By JAIMIE JULIA WINTERS
winters@montclairlocal.news

The Montclair Township Council has introduced a municipal budget that increases the municipal portion of a property owner’s tax bill by 1.98%.

It would be the second year in a row taxpayers would see their municipal taxes rise, after three years of no increases, if the council passes the proposed $94.99 million budget after holding a public hearing April 19. 

A 1.98% increase would mean a $99.64 hike, to $5,143, in municipal taxes for the owner of a home assessed at the township average of $632,000.

School and county budgets for 2022 haven’t yet been presented,  but according to the township’s 2022 municipal budget presentation, given on March 15, school taxes are estimated to go up 2.82%, while county taxes are estimated to rise by 1.6%, and the county open space tax is estimated to increase by 2.6%.

Libraries are guaranteed a certain minimum of funding under state law, based on a community’s tax base —  $2.87 million for Montclair’s library in 2022, up from $2.68 million in 2021. The tax rate to support that levy is set to go up 5.84%. That funding is separate from another $515,000 the council plans to allot for the library out of its municipal budget. 

In 2021, after factoring in school and county taxes, the owner of a home with the average assessment paid a total of $20,419 in taxes, according to the municipal budget presentation. The township estimates a total tax bill of $20,892 for 2022 — a $473 increase.

The total municipal tax levy would grow by 2.15%, to $69.07 million.

Padmaja Rao, the township’s chief financial officer, told the public when the budget was introduced on March 15 that Montclair was still feeling the economic impacts of the pandemic, and that rising inflation rates are affecting budgeting for township operations. 

Township Manager Tim Stafford, who creates the budget with department heads, said that with the proposed budget, Montclair will be able to maintain service levels.

The township once again plans to dip significantly into its surplus. This year, the township expects to use $6.7 million of its $13.92 million surplus to fund a portion of the budget — leaving $7.22 million. In 2021, the township used $9.45 million of a $15.77 million surplus, leaving $6.32 million. And in 2020, the township used $7.95 million of a $16.87 million surplus, leaving $8.92 million.

Rao said that the “goal is to stop dipping into our reserves and eventually replenish these reserves.”

Where the pandemic severely lowered local revenues such as parking and construction fees, these revenues are returning, but not anywhere near pre-pandemic levels, she said. Construction code fees are expected to increase by 60.64%, to $1.2 million. Anticipated parking permit and meter fees are estimated at $2.5 million — up  33.61% compared to last year. Rao didn’t address during the March 15 budget overview why those fees were expected to rise by so much.

PILOTs — payments in lieu of taxes, which developers pay instead of taxes after build-outs are estimated — are expected up 4.93%, to $4.3 million.

State aid remains flat compared to last year, at $2.97 million. The township will receive $2.02 million in American Rescue Plan Funds and will be putting $1.2 million toward the general budget and the balance to the parking utility budget.

Total appropriations would decrease slightly, from $95.16 million in 2021 to $94.99 million in 2022. The largest appropriations are for debt services ($19.42 million, up 3.9%), police ($17.46 million, up 5.04%), the fire department ($11.83 million, up 1.56%) and pensions, Social Security and Medicare ($10.02 million, down 0.68%). 

Rao said there is little room for changes in department salary appropriations, as the number of employees is set and salaries and raises are contractual. Raises are currently set at 3.05% for public safety and 1.82% for all other civil and public works employees.

The township is not filling 13 open positions in the fire department, which will remain at 76 members, Rao said. The police department is currently staffed at 111 officers, with no new hires budgeted. Departmental hiring freezes implemented right after the pandemic began continue, she said.

The budget does reflect a new appropriation of $15,000 for special events. That figure was originally slated to be $30,000, but Mayor Sean Spiller announced at the March 15 meeting that $15,000 would be moved to the library, part of the $515,000 being given in discretionary funds. 

The budget adds $125,000 for a rent control compliance department, in anticipation of a rent control ordinance going into effect this year. An ordinance the council passed in 2020 never went into effect, tied up in a legal battle with landlords, but is expected to go before voters in a referendum unless tenant advocates and landlords strike a last-minute deal over the next few days for a new ordinance that could replace it.

Some appropriations would decrease. Health and senior services would be down 18.6%, to $2.3 million. Rao said the department continues to see grants such as about $300,000 for COVID-19 response and $120,000 for lead exposure investigations.

Utilities appropriations would drop 26.03%, to $1.95 million. Community services would drop 9.69%, to $4.07 million. Rao didn’t address why those figures are declining during her overview. 

Overall budgets

Rao additionally went over three overall budgets: water, parking and sewer. 

The Water Bureau budget would increase by almost 8.99%, to $9.64 million, with infrastructure improvement funds increasing by 44.44%, with $2.6 million paying for backup pumps, the cleanup of Burnside Avenue (which has frequently flooded in heavy storms), water meter replacements, distribution improvements and security upgrades.

The Sewer Utility budget would increase by 5.14%, to $9.01 million. The two utilities have a combined salary budget of $2.43 million, but revenues are expected to equal appropriations for both departments.

The Parking Utility total budget would increase 19.8%, to $5.12 million, with salaries increasing by 20% to $1.19 million and $760,000 set aside for new parking meters and kiosks and cameras for the Midtown deck, but with parking revenues expected to increase by 19.98% to meeting the $5.12 million spending, including a new allocation of $818,219 from the American Rescue Act.

The library would get a total of $3.38 million this year — including both the required funding under state law and the $515,000 at the township’s discretion — amounting to an 8.62% increase overall from 2021’s $3.1 million.

Emails sent March 18 and March 21 to Stafford through Communications Director Katya Wowk asking if department heads will attend a future council meeting to give presentations have not been answered. 

Debt

Outstanding debt continues to drop from its highest level in 2011 of $223 million, with the plan to be down to $145 million by end of 2022. The township’s debt also includes $8.19 million from school bonding. Although the district will now bond on its own and carry its own debt due to the change from a Type I to Type II school district, the township will be responsible for paying off the current balance.  

As debt decreases so do interest payments, with those funds being used instead for services and infrastructure, Rao said.

At any time, the township maintains a calculation of how much it would have to pay out for unused time off under contractual agreements, if employees covered by those contracts left their jobs. The figure declines over time as some employees leave, because of stricter limits on how much time can be paid out under contracts for more recently hired employees. As of 2021, it was $10.34 million; in 2022, it’s $9.94 million.