Tammie Kopin, the chief financial officer of Chatham Borough, made a presentation of the municipal budget of $13,606,140 to the Borough Council on Monday night. The overall budget will increase by 3.66 percent over 2010, and the tax levy will increase by 3.13 percent.
Kopin said that 13 different departments in the borough made $122,600 reductions to their budget requests from 2010. Employees from the police department and the Department of Public Works renegotiated their contracts to halve their salary increases.
The 2011 local municipal tax rate increase will be 0.368, or a 1.3 cents, over the 2010 rate of 0.355. For borough residents in a home assessed at $658,000, the increase amounts to an additional $85 in taxes for 2011. Kopin said that this amount accounts only for municipal taxes, not county or school tax increases.
Tax Levy 2010 Tax Levy 2011 Increase in $ Increase in % $7,343,862 $7,573,840 $229,978 3.13%
"Every year we have mandatory increases in our budget that we cannot escape," Kopin said. In 2011, these mandated changes (outlined in the table below) amounted to a 3.5 percent increase since 2010.2011 Mandatory Increases Pensions - Public Employees Retirement System $99,446 Pensions - Police and Fire Retirement System $135,377 Debt Service $90,536 Madison/Chatham Joint Meeting Contribution $13,136 DPW Contractual Salaries $35,443 Police Contractual Salaries $93,108 Non-Contract Salaries $22,105 TOTAL $489,151
The Finance Committee also restructured the timeliness of the debt service payments to reduce that amount from about $200,000 to $90,536.
Kopin said, "There are two caps that we work under in a municipal budget. there's first the approproations cap, which is 3.5 percent. That puts a cap on your expenditures."
The cap for budget appropriations is 3.5 percent, for an allowable maximum of $9,357,768. The borough's budget allows for an appropriations budget of $8,736,258, or $621,510 under what the cap allows.
"When you don't go to your maximum any given year, you have two years to use that in the following year if you need to," Kopin said. The $621,510 will be available for CAP banking and use in the next two years. "You can use that for mandatory increases," Kopin said.
Under the state-mandated tax levy cap of 2 percent, the borough could raise a maximum of $7,761,632. The actual amount they will raise by taxation in 2011 is $7,573,840, with a difference of $187,792 under the 2 percent tax cap.
"If we went to that maximum," Kopin said, "we would actually be at 6.19 percent increase in the tax rate rather than a 3.6. That's because there are exemptions added to that 2 percent property tax cap." The exemptions include increases in pensions, capital improvement fund payments and debt service payments.
The budget anticipates raising $1,679,000 from miscellaneous revenues, such as licenses, store user fees, rentals, fees and permits. State aid for Chatham Borough will remain flat from 2010 at $572,099, and the reserve for uncollected taxes is $2,021,912.
The budget also has a capital improvements budget of $1,445,480 for everything from a new in-car camera system and vests for the police department, improvements to the firehouse, roads, drainage, curbs and sidewalks, equipment for the DPW and water utility capital projects.
Kopin broke down the allocation of tax dollars for borough residents. For each tax dollar paid, 62.25 perecent goes toward the school taxes; 16.58 percent goes to the county; and 21.17 percent goes toward municipal taxes.
A formal introduction of the budget will take place at the March 28 Borough Council meeting and a vote to formally adopt the budget on April 25.