Clifton City Council Discusses Budget with a 3 Tax Point Increase
The Clifton City Council met on April 9th for the final budget work session that lasted a little under one hour. The City Manager and the CFO provided budget handouts showing the changes that were made to the budget based on the input of the City Council from the previous budget work session in March.
The two administrators explained that prior to this current version, the budget had an $8M shortfall and incorporating the suggestions from the City Council, the shortfall was now $4M. This $4M difference between revenues and expenses would require an 8-tax point increase in order to balance the budget. On Clifton’s average assessed home of $179,000, that would mean an annual $143 tax increase for the municipal portion of taxes. The Mayor reminded the administrators that at the previous work session the majority of the Council indicated that they could support a 3-tax point increase and asked what can be done to achieve that policy goal.
The CFO indicated that the recent change in the collection of delinquent sewer payments now made the Sewer Utility self-liquidating and there is no longer the need to raise a $500,000 projected deficit in 2022 property taxes. The original budget recommendation also used $4.5M in Fund Balance as a revenue source and this version increased that to $8M leaving Fund Balance at 3.8%. (For an explanation of the role of Fund Balance in municipal cash flow, click here and read the section "Revenue and Fund Balance".) The rest of the anticipated revenue to close the remaining $4M gap will come from the American Rescue Plan Act funding.
It was explained that last year the City Council recognized that the pandemic had put a financial strain on residents and businesses in Clifton and established the goal of a 0% tax increase in 2021. This was achieved by utilizing a large portion of the American Rescue Plan funding to close that budget gap. And while the ARP grant was a one-time payment, there was still money left over to use in the 2022 budget to bring the tax increase to a 3 tax point increase or roughly $54 on the average assessed home. Councilman Gibson indicated that would translate to $5 per month to taxpayers.
For context, the City's portion of a tax bill in 2021 was 29.5% (including the Library budget), the County accounts for $24.3% and the School Board $46.2%
The discussion went into greater detail of allowable uses of American Rescue Plan money. Both the City Manager and CFO explained that a better use of this grant would be for long term capital projects such as sewer improvements or the purchase of ambulances. Councilwoman Pino objected to the discussion of capital projects because the Bond Advisory committee had yet to meet to discuss the departmental requests.
The City Manager responded that the 2022 budget has $500,000 in the Capital Improvement Fund to use as the required 5% down payment for a Bond Ordinance to fund capital projects. Bond Advisory will still meet to discuss which projects are a priority but there is a cap of $10M in projects which is historically what the City budgets for each year. Councilwoman Murphy clarified that despite any recommendation that comes from the Bond Advisory, it may still be amended by the Council as a whole. Mayor Anzaldi reminded the Council that a Bond Ordinance requires 5 votes to pass and that it is common to adjust Bond Advisory recommendations in order to have the support of at least 5 Council members.
Councilwoman Sadrakula objected to the capital projects list not being provided to all Council members. Administration indicated that the total capital projects list (which exceeds $10M) was distributed to the full Mayor and Council at the first budget work session in January. Councilwoman Pino and Councilwoman Sadrakula were both absent at the first work session but all materials were delivered to them. The other Council members confirmed that this information was provided to everyone.
The City Manager then provided a detailed explanation of the 15 new positions in the 2022 budget that was questioned at a previous budget work session. The description of the various positions demonstrated that these are not all new positions as several of these positions were created in the 2021 budget but are still vacant.
New positions in the 2022 budget include an additional Superintendent of Public Works in order to split the duties of the DPW and the Sewer Utility. A new position in the Tax Assessor office is the result of a restructuring to save money. Similarly, a part time Animal Control Officer will remain part time but become a per incident pay structure. Because the City is contractually obligated to pay a minimum of 2 hours for after hours calls, paying $50 per call should produce a savings. A part time nurse in the Health Department is being converted to full time in order to fill the growing needs of the Health Department. The largest change to new positions is the addition of 4 new supervisory positions, 3 lieutenants and 1 sergeant, in the Police Department.
The City Manager clarified that he has the authority to restructure departments and add personnel for all departments except Public Safety (Police and Fire). The City Council decides Police and Fire staffing by the adoption of an ordinance creating a table of organization for each department. The policy decision by the City Council to add the 4 new supervisory positions in the Police Department has increased the budget by nearly $1M accounting for Salaries and Benefits.
The meeting concluded with the City Manager recapping the following budget highlights:
- The maximum 2% tax levy increase represents a 3 tax point increase or roughly $54 on the average assessed home
- $6.3M of American Rescue Plan grant money was used last year, $4M will be used this year.
- To date, the one-time American Rescue plan used $10.3M for operating costs, $1.3M for long term infrastructure spending, leaving $7.2M yet to be allocated.
The 2022 budget will be introduced at tonight's April 19th Council meeting.
Note: This article was updated after the adopted budget was made public.
Read previous municipal budget articles by Joe: