The hearings are meant to explain the document to the public, and to get suggestions before the budget comes up for a final council vote.
Last week's two public hearings were led by the council's Finance Committee chair, 3rd Ward Councilman Michael Russo.
Although Mayor David Roberts was present Wednesday evening for the first meeting, he was unable to attend the second on Thursday due to a scheduling conflict, he said. The majority of the city's directors were present for the second of the two meetings.
The $87 million budget is up $8 million from last year and will see a 5.2 percent increase in municipal taxes. But municipal taxes are only one part of each resident's bill. Residents will also have to pay school and county taxes. So the final tax rate increase, including all three, is going to be 2.49 percent, as county taxes did not grow this year as much as they have in the past.
The next scheduled budget hearings are Thursday, Dec. 6 and Thursday, Dec. 13 at 7 p.m. in City Hall.
Parking Utility costs $13.4M
On Thursday night, 2nd Ward Councilwoman Elizabeth Mason made one of the most noteworthy observations. After expressing her disappointment that Roberts could not be present at the meeting, Mason asked city Business Administrator Richard England about a $13.4 million appropriation to the Hoboken Parking Utility.
That amount appeared not to have been included in the budget of $87 million.
England acknowledged that the Hoboken Parking Utility's appropriation was indeed separated from the general appropriations, making the city's actual total operating costs in the proposed budget in excess of slightly over $100 million. Theoretically, the Parking Utility will have to bring in $13.4 million in revenue in order to pay for itself without city funds.
In an interview Friday morning, England explained that utility appropriations, as in the case of Hoboken's Parking Utility, are, by law, always separate from the city's general appropriations, which include everything from spending on public safety to insurance and pension costs.
England added that the Parking Utility is a self-sufficient entity which provides additional revenue to the city through surplus funds. In this year's proposed budget, the utility is anticipated to generate $6.1 million in profit, meaning their total anticipated earnings for the 2007-2008 fiscal year will fall just shy of $20 million, according to England.
Questions on the increases
The city's total spending wasn't the only financial issue that required clarification by the business administrator as residents raised questions over the actual size of the municipal tax increase, as well as the city's share of the overall 2.49 percent tax increase.
According to the previous year's (2006-2007) fiscal year budget, the city collected $28.9 million through local taxes for municipal purposes. In this year's proposed budget, the city is looking to collect $32.1 million for municipal purposes, an increase in the tax levy of approximately $3.2 million, or 11 percent.
In an interview earlier in the week, Roberts defended the budget and the city's share of the tax increase.
Roberts said that the reason for the increased expenditures included police and fire department increases in new employee contracts; pension increases, and other rising costs. Contracts with firefighters were settled in the last two years, he said, and the police contract is expected to be settled soon.
He said that over his two terms in office, the overall tax has only risen 9 percent, which he said was a relatively low amount. Some believe, however, that the increasing number of taxable properties in town means that any tax increases should be staved off. Roberts said that because neighboring communities like Jersey City have passed many in-lieu-of-tax deals with developers of new property in those towns, all of those properties' funds go right to those cities instead of to the county as well, so Hoboken has had to pay an unfair share of county taxes.
Roberts said that over the past 10 years, the municipality has gotten only 25 percent of the overall taxes that residents pay, with the school and county sharing the remainder. In comparison, over the past 10 years, Jersey City has received between 39 and 46 percent of the overall taxes its residents pay, while West New York has received between 45 percent and 50 percent for its municipality.
Roberts said that it was clear Hoboken has been bearing the burden for the other municipalities that were contributing a smaller percentage of their taxes to the county. The mayor concluded that this year's increase was a way for Hoboken to make up for the disproportionate amount of taxes it had to pay in previous years.
Roberts said that in the years to come, he plans to encourage more Payment in Lieu of Taxes (PILOT) programs with developers. In those deals, the development gets to be exempt from regular, fluctuating property taxes, and makes a separate deal to pay a fee straight to the city, not to the county and schools. On one hand, this would mean that more money would go to the city and none would go to the county, which would keep municipal taxes down. On the other hand, it would also mean that regular taxpayers in the city pay a bigger share of school taxes than developers of PILOT properties.
The mayor also mentioned that while the city's overall taxes have increased by less than 9 percent, the value of properties has increased by over 110 percent in some areas, which according to Roberts demonstrates that the city's budget is healthy and headed in the right direction.
Lastly, Roberts pointed out that approximately $4.6 million of this year's budget will be a one-time cost to the city, with $1.7 million going towards deferred costs for services the city is still paying for from last year's budget, and $2.9 million in salary adjustments, a one-time retroactive payment to municipal employees.
Concerns and suggestions
Mason wasn't the only person who expressed concerns over the proposed budget.
Fearing that the city is wasting some of its money it receives through taxes, 5th Ward Councilman Peter Cunningham suggested on Thursday that the city hire an outside firm to conduct an efficiency audit of City Hall.
The idea was supported by resident activist Maurice "Mo" DeGennaro who, having been appointed by the mayor as an advisor to the city earlier in the year for the fee of a dollar, has long been arguing that the city can be run more efficiently.
Residents also added their own two cents to the budget discussions this week.
Hoboken Housing Authority Commissioner Perry Belfiore suggested that the city and the Hoboken University Medical Center discuss a possible arrangement in which the city could save on health care costs while bringing more business to the hospital.
Currently, the city spends approximately $8,900 per year on health insurance and additional medical costs for a city employee who is single and approximately $22,000 on an employee who has a wife and children, according to England.
In order to help reduce health care costs in the future, Roberts has proposed making employees pay for a percentage of their family's insurance, though it can't be implemented until it is negotiated into the municipal employees' contract.
In addition, the administration has found a total of 42 city employees who, since their spouses are also city employees, can share one health insurance package, but currently are not doing so, causing the city to pay for 21 health packages they shouldn't be. According to Roberts, the situation is being corrected.
Michael Mullins can be reached at mmullins@hudsonreporter.com.
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