2021 Budget Please e-mail me directly at MayorRunfeldt@bolp.org
On Saturday, February 20th I presented my proposed 2021 Operating Budget of the Borough of Lincoln Park to the town Council. After careful review, the Council accepted the budget as presented and will be taking action in the coming weeks to introduce and approve it. The budget I presented was the culmination of keen spending oversight by our Administrator and CFO and the dedication of the borough’s department heads to contain costs while continuing to provide the highest level of service to our residents and businesses. Each of them, and all of our employees, deserve recognition for their efforts to make Lincoln Park a vibrant community for residents and businesses.
For the 13th consecutive year, the total budget expenditures have remained relatively stable and minimal. Cost containment continues to be a primary goal of mine and has likewise been an aim of the Borough Council. Year after year, with this direction, we have attained a very positive result and I commend Council for their steadfastness to this objective. Another annual goal of mine has been to present a fully compliant budget to Council with regards to the State’s financial regulations. I am happy to inform you that this budget is, in fact, a fully compliant budget without any cuts in services.
The 2021 budget as I presented to the Borough Council has a spending increase of just 1.44% over last year’s budget. This year’s increase is primarily due larger than usual mandated pension contribution payments which totaled nearly $200,000.00 more this year, a $130,000.00 increase in our sewer provider charges and other usual non-discretionary increases such as insurance costs and contractual obligations.
Compounding the effect of these increases was the consequence COVID had on the amount of money the borough generates from sources other than taxes. The Borough brought in substantially less revenue due to the COVID-19 pandemic, especially in court fees (-$48,000 / 46% reduction) and recreation fees (-$109,000 / 80% decrease).
Even with the increase in mandatory spending and the various decreases in other revenue sources I am pleased to let you know the average increase is only 1.79% in municipal taxes to residential properties in Lincoln Park. The end result, and more importantly, what this means to the taxpayers of Lincoln Park, is a budget which will increase the average household’s (assessed value of $321,323) taxes only $60.77 for the year or $15.19 per quarter.
It is essential to note that this budget was achieved in the face of the continued loss of tax ratables due to flood buy outs along with the downturn in our economy due to the continuing COVID-19 pandemic. On a positive note, I feel that we have, in fact, turned the corner and have begun to reverse these negative trends. Tax appeals appear to be decreasing, due to property values and business revenues increasing as our economy recovers its strength. Continued “capping” of unused sewer lines and improvements to our sewer infrastructure are ongoing and should soon lead to cost containment of sewer provider charges due to drastically lessening the amount of unwanted infiltration to our system. We recently had the first upscale multi-unit retail center in years be completed at the corner of Boonton Turnpike and Comly Road. Two significant residential development projects in our downtown area should begin shortly, as well as another just outside of our downtown revitalization zone. Our planning, engineering, and land use boards have made this possible in a responsible and smart way to ensure that our small-town feel is maintained as we experience this new and needed progress. Lincoln Park has become an attractive place for growth. I attribute this to our wonderful residents and businesses, a vibrant community, the quality of life we provide and the financial efforts your elected officials have made over the last 15 years.
I am also pleased to inform you that we remain on course with my plan for Lincoln Park to become completely debt free by 2030. The plan is to “pay as you go” for all capital improvements and reserve for future foreseeable projects. Key to this plan is to limit the capital portion of the budget to approximately 1 million dollars per year and fully fund these ordinances in the following year rather than borrow money. As the Borough’s debt service continues to decrease, the reduction will be budgeted to a capital improvement fund which helps to offset the costs of these capital purchases. During the 2021 budget, the Borough will fully fund the 2020 bond ordinances and not incur any additional debt for the town or you, the taxpayer. The 10-year capital plan that I started 12 years ago, update annually and which council has continually backed provides us with a sound foundation for being able to move forward with this plan.
To recap these points and a few additional items that I would like to bring specifically to your attention to regarding the 2021 budget…
• Total amount to be raised by taxes for the municipal budget is $13,998,817.90 in 2021 which is $168,803.67 below the allowable Levy Cap and $493,124.21 below the Appropriations Cap allowed by the State of New Jersey.
• Impact to the average household in Lincoln Park is $60.77 for the year or $15.19 per quarter.
• The Borough continues to be on track to be debt free by 2030.
• The Borough utilizes the newest financial software and technology available to make sound financial decisions and operate more efficiently.
• Fund Balance remains very stable at 5.3 million. A healthy Fund Balance provides tax stability and contributes to the orderly provision of services from year to year. A strong Fund Balance also protects taxpayers from unexpected changes in financial conditions due to cuts in state aid and/or a natural disaster or other emergency.
• Tax Collection rate for 2020 (98.70%) was excellent, especially in light of the economic downturn which occurred due to COVID-19.
• A new fire engine for Company #1 to replace the 32-year-old 1989 engine currently in use is recommended as a purchase this year. In keeping with our “pay as you go” mindset, my recommendation includes fully funding this purchase with capital reserve funds. This will require no bonds to be sold, no interest will be paid by taxpayers, and most importantly there will be no increase to our amount of debt.
Due to the diligent budgeting and responsible spending of all departments, and the attentive adherence to procurement procedures the Fund Balance now stands at approximately 25% of the overall budget, an outstanding number. As mentioned above, a healthy fund balance provides us with both stability and safety in future budgets and emergency events.
A large portion of the increase to this year’s budget is due to statutory, contractual, or insurance obligations along with COVID forced lost revenues. There are minimal discretionary spending increases, most of which have been responsibly offset by finding a cut or cost savings elsewhere. The budget as presented provides a balance that takes into consideration the fiscal realities of the time while also maintaining the resources necessary to provide the services to our residents and businesses that have made Lincoln Park such an attractive place to live and do work. The relatively small increase in this year’s budget is a wonderful accomplishment that I, the administration and the Borough Council are proud of and happy to present to you.
I have constantly prided myself on making decisions that are in the best interests of our town at each moment in time and also to ensure that we remain a vibrant and thriving community in the future. This budget is definitely good for our residents now. The goal to become debt-free and maintain the budgeting tools we use sets us up for success going forward. These decisions now will affect the future of our town, for us now, for new residents who move here, and perhaps even future generations of your own family!
Mayor David Runfeldt