20220307 - Village Council Special Public Budget Meeting Minutes

A SPECIAL PUBLIC BUDGET MEETING OF THE VILLAGE COUNCIL OF THE VILLAGE OF RIDGEWOOD HELD IN THE SYDNEY V. STOLDT, JR. COURT ROOM OF THE RIDGEWOOD VILLAGE HALL, 131 NORTH MAPLE AVENUE, RIDGEWOOD, NEW JERSEY, ON MARCH 7, 2022 AT 5:00 P.M.

 

1.         CALL TO ORDER – OPEN PUBLIC MEETINGS ACT – ROLL CALL – FLAG SALUTE

 

Mayor Knudsen called the meeting to order at 5:02 P.M. and read the Statement of Compliance with the Open Public Meetings Act.  At roll call the following were present:  Councilmembers Perron, Reynolds, Sedon, Vagianos, and Mayor Knudsen.  Also present were Heather Mailander, Village Manager/Village Clerk; Robert Rooney, Chief Financial Officer; Stephen Sanzari, Treasurer; and Olivia Dimitri of the Finance Department.

 

Mayor Knudsen led those in attendance in the Pledge of Allegiance to the flag and asked for a moment of silence for men and women serving our nation, all first responders, and for worldwide peace.

 

2.         COMMENTS FROM THE PUBLIC

 

There were no comments from the public at this time.

 

3.         DISCUSSION ITEMS

 

            A.        FINAL BUDGET REVIEW

 

Ms. Mailander announced that the final budget review will be discussed this evening.  Mr. Rooney will review the final reductions made to the budget and the final numbers which determine the tax rate.

 

Mr. Rooney spoke about the summary that he handed out to everyone.  On the first page was a comparison of the municipal property tax increases for the last three years.  He stated that “NVT” means “Net Valuations Taxable” and “ATBRT” means “Amount to be Raised by Taxation.”  The ATBRT divided by the NVT results in the tax rate.  He pointed out that the $55,934,502.00 indicated under “Budget Proposed 2022” represents all the department requests which were put into the overall budget.  This generated a 5% increase over the prior year (2021), which, in turn, generated a 4.9% tax increase.

 

Mr. Rooney described the challenges faced by the Village administration in calculating the tax rate for 2022.  There was a shortfall of local revenues of approximately $523,000.00; a shortfall in other revenues of approximately $27,000.00; projected 2022 shortfall of $2.5 million; and a shortfall of receipts from delinquent taxes of $64,000.00.  In 2022, he was able to capture another $178,000.00 using a three-year average, allowable by the state.  Mr. Rooney indicated that he can use $2.3 million of American Recovery proceeds in this year’s budget.  He stated that, unfortunately, based upon the amount of delinquent taxes available, he still comes up $140,000.00 short of what he can anticipate.  Of the $3 million shortfall, he is able to “come back” with $2.3 million.

Regarding appropriations, Mr. Rooney remarked that “Salaries and Wages” have increased 7% over last year; “Other Expenses” by 9%; “Pensions and Social Security” by 11%; and “Interlocal Agreements” by 4.6%.  Debt Service decreased by 13% from last year.  “Deferred Charges” (special emergencies such as Covid) and “Capital Improvement Fund” decreased by $50,000.00.  Overall, there is a 5.21% budget increase.

 

Mr. Rooney described the three-year average of the revenues which he is allowed to utilize in 2022 to compensate for the shortfalls, as well as the work done by him and Ms. Mailander to find ways to lower the budget.  Each departmental budget was reviewed at length, examining salaries and wages, other expenses, etc.  Adjustments were made and they came up with a reduction of approximately $629,000.00, and there will also be a 6% reduction across the board for all departments in “Other Expenses” to get to a number of approximately $900,000.00. 

 

After these reductions, the proposed budget will generate a tax increase of approximately 2.2% for 2022.  He mentioned that additional budget reductions could be made, to reduce the 2.2% tax increase even lower which, in turn, would increase the 6% reduction taken so far in “Other Expenses.”  Mr. Rooney stated that he is awaiting a return call from the State of New Jersey to ascertain whether or not he is within the “cap.” Before the reductions aforesaid, he was approximately $800,000.00 over the cap.  

 

Mayor Knudsen asked what would happen if the 6% reduction were increased to 6.5% or 7%.  She asked what the “wiggle room” was in that number and wanted to know what those incremental percentage increases would translate into dollars.  Mr. Rooney did some calculations and reported that every $587,000.00 is worth “a penny on the rate” or ten cents.  Seeking further clarification, Mayor Knudsen said that a 6% reduction amounts to $270,000.00, affirmed by Mr. Rooney.  She asked how a reduction of 6.5% would affect the 2.2% tax rate, or the dollar value of the percentage over 2% on the proposed tax increase. 

 

Councilman Vagianos stated that his rough calculations showed that a reduction of $300,000.00 would be required to bring the 2.2% tax rate down a full point, based upon Mr. Rooney’s statement that he reduced the 5.2% rate by three points to 2.2% with a deduction of $900,000.00.

 

While Mr. Rooney made some calculations, Mayor Knudsen explained to the viewing audience how they arrived at the 2.2% tax rate. She explained how all the “little numbers” add up to a lot of money.  Councilman Sedon remarked that the 2.2% tax rate as it stands now, is much better than in 2021 and is close to being in line with what he has experienced over the past seven years of developing and passing budgets.

 

Mr. Rooney said that a further reduction of $200,000.00 would get them “where they need to be” (on top of the $270,000.00 already deducted).  Councilwoman Reynolds asked about a 7% reduction.  Mr. Rooney replied that a 7% reduction would amount to $315,000.00.  Councilman Vagianos said that this represented $45,000.00 a point.  If the overall reduction were increased another percentage point to 8%, this would bring the tax rate to a little over 2% with a reduction in operating expenses of $360,000.00.  A 9% reduction would amount to a total reduction of $405,000.00 to reach approximately a 1.85% or 1.9% tax rate.

 

Councilman Vagianos asked Ms. Mailander how a 9% reduction would affect Village departments.  Ms. Mailander replied that a 9% reduction could affect both large and small departments in a significant way, since those budgets have already been reduced.  Councilman Vagianos said that the bulk of each department’s budget is comprised of salary and wages.  Ms. Mailander indicated that personnel expenses were not touched because that would involve layoffs, and that is why they are trying to take reductions from operating expenses.

 

Mayor Knudsen said that a 9% reduction was way too high.  Deputy Mayor Sedon recalled one year when there were no tax increases and there were a lot of complaints received about the condition of Village parks.  Mayor Knudsen concurred and said that it took a long time after that for the Village to restore the services back to what residents had expected them to be. 

 

Mr. Rooney indicated that a 7.5% reduction would amount to $337,500.00, which would result in a 2.02% tax rate.  Councilwoman Reynolds stated that she thought a 7% increase would bring the tax rate to 2.1%.  Mr. Rooney replied that a 7% reduction would result in a tax rate of 2.08%. Mayor Knudsen asked what a 7.75% reduction would be, and Mr. Rooney said that would amount to $348,750.00, with a resultant tax rate of 1.99%.  Mayor Knudsen asked where these deductions would be made.  Mr. Rooney said that, similar to last year when they were in the same situation, they would go back to each Department Director and tell them that a certain percentage would be taken off their respective operating expenses.

 

There was an ensuing conversation in which the Councilmembers talked about how the cuts would affect each department.  Mayor Knudsen asked if the 7.75% reduction across the board in operating expenses would make it impossible for some departments to function.  She said that they didn’t want to pass a budget which would hurt the day-to-day operations of the Village, impact employee morale, and impact residents who rely on services.  Mr. Rooney said that he did not believe the potential reductions would drastically impact the functioning of the Village since there was nothing cut that would reduce services.  He spoke about his discussions with the Department Directors and about “soft numbers” they worked with to reduce the budget.

 

Councilman Vagianos asked if these reductions would concretely impact the maintenance of the fields or other similar items, since these are things which Village residents readily observe and there are already issues with the condition of the fields.  Mr. Rooney said that he did not believe the reductions would have any impact on field maintenance or similar functions.  Ms. Mailander said that she was concerned that there have been cuts made already, prior to this evening, but that Mr. Rooney is really the one who would know how each department would be affected by the reductions.  Ms. Mailander indicated that there would be no layoffs with the 7.75% reduction, and reduction of employees is what really impacts services to residents.

 

Councilwoman Perron indicated that she would be willing to go a little higher than the 1.99% tax rate, maybe to the 2.02% tax rate with a reduction of 7.5% in operating expenses.  Deputy Mayor Sedon said that he was good in the range of 1.99% to 2.08%.  He mentioned that the cost of everything is going up, such as supplies and materials Village employees rely on to keep the Village functioning, so that residents enjoy what they have become accustomed to and don’t visibly see things deteriorating, such as the condition of the fields or the condition of the CBD.  He indicated that any of the aforesaid rates would be well below the rate of inflation.

 

Mayor Knudsen wondered whether certain Village departments would run into issues since costs are rising for materials.  Mr. Rooney said that they could; however, he and Ms. Mailander did a detailed review through each department’s budgets, paying attention to areas that were substantially higher than last year (not necessarily materials and supplies).  He remarked that departments sometimes “magnify their wish lists” in the knowledge that they will be trimmed down eventually.  Compared to what the actual spend was in 2021, there is some flexibility.  He stated that some areas they did not touch were things such as utilities, where it is known that gas prices are increasing.

 

Ms. Mailander indicated that in 2021, things were different due to Covid; i.e., the summer day camp was not full, Graydon Pool was not fully staffed with lifeguards, etc.  In 2022, they are planning to have a full summer day camp program, which will entail more staff and materials for arts and crafts, Earth Day, etc.  Mayor Knudsen remarked that those camps are fee based and, therefore, the anticipated revenue was not received in 2021, either.  With a full summer camp attended by hundreds of children, more revenue can be anticipated.  Councilman Vagianos asked whether the Village makes money on the camp revenues or loses money.  Ms. Mailander replied that the Village does not lose money on the camp program and realizes some revenue.

 

Councilwoman Reynolds indicated that she was also agreeable to anything between 1.99% and 2.08%.  She mentioned that in 2021, the Village was expecting $2 million in American Recovery Plan (ARP) funds, due to the Covid pandemic.  She asked if this was received and, if so, where that money could be applied. Mr. Rooney directed Councilwoman Reynolds to page two of his paperwork concerning revenue shortfalls, in the right-hand column where $2.3 million was indicated as ARP money.  Half of this money was received last year and he anticipates the other half to be received in 2022.  That money has already been dedicated to cover revenue shortfalls, included in this year’s calculation. Councilwoman Reynolds said that her only concern was that people come to live in Ridgewood for its services, among other things, and she didn’t want the cuts to affect what residents are accustomed to having/enjoying.  Mr. Rooney replied that he didn’t believe there was any line item in the proposed reductions that would affect any existing programs or services.

 

Councilman Vagianos said he was also agreeable to the range of 1.99% to 2.08%.  He summarized that a 7% reduction would result in a 2.08% tax rate, 7.5% reduction would result in a 2.02% tax rate, and 7.75% reduction would result in a 1.99% tax rate.  He said the difference between the highest and lowest tax rate was about $68,000.00.  He also mentioned inflation and stated that the cost of grass seed in 2021 will most likely be higher in 2022, along with everything else.  Councilman Vagianos said that he would really like to go with the 1.99% tax rate.

 

Mayor Knudsen indicated that she also preferred the 1.99% tax rate.  She said that, comparatively speaking, the reductions are relatively not all that much when compared to the entire budget of approximately $55 million.  With tax rates being “compounded going forward,” she felt that the lower tax rate would be best since it becomes the base for the next year.  Ms. Mailander reminded everyone that total reductions actually amounted to approximately $1 million from the original budgets submitted.

 

Mayor Knudsen remarked that, going forward, it would be helpful and more seamless to see not only the final figures, but also the original figures as well, in order to put things into perspective and get the big picture.  Mr. Rooney reiterated that some departments had a wish list, such as $2,400.00 for a new shed at Graydon Pool, which Ms. Bigos agreed could be put off until next year.  Mr. Rooney agreed that next year, he would provide before and after figures.  At Councilman Vagianos’s suggestion, it was agreed that a brief recess would be taken so that these before and after numbers could be compiled.

 

On a motion by Councilman Vagianos, seconded by Councilwoman Perron, it was agreed that the meeting would be suspended until 6:15 P.M.

 

Roll Call Vote

AYES:          Councilmembers Perron, Reynolds, Sedon, Vagianos, and Mayor Knudsen

NAYS:         None

ABSENT:    None

ABSTAIN:   None

 

Mayor Knudsen called the Special Public Budget meeting back to order at 6:22 P.M.  At roll call, the following were present:  Councilmembers Perron, Reynolds, Sedon, Vagianos, and Mayor Knudsen.  Also present were Heather Mailander, Village Manager/Village Clerk; Robert Rooney, Chief Financial Officer; Stephen Sanzari, Treasurer; and Olivia Dimitri of the Finance Department.

 

Mr. Rooney explained that the “From” column in his calculations represents the numbers originally presented to the Village Council by various Village departments (after adjustments made last year and earlier this year), and the “To” column represents his suggested changes.  Mayor Knudsen mentioned that the Traffic & Signal Department started at $45,000.00 and was reduced to $25,000.00.  Councilwoman Reynolds mentioned that there would be an additional 7.75% reduction from the $25,000.00. Mr. Rooney reminded everyone that $25,000.00 represents only one line item of “other expenses” and that the proposed reduction, whatever it ends up being, would be across the board for all “other expenses”. 

 

Councilman Vagianos said that it would be important to view these numbers as percentages from the overall number.  Reviewing a few items, he remarked that there were items already reduced by as much as 100% (totally eliminated).  Mayor Knudsen asked what the 100% reduction represented regarding the reserve for tax appeals.  Mr. Rooney replied that for the past three or four years, he has been trying to put money into a reserve account that will pay for any tax appeals that are filed against the Village, where the Village has to pay.  Every year he has tried to put $75,000.00 into this account; however, every year that item on his wish list is removed.

 

Councilwoman Reynolds asked where the money is found if the Village is unsuccessful in these tax appeals by residents and there is no funding in the reserve account.  Mr. Rooney replied that that loss is directly applied against the taxes that were collected.  He spoke about delinquent taxes and his shortfall regarding same.  He explained that there were judgments against the Village, which basically reduced what the Village thought would be collected in taxes.  This would not occur if reserve money had been set aside.  He compared it to the reserve funds set aside for terminal leave.

 

Mr. Rooney attempted to go through each item line by line, to explain the changes which occurred.  He stated that, in some cases, he adjusted items to actual spends in the prior year.  For example, regarding “Police Overtime Reduction,” the Village incurred less than $300,000.00 in that category in 2021; therefore, he felt that less than $300,000.00 was a sufficient sum of money to set aside for same.  He said that he has been pretty successful in judging the amount needed ever since the Police Department got their new time reporting system.

 

Mr. Rooney explained that “Uncompensated Pay to Trust” represents monies set aside in the trust reserve to be used in case there needs to be a payout for terminal leave.   “Office and Clerical” represents a new employee hired, who will probably not start working until July 2022, so the number shown represents only half of that person’s salary.  Regarding “Traffic and Signal,” Mr. Rooney mentioned that he had a discussion with Rich Tarlton today and he agreed that a $20,000.00 reduction would be appropriate.

 

Regarding “Fleet – Overtime,” Mr. Rooney explained that reductions were made in accordance with the actual spend in 2021 in this category.  Regarding “Recycling – Materials and Supplies,” Mr. Rooney indicated that this represents the purchase of barrels; there are sufficient monies set aside via ordinance which can be used for this purpose.  Therefore, the $15,000.00 was moved over to “Capital.”  Regarding “OEM Materials and Supplies,” Mr. Rooney stated that the $10,000.00 for Covid supplies has been adjusted since enough materials have been stockpiled and he believes there are sufficient funds available in case of a need to purchase more Covid supplies.

 

Ms. Mailander indicated that regarding “Streets – Other Contractual Services,” this $50,000.00 was moved over to the “Snow Trust” category.  Mr. Rooney concurred and indicated that if money is needed, it can be taken out of this trust account.  He discussed the item for “MIS” for $35,000.00 which represented funds for a website and the “Accumulated Leave Trust” for $25,000.00.  For these items, Mr. Rooney indicated that he can always use money in the trust account if necessary.

 

Regarding “Graydon Pool – Materials and Supplies” and “Purchase of Other Equipment,” Mr. Rooney indicated that he had a conversation with Nancy Bigos, Director of Parks and Recreation, and she agreed that it would be appropriate to reduce the amounts for those items.  Regarding “Building Maintenance Overtime,” this represented a lot of overtime in 2021 due to sanitation measures being taken for Covid in Village offices.  Since Covid numbers have decreased, $10,000.00 was taken off of the original amount requested.  Regarding “Elections – School Security,” Ms. Mailander indicated that the cost for this item was not as high as they had anticipated, so this was able to be reduced by $3,500.00.

 

Pertaining to “Conferences and Meetings” in the Village Manager’s budget, Ms. Mailander indicated that the $5,000.00 allocated for various Department Directors to attend a national conference, with the Village paying a portion of the fee and the Department Director personally paying the difference, has been removed.

 

Regarding “Disposal Fees for Yard Waste,” Mr. Rooney said there are trust monies which may be used for this item if necessary.  He discussed the “Reserve for Tax Appeals” and the “Capital Improvement Fund” and indicated that these items were reduced to coordinate with the down payment needed for the Capital Ordinance which will be introduced on May 9, 2022.

 

Councilman Vagianos noted that many items were reduced to 2021 levels, with reserve funds being available if necessary or in the alternative, delaying the purchase of items until 2023.  Mr. Rooney concurred.  Mr. Rooney said that the trust funds that are available have been stockpiled over time.  Councilman Vagianos thanked Mayor Knudsen for her suggestion of presenting “before and after” numbers since it really put things into perspective for him.

 

Mr. Rooney indicated that the 7.75% reduction may critically impact some departments, especially the smaller departments in the Village.  Councilman Vagianos asked if Mr. Rooney would be able to do anything to help a smaller department struggling with these budget reductions.  Mr. Rooney indicated that he would “make it work.”  For example, in the IT budget, many of Mr. Hansen’s expenses may be applicable to software subscriptions or contractual obligations for which he may not have any funds available after reductions.  In that instance, Mr. Rooney would have to find the money from another departmental budget to pay for the software subscriptions.

 

Councilman Vagianos indicated that he was comfortable with proceeding with the 1.99% tax rate.  Deputy Mayor Sedon agreed with Councilman Vagianos, as did Councilwoman Reynolds.  Deputy Mayor Sedon pointed out that there are budget transfers at the end of the year, so if there are unused funds at the end of the year in one department, those funds can be transferred over to another department which had to “overspend” due to emergencies or rising costs. 

 

Councilwoman Perron asked if they could arrive at a 2% tax rate if reductions were reduced to 7.65%.  After further calculations, Mr. Rooney indicated that a 7.65% reduction in operating expenses ($344,250.00) results in a flat 2% tax rate.  Mayor Knudsen was agreeable to this.  Councilman Vagianos indicated that the public would enjoy a “feel good moment” if the tax rate were set under 2%.  There was discussion that the difference between 1.99% and 2% was negligible.  Mayor Knudsen asked Councilman Vagianos if he would vote against the budget if the tax increase was greater than 1.99%.  Councilman Vagianos said that he would do so, because the residents would appreciate a 1.99% municipal tax increase.

 

B.        WRAP-UP AND SETTING OF TAX RATE

 

After further discussion, it was decided that the municipal tax rate increase would be set at 1.99%, with 7.75% further reductions in operating expenses.  Mayor Knudsen thanked everyone involved in arriving at the final budget this evening.

 

4.         COMMENTS FROM THE PUBLIC

 

There were no comments from the public at this time.

 

 

 

 

 

5.         ADJOURNMENT

 

There being no further business to come before the Village Council, on a motion by Deputy Mayor Sedon, seconded by Councilwoman Reynolds, and carried unanimously by voice vote, the Village Council’s Special Public Budget Meeting was adjourned at 6:43 P.M.

 

 

 

 

 

                                                ______________________________________

                                                                                                Susan Knudsen

                                                                                                       Mayor

 

 

 

 

 

 

 

________________________________________

                     Heather A. Mailander

             Village Manager/Village Clerk