By Ron Leir
Will Kearny receive state transitional aid? What will be the outcome of contract negotiations with the municipal nonuniformed employees union?
Will the town succeed in persuading the U.S. Dept. of Homeland Security to pay for 12 new firefighters?
These and other financial considerations will play out during the balance of the year as the town’s governing body ponders how to pare down the proposed municipal budget of about $76 million introduced last Monday.
As the budget, up from $74.8 million last year, now stands – it will get a public hearing April 21 at 6 p.m. in the council chambers – overall spending is up from last year by 2.4% but the impact on the local levy – even with $2,125,000 million in transitional aid included – is a 6% increase, according to Town CFO Shuaib Firozvi.
If those numbers stick, Firozvi said, the owner of a house with an “average” assessment of $95,000 could expect to pay an additional $228 in taxes on his/her property. And that’s without any school and county tax hikes, if any.
But Mayor Alberto Santos has asked Firozvi and town auditor Steven Wielkotz to come up with recommendations for cuts.
“The number we want to be around is not higher than a 2% tax increase,” the mayor said. “If this budget lacks material amendments [that fails to reduce the tax impact], I’m not voting on it.”
That task, however, will be complicated, Firozvi said, because the town does not expect to know if it will be getting transitional aid by that point. And, he noted, “most budget line items are either flat or lower than last year.”
Expenses are up in such areas as employee health benefits, by $160,000; and contractual service fees to Passaic Valley Sewerage Commission, by $158,000, he said.
And the amount of surplus is being trimmed, from $2.4 million last year, to $1.2 million for 2015, he added.
On the plus side of the ledger, Firozvi said the town is projecting a decrease of $800,000 in debt service payments; however, as Santos later pointed out, that savings will be partly canceled by the town bonding to finance the new Dukes St. pump station.
The town is projecting an additional $200,000 in revenues to the water utility, largely the result of increased user rates, but that will be partly undercut by an approximately $40,000 obligation to United Water as interim water utility operator. (Theodore Ferraioli, the $99,000-a-year assistant water superintendent, has delayed his previously announced March 1 resignation to April 1, according to Santos.)
The town has negotiated PILOT (payments in lieu of taxes) agreements with the owners of Kearny Point, an industrial park in South Kearny, for one warehouse building the owners expect to lease to multiple tenants; and with builder Ed Russo for a multifamily residential complex at Bergen and Schuyler Aves.
Santos said that Russo expects to start renting the first two of six buildings now under construction by the end of the spring, “so we should get a half-year PILOT for that,” and that “at least a portion of the South Kearny building will be on line by the end of the year and the owner expects to lease space to one or two tenants so we should be seeing some revenue from that.”
Meanwhile, Kearny is waiting to hear how much – if any – transitional aid Trenton is willing to dispense this year. Per state protocol, Kearny is required to ask for 15% less than the amount it got last year.
One expense that remains a question mark is how much the town will end up paying the more than 80 civilian employees represented by Civil Service Council 11, whose contract with the town expired Dec. 31, 2014. Both sides are in talks on a new labor agreement.
Also up in the air is whether the town will commit to hiring any additional firefighters. Last Monday, the Town Council authorized making application to Homeland Security for a grant to pay salaries and benefits for 12 additional firefighters for two years. If the town fails to get the grant – as it has in two previous efforts – it’s unclear whether it will lay out any local funds to beef up the short-staffed Fire Department, which will be down another member with the July 1 retirement of 28-year veteran Capt. Gary Dye, who is due to receive nearly $70,000 in terminal leave pay and unused vacation benefits.