2022 Budget Workshop - Part I
The Verona Town Council had our first 2022 Budget Workshop on Wednesday night. Here are the highlights.
Over the last several years, the Verona Town Council has approached our budgeting process to allow Council members and the public ample time to ask questions, down to the line-item detail in each department. The budget is the responsibility of the Township Manager, and the CFO puts the figures together in conjunction with the Department Heads. The Department Heads typically come to the budget workshop to discuss the trends that are happening in their departments and then we can ask questions on the detail. After the workshops, the CFO and Township Manager determine what to "lock in" as the proposed budget, and it is formally introduced. Normally this is sometime in April. Then one month later there is a public hearing on the budget hearing. At that point the Council votes on the budget.
As a result of this process, the best time to make changes to the budget is before it is introduced, which is why we have the workshops. After it is introduced it cannot be changed.
On Wednesday we reviewed the top line figures with the budget, and then the major departments that drive most of the costs. Here is a short summary.
Overall, the budget is looking like it will be $26.6 million (as compared to $26.2 million last year). The amount raised by taxation is projected to be $18.1 million, resulting in an increase of the tax rate of 2.40%. This equates to an average increase of $88.
This year we have some big accounting "events" that will be in our budget. You may recall we had declared a budget "special emergency" due to Covid in both the pool and general fund for revenue losses we experienced in 2020 and 2021. In 2022 we are projected to receive over $700K in money from the American Rescue Plan, so how we spend that anticipated revenue will be in this budget. In addition, we suffered unexpected budget costs due to Ida, for which we had another "special emergency", and those costs need to be paid back this year.
Overall, our financial position continues to remain strong. I do have some questions on how these big items listed above all play out and interact with each other, which should be addressed on Monday night at our Council meeting when we do "part two" of our budget workshops. However, it does not appear that the financial impacts of Covid are going to negatively impact the taxpayer in the long term, due to the money we will receive from the American Rescue Plan.
The average projected tax bill is going to be $3,278 next year. By department, this is how the budget breaks out: public safety $1,076 (up $30), capital projects and debt $537 (down $15), public works $427 (up $1), public utility, garbage and recycling $389 (up $4), administration and legal $318 (up $6), community services and recreation $260 (down $8), public library $130 (flat), misc $141 (down $19).
The biggest cost driving our budget are salary and wages, increases in garbage collection costs, anticipated rising gasoline costs, and past impacts to revenue due to Covid. Some unknowns in our budget are our ongoing negotiations with our two unions, as new agreements are not yet finalized, and how revenues will bounce back post Covid. For the future, the biggest financial impact we need to address this year for 2023 is the financing of significant debt we took on to build affordable housing and preserve open space.
Some additional highlights:
Public works (45 min mark): The program we put in place last year to tag recycling that is not following our ordinance is working! Our fines are way down. In addition, while our garbage costs are increasing due to our existing contract, Verona residents are putting out less bulk waste, and that helps to stabilize costs.
Police (1 hr 15 min mark): Two officers with retire next year but the savings from those retirements will not impact the 2022 budget. We discussed the success of the part time hires in the department and some challenges with managing costs related to dispatch. The department is going through a big accreditation process that, when complete, will likely result in a reduction of our insurance fees.
Recreation (almost 2 hr mark): Staffing has been cut in Recreation in the past, and in 2023 they will be adding a part time position. Summer camp will be fully operational this summer and will cost $300. Programs for the disabled will be added. The ballroom at the Community Center is being rented Friday, Saturdays and Sundays. Senior group is re-starting.
Buildings and Grounds (2 hr 25 min mark): They will be looking to hire someone in 2023 to start to plan for retirements. Overtime costs will decrease due to a reduction on hours spent cleaning the building. Many projects will happen this year, including installing the new traffic signals by FN Brown.
Water and Sewer: Due to raising or our rates in 2023, the financials in this utility will be strong. Questions remain on how the significant capital costs are going to be paid for. More to come on this.
Pool utility: The pool revenues significantly "bounced back" post pandemic. Rising minimum wage will increase salary costs. The pool rates will remain flat in 2022.
At our meeting on Monday night we are going to cover the rest of the budgets. In additional, the Township Manager is working on a 5 year capital plan, which will be a big post in itself! The Capital Plan is when we talk about the big things that need to be addressed in town that require bonding.
The YouTube video of this workshop can be found here: https://youtu.be/QQKml-Zh-NA. The documents can be found here: https://www.veronanj.org/councilmeetings . Finally comments should always be sent to the entire Council by going here: https://www.veronanj.org/council.