2009 TOWNSHIP OF MOUNT OLIVE MUNICIPAL BUDGET

1. 2009TOWNSHIP OF MOUNT OLIVE MUNICIPAL BUDGET Mayor David M. Scapicchio William Sohl, Business Administrator Sherry Maniscalco, Chief Financial Officer

2. 2009 MUNICIPAL BUDGET • Challenges for the 2009 budget: • 1. Spending CAP (2.5%) as well as the Property Tax Levy CAP (4.0%) • 2. Potential decrease in state aid • 3. Pension deferral (pending) • 4. Mandated increases in areas like debt service, pension, labor and fleet maintenance • 5. Maintaining the commitment to the same level of services

3. 2009 MUNICIPAL BUDGET On the positive side for year-end 2008 we had: • A higher than anticipated level of surplus ($4,119,628.44 was the ending balance) • A higher tax collection rate in 2008 than in 2007 • An ability to cancel appropriations by $205,000 as a result of savings in areas like vehicle fuel, legal fees, fleet maintenance • A successful defense of 727 appeals resulting in a loss of only 1.8%

4. 2009 MUNICIPAL BUDGET • Update on budgeting through-out the state: • 1. Of the 51 state fiscal year towns, only 6 have adopted their budgets……the rest are waiting for the pension deferral or extraordinary aid • 2. It is anticipated that most of those towns will apply for levy cap waivers if they don’t receive the deferral or the aid • 3. Extraordinary aid and distressed cities aid have already been reduced throughout the state. • 4. The DLGS has reinforced the fact that if the pension deferral legislation is adopted and municipalities do not take advantage of it, it will be almost impossible to obtain a levy cap waiver.

5. 2009 MUNICIPAL BUDGET • Overall review: • 1. The spending CAP for 2009 was set at 2.5%. The Mayor’s recommended and proposed municipal budgets are within the spending CAP. • 2. The property tax levy CAP for 2009 was 4% with some exceptions for debt service and PERS pension. The Mayor’s recommended budget was not within the levy cap as a result of the review of surplus regeneration through 2009. The Mayor’s proposed budget before you is within the levy CAP and required the use of an additional $591,310 in surplus. We have included an analysis of surplus in section 2 detailing our recommended versus proposed budget. • 3. We encourage the application of a property tax levy CAP waiver to reduce our use of surplus and avoid potential increased costs in areas like debt service.

6. 2009 MUNICIPAL BUDGET • Overall review (continued): • 1. The proposed municipal tax rate is .502 as compared to .461 in 2008 resulting in a tax increase of $155.92 to the average homeowner with a house assessed at $380,300. • 2. Our ratable base decreased by .42 percent from 2008 to 2009 or about $15,287,000 • 3. We decreased the departmental and volunteer fire/rescue budgets by $180,000 • 4. We moved approximately $100,000 of recreation costs to the utility and have recommended the implementation of a beach fee schedule • 5. We have allocated 20% of the planning administrator’s salary to the COAH trust fund

7. 2009 MUNICIPAL BUDGET • Surplus: • Our surplus balance at 12/31/08 was $4,119,628.44 which was $787,000 lower than in 2007……this reduction is attributable to the decrease in added assessments • Our nine year average from 2000 – 2008 was $3,800,425 and we exceeded that by $319,000

8. 2009 MUNICIPAL BUDGET

9. 2009 MUNICIPAL BUDGET • Overall changes in revenue from 2008 to 2009 : • 1. Surplus – Proposed use of surplus decreased by $8,690 • 2. Delinquent Taxes – Increased $156,000 based upon outstanding taxes at year-end • 4. Open Space Trust – Decreased $439,000 based upon the projected year-end balance in the trust • 5. Local Revenues/State Aid/Other Revenues – Local revenues decreased $120,000 due to a drop in the interest earned on investments and municipal court revenues, state aid from the garden state trust fund decreased $28,609 and hotel tax revenues decreased $20,000 based upon prior year realized figures

11. 2009 MUNICIPAL BUDGET • Overall changes in expenditures: • 1. Salaries/Benefits – Increased $507,765 based upon anticipated contract settlements • 2. Legal – Decreased $40,500 based upon an expected decrease in miscellaneous litigation • 3. Fleet Maintenance – Increased $51,219 due to cost of living increases and an anticipated increase in non-contract charges • 4. Library – 1/3 mil requirement increased by $5,677 • 5. Pension – Increased $279,883 which represents the full pension bill due without regard to any deferral

12. 2009 MUNICIPAL BUDGET • Changes in expenditures (continued): • 6. Reserve for Uncollected Taxes – Increased $182,284 based upon tax levy requirements in 2009 • 7. Debt Service – Increased $176,430 as a result of the new bond sale in 2008 • 8. Accumulated Absence Trust – Decreased $25,000 since retirements are expected to slow in 2009 • 9. Utilities – Increased $4,750 primarily attributable to street lighting, vehicle fuel may be able to be reduced once we have a history of rates/consumption in 2009 • 10. Departmental Budgets – Decreased $180,000

13. 2009 MUNICIPAL BUDGET • Moving into 2009: • We have: • 1. $400,000 on hand for tax appeals at 12/31 • 2. $158,000 in our accumulated absence trust fund for retirement payouts • 3. $73,000 remaining in our unemployment trust fund • 4. $1,128,000 remaining in surplus based upon the proposed budget

14. 2009 MUNICIPAL BUDGET • In summary: • Our future budget course will be dependent upon the pension deferral issue and whether we take advantage of it or not. • Salary negotiations could lead to greater awards than we anticipated in this budget. • We have presented a budget that maintains services while trying to keep the tax burden to minimal levels for our residents.