LINDEN – Last week the city council broke all records in passing a $100.6 million budget, a feat even Mayor Rich Gerbounka touted as going easier this year than any previous in memory.
The $100.6 million spending plan for 2014 will see the average property owner with a house assessed at $134,200 pay $104.80 more than last year. Last year, the tax increase was $96 for the average homeowner. This is just one part of a three-part tax bill that will also include county and school taxes.
Property owners will still have to pay a $10 monthly garbage tax, instituted last year when it became apparent the governing body was unable to stay under the 2-percent state mandated cap without layoffs.
According to city Chief Financial Officer Alexis Zack, the city raises $1.7 million from the garbage tax, which helps considerably in putting together the annual spending plan.
Another windfall that helped with this year’s budget planning was the $2.5 million the city received in February from Spectra Energy. Gerbounka explained why the city received this revenue this year and why it will continue year after year.
“Spectra Energy is running a gas pipeline through a portion of the city along the turnpike and because they are going through our city, they are paying us $2.5 million a year for that right,” said the mayor.
Gerbounka said that along with the Spectra money each year, there is another development that will help pad city coffers.
The former GAF industrial property will be redeveloped into a 2.7 million square-foot corporate warehouse park on 134 acres, generating as many as 2,000 to 3,000 jobs along with a sizeable ratable for the city.
The mayor said that considering the site is larger than the General Motors site being developed into a mall along routes 1 and 9, which is expected to generate $4.8 million in taxes, the new corporate park could bring more than $5 million in taxes.
“With austerity measures we are starting to come out of the fiscal woods,” Gerbounka said late last week, adding “we realized we needed to stop using Draconian measures to balance the budget.”
The mayor also credited council members for implementing these austerity measures that “are finally starting to pay dividends.”
“This year is a good year. 2015 will be even better but in 2016 things will be very good,” the mayor added.
Although the 2014 budget came in over $100 million compared to 2013 when the spending plan was $98.6 million, this year’s spending plan, 4.7 percent more than last year, will not see any employees laid off or reductions in public safety personnel.
In fact, according to the mayor, the city will be hiring six new police officers July 1, which brings the number of officers hired this year to 12. The police department salaries and wages came in this year at $14 million compared to 2013 when that number was $13.2.
Police and fire salaries are negotiated through contractual obligation.
Zack explained that out of the $100.6 million budget, the total amount to be paid by taxes is $57.3 million, compared to 2013 when the number was set at $54.7 million. The governing body did agree to reduce the budget by using about $5 million from surplus, leaving around $750,000 in savings.
In 2005, Linden had $45 million in surplus.
The chief financial officer explained that the city received $19.9 million in state aid, $1.2 million from red-light camera fines, plus other revenue that is realized from construction code fees, delinquent taxes and other general revenues which when all tallied came to $43.2 million.
City Councilman Peter Brown Jr., who chairs the Finance Committee, was also proud of how smooth things went this year with the annual budget. He noted that recently Moody’s Investment Services upgraded Linden’s bond rating from a negative outlook to stable.
“It’s important for residents to know we are not out of the woods yet and we will continue to work on stabilizing future budgets for the years to come while improving the quality of life for our residents,” said Brown, pointing out that the 2014 budget focused on several key issues that are important because they are related to improving the quality of life for residents.
“Those issues are financial stability, investing in our police department and rebuilding our public works department,” the finance chairman said, adding that it is important the city supplies the tools and resources the police department needs “in order to effectively and efficiently prevent, fight and solve crime.”