Robalino Pushes to Have $143,000 Restored to Budget Surplus

Councilman Diego Robalino made a motion to restore the $143,000 in surplus funds that Councilman Austin Ashley spearheaded moving from surplus to revenue at the  to pay for the entire cost of the borough's tax reassessment.

Robalino's motion, seconded by Council President Howard Berner, came about during the introduction of the municipal budget, and the subsequent amendment to the budget, at Monday evening's Mayor and Council meeting.

The restoration of the $143,000 to surplus increases the municipal tax by $21, bringing the total to $82 on an average home assessed at $410,000. This increase represents a flat 2 percent municipal tax increase. 

Robalino, who was not present at the April 9 work session, made a motion to restore the $143,000, bringing the surplus back up to $314,000. Citing concern that an insufficient surplus would leave the town vulnerable if there was another Hurricane Irene, and in an effort to keep New Milford's bond rating from any further downgrades, Robalino said he did not feel comfortable leaving so little in surplus. 

"We went from having one million dollars of surplus in 2009, to $171,000," Robalino said.

Ashley asked the borough's auditor, Gary Higgins, how the town would get money if there was an emergency.

"You’d have to get an emergency appropriation," Higgins said. "But it's better to have cash on hand."

"If you don’t have cash on hand," he added, "you have to borrow and pay more interest."

After being questioned by Council President Howard Berner, Higgins said that an emergency appropriation in the form of a bond has associated administrative costs, as well.

"Our bond rating factors into the amount of interest we pay on a bond," Berner said. "A lower bond rating means we pay more in interest if we need to borrow during emergencies."

"And remember," he continued. "The interest rates we pay on these bonds last over the life of the bond, which is five to ten years."

Councilwoman Hedy Grant asked Higgins for clarification regarding the range bond credit rating agencies utilize in dropping the bond rate, but Higgins did not know off-hand. 

"We have no facts that our bond rating will be affected," Grant said in recommending that the $143,000 remain in revenue to pay for the entire cost of the borough's tax reassessment.

Responding to Robalino's motion, Ashley said, "If we have the money in surplus, we should give it back to the tax payers."  

"It's morally reprehensible to me to increase taxes during these times," he added. 

Berner said that it would only take one severe weather event like Irene to wipe out the surplus if it was left at $171,000.

"I don’t think it's prudent of us to leave ourselves short given what we’ve had to deal with in terms of the three storms we had last year," Berner said, referring to the Palm Sunday storm, Hurricane Irene and the October snowstorm.

Mayor Ann Subrizi, whose vote broke the tie in favor of restoring the $143,000 to surplus, recommended that in the future the council be guided by a minimum 2.5 percent surplus rule to avoid political manipulations of the budget. Subrizi explained that a minimum of 2.5 percent of the budget should be placed in surplus to avoid any future incidents of low budget surplus.

When pressed by Councilwoman Hedy Grant what she meant by "political manipulations," Subrizi responded, "I mean, if you’re using more money to lower taxes, but putting your government at risk."

Subrizi said that surplus is the only thing at the council's disposal that will raise the borough's bond rating.

"We can’t control the real estate market, but we can control the surplus," Subrizi said.

The vote on the budget amendment will be held at the mayor and council work session on May 14.

The vote on the budget will be voted on at the public session of the mayor and council on May 19.