Overall, the tax levy increased by 6.89 percent, a $1,264,914 increase over last year’s $18,349,278. The levy makes up a larger chunk of the budget than last year: 74.89 percent of the borough’s total budget for 2008 is covered by the levy. In 2007, the levy made up 71.39 percent of the budget. However, the percentage of the budget made up by the levy dropped last year in between introduction in March and adoption in August. In March 2007, the levy was expected to constitute 76.5 percent of expenses.

Total budget

The total budget comes in at $26,189,397, a $486,795, or 1.89 percent, increase on last year’s $25,702,602.

When the 2007 preliminary budget was introduced last March it featured a 24-percent increase in the average homeowner’s tax bill. By the time the budget was amended and adopted in August, the percentage had dropped to 15.7 percent, or $390 more than 2006’s bill.

"The number will come down," said Councilperson Rose Inguanti. "It has to come down."

"This is the worst case scenario," said Mayor John Hipp. "What I can assure everyone tonight is that there won’t be an increase [between now and adoption]."

Town worth down

In an interesting sidebar, Rutherford’s total assessed value dropped by $20 million from $2.881 billion in 2007 to $2.861 billion in 2008. The $20 million decrease is due to settlements in property assessment appeals, according to CFO Ed Cortright. The total may drop even lower, as Inguanti stated the town was expecting "a very busy appeals season."

Increases, decreases

The largest increases in expenditures came in pension and insurance payments. Total pension payments went up by $523,800, a 39.2-percent increase, and insurance (between group health, worker’s compensation and liability) went up by $701,889, a 17.2-percent increase on last year’s $4,085,000. Cortright said payments into the pension system are due by April 1 and that the past few years have seen significant increases in order to support an unfunded liability in the state’s system that resulted from a reduction in the surplus during the nineties.

The borough also saw a $75,000, or 250-percent, increase in the length of service award program (LOSAP). LOSAP pays stipends of $1,100 to volunteer personnel such as firefighters and ambulance workers who answer a certain number of calls each year. Cortright said the dramatic increase resulted from the use of a long-standing LOSAP surplus to help reduce last year’s budget.

Total utilities expenditures saw an 8.1-percent increase for the 2008 budget, going up by $246,000 from 2007’s $3,041,000. Two of the largest sources were dumping fees, which increased by $95,000, or 11.7 percent, and sewer fees to the Bergen County Utilities Authority (BCUA), which increased by 12 percent. Cortright said the total for dumping fees likely ought to drop between now and the budget’s adoption. He budgeted for a one-percent increase in the total amount of garbage picked up by the borough, an amount he said is a little over the trend for the past few years.

Councilperson Maura Keyes objected to several utilities line items.

"We’re not being realistic when we look at a fuel oil increase of $1,000 and a gasoline increase of $5,000," said Keyes. "I don’t think those are realistic. I can blow through those increases in my own car."

Cortright responded that the borough budgeted for more than it needed in 2007, thus making only small increases in the line items necessary for 2008.

Cell tower for sale

Under expected revenues, Keyes and Councilman George Fecanin also raised questions about a $400,000 line item for the sale of one of the three leases on the borough-owned cell tower at police headquarters. Earlier this year the borough received a proposal from New York-based Wireless Capital Partners to purchase the three leases on the cell tower for 40 years for a lump payment of about $902,000. Currently the town makes about $100,000 in total revenue off the three leases annually. Hipp said he would consider selling the leases only for a higher amount than the one offered. The $400,000 item assumes the company would be willing to purchase only one lease and would do so for a higher per-lease price than they offered.

Will the state help?

Recently the borough received a phone call from the Department of Community Affairs (DCA) reprimanding the town for agreeing to pay former Chief Steven Nienstedt and former Captain Thomas Farrell as much money in unused sick and vacation time as the borough received in extraordinary aid for the same year. The DCA said it would be less likely to look favorably upon future extraordinary aid requests from the borough as a result.

Hipp said he expects to work closely with the state now that the budget has been introduced, though he said he doesn’t expect the town will receive extraordinary aid. In addition, last week the DCA announced it would be cutting $205,000 in state aid to Rutherford as part of a series of statewide cuts. That potential $205,000 loss was not factored into the preliminary budget.

"[The cut] is not going to happen," said Cortright in response. "The league of municipalities is going to fight it, the municipalities themselves are going to fight it… There’s going to be so much opposition [the state is] going to have to rethink this."

Foreclosure for EnCap

The town is also anticipating a $505,000 increase in delinquent tax revenue, over a 50-percent increase from last year. That figure represents how much EnCap owes the borough for four quarters’ worth of unpaid 2007 taxes, a number so large the council had to pass a resolution adjusting the reserve for uncollected taxes because EnCap’s delinquency made last year’s collection rate unrepresentative of the borough’s average. Hipp said if EnCap doesn’t pay the taxes it owes, the property will be put up for a tax sale this upcoming May.

A public meeting to discuss the budget will be held on April 9.