Mahwah February 6, 2013 THE VILLADOM TIMES IV • Page 5 Budget includes tax increase, DPW layoffs by Frank J. McMahon The 2013 budget proposed for the Township of Mahwah includes a tax increase, the outsourcing of recyclables collection, the layoff of department of public works employees, a wage freeze for all township employees, and $6,261,560 in surplus. Mahwah Township Administrator Brian Campion and Kenneth Sesholtz, the township’s chief financial officer, recently presented Mayor William Laforet’s proposed budget to the township council. Campion advised that the mayor’s total projected budget is $35,650,103, with $33,022,792 in appropriations and $2,627,311 in a projected reserve for uncollected taxes. The total projected budget is $1,085,443 higher than last year’s total budget and would, if adopted in its current form, raise the township’s tax rate by 1.7 cents, or 4.89 percent, from 34.8 cents to 36.5 cents. Campion explained that 4.89 percent tax rate increase, saying the budget appropriations are well under the two percent state-imposed tax levy cap, but there are cost increases in the budget that are allowed to be excluded from the cap. Those increases include $270,000 as an allowable health insurance cost increase, a $100 allowable Emergency Services Volunteer Length of Service Award Program increase, a $12,000 capital improvement increase, $135,000 in allowable debt service cost increases, and $935 in deferred charges to “future taxation unfunded.” The 1.7 cent increase in the municipal tax rate would result in a $60 annual increase for the owner of a home assessed at $350,000. The average assessed value of a Mahwah home for 2013 has not been released, but the increase on a home with last year’s average assessed value of $470,000 would be $80 for municipal purposes. Campion advised that one of the major causes of the tax rate increase is the decrease in the average assessed value of the overall township which is used to calculate the township’s tax rate. When the average assessed value declines, the tax rate increases, he said. When the average assessed value rises, the tax rate decreases. The current average assessed value of the township is $5,655,450,055, which is down $41,173,722 from last year. Another cause, according to Campion, is that the cost of employee medical insurance coverage has increased by $585,000. Campion also pointed out that the library returned $182,557 in excess funds to the township last year, but this year the library is expected to return only $11,282. In addition, $50,000 has been put into the reserve for tax appeals and $94,000 into debt service. The proposed budget, according to Campion, assumes the award of a recycling contract to a private contractor on April 1, which would increase the collections to weekly and is estimated to eventually save $200,000 per year. That contract would impact five of the current seven members of the DPW. Two of seven would be retained for maintenance work, two would be transferred to the water department to fill positions that are currently vacant but funded, and three junior DPW employees would be laid off, although they could be rehired in 2014 when three senior members of the DPW are expected to retire. Campion explained that, due to transition costs, there would be no savings in outsourcing the collection of recyclables in the first year of the private contract, but $100,000 would be saved in the second year, and $200,000 per year thereafter. Councilman John Roth questioned the validity of the projected cost savings. He said he is not opposed to privatization, but needs a compelling reason to pursue that option. He argued that his calculations indicate the township could lose money on an annual basis, and asked Campion to pre- pare a three-year analysis of the cost difference between the township collecting recyclables and the privatization of that function. Councilwoman Lisa DiGiulio said she does not want to privatize the collection of recyclables because the DPW employees perform other duties besides collecting recyclables and help residents in emergencies like Hurricane Sandy. She argued that all township departments should be restructured instead, and the current automatic stepin-grade salary increases in other departments should be eliminated while some positions should be consolidated so that, in the long term, the township could keep the DPW workers and still get the cost savings. Councilman Roy Larson questioned why the recycling proposal is to change to a once per week collection instead of the current every other week schedule. “Explain the rationale to go to once a week,” Larson asked Campion. “There’s no compelling reason to do it.” Campion explained that the every week bid was made by a collection company with which the administration is more comfortable and that schedule would be an added service for residents and may increase the amount of recyclable materials collected in the township. The proposed budget also assumes a wage freeze, according to Campion, even though there is an increase of $314,000 in the amount appropriated for salaries and wages. Campion explained that the appropriation for salaries and wages increased because the 2.5 salary increase granted last year became effective on July 1. As a result, last year’s budget only contained a half year of the salary increase, while this year’s budget must absorb the full year’s expense even though no employees will see an increase in their salary this year. Roth questioned why there is more than $6 million in (continued on page 27)