It’s budget season for municipalities across the state in New Jersey. And just like the NJ State Legislature plays a critical role in the State budget process, the same scenario plays out at the municipal level, albeit without all the pomp and circumstance, and on a much smaller scale.
On February 27th the West Windsor Council members received a copy of the 2024 Municipal Budget proposal and 6-year Capital Improvement Program recommendation. It was subsequently posted on the township website on March 1, 2024, and can be found at this link. Public meetings to review the budget were held on 3/7, 3/19, and 3/21.
COUNCIL ROLE IN THE BUDGET PROCESS
The Municipal Council plays a critical role in the budgetary process. Their responsibilities include:
Budget Review and Approval: The Municipal Council reviews the proposed budget presented by the mayor and municipal administrators. They examine revenue estimates, expenditure plans, and proposed tax rates to ensure they align with the needs and priorities of the community.
Public Input: Council members hold public meetings to gather input from residents regarding the budget. This feedback helps inform their decision-making process and ensures that the budget reflects the desires and concerns of the community.
Amendments and Modifications: The council has the authority to propose modifications to the budget based on their discussions and public input. They may propose to reallocate funds or adjust spending priorities.
Final Approval: Once the budget has been thoroughly reviewed and any adjustments made, the Municipal Council votes to approve the final budget. This approval signifies the Council's endorsement of the financial plan for the upcoming fiscal year.
Oversight and Monitoring: Throughout the fiscal year, the Municipal Council monitors the implementation of the budget, ensuring that funds are being spent as allocated and in accordance with legal requirements. They may request updates and reports from municipal departments to assess budget performance and request adjustments.
Overall, the Municipal Council serves as a key oversight body in the budgetary process, ensuring transparency, accountability, and responsiveness to the needs of the community.
WEST WINDSOR 2024 BUDGET
The 219-page West Windsor budget document was delivered without an executive summary. Instead, a cover page was provided with tables showing the changes in appropriations and revenues compared to the previous budget year. The second page presents a table showing that the local municipal tax rate (property tax rate) is unchanged compared to the previous year.
The budget document meticulously details the township’s annual spending, delineated by salary & wages, operating expenses, and a capital improvement program.
Operating expenses in a municipal government budget refer to the ongoing costs incurred in the day-to-day administration and provision of services to the community. These expenses include salaries and wages of municipal employees, utilities, maintenance of infrastructure, supplies, contracted services, insurance premiums, and other expenses necessary for the operation of municipal departments. Efficient management of operating expenses is crucial for maintaining the delivery of essential services while ensuring fiscal responsibility within the municipal budget.
The Capital Improvement Program involves investments in infrastructure or assets with long-term benefits. These programs typically include building improvements and repairs, major infrastructure projects, vehicles, and commercial grade equipment.
OPERATING EXPENSE BUDGET
The proposed West Windsor Operating Budget for 2024 is slightly over $50 million, which is comparable to the previous year. There are numerous NJ State statutes that govern municipal budgets, including restrictions on the growth of appropriations. It is a complex model, with numerous exceptions. The township finance team, led by the CFO, has done a thorough job to ensure that the township is abiding by all statutes.
Salary and wages account for over $16M (30%) of the operating budget, of which $7M is for the Police. When factoring in expenses for social security, insurance, consultants, and retirement funds, over $31M of the operating budget is for “people” costs – slightly over 60%.
After people costs, the big-ticket operating expense items are sewer fees ($3.4M), refuse collection, which includes garbage and recycling ($3M), and utility expenses ($1.1M). Other large items in the operating budget include principal and interest payments for bonds and notes ($4.2M), and a reserve for uncollected taxes ($1.9M).
The remaining of the expense budget is spread out across a variety of departments to support township service operations and infrastructure maintenance, such as police services ($703K), fire hydrant services ($721K), emergency services ($289K), volunteer fire companies ($150K), and snow removal ($163K), to name a few.
CAPITAL IMPROVEMENT PROGRAM
The Capital Improvement Program recommendation for 2024 is $11.5M. It is important to note that this is a management tool, as opposed to a budget. These projects are funded through a loan, typically a bond, and the Council must approve each bond ordinance. While these projects are separate from the operating expense budget, there is some crossover impact, as the down payment for bonds, usually 5% of the loan, is considered an operating expense. Additionally, these projects are likely to impact future operating expenses, so all that needs to be considered when preparing the budget recommendation.
The 2024 Capital Improvement Program includes a significant amount of core infrastructure projects for township owned buildings and property. This includes roof replacements and repairs for the police and court, the arts council, and the fire and emergency services station buildings, totaling $1.275M. Other large capital projects include improvements to the sewer and pump stations ($1.5M), road improvements ($2M), AC replacement for the police and court building ($400K), replacement of fire engine 44 ($400K), a new one-person leaf truck ($385K), and upgrades to the 911 System ($300K).
Bicycle and pedestrian improvements have been a hot topic, and recent tragic events have heightened the visibility of this area. $520K was recommended for 2024, which represented a $20K reduction from 2023. The Council recommended an increase to $550K, specifically targeting crosswalk improvements. It’s important to note that the $2M allocated to roadway improvement projects, plus an additional $526K from a Dept. of Transportation grant, will also contribute to bicycle and pedestrian improvements specific to the nature of each project.
In addition to the new one-person leaf truck, a variety of new vehicles and equipment for the Public Works division has been recommended, replacing equipment that is over 12 years old and reaching the end of useful life. ($440K)
And finally, $100K has been allocated to the Water Works Swim Pool Complex to cover the costs of general improvements and required upgrades.
In addition to the increase in crosswalk improvements, the Council also recommended a small increase in the investment of automatic external defibrillators (AED’s) to ensure that every municipal owned building, including the Arts Council building, has an AED on premises.
It is possible, and often that case, that during the course of the year, additional grants will be obtained for a variety of programs. When these grants are secured, the Capital Improvement Program can be modified to reflect the additional spending funded by the grant.
REVENUE
Revenues for the Township are itemized into thirty different categories, including interest on investments, municipal court fines, sewer charges, hotel occupancy taxes and state funding among others. These revenues account for nearly 50% of the total operating budget, leaving the remainder to be raised by taxation. Compared to other municipalities in Mercer County, this is an excellent ratio, and allows for the local tax levy (i.e. property tax) rate to remain unchanged in 2024.
SUMMARY
Budget proposals are often delivered hand in hand with a statement of the goals and objectives for the municipality. Ideally, the budget should reflect the stated vision of the township. While absent of a vision statement, the recommended budget plan delivers the necessary funding to maintain municipal operations without an increase in the residential property levy.
The budget document provides a comprehensive overview of the township's financial framework, detailing operating expenses, capital improvements, and revenues. With 60% allocated to human capital costs, coupled with investments in core infrastructure, the budget demonstrates the township's commitment to maintain outstanding services to all residents.
The Capital Improvement Program recommendation of $11.5 million prioritizes an approach to infrastructure maintenance. From core infrastructure projects to enhancements in public safety, the program strives to address evolving community needs, balanced by practical financial management.
Robust revenue generation, comprising diverse sources, significantly offsets the reliance on taxation. This balanced revenue structure underscores fiscal prudence and minimizes the burden on taxpayers.
Overall, the West Windsor Township's 2024 budget exemplifies a sensible approach to financial management. With a focus on infrastructure investment, public safety, and fiscal sustainability, the budget sets the foundation for continued financial stability.
The budget will be introduced at the Council business meeting on April 8th (7pm) and will be voted on after a public hearing during the Council business meeting on May 13th (7pm). Public comment is welcomed and encouraged.