1. Mayor David M. Scapicchio William Sohl, Business Administrator Sherry Maniscalco, Chief Financial Officer

2.  Challenges for the 2009 budget:  1. Spending CAP (2.5%) as well as the Property Tax Levy CAP (4.0%)  2. Potential decrease in state aid  3. Pension deferral (pending)  4. Mandated increases in areas like debt service, pension, labor and fleet maintenance  5. Maintaining the commitment to the same level of services

3. On the positive side for year-end 2008 we had: 1. A higher than anticipated level of surplus ($4,119,628.44 was the ending balance) 2. A higher tax collection rate in 2008 than in 2007 3. An ability to cancel appropriations by $205,000 as a result of savings in areas like vehicle fuel, legal fees, fleet maintenance 4. A successful defense of 727 appeals resulting in a loss of only 1.8%

4.  Update on budgeting through-out the state:  1. Of the 51 state fiscal year towns, only 6 have adopted their budgets……the rest are waiting for the pension deferral or extraordinary aid  2. It is anticipated that most of those towns will apply for levy cap waivers if they don’t receive the deferral or the aid  3. Extraordinary aid and distressed cities aid have already been reduced throughout the state.  4. The DLGS has reinforced the fact that if the pension deferral legislation is adopted and municipalities do not take advantage of it, it will be almost impossible to obtain a levy cap waiver.

5.  Overall review:  1. The spending CAP for 2009 was set at 2.5%. The Mayor’s recommended and proposed municipal budgets are within the spending CAP.  2. The property tax levy CAP for 2009 was 4% with some exceptions for debt service and PERS pension. The Mayor’s recommended budget was not within the levy cap as a result of the review of surplus regeneration through 2009. The Mayor’s proposed budget before you is within the levy CAP and required the use of an additional $591,310 in surplus. We have included an analysis of surplus in section 2 detailing our recommended versus proposed budget.  3. We encourage the application of a property tax levy CAP waiver to reduce our use of surplus and avoid potential increased costs in areas like debt service.

6.  Overall review (continued):  1. The proposed municipal tax rate is.502 as compared to.461 in 2008 resulting in a tax increase of $155.92 to the average homeowner with a house assessed at $380,300.  2. Our ratable base decreased by.42 percent from 2008 to 2009 or about $15,287,000  3. We decreased the departmental and volunteer fire/rescue budgets by $180,000  4. We moved approximately $100,000 of recreation costs to the utility and have recommended the implementation of a beach fee schedule  5. We have allocated 20% of the planning administrator’s salary to the COAH trust fund

7.  Surplus:  Our surplus balance at 12/31/08 was $4,119,628.44 which was $787,000 lower than in 2007……this reduction is attributable to the decrease in added assessments  Our nine year average from 2000 – 2008 was $3,800,425 and we exceeded that by $319,000

9.  Overall changes in revenue from 2008 to 2009 :  1. Surplus – Proposed use of surplus decreased by $8,690  2. Delinquent Taxes – Increased $156,000 based upon outstanding taxes at year-end  4. Open Space Trust – Decreased $439,000 based upon the projected year-end balance in the trust  5. Local Revenues/State Aid/Other Revenues – Local revenues decreased $120,000 due to a drop in the interest earned on investments and municipal court revenues, state aid from the garden state trust fund decreased $28,609 and hotel tax revenues decreased $20,000 based upon prior year realized figures

11.  Overall changes in expenditures:  1. Salaries/Benefits – Increased $507,765 based upon anticipated contract settlements  2. Legal – Decreased $40,500 based upon an expected decrease in miscellaneous litigation  3. Fleet Maintenance – Increased $51,219 due to cost of living increases and an anticipated increase in non-contract charges  4. Library – 1/3 mil requirement increased by $5,677  5. Pension – Increased $279,883 which represents the full pension bill due without regard to any deferral

12.  Changes in expenditures (continued):  6. Reserve for Uncollected Taxes – Increased $182,284 based upon tax levy requirements in 2009  7. Debt Service – Increased $176,430 as a result of the new bond sale in 2008  8. Accumulated Absence Trust – Decreased $25,000 since retirements are expected to slow in 2009  9. Utilities – Increased $4,750 primarily attributable to street lighting, vehicle fuel may be able to be reduced once we have a history of rates/consumption in 2009  10. Departmental Budgets – Decreased $180,000

13.  Moving into 2009:  We have:  1. $400,000 on hand for tax appeals at 12/31  2. $158,000 in our accumulated absence trust fund for retirement payouts  3. $73,000 remaining in our unemployment trust fund  4. $1,128,000 remaining in surplus based upon the proposed budget

14.  In summary:  Our future budget course will be dependent upon the pension deferral issue and whether we take advantage of it or not.  Salary negotiations could lead to greater awards than we anticipated in this budget.  We have presented a budget that maintains services while trying to keep the tax burden to minimal levels for our residents.