LAVALLETTE — The borough council approved the 2020 municipal budget during its virtual meeting held via YouTube on May 4.
The 2020 budget appropriations are $9,216,883 and are under the allowable expenditure appropriation cap by $399,881, according to Borough Administrator Robert Brice. The 2020 budget appropriations decreased $30,729 [or .33 percent] from 2019 budget appropriations as amended, he said.
The local municipal tax rate is presumed to be 25.5 cents, a decrease of 5.6 cents from the 2019 level. But because of the borough’s revaluation last year, the borough’s 2020 net valuation is $2,375,500,100, an increase in the taxable amount by $460,074,716.
Because of that, residents will see an equivalent increase of a half-cent over the 2019 municipal tax rate.
The amount to be raised in local taxes to support the 2020 introduced budget will be $6,0651,744, an increase of $95,771, or 1.61 percent, over the 2019 level, Mr. Brice said. The average residential assessment in 2020 is $876,244, an increase of $168,458 over the 2019 average residential assessment of $707,786.
According to Mayor Walter LaCicero, however, because of the revaluation, many property owners in town will actually see a drop in taxes compared to 2019, even though taxes are technically going up by half of a cent.
“I had intended to try to bring the new budget in at a quarter of a cent,” said the mayor. “That was before the coronavirus hit us. Now we’re faced with a lot of unknowns here for the 2020 budget.”
He said there is uncertainty over beach revenues with the current closures of borough beaches and how long that will last.
“If we have a really bad year, we’re going to be short $800,000,” said the mayor.
Mayor LaCicero also said the coronavirus could impact borough employees. If an employee can not work, the borough would be forced to pay others overtime to pick up the lack in work resulting in more money spent.
“Faced with these unknowns, the auditor, the administrator, CFO and I decided that it’s probably best to maintain the half a cent number that we did in 2019,” he said, “… raise the taxes that much this year just to be sure we have enough money to get through this price going up and impacting us substantially.”
Mr. Brice said the borough may also be able to apply for state money in some cases involving loss of revenue during a state emergency, but the borough could not count on that revenue.
The budget holds a $1.6 million surplus, the mayor said, to have funds for these uncertain times. He hopes to drop this number in future years, to cut taxes in the borough.
Auditor Robert Oliwa told the council he believed, even with the uncertainty, the borough is in a strong financial situation and is ready for the crisis.
“Overall, I was very impressed with the final surplus amount on December 31 of 2019,” he said. [The 2019 surplus of $2,741,000] was the highest going back to where I practiced since 2003.”
He said 2018’s surplus was around $2.5 million, following a trend for the borough since 2016.
“It’s been proceeding up since 2016, and going into the COVID-19 crisis, it’s very important that you’re financially strong to be able to withstand maybe some revenue shortfalls,” he said.
Mr. Oliwa added it is hard to predict the future with court revenues, beach fees and more, so having this high surplus is a great way to offset these uncertainties.
Mr. Oliwa also said the borough’s tax collection rate as of late has been extremely high, with last year’s rate at 99.25 percent.
“And what that does is when you’re utilizing a reserved front like the taxes in the 98, 96 percent area, you’re realizing excess revenues,” he said. “So that brought in over $470,000 of excess taxes and that replenishes your surplus balances.”
He said if the borough can bring in this excess year to year, they will continue to grow.
“You’re in the strongest financial position probably in Lavalatte’s history to be perfectly frank with you, at least from a surplus point of view, so it’s a great way to go into a crisis year, you’ve got financial strength to weather what’s ahead of you,” he said. The capital budget of $3,585,000 includes plans for “road improvements, the purchase of equipment and/or vehicle for various Borough departments and the electric utility, public works building renovation and repairs, improvements to the tennis courts, West Point Island channel dredging, living shoreline project on the bay, and water system and well upgrades,” officials said.
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