Proposed Red Bank Budget Brings a 3.8-Cent Tax Increase, For Now

"We're still Hip Town. We haven't lost our swagger."

That was how Red Bank Councilman, and finance liaison, Mike DuPont summed up challenges he felt were being met to make the borough's 2013-14 municipal budget as austere as can be. He gave "kudos" for all working on what he deemed a "great budget in a difficult year."

Administrator Stanley Sickels, with department heads present and DuPont and Chief Financial Officer Colleen Lapp moderating, headed an hour-long presentation Tuesday night on the $21 million spending plan, the notion of "sharpening pencils" to whittle it down and fiscal obstacles.

What it all boils down to right now is that the property tax rate is 52.9 cents per $100 of assessed value, an increase of 3.8 cents over last year's rate per $100 of 49.1 cents. 

The average residential assessment in Red Bank is $395,948, Sickels said. And "one penny on the tax rate to a residential homeowner is $39 while a penny on the tax rate as far as revenue to borough is $222,000."

What it all means to the average taxpayer, Sickels said, is about $6 a day for one month out of the year, like coffee money, or roughly $172 a year. "And in Red Bank, we provide a lot of municipal services for that."

Revenue Issues:

Revenue decreased last year for a few reasons, one being that there was a "decrease in construction projects that did not come through and/or were forestalled," Sickels explained. "And revenues were down due to tax appeals — assessments (ratables) were down by $19 million in 2012."

Tax appeals, especially in the business district of the borough, have been a point of contention. Some business owners said at the forum that the high amount of appeals and legal fees incurred battling them, on both sides, could be avoided by reassessing assessment methods before they get to the appeals stage.

Sickels also called attention to the fact that Red Bank is in the unique position of having an unusually high percentage of tax exempt properties at a rate of 17 percent, compared to an average of 3 to 5 percent in neighboring towns.

The borough, he said, has some 50 churches/religious institutions, Lunch Break, The Salvation Army and more, which he said the borough is happy to have, though the abundance explains a portion of the revenue lag.

Union Contracts and Benefits Costs:

With employee salaries and benefits characteristically taking the bulk of budget money, contractual obligations are and have been a big strain, Sickels  added. However, the administrator pointed out that the borough has been ahead of the game by instituting reforms such as a cap on sick day payout upon retirement as far back as the early 1990s and keeping it up to date and in line with new limits. Some contracts, however, go back to before the changes and are grandfathered, he said.

Right now, Sickels pointed out, both the police and communications (PBA and CWA) unions are in the last year of their contracts and the new ones will be negotiated carefully. 

Health insurance rates went up 22 percent last year, this year the rise is a much lesser 6 percent as a result of negotiations and plan changeovers. DuPont had called attention to the fact that Red Bank employees contribute roughly $200,000 a year to their benefits plans.

Hurricane Sandy Expense:

There are also Hurricane Sandy-related expenses that Sickels said many may not realize occurred, since Red Bank was not hit as hard as towns right on the shore.

However, he said, while "we're still developing some of those costs, we figure that infrastructure/structure costs figure in at about $1.2 million so far, including man hours spent with the borough as a resource (town)."

Red Bank, Sickels said, is a hub where people did and will continue to come for neighboring assistance, food, electricity and more post-Sandy and into the future. FEMA, he said, has looked kindly on that and there is funding that can still be applied for considering the regional hub designation.

The formal public hearing is slated for the April 24 at 6:30 p.m.