Kalafut's Numbers Show Surplus Will Continue to Fall

Madison Chief Financial Officer Robert Kalafut presented numbers on Tuesday night that showed the borough's estimated needed dollar amount to be raised for municipal purposes in 2010 is $1,021,292 above the allowable tax levey.

Kalafut used a slideshow to illustrate the numbers through charts in front of the Borough Council and a small public contingent at Bayley-Ellard.

One of the main themes of Kalafut's presentation was that each year the borough depletes more and more of its surplus because the amount the borough uses to offset property taxes is greater than the revenue generated. Kalafut estimates the borough will generate $3 million per year in 2010 and 2011, money he will need to have ready to make municipal payments.

"Three million dollars is the number I am comfortable with and looking for as a minimum number to meet the school board payments prior to the tax collection cycle and avoid the selling of tax anticipation notes," Kalafut said. "We really don't want to go there."

The other main point Kalafut made was that increased pressure is being put on all of the revenues generated to keep property tax rates low, something that is becoming harder to do recently.

"From 1993 to 2004 the property tax levy was $8 million and change," Kalafut said while showing how the number remained almost the same for a dozen years. "For 12 consecutive years, which is quite amazing ... 12 consecutive years is just incredible for tax payers, but it certainly put a tremendous amount of pressure on all the revenues."

Something that has continued to rise is the cost of pensions and health benefits for borough employees. Though salaries and wages actually dropped by $41,000 from 2008 to 2009, health insurance went up by 24.3 percent and pensions went up by 5.77 percent. The year prior, it was pensions rising at a large rate, going up by 37.18 percent from 2007 to 2008, while health insurance went up 5.02 percent.

Kalafut's major budget assumptions for 2010 were a 2 percent increase in salaries and wages across the board with no promotions and a hiring freeze for non-emergency positions. Also included was a 19.5 percent increase in police and fire pensions and a 12.5 percent increase for public employees. An 11.73 percent increase in health insurance was also included.

But pension numbers could change pending Gov. Chris Christie's proposal to reform the pension system for state employees.

However, the council and Borough Administrator Ray Codey made several comments about how there is much road left to be traveled when it comes to discussing numbers with department heads and labor unions.

Kalafut also made a recommendation that turfing of the 49 acres be contained in the Open Space Trust Fund, so that the improvements would be added to the acquisition price, which is already contained in the fund.