The Maplewood Citizens Budget Advisory Committee put forth its annual
recommendations to the Township Committee Saturday, which included suggestions for putting off capital improvements and any
spending that is not "immediately needed." It cited some $600,000 that could be saved in potential deferments
of capital spending.
The volunteer group, whose recommendations
are not required to be followed, also cited $70,000 in grants to outside groups that could be cut, and noted more than
half of some $400,000 in monies owed to the township, such as that for Fire Department response, is not being collected.
But the committee revealed it was sharply divided on whether to recommend defering pension benefit payments.
The CBAC report comes as the township is trying to close
a $2.5 million budget gap and a week after plans to layoff 17 employees, and institute a summer Friday furlough plan, were
announced.
The entire CBAC recommendation summary is listed below:
Maplewood Citizens Budget Advisory Committee
Top Recommendations
Since the news of
the town's layoffs, the CBAC committees have been reviewing recommendations with a simple yardstick: this or someone's
job? You will see in our reports recommendations to defer spending on capital requests, purchases, projects and appropriations
totaling more than $600,000. We firmly believe that with the future state of our economy so unclear and with so many residents
themselves grappling with uncertainty if not in actual financial trouble, any spending by the town that is not immediately
needed for the safety and health of residents and staff or is not needed to meet our contractual commitments and debts should
be deferred.
Specifically,
this year's top recommendations are:
- Defer proposed engineering projects - Springfield Avenue Improvements, Burnett, Hillcrest, West Parker,
etc. - unless funded largely by stimulus or other outside funds. Only projects where safety will be compromised or where the
town is under an external obligation should go forward. For projects where work can be delayed without significant impact,
80% of the project cost should be covered for us to proceed.
- Defer most
equipment requests, in particular vehicles, except where absolutely necessary to continue providing service to the town or
where required for safety reasons.
- A number of requests for service
contracts have been proposed for this year. We recommend that only those for systems deemed mission critical for life or public
safety reasons be funded. We note that Consumer Reports advises consumers against service contracts as generally
costing more than the occasional repairs. We believe the same logic applies for us. We also suggest that other options for
maintenance be explored.
- For all requests for new equipment and systems,
recommend that the full lifecycle costs of the system including service contracts, additional staffing needs and maintenance
costs be presented as part of the request. We noted this year that both the Township Committee and department heads seemed
surprised at the year-over-year follow-on costs associated with many of the purchases made recently. In the future, the Township
Committee should know that they are being asked to fund a $50,000/5 year system, not just a $10,000 purchase this year.
- Reduce or eliminate grants to civic organizations. The CBAC has long advocated that township
funds should be seed money to help these organizations get established but that they should be required to become self-supporting.
This year proposed grants total over $70,000 and could be used to help avoid job losses.
- We recommend that the town make every effort to recoup monies owed it. We learned from the Fire Department
that while they bill out between $400,000 and $450,000 each year, less than half those amounts are eventually paid. If this
is correct, the town should be making every effort to collect what it is owed.
Option for Pension Deferment
Although the option for
the town to defer a portion of its pension obligation still depends on action in Trenton, the CBAC felt it worth discussion
to see if we could present the town with a consensus recommendation. Each chair was asked to poll their committee and present
their position: in favor of deferring, opposed to deferring, or unable to reach a consensus.
The CBAC as a whole was unable to reach a consensus.
Three committees were in favor, one was opposed and one was intractably divided.
While we can not offer the Township Committee a consensus recommendation,
we can summarize the essential arguments made on both sides.
Arguments for Deferring
- Setting aside more money than the state requires in the current climate could result in even
more layoffs. Optional spending at this point should be measured versus its contribution to yet more jobs lost. The legislature
is looking at this precisely to try to help towns avoid this sort of drastic action.
- The pension liability is not a real shortfall now but rather a projected shortfall in the future. The plan
can still meet its present obligations. There are too many unknowns at this point to know for certain what our obligation
may look like several years from now.
- State and federal government is
realizing that pension obligations are a growing burden for municipalities and may well take action to help address the problem.
Arguments
against Deferring
- We have only just returned to full pension payments after several years of steep tax hikes as we return to full pension
funding. Deferring pension obligations now will put us through that experience all over again.
- A shortfall in earnings due to the lower contributions may well make our liability in the future years
even worse than it would otherwise be.
- Setting aside additional funds
now is like ‘buying low.' We could see higher growth on dollars invested now than money we will set aside in the
future.
We review the budget this year under economic conditions far different from one year ago.
We noted then that Maplewood was struggling to maintain its character and its quality of life in an increasingly difficult
economic and social climate. The situation is far worse this year. We empathize with those township employees who have lost
their jobs because of the state-imposed tax caps, shrinking state aid and the rocky state of the economy in general. We hope
that our recommendations and suggestions can help the TC and town's administration minimize further impacts.
