Township Finances: Projected Expenses Lower and Revenues Higher Than Budget


Township Finances: Projected Expenses Lower and Revenues Higher Than Budget

The finance committee delivered an update at the October 14 regular Township Committee meeting. With three quarters of the year complete, the projection is that revenues will be above plan $9.42 million, fully 10.3%, or $882K above the budget of $8.54 million. As well, expenses are projected to be 9%, or $754K, below plan.

Most of the positive variances appear to be the result of the budget that was constructed with a very conservative outlook. On the revenue side, projected tax intake is estimated to be fully 14% higher ($796K) than budgeted. Given the stability of the tax rate and the assessed values, it is hard to understand the source of this upside surprise. Similarly on the expense side, the biggest variance derives from $606.4K less (or 13%) in compensation. As there were no large pay cuts or layoffs, this positive variance also appears to be driven by conservative budgeting rather than belt tightening.

The presentation also reviewed the recent Agreement with the police union (see other article), engineering costs for three recent years and Affordable Housing costs. As we have highlighted in prior issues, Harding’s state mandated obligation (COAH) to build more affordable housing units could be “very costly”. The actual number of additional units is not clear at this time but it could be at much as 50 and maybe 80 additional units. To put this in perspective, Harding currently owns and manages 24 units – The Farm at Harding on Woodland Avenue (original cost was $3.8 million). One township committee person said that Harding can handle the current requirement, but he is “not so sure that Harding can handle 3 to 4 times” that number. It is clear that COAH requirements are the largest financial unknown for future Township finances and taxes.

Other Items from October 14th Township Committee Meeting:

The EMT squad was recognized for saving the life of a resident with CPR.

The Board of Adjustment made its annual report presentation. The representatives said that most business was routine with two important exceptions: Hurstmont development proposal and the proposed cell tower.

The TC heard from the Historical Preservation Commission and the Planning Board on changes to a township ordinance which regulates demolitions of historical structures – aka the Demolition Delay Ordinance. The TC will consider the input.

Energy Savings: Richard Steel of Commercial Utility Consultants presented a plan whereby townships can purchase generation capacity in bulk – Morris County Cooperative. Importantly, under this plan, residents are automatically enrolled unless they proactively opt out. This unusual coercive structure is a feature of NJ State regulation. Fortunately, the scheme is supposed to save residents 5-10% on the generation portion of their bills. Generation can be about half of a residential electric bill. According to the presentation there is not risk to the consumer.

Tennis Courts – They’re Back. . . It appears that there is support from the TC for repairing or replacing the town’s tennis courts after all. The change of thinking is the result of a tour of the new multi-purpose courts at the school. These were supposed to be suitable for tennis and obviate the need for dedicated tennis courts at Kirby Hall. Upon inspection however, the court surface is not correct and the fences are too low. The options to repair the Kirby Hall courts are $75K (“slip-sheet) and $125K (mill and lay new asphalt). The contractor recommends the less expensive option given the state of the current surface.

In addition, the TC was updates on road repairs, paid bills, released escrow, approved best practices inventory, authorized online auction of old vehicles, accepted revenue from state fund for body armor, etc. etc.