2. 2015 Municipal Budget Overview Borough of Montvale April 14, 2015

3. Key Questions  What are the sources of revenue that the Borough expects in 2015?  What are the Borough’s key expenses and significant expenditures in 2015?  How will this affect our municipal tax rate?  What is the current financial state of the Borough?  What challenges do we face, and what is our strategy to build upon Montvale’s strong financial footing?

4. 2015 Budget Summary Revenues Budget Year (2015) Proposed Prior Year (2014) Adopted ChangePercent Surplus Anticipated (Utilized)4,750,0002,800,0001,950,00069.64% Local486,450478,4508,0001.67% State Aid1,262,378 00% Construction Code210,000225,000 % Interlocal Agreements166,427166,381460.03% Public & Private Revenue685,60018,577667,0233590.59% Special Items329,305300,74428,5619.50% Delinquent Tax210,000215,000 % Municipal Tax11,839,10711,499,918339,1892.95% TOTALS19,939,26716,966,4482,972,81917.52%

5. 2015 Budget Summary Appropriations Budget Year (2015) Proposed Prior Year (2014) Adopted ChangePercent Salary and Wages4,445,0124,245,485199,5274.70% Deferred Charges & Statutory Expenditures 992,956952,19940,757 4.28% Other Appropriations 7,931,2577,640,232 291,0253.81% Debt Service1,824,1051,823,305800.04% Capital Improvements 3,166,958786,1002,380,858302.87% Reserve for Uncollected Taxes 1,578,9791,519,12759,8523.94% TOTALS19,939,26716,966,4482,972,81917.52%

6. Significant Expenditures  Road Resurfacing  Fire Engine Replacement  Sewer Line Project at Pascack Brook  Planning, Design, & Engineering Costs for replacement of Montvale Firehouse While capital expenditures, the Borough is paying for these projects and items with current funds, not additional debt.

7. Property Tax Levies 2015 (Projected) 201420132012 Municipal 11,839,107 11,499,918 11,181,960 10,767,930 Open Space 102,808 100,465 100,623 118,762 Regional School 12,196,368 11,841,134 11,270,846 10,919,352 Local School 15,523,031 15,070,904 14,645,752 14,217,867 County 5,449,701 5,290,972 4,960,331 4,961,331 Total Levy 45,111,015 43,803,393 42,159,512 40,985,242

8. 2015 Projected Tax Levy

9. Tax Rate Comparison 2015 (Projected) 2014ChangePercent County.265.264.001.38% Regional School.593.590.003.51% Local School.755.750.005.67% Open Space.005 00% Library.036.038 % Municipal.540.534.0061.12% Total Municipal.576.572.004.70% Total2.1942.181.013.60%

10. The average assessed value of a residence is estimated at approximately $514,300. The projected increase in the 2015 municipal portion of tax for an average residence is estimated at approximately $31.

11. Montvale Surplus Overview Surplus plays two important roles for the town: 1) it serves as a cushion against the impact of negative financial events; and 2) it provides liquidity for cash flow. Year Utilized in Budget Balance at Year End 2008$2,325,000$3,058,780 2009$1,800,000$2,190,087 2010$1,800,000$2,955,738 2011$1,800,000$3,672,643 2012$1,800,000$4,448,600 2013$2,100,000$5,686,888 2014$2,800,000$6,707,625 2015 (proposed)$4,750,000$4,572,090

12. Municipal Debt YearBondsNotes Authorized But Not Issued Total 2010 10,198,000 1,900.000 46,616 12,144,616 2011 12,663,000 0 1,528 12,644,528 201211,175,000 0 0 11,175,000 2013 9,685,000 0 0 9,685,000 2014 8,155,000 0 0 8,155,000

13. Debt Service: Current Schedule Combined ExistingOutstanding Debt YearPrincipalInterestTotalAt End of Year 2015 $ 1,575,000 $ 249,100 $ 1,824,100$ 6,580,000 2016 1,595,000 200,950 1,795,950 4,985,000 2017 1,630,000 152,450 1,782,450 3,355,000 2018 1,625,000 105,900 1,730,900 1,730,000 2019 875,000 47,563 922,563 855,000 2020 425,000 21,375 446,375 430,000 2021 430,000 10,750 440,750 0

14. Municipal Debt The Borough’s bond rating is a AAA with a stable outlook. The following factors (among others) were considered in determining the rating: - Surplus and the ability to replenish - Outstanding debt and the ability to pay - Tax Base - Strong financial management practices and a stable financial position

15. Surplus vs. Municipal Debt If Montvale has a significant Surplus, why don’t we just pay off our Municipal Debt? Our current debt is at advantageous rates that might be difficult to replicate in the future We are careful about economic changes that may place a call on our surplus In a sense, we are holding down additional debt by paying for capital items with surplus this year Also: the “fairness” issue…

16. Long-term Investments: Who Should Pay? For major projects that will serve Montvale for 50+ years, like the new firehouse, financing a large part of it through debt shares the financial burden of paying for it between today’s taxpayers and future Montvale residents.

17. Challenges Ahead  Upcoming Infrastructure Investments –Firehouse Replacement –Road Maintenance; Aging Sanitary Sewer System –Fieldstone Turf Replacement  Changing Corporate Real Estate Environment –Are Large Corporate HQs Going to Continue? –Will Tax Appeals Increase in Frequency and Size?  Employee Pension and Health Benefit Liabilities –Much of this Driven by Trenton & Overall Economy –Continue Offering Services While Managing Salaries and Benefits

18. Strategies: Infrastructure  Firehouse Replacement –Explore financing that dovetails with paydown of existing Borough debt –Timing: Spring, 2016  Road Program –Develop a multi-year schedule and treat as a regular line in operating budget  Fieldstone Turf Replacement/Sanitary Sewers –Projects require study –Pursue Grants when Available

19. Strategies: Corporate Real Estate  Evaluate Current Zoning –Review Master Plan  Continue Outreach to New Corporate Tenants –Expand Scope to Nontraditional Tenants –Target Entities with Strong Ties to Specific Location Infrastructure  Establish Increased Reserve for Tax Appeals

20. Strategies: Salary & Benefit Costs  Manage Health Costs; Explore Alternative Plan Designs –Reduced Costs by Approximately 8.2% in 2014  Achieve Greater Efficiency though Continued Successful Shared Services –Realized Savings of Over $300,000 in 2014 through Pascack Valley DPW –Consolidated Municipal Court continues to produce savings  Continue to Pursue Flexible Employment Approach in Administration, etc.

21. Questions?

22. APPENDIX & EXHIBITS

23. Grants Received  Clean Communities –2012 $13,601.29 –2013 $15,976.00 –2014 $14,984.21  Recycling Tonnage Grant –2012$6,892.00 –2013 $12,143.68 –2014 $10,627.30

24. Medical Benefits Comparison of Health Insurance Costs for 2014 and 2013 Difference Actual CostIncrease Group Insurance 2014 2013 (Decrease) Medical631,079690,014(58,935) Prescription217,357229,447(12,090) Dental43,31252,100(8,788) Total891,748971,561(79,813) % Decrease8.20%

25. SHARED SERVICE ANALYSIS BUDGET (INCREASE)/ 20132014DECREASE ROAD REPAIRS AND MAINTENANCE: SALARIES AND WAGES$599,735$0$599,735 OTHER EXPENSES$306,525$10,000$296,525 PUBLIC BUILDINGS AND GROUNDS: SALARIES AND WAGES$101,426$25,000$76,426 OTHER EXPENSES$121,567$40,000$81,567 SEWER SYSTEM: OTHER EXPENSES$60,000$10,000$50,000 RECYCLING: SALARIES AND WAGES$8,550$0$8,550 OTHER EXPENSES$120,000$5,000$115,000 MAINTENANCE OF ALL VEHICLES: OTHER EXPENSES$123,000$34,000$89,000 OPEN SPACE: SALARIES AND WAGES$31,000$0$31,000 OTHER EXPENSES$23,899$0$23,899 OTHER EXPENSES - OTHER: FICA$56,664$1,913$54,752 WORKERS COMPENSATION$33,399$1,051$32,348 PENSION$70,377$2,730$67,647 HEALTH$217,104$0$217,104 VISION$4,500$0$4,500 LIFE$535$0$535 CAPITAL IMPROVEMENTS$60,000$0$60,000 SHARED SERVICE AGREEMENT: RIVERVALE$0$1,503,000($1,503,000) $1,938,281$1,632,694$305,587