but if you seriously believe these current guys are saving up money for a giant boondoggle I think you are off the wall. I have spoken to all of these guys, both parties, I think they are trying to do what they think is best in a difficult time. I also have problems with what they are doing, but I don't believe they have any ulterior motive. |
|
| Back to top |
|
|
Guest
|
| Posted: Fri, Mar 18 2011, 11:07 pm EDT Post subject: Re: Cranbury Mayor Suggests Other Budget Options; Committee Reaction Is Lukewarm |
|
|
I agree with the above. I don't agree with using a tax increase, surplus or state aid to pay off the debt early and am not clear that we need to raise taxes this year. I think Mayor Cody is asking valid questions.
But I absolutely don't think the actions of the majority is part of a conspiracy to horde money for "pet projects." Given the actions of some of the recent past members of the Committee I can see where this idea would come from, but this is not the same group. There are real, non-elective and potentially massive liabilities coming up soon including the dam repair, the Liberty Way project that the Township is legally obligated to, unless something changes, and possibly more affordable housing. The Liberty Way project alone could be 4 times our surplus. These guys are worried about that, and about the alternative likelihood that if we draw down the debt too much now the tax increase later will be massive. Mayor Cody is simply saying that it doesn’t make sense in such a poor economy to force people to swallow an increase on this possibility down the road, especially when it may go toward things like elective debt pay off.
Neither group is being political or petty. They just don’t agree. It’s a tough situation all around because of the mess left by the previous Township Committees. I remember just a few years ago when Mayor Stout was defending the idea of pursuing a stand-alone new Library project, even as the economy had started to tank, by saying that legally we could have far more debt than we did and therefore we were already being fiscally conservative. Yet the reality is debt payments are the largest factor in our municipal budget increases over the last 10 years. None of the current members, as far as I have seen, are that off base. |
|
| Back to top |
|
|
|
