Mayor: 'New Reality' Needed to Restructure Village Financial Model

Without specific expertise in budgeting, the Ridgewood Village Council needs some help working through the numbers. As soon as this summer, it may have just that – the council on Wednesday agreed in principal to create a financial advisory board.

The creation of a financial advisory board would help signal a new era in municipal government, according to Mayor Paul Aronsohn.

The recommendation first appeared on the council's radar when the – report became public in January.

It couldn't have come at a better time, Aronsohn argues.

Council members are currently wading through grim figures for the 2013 budget. If it's to pass a budget with a zero percent tax increase, officials must find $2.8 million in savings. Policy decisions, along with major overhauls to the department staffing models, will need to be made, several officials have said.

"The problem we have is structural," Deputy Mayor Albert Pucciarelli said in regards to village finances. "I don't have an MBA in finance or the ability to try and restructure in every department. A financial board can help concentrate on that and only that...The lesson I've learned is the present situation is not sustainable and we're kidding ourselves if we think it is."

Aronsohn, who suggested the Tiger Team report be commissioned, said the creation of a financial board would help signal that times are a-changin'. Tax revenues are declining while citizens make smaller incomes. But public safety costs – mostly contractual – are rising.

Contracts for police and fire do not expire until 2014 and 2015. The agreements boost costs up 5 percent overall this year, more than $850,000. It's not just salaries, as you might expect. It's step increases. It's longevity pay. It's overtime.

"There's only so much we can do in terms of those now except to create a new reality in Ridgewood, a new normal in Ridgewood," Aronsohn said. "We need to fix it. This isn't punitive action, this isn't blaming anybody. It's recognizing there is a problem and we need to address it."

(Three of the five current council members agreed to the contracts in 2010, with many former council members hailing them as a significant financial victory for the town.)

The preliminary plan is to have a committee modeled after the Citizen's Safety Committee, which features residents as well as police and engineering staff.

The number of members for a finance board is not yet clear, nor is even the name of the prospective body.

According to Councilwoman Gwenn Hauck, the state of Massachusetts requires towns to have a financial advisory board. Few in New Jersey do, however. Just five have advisory boards.

"This is kind of groundbreaking and I'd be proud of us for doing something like this," Hauck said.

Councilman Tom Riche enthusiasm was somewhat more tempered. The council controls about 24 percent of the overall local tax portion. A two percent increase – as allowed by law – would kick up taxes about $100 a year for the average resident, he said. 

"I'm more than willing to pay that $100 to pay the services and keep what we have," he said, noting he's not opposed to a board examining the figures. Without mutual interest from the school board to keep taxes at bay, any council effort will be minimal on the taxpayer.

The council, Riche stressed, must also have complete authority over financial policy.

"I wouldn't want it to interfere with normal duties or the village manager's job; I don't want to cede authority."

Councilwoman Bernadette Walsh said it's the council that needs to outline new financial policies to allow the prospective finance board to sink its teeth into numbers.

The committee is not likely to be formed before submission of the 2013 budget.

That doesn't mean the council won't set the stage.

According to Walsh, financial policy overhauls the council hopes to start this cycle will allow the finance committee to examine future budgets with better options.