Minutes of Special Commissioners Meeting - January 29, 2008
Prior to the opening of the special meeting, Mr. Groon led those present in the Pledge of Allegiance to the Flag.
meeting of the Board of Commissioners, Borough of Wildwood Crest,
Gould - Cabrera – Groon – Yes
Mr. Groon read the following statement: In compliance with the Open Public Meeting Act, Chapter 231, P.L. 1975, the notice requirements have been satisfied as to the time, place and date of holding said special meeting by posting notice on the bulletin board in the Borough Hall and by mailing same to the Gazette-Leader and The Press on January 25, 2008 at 9:00 a.m.
Mr. Groon next announced the one-way in and the one-way out method of ingress and egress in case of emergency.
The Clerk indicated that the discussion at this meeting would be limited as a work session for discussion of the 2008 Municipal Budget, including capital items for inclusion therein. He added that each of the Commissioners was provided with a capital budget proposal by the CFO, and additional discussion items would be the status of the 2008 Municipal Budget.
Mrs. Gould inquired of the CFO as to where the Borough stands financially regarding the budget. Mr. Groon interjected that the capital budget is capped at 4% from 2007. The CFO stated that the levy cap is 4%. He added, however, that his statements to be made at this meeting would be based on information presently in his possession since guidelines to have been issued by the State by January 15th were still not available and probably would not be available until February 1st. In response to Mr. Groon’s comment regarding the CAP, the CFO indicated that the capital improvement fund, as he understood it, would be an exclusion to the 4% levy CAP; that is, it will be in addition to the 4% levy CAP, with some restriction. He explained that you take the levy, add 4%, and subtract from that number the 2007 capital improvement fund, and then add to that the 2008 capital improvement fund. The 2008 capital improvement fund can be as high as the governing body wants it to be, because it is not being governed by the 4% CAP. The difficulty in making it as high as they might wish would be with regard to what the ultimate tax levy will be. As the capital improvement fund is increased, it must be balanced on the revenue side. If the capital improvement fund is increased, revenues must be increased.
Mr. Groon stated that the capital improvement budget would remain within the budget, but would be subject to the “ebb and flow” of the budget. The CFO concurred.
The CFO stated that at the present time, with the numbers presently in his possession and subject to the capital improvement list being presented to the Commissioners, he had heard from the Engineer that there are some projects that have been requested but not on the list presented by the CFO. He stated that if the Commissioners were to do everything on the capital improvement list, and then some, they would have to increase the capital improvement fund over the present $180,000. He added that currently, with the numbers in his possession, the Borough is a little over $71,000 over the Tax Levy CAP, but under the appropriation CAP by $125,000. Therefore, the Commissioners will either have to cut some appropriations inside the CAP, or increase revenues. He stated that presently the Borough was looking at a tax levy increase of 13%.
Mr. Groon inquired if it would be appropriate to try to accomplish coming close to the current $180,000 and adjust the projects accordingly over the next few years. The CFO responded that the capital improvement fund, after an adjustment to the previous year, becomes an exclusion to the levy CAP. Mr. Groon reiterated his inquiry as to staying “relatively stable” by staying in the $180,000 to $200,000 range and attempt to build the projects around those numbers. The CFO responded that it is difficult to speak about going forward because the municipality will have to see what one full cycle in the new levy CAP yields. In other words, in future years there are going to be adjustments to the levy CAP.
Mr. Groon stated that he was trying to “get a feel” of what needs to be done since there are certain replacements that are needed every year, and certain projects to be accomplished each year, and then there are the larger projects, and he was trying to incorporate that into a plan or at least an understanding on how to accomplish that. The CFO responded that presently as the law is written, the capital improvement fund, as adjusted, is an exclusion to the 4% levy CAP and all of the debt service increases are an exclusion to the 4% levy CAP. However, if there is a decrease in the debt service in any given year, it would have an adverse effect and that comes off the 4%. He stated that in the first year, somewhere between $175,000 and $200,000 would be a number the Borough can live with in the capital improvement fund. He added that it will not be very difficult to find $71,000 in the levy CAP. Mr. Cabrera asked if the proposed $180,000 is part of the CAP consideration to be looked at. The CFO responded that the $180,000 is an appropriation in the capital improvement fund. Mr. Cabrera inquired if it is subject to the 4%. The CFO responded that it is an exclusion. He added that in order to keep the $180,000, the Borough will have to find $71,000 either through budget cuts or increased revenues to get under the levy CAP. Mr. Cabrera inquired if the first step would be to go through the proposed capital projects for 2008. The CFO responded in the affirmative. Mr. Groon interjected that an alternative would be to come up with the $71,000. The CFO stated that in his opinion the first step would be to go through the capital projects because if the $180,000 turns into $200,000 that only increases the levy CAP differential. If some of the projects that are in budget appropriations are put into a bond ordinance, that could go toward the $71,000 levy overage. However, even in that event, the Borough would still be looking at a 12.5% tax increase.
The Engineer inquired as to how the revaluation will impact the tax increase. The Clerk responded that the revaluation will not be completed until the end of 2008 and not on the books until 2009. The CFO stated that the impact of the revaluation on the tax levy CAP will have no impact since the revaluation is a “revenue neutral” exercise. Therefore, the items that are exclusions presently, the revaluation should have no impact.
CFO stated that items that are not listed on the capital improvement
list include reconstruction of the 400 block of
Groon stated that taken in total, there are things that are done on a
yearly basis, and then there are the major projects. He asked if it
would not be advisable, not knowing where things are going in the
future, to identify the annual projects, assign a certain amount of
value for each year for the major projects, and make a plan for the next
several years. The CFO responded that approximately 65% of the current
$180,000 is the major projects. Mr. Groon explained that, since
Mr. Groon also suggested attempting to obtain grants for some of the projects, such as the outfall line extensions.
The CFO stated that if the Commissioners wanted to have a self-imposed CAP of $200,000 because of the implications of the tax levy, they could start cutting funds from operations which would accomplish two things: staying further under the budget CAP, and every dollar cut from operations could then be put into the capital budget. The same amount of money would be raised by taxation, and the extra funds in the capital improvement fund would give the Borough the ability to authorize debt for another $2.1 or $2.2 million. That would accelerate the process on the major projects. Mr. Cabrera inquired if the additional $100,000 could be found in miscellaneous revenues. The CFO responded that the miscellaneous revenues are dropping. He added that the new levy CAP will restrict the Borough from generating surplus. He went on to state that the Borough generated surplus in tax revenue collection in 2007 of over $400,000. There were three reasons for that: the county tax board rounds rates up to give extra cash flow to the municipalities; the new construction in the Borough; and the reserve for uncollected taxes is calculated as a conservative rate. He indicated that the Borough will no longer be allowed to calculate the reserve for uncollected taxes at anything other than the maximum. It was his opinion that that is “bad management” but the state is forcing local government to practice “bad management.”
Mr. Cabrera suggested reviewing the proposed capital improvement budget and discuss it in detail. The Clerk interjected his suggestion that it should be about priorities. He added that the list in 2008 and going forward, as well as all of the operating expense budgets and salary and wage line items, must be “closely scrutinized.”
Groon said that
Mr. Groon asked Mr. Cabrera about his request for two dump trucks. Mr. Cabrera responded that the Fleet Maintenance Supervisor had indicated that the present dump trucks are heavily utilized and are in need of replacement. Mrs. Gould stated that the Fleet Maintenance Supervisor’s opinion is trustworthy, and she suggested keeping the dump trucks in the budget.
With regard to gutter replacement, phase 2, Mr. Cabrera indicated that the Borough has commenced phase 1 of that project, and this would be the continuation for gutters that are not scheduled for replacement in the street reconstruction projects. Mr. Groon inquired if this would be one of the “every year” projects. Mr. Cabrera responded in the affirmative. The CFO stated that the appropriation was $50,000 in 2007, and he had appropriated $75,000 in 2008 because that was what he had been provided. Mr. Cabrera stated that $25,000 of that would be used for concrete work on the bikepath. The Engineer interjected that he would estimate that with the $50,000 for gutter replacement, the Borough would be able to do approximately 80% of what was done in 2007. The Clerk stated that both projects must be done because of liability issues, since the Borough is on notice of the need and the work has been commenced. Mrs. Gould stated that she would agree with the projects.
Mr. Cabrera stated that the Crest Pier Roof needs repair since it is leaking into the basketball court. Mrs. Gould stated that there have been many roofers look at that roof and there has never been a resolution to the problem. The amount budgeted for that work was $25,000.
The next item for discussion was the new bathrooms and heating system at the swimming pool. Mr. Cabrera stated that the work had been planned for 2007 but it was not done. He stated that it calls for bathroom tile work, new fixtures, the drainage system repaired or replaced, and replacement of the pool heating unit, as well as resurfacing of the pool. Mr. Groon asked Mr. Cabrera if all of the work can be accomplished for $50,000. Mr. Cabrera responded that the tile work and the drainage can be accomplished, as well as the resurfacing. The only unknown is the pool heating unit. The CFO stated that the appropriation was in the 2007 budget and $45,000 of the appropriation was canceled.
Cabrera stated that the flat-bed truck, the roll-off truck and the
renovation of the office at Public Works are all relative to the new
recycling mandates from the State of
Mr. Groon stated that the generator at the ambulance corps building is necessary since the existing one is in poor condition.
With regard to the replacement of parking meters, Mr. Cabrera stated that there is revenue generating aspect to the meters, and inquired whether they would be replacement of old meters or installation of new locations. The CFO responded that it would be a combination of the two.
Mr. Groon stated that the Municipal Court Judge has requested the purchase of video conference equipment for the court under state mandate. The CFO interjected that the $5,500 requested represents the Borough’s share of the project.
Mrs. Gould and Mr. Cabrera voiced their opinion that the new telephone system should be removed from the capital budget because of budgetary constraints.
regard to the street-end bollards, Mr. Cabrera indicated that they would
be located at the street-ends south of
With regard to the proposed fitness park stations, Mrs. Gould indicated that she had requested additional information and had not received anything to date. Mr. Cabrera produced information describing the proposed fitness stations. He added that there are property owners in the vicinity of the park who have expressed a willingness to purchase the fitness stations. The Clerk interjected that the solicitor has recommended against any consideration in that direction because of potential obligations that the Borough would have to those property owners from a standpoint of open space, and the ability of the Borough to sell the property in the future if necessary with private funds having been utilized for the “public venture”. The CFO stated that the property owners would not be purchasing the equipment. Rather, it would work similar to a grant whereby the property owners would “donate” funds to the Borough and the Borough would have the final determination over the utilization of the funds. The property owners would have no further say in the matter. Mr. Groon stated that it was his understanding that the solicitor had been referring to the construction of the park itself and not the equipment. Mr. Cabrera voiced his opinion that the project be removed from the capital budget and try to have private property owners fund the equipment.
regard to the reconstruction of the 100 west block of
Cabrera then indicated that he wished to discuss
Groon stated that he sees six projects: three phases of
Clerk asked the Engineer his opinion of the 400 east block of
Mr. Groon stated that one of the things to be recognized is the issue of consistency in how the Borough approaches capital improvements. He indicated that the Borough should keep it fairly consistent. The CFO stated that the Borough has “set the tone” to the extent that in August 2006 the Borough sold bonds and issued permanent debt that resulted in no short term financing as of that date. Since that sale, the Borough has sold $6 million in bonds. At an upcoming meeting, the Commissioners will be authorizing the renewal of Bond Anticipation Notes that were initially sold in 2007 in the amount of $2.4 million. The Borough recently sold $5.2 million. In less than two years, the Borough now has $7.5 million in debt in an eighteen month period. He indicated that he did not know if the Borough can sustain that kind of increase in debt, stating, “at some point in time you will have to start paying.”
The Engineer stated that the Commissioners must determine what is best for the Borough in terms of debt, but indicated that there are grants available. He added that the USDA has changed its requirements. The CFO interjected that the Borough recently hired a grants coordinator.
The CFO went on to state that he is not comfortable with “real long term debt” but sometimes it is necessary. With regard to the beach outfall extensions, he indicated that he was aware of municipalities in northern New Jersey that have “beach utilities” which would cover outfall lines, and that kind of debt can be incorporated into a user fee as other towns have done.
Groon asked, in the event
Groon stated his opinion that “either we incorporate the outfall on
the street side with each phase of Seaview or it will have to wait four
or five years.” Mr. Cabrera stated that the drainage is a problem and
must be taken care of. Mr. Groon added that, unfortunately, that would
add another $1 million to each phase. The Engineer concurred, adding
that would be the case if two were completed per phase of
Cabrera stated that it was his opinion that the outfall lines and phase
Engineer brought to the attention of the Commissioners that in the next
Mrs. Gould interjected that “islands are nice and they look wonderful, but they are not a necessary thing at all in Wildwood Crest.”
The CFO asked the Commissioners what their final determination was with regard to the storm sewers. The Clerk responded that it was his understanding that they were going to increase the capital improvement fund proportionately. Mr. Groon interjected that that would not help in the overall budget scheme. Mr. Cabrera stated that it should be done as a priority and adjust the budget later. The CFO stated that it would add $600,000. He added that “the cost will be the cost and it is a matter of the method of financing.” Mr. Groon stated that he would feel more comfortable if there was a different funding mechanism. He went on to state that an extra $3 million makes him uncomfortable because he was concerned about that the impact on the taxpayers in three or five years when it is financed. He indicated that he would not mind adding it on, but that the repayment would have to change.
Clerk pointed out that with the cuts already agreed to, the capital
improvement fund would still remain at approximately $180,000 if the
cost of the stormwater sewer work came in at around $750,000. The CFO
concurred. Mr. Groon responded that he thought the idea was to lower it.
The Clerk stated that the Engineer has stressed that the “number one
Cabrera asked if they were referring to all of
Clerk asked the Commissioners if that was the direction the Engineer
should proceed. The Engineer reiterated that it would be his
recommendation to get
The Engineer added that the only other matter he wanted to bring to the attention of the Commissioners was the replacement of control valves for the pump station. He added that they have had an emergency repair during the off-season, and if it happens during the summer it would be a major problem. The Clerk stated that that would seem to be a significant problem. The CFO interjected that that project is already in the budget.
It was decided that the Commissioners would go back to their individual budgets and see what other expenses can be cut or reduced. The Clerk stated that he would caution the Commissioners that whatever they would intend to reduce or take out in 2008, if it is a priority and will have to be put in the 2009 budget, they would be in the same position at that time as they are no presently in. Therefore, he stated that they should cut or reduce only those things that are not absolutely necessary or required. Mr. Groon stressed that the Commissioners must be careful because when the O/Es are reduced, they will not be able to recover those funds.
Mr. Cabrera asked at what point the Borough should be talking about shared services. The Clerk responded that “that door can always be opened”; that perhaps lists can be developed for potential consideration.
Mr. Cabrera then asked if there was anything under miscellaneous revenues that could be done to increase those revenues. Mr. Groon responded that that is something that will have to be discussed and would be difficult to implement for the 2008 budget year, but it was his opinion that it must be done.
Clerk summarized the meeting by stating that the Commissioners will go
back to their individual budgets and scrutinize the O/E to see what can
be reduced. The CFO stated that if the budget is going to be introduced
The CFO stated that the tax levy is now up 11.75% after the cuts made at this meeting, an increase of approximately $0.04.
Mr. Groon inquired as to the new pension increase. The CFO responded that it is $183,982, adding that that is a combination of PERS and PFRS. He indicated that in 2009, PFRS will be 100% funded, resulting in their portion being removed. Presently that is outside the CAP but once it is fully funded, it will come inside the CAP in 2009. In 2010, the PERS will be fully funded and it will move inside the CAP.
The CFO stressed that unless recurring items of revenue are addressed, or there is a cut in appropriations, it will be a matter of time before surplus is exhausted.
There being no further matters for discussion, Mr. Cabrera motioned, seconded by Mrs. Gould, that the meeting be adjourned.
Kevin M. Yecco, Clerk/Administrator