As they did a year ago, with critical economic issues still pressing, the Madison Borough Council got an early start on the 2012 municipal budget process with an initial hearing Friday night at .
No formal action was taken, and the presentation by Borough Administrator Ray Codey and Assistant Borough Administrator Jim Burnet was based on what were described as “ultra conservative” estimates by borough Chief Financial Officer Robert Kalafut. (Kalafut had a family emergency and did not attend the meeting.)
“I hope we would not have a tax increase [in 2012] over 2 percent,” said Council member Jeannie Tsukamoto. Members-elect Bob Landrigan and Carmela Vitale also attended the meeting.
Appropriations are estimated to total $25,243,096 in 2012, up from $24,451,902 in 2011. But Codey noted that absent $129,000 mandated by the Morris County Tax Board to cover property revaluation, the proposed 2012 spending is actually less than appropriations of $25,137,621 in 2008.
Municipal salaries, health and pension benefits represent more than half of the total budget.
Total salary costs in 2011 checked in below 2007 levels, on a smaller workforce due to attrition, expanded staff responsibilities, higher employee health care contributions, as well as a shift of many municipal employees to a less expensive state healthcare plan.
A significant unknown is the union contract that Codey said would be awarded by an arbitrator in 2012.
“The budget assumes a 1.5 percent increase in salaries,” said Codey. “As far as the P.B.A. [police] contract, we hope for a modest salary increase and lower starting salary range.”
The borough wants to set up performance-based standards to determine raises for non-union employees, and also propose that to union employees," Codey said. “Union step progressions for raises costs the borough approximately $100,000 per year.”
The , electric and water departments, and are staffed by non-union employees.
Borough budget planners will see actual figures in January, after 2011 results are closed out.
Council member Robert Catalanello said that the borough must look hard at all possible savings. “I want to see the books and check line-by-line on expenses.”
Likely areas for the borough to seek savings are utility costs such as fuel, and solid waste removal, while planners expect to realize $250,000 for appropriations from the sale of the Orchard Street property. It is expected to close by Dec. 20.
Appropriations totaled $1,176,142 for the library in 2011, which wasn’t billed for grounds maintenance, water or electric service. The 2012 budget proposal did not make specific recommendation for appropriations.
“I am a very strong proponent of providing a level of subsidy above the mil rate to offset the electric service,” said council member and incoming mayor Bob Conley. “Meter it, and charge them for it. Let them find ways to save on electric.”
On the revenue side, the borough will have to contend with shrinking surpluses thrown off by the electric and water departments, which have declined from $8.936 million in 2007 to an estimated $4.058 million in 2011. State aid is expected to remain flat on-year in 2012, having dropped by $440,000 since 2007.
Other revenue sources include fees and permits, intermunicipal construction services, the Cablevision franchise fee, among others.
The next budget meeting has yet to be scheduled.