20210308 - Village Council Special Public Budget Meeting Minutes
A SPECIAL PUBLIC BUDGET MEETING OF THE VILLAGE COUNCIL OF THE VILLAGE OF RIDGEWOOD HELD VIA ZOOM, DUE TO THE COVID-19 PANDEMIC, ON MARCH 8, 2021 AT 5:00 P.M.
- CALL TO ORDER – OPEN PUBLIC MEETINGS ACT – ROLL CALL – FLAG SALUTE
Deputy Mayor Sedon called the meeting to order at 5:03 P.M. and read the Statement of Compliance with the Open Public Meetings Act. Deputy Mayor Sedon read a required announcement regarding the remote meeting format. At roll call the following were present: Councilmembers Perron, Reynolds, Sedon, and Walsh. Also present were Heather Mailander, Village Manager/Village Clerk; and Robert Rooney, Chief Financial Officer. Mayor Knudsen was absent.
Deputy Mayor Sedon led those in attendance in the Pledge of Allegiance to the flag as well as in a Moment of Silence for our Frontline Workers and Servicepersons.
- COMMENTS FROM THE PUBLIC
There were no comments from the public.
- DISCUSSION ITEMS
- Final Budget Review
- Revenues
Robert Rooney, Chief Financial Officer, stated that they would start with the Parking Utility Fund. They had talked about the appropriations at an earlier meeting and these are the revenues to support it. He discussed the parking meter revenue for 2020, how they were approximately $700,000 short of what they anticipated for the year. The State has allowed the Village to average the last three years of revenue collections, and the average for those years is $1.6 million. That is what he is allowed to budget for this year. To compensate for the other shortfalls, he is increasing the operating surplus to $477,000 and he is using parking capital surplus of $400,000.
Mr. Rooney stated that the overall budget is slightly down from last year. That is the result of not having any surplus money he can send to the general fund amounting to $300,000, and the increase because of bond principle of $225,000. This is the first year the Village has to make payment on the bonds that were issued two years ago.
Councilwoman Walsh stated that since the Country is still in a pandemic and there is going to be another year of negative revenue on the horizon, what is the Village doing in anticipation of that situation? Mr. Rooney stated that unfortunately, almost all of it is contractual in the appropriations, because he has lease arrangements on the kiosks and debt service that has to be paid. There are Parking Enforcement Officers that are paid through salaries and wages, and there is also an allocation of time included in the budget, that management puts in. On the revenue side, Mr. Rooney stated that he stretched as much as he could to balance this out this year. One of the things that the Village may have to consider this year, which is also in line with the Walker Report that was done a few years ago, and that is to increase the rates on parking.
Mr. Rooney stated that they have the PEOs monitoring the kiosks when they go out. When they find one that isn’t working, they notify the Signal Division and they come out to do the repairs. He has almost 100 kiosks, so if a couple of kiosks don’t work occasionally, that is not unexpected. However, they try to do the best they can, to make sure the kiosks are operational.
Councilwoman Reynolds asked if there was any possibility that they could get some COVID relief money for the loss in parking revenue. Mr. Rooney stated that the Village was allowed to adopt an emergency resolution about a month ago, where it became effective at the end of December. The shortfall for the revenue that was experienced in 2020, must be raised in this year’s budget. The impact of that will not be felt until 2022, but that’s another process that the State has allowed the Village to do to keep it balanced. Councilwoman Reynolds stated that she was looking for more of a handout. Mr. Rooney stated that the unfortunate part is that municipalities are not allowed to anticipate any revenues that could potentially be received from the State or Federal Government until they are received, or until an award letter is received. FEMA is notorious for an approximately two year delay, but hopefully by 2022, the revenues will be received and they can use it to offset some of these shortfalls.
Councilwoman Walsh stated that they have nobody parking, and asked how they could raise the parking fees. Councilwoman Reynolds stated that people are parking on the street, just not in the garage. Mr. Rooney stated that it is a dilemma and when COVID started, it was identified as a revenue problem. Hopefully by summertime, more people will be parking in the Central Business District (CBD). There is no other vehicle to compensate for any of these revenue shortfalls, other than to raise parking rates, which will be paid for by those who park in the CBD. Deputy Mayor Sedon stated that when they raised the parking rates, they charge $1.25 on the street and $1.00 in the lots, but they aren’t going to have any data because of everything that happened last year. He agreed with Councilwoman Walsh that raising the parking rates on people that are coming to the CBD is a dilemma.
Councilwoman Reynolds asked how many permits they have sold. Ms. Mailander stated that she would check and let her know. Councilwoman Perron stated the interest on investments has been reduced, and asked if he could describe the investments. Mr. Rooney stated that the Village uses a cash management program through the State. The reason for the shortfall last year was predominantly when they had the funds available from the garage, the Village was spending down on $12 million at 4.5% and when COVID hit, they dropped to less than .25% and that drastic turn created the shortfall.
Mr. Rooney stated that regarding the general fund revenues, the number for local revenues is approximately $1.5 million of a shortfall, which is compensated for in the current year by the same emergency that the Village Council adopted in December to allow for a balance in operations, so that the deficit doesn’t take the Village down during the year. The revenue that he is allowed to anticipate in 2021, the three-year average can also be used. State aid is flat to last year. There are three or four other special items that he is using to balance the budget. The amount to be raised by taxation has increased by approximately 5% over last year.
Councilwoman Walsh stated that recreation fees and permits were negative, but because they didn’t run those programs, there was no cost to the Village. Mr. Rooney stated that many of the programs or events that occurred were run through the Recreation Trust Fund. If they had money sitting in the Recreation Trust Fund and wanted to run a program that they didn’t collect for in advance, they would run the expense through the trust fund. When the money came in, they would put the money back into the trust fund, so what she was seeing is programs that didn’t exist.
Councilwoman Walsh asked about the significant sewer dischargers. Mr. Rooney stated that he has to do research on this, because he thinks the offset to that might be posted to the sewer plant discharge acceptance, which is why it is showing an excess.
Councilwoman Perron asked about the sale of Village property, and if that was moveable property or real estate. Mr. Rooney stated that was moveable, so it may be equipment. Councilwoman Perron asked about account “07-192.” Mr. Rooney stated that was the Library.
Councilwoman Reynolds asked about “07-190 Amount to be raised by taxation” and if that includes any of the new apartment buildings. Mr. Rooney stated that they get no benefit from the apartment buildings until the property is assessed. There was a partial assessment this year for the apartment building on Broad Street, but they will not get the benefit until October 2021. Councilwoman Walsh stated that she heard from someone that got a unit at the Dayton that they got one of the last units and that the Dayton is full. Mr. Rooney stated that he can’t speak for the Tax Assessor, but there was a timeframe for when he could assess which he believes was October 2020, and he can’t assess the rest of it until October 2021. They will get the benefit at that point, but there is nothing they can do in between. Councilwoman Reynolds clarified the timing of the payments. Mr. Rooney clarified the added assessments would be included at that time, from the date of move-in, but there are certain stipulations that the Tax Assessor faces.
Deputy Mayor Sedon asked if the same thing applied to the taxes for the buildings, and whether they can anticipate the revenue for them and would that be an unanticipated added bonus. Mr. Rooney stated it would increase the volume of the tax revenue brought into the Village in 2021, and then in 2022, it changes the base that the tax rate is calculated, based upon the assessment that is levied on the new complexes. Councilwoman Walsh stated that if the rate is going to be set October 1st, they should put some sort of reminder in the calendar that the Benjamin, the multi-family housing building on Franklin Avenue, gets their final certificate of occupancy, and Chestnut Village, the multi-family housing building located on Chestnut Street, does as well, because if they miss that October 1st deadline, then it works in their favor and against the Village. Mr. Rooney stated that the Tax Assessor is well aware of the need to get these buildings assessed and on the tax rolls at the earliest opportunity.
Councilwoman Perron asked about the special franchise tax revenue from PSE&G which was taken out of this year’s budget and whether the revenue was gone for good. Mr. Rooney stated that it was gone for good, because the State did an audit of PSE&G’s tax return, which was taking a deduction for this franchise tax they were paying to the Village. The Village gave information that was on file, which was sent to the State, but there was nothing that identified that this contribution is of a legal nature. The State disallowed PSE&G’s deduction, so they are not going to pay the Village anymore. Mr. Rooney stated that he hasn’t gotten any information as to whether PSE&G is appealing the decision.
Mr. Rooney stated that when they started the meetings with the Department Directors and took into consideration their requests, he and Ms. Mailander made some modifications to their requests to bring it down slightly and they were over a 10% increase to the prior year. The Village Council made some changes and modifications that he took into consideration. He then got it down to a 7% increase. He had a conversation with Mayor Knudsen and Ms. Mailander and they decided that 7% was way out of line and he was able to get it down to a 4.7% municipal tax increase, which is a result of moving some money around and utilizing trust funds.
Mr. Rooney stated that every Department Director has been contacted to let them know what the modifications to their budgets are, and they understand, and are willing to work with what has been proposed.
Councilwoman Walsh stated that she thinks there is no way they can approve a 4.7% municipal tax increase this year as people are suffering and they don’t even know what the Board of Education is going to do. She added that she believes the budget must be reviewed again to get the municipal tax increase down to 2% or 2.5%. There are so many things in business going on right now, companies are already making decisions that are going to negatively impact people, and she doesn’t feel comfortable adding an extra tax burden of a 4.7% municipal tax increase.
Councilwoman Reynolds asked what the 4.7% municipal tax increase would equate to in dollars for the current average valued Ridgewood house. Mr. Rooney stated that the tax on an average assessed value of $701,664 results in a $4,571 tax for municipal purposes and that is approximately $213 higher than last year. Councilwoman Reynolds asked if the municipal budget is 23% of the total tax rate with the Board of Education being 67% of the total tax rate. Mr. Rooney stated that was correct. Councilwoman Reynolds asked if the Board of Education was holding their budget meetings concurrently. Ms. Mailander stated that their budget year begins July 1st. Mr. Rooney stated that they wouldn’t be doing this until April or May. Councilwoman Reynolds wondered what the increase would be if the Board of Education went up 2%. Councilwoman Walsh stated that the County indicated that they were increasing as well.
Deputy Mayor Sedon asked if there was a ballpark number that they would have to shave off the budget to reduce the municipal tax rate. Mr. Rooney stated that every quarter of a percent is worth approximately $90,000. To get it down to a 2.5% municipal tax increase, it would be an $800,000 reduction. The current budget has new hires of two Police Officers and two Firefighters. If they reduce the budget further, the budget reductions will be a reduction in personnel. A lot of this is contractual, they had pension increases of 12% this year, a 12% debt service increase, and those are things they can’t touch. If they are considering the operating part of the budget, then they are going to have to reduce existing personnel.
Mr. Rooney stated that he pared the 2021 budget down to what he think is bare bones. He added that he tapped into his trust money, brought in revenue on three-year averages, and there are a lot of things they are stretched out already. Councilwoman Reynolds stated that her feeling is although a 4.7% municipal tax increase sounds high, $213 on the average house is less than $20 a month. She knows they are going to have the Board of Education tax increase on top of that, but the Village Council does not want to put themselves in a position where so much is cut from the budget that services may have to be reduced. Mr. Rooney stated that municipalities surrounding Ridgewood are at 2.5% to 3.5% municipal tax increases, and are feeling the impact of less revenues, due to the COVID pandemic as well.
Councilwoman Perron asked if they could ask residents to collect and dispose of their own leaves, which might save some money. Ms. Mailander stated that she didn’t know where residents would dispose of the leaves. Councilwoman Perron asked about the capital improvements and whether they can be put off at all. Mr. Rooney said no, that is the down payment on the capital ordinances. The capital budget that the Council approved, has to have a 5% down payment and this is where that money comes from.
Councilwoman Perron asked if furloughs were out of the question. Ms. Mailander stated that they weren’t out of the question, but they probably wouldn’t take place until June or July. Mr. Rooney stated that because of Civil Service, they have requirements that have to be met before furloughs can take place. Ms. Mailander added that it is almost like a layoff process and takes 120 to 160 days total. They have to send the plan to Civil Service for them to review and approve. It then comes back to the Village to implement. Furloughs would have to happen Village-wide, because excluding Departments or Divisions from furloughs wouldn’t allow for the full savings.
Councilwoman Walsh asked if what Ms. Mailander was saying is that instead of a furlough, reducing personnel would be more effective. Ms. Mailander agreed, because then personnel are being laid off and not being replaced. Councilwoman Perron asked if they could hire one Police Officer and one Firefighter. Ms. Mailander stated that one Police Officer is already in the Police Academy, and they could hire one Firefighter, but part of the reason for hiring the second Firefighter was because they were taking over for the paid EMTs during the day. Overtime for the Fire Department may be incurred if they don’t have enough personnel to answer ambulance calls.
Councilwoman Walsh asked where else they could make changes. Ms. Mailander stated that they were down to existing personnel. Deputy Mayor Sedon stated that they would have to go Department by Department and person by person to add up what they would save in salary. Councilwoman Walsh indicated that there would also be some savings in benefits. Mr. Rooney stated that with benefits, they still have a 12% increase and won’t realize that savings until next year. Councilwoman Walsh stated that the Village should start with the people that have not yet been hired, as a first step. Ms. Mailander stated that would add up to approximately $150,000, because they are low salaries.
Deputy Mayor Sedon suggested introducing the budget and then the public could weigh in at the budget hearing and the Village Councilmembers can gauge public opinion that way. Ms. Mailander added that they do have unemployment expenses if they do layoffs, so they are not getting the full savings. Councilwoman Reynolds asked what would be the cost of unemployment. Mr. Rooney stated that he didn’t know, he added that the one other reminder is that when they introduce the budget, it goes to the State and is subject to their review. Since this is a very unique year, they may have questions or suggestions, but it is subject to their review and approval and they usually don’t get the answer until two or three days before the budget is adopted. Councilwoman Reynolds asked when the State receives the budget. Mr. Rooney stated that it is three days after the Village Council introduces the budget, and then they assign a reviewer.
Councilwoman Reynolds asked when the budget will be adopted. Mr. Rooney stated that the budget is currently scheduled to be adopted on April 14th, which is within the timeframe set forth by the State. If the State comes back and asks for changes, then the budget will be amended that night and the Village Council can adopt the budget. If the Village Council suggests changes that exceed certain percentages of line items, then they have to have another hearing within 3 days of the day they adopt the budget, and then go through another process of advertisement and adoption of the budget amendments.
Ms. Mailander stated that in the past, there were two or three years of 0% municipal tax increases and two or three years of 1.99% municipal tax increases, and so unfortunately that comes back to haunt us. The reality is, it is not sustainable to have such low tax increases, but the COVID pandemic combined with the low tax increases, created the need for a higher municipal tax increase. There are four or five Police Officers who could retire tomorrow, and there is also the multi-family housing that is coming into being, which will require additional Police Officers.
Councilwoman Reynolds stated that she thinks they would be hurting themselves if they reduced the Police Officer by one and the Firefighter by one. It takes so long to get a Police Officer on the street, and they would then be behind by a year for a big influx of people in the multi-family developments. By hiring two Firefighters and getting rid of the daytime EMTs, if they are saving money, then they would be crazy to not do that. Ms. Mailander stated that this year, they would be saving money under this proposal.
Deputy Mayor Sedon stated that his suggestion is to introduce the budget so they could start to hear back from the public and see if they are accepting of the proposed municipal tax increase or if there is a major outcry. They would have to take that information into consideration and move forward. Councilwoman Walsh stated that she thinks they need to consider everything, with the unknown of the Board of Education’s tax increase and the challenges that they have had this year. Residents are really going to be hit by them, and then if there are large tax increases from the Village and the County, it could be well over a $1,000 tax increase on the average house.
Councilwoman Walsh stated that the parking revenue is not going to increase. Councilwoman Reynolds stated that the last couple of times she went into town, there was not a parking space available on the street. Councilwoman Walsh asked if they could get the revenues to date for parking. Mr. Rooney stated he would provide those revenues to the Village Council. Councilwoman Reynolds stated that she thought that creative solutions for the parking garage must be determined. She wondered if people would be interested in renting the garage for parking overnight, adding that they should try and find some ways to make money off of the almost empty Hudson Street Garage.
Councilwoman Walsh stated that Councilwoman Perron’s idea was that if people had to deliver their leaves somewhere, that is a tremendous savings, but that would be a shift in how Ridgewood has done it in the past. Councilwoman Reynolds stated that she thought they would get so much push back from that, because there are a lot of people who can’t bag their own leaves. Councilwoman Walsh added maybe less expenses would mean picking up garbage once a week. These changes will have an impact and everyone can plan accordingly. There was discussion of encouraging people to drop off their own recycling, or reduce the bulk pickup collections.
Councilwoman Reynolds asked if they could figure out what the savings would be if they picked up recycling once a month, adding that she thinks garbage pickup in the summer really has to be twice a week. Ms. Mailander stated that there are some towns that do twice a week garbage pickup from June through September, and then once a week garbage pickup for the rest of the year. There are other towns that pickup garbage once a week, year round. Councilwoman Perron asked if they said garbage pickup at the curb for this one year, do they save any money. Ms. Mailander stated that they might save on personnel. Councilwoman Walsh stated that they have talked about this for years, so maybe this is the year the Village has to try it. Councilwoman Perron stated that maybe this is the opportunity, and if a resident has a hardship bringing garbage to the curb, he/she can apply to the Village for assistance.
Deputy Mayor Sedon stated that all of these ideas are well and good but he doesn’t know that they could enact all of this in the timeframe that they have for the budget. If they could get the information and make the changes to how they operate this year, he didn’t know how that would delay the budget process or what that would entail. Ms. Mailander stated that it would delay the budget process, because they are supposed to introduce the budget on March 10, 2021. The latest they could introduce the budget and still be in the timeframe would be at a special public meeting on March 24th, then they would adopt the budget at a Special Public Meeting at the end of April. Changing garbage collection will not realize nine months of savings. She added that she agrees with Deputy Mayor Sedon that these are conversations they should certainly have this year, something that they should consider going forward, but realistically in order to get this budget done in the timeframe required by statute, it is going to be difficult.
Mr. Rooney stated that he suggests the Village Council introduce the budget on March 10th, and they have options. If they want to amend the budget down the road they can, but at least they will have the opportunity to get the feedback on any adjustments from the State, and during that time, the Village Council can see what other alternatives they want to pursue. If they delay the budget introduction, they are going to postpone this and they don’t want to run past the timeframe required in the statute. Councilwoman Walsh stated that she thinks they need to be agile, and if it is going to take acting quickly on changes, then the Village must act quickly.
Councilwoman Perron asked if there was an emergency procedure for passing ordinances instead of the 60 days. Ms. Mailander stated that it wasn’t 60 days, it’s that they have to advertise it and there has to be at least 7 to 10 days until the hearing and then with some ordinances there are times in between introduction and adoption so they would have to look at how long that would take. An ordinance is then effective 20 days from the date of adoption, so at the shortest it may be 45 days. Deputy Mayor Sedon stated that if the Village wanted to do away with leaf collection, a schedule would have to be figured out and must determine how it would be coordinated.
Councilwoman Walsh added that it was easier to not hire somebody than to furlough them or lay them off. Ms. Mailander stated that the new hires are two Firefighters, one Police Officer, and three other employees who are going to be hired in November in various Departments. Councilwoman Walsh stated that the only choice in reducing the budget is a layoff or furlough of existing personnel. Deputy Mayor Sedon agreed that there was really no other way.
Councilwoman Reynolds stated that the Library was going to get a $1.4 million grant, which didn’t happen. The Library is now applying for a $700,000 grant. Since they are probably not going to be getting a grant this year, she wondered if there is any way that more of that money could be used this year. Mr. Rooney stated that the amount of operating money that the Library gets from the Village is about $2.5 million. The reduction made relates to the capital budget, so that has been dealt with already and taken into consideration for capital funding. Deputy Mayor Sedon added that there is the 5% down payment on capital, but that is on the total capital.
Deputy Mayor Sedon stated that he was back to his original suggestion of introducing the budget on March 10, 2021 and then hearing from the public. Councilwoman Reynolds stated that she thinks that’s fine, but asked how they will get the word out. Ms. Mailander stated that they send out a budget newsletter after introduction that goes to every single household and they have the opportunity to comment at the public hearing and any other meeting. Councilwoman Walsh stated that to get more people involved and to hear their comments they need to push the message to them that they are struggling to reach a decision and would value community input. Deputy Mayor Sedon suggested Facebook posts regarding the proposed increase. Councilwoman Perron added posting to the website as well.
Ms. Mailander stated that they would need an explanatory statement about the 4.7% municipal tax increase, because anyone seeing that number would be overwhelmed by it. There was agreement from the Village Council. Mr. Rooney stated that at the budget introduction on March 10th, he and Ms. Mailander would be making a presentation on the budget which they normally do, and there will be information in the presentation to support why the 4.7% municipal tax increase is needed. Ms. Mailander added that people still have the opportunity to comment at any of the Village Council meetings, regarding the budget. Mr. Rooney stated that he would send the Village Council a breakdown of what the next steps are.
- COMMENTS FROM THE PUBLIC
There were no comments from the public.
- ADJOURNMENT
There being no further business to come before the Village Council, on a motion by Councilwoman Perron, seconded by Councilwoman Reynolds, and carried unanimously by voice vote, the Village Council’s Special Public Budget Meeting was adjourned at 6:17 P.M.
______________________________
Michael Sedon
Deputy Mayor
Heather A. Mailander
Village Manager/Village Clerk
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