Thursday, January 23, 2020

2020 Budget Message

2020 Lawrence Township Budget Recommendation
         In 2020, Lawrence Township is set to realize the culmination of significant projects that have been years in the making.   They include the following:

  • The acquisition of 5.9 acres of land located at 2420 Brunswick Pike, which is situated adjacent to Colonial Lake.  The property to be purchased has been subdivided to allow for the continued operations of the business known as Colonial Bowling & Entertainment.  The purpose of this acquisition is to preserve the land surrounding the lake, and to improve the park for the overall expanded enjoyment of the residents of the Township.   The total purchase price is $3,650,000 which is being funded by the Mercer County Open Space Assistance Program ($1,470,100), the New Jersey DEP Green Acres Program ($211,133 with an additional $500,000 pending final approval), a citizen’s group known as the “Friends of Colonial Lake” (amount to be determined) and the remaining balance from the Lawrence Township Open Space fund.  The terms provide for payments to be spread over three years to allow the Township additional opportunities for grant money.  If the additional targeted grant money is realized (and it seems promising), the total contribution from grant sources would be $2,950,200 which would result in total contributions from our Open Space Fund just fund $700,000.  

  • The planning and completion of the Brunswick Pike Streetscape.  With grant monies received ($60,000) and a previously budgeted amount ($175,000), the Township’s long time work in realizing an improved Brunswick Pike from the Brunswick Circle to Lake Drive is closer than ever to a reality.  Public meetings will be held to discuss the design plans and receive resident and business owner feedback. We expect to start the work in the Fall of 2020.

  • The continued study and remediation of the property appropriately known as the “Pit Stop” (1175 Lawrence Road) has been green lighted with grant monies being awarded by NJ DEP Hazardous Discharge Site Remediation Fund in the amount of $239,524.  A firm has been engaged, and the work scheduled will include the demolition of the structure and the evaluation of the soil underneath it to determine the extent of contamination to develop a plan for remediation.   The goal is to clean the property, discharge the current liens against title, and acquire ownership.  Grant funding is conditioned on the fact that the site is to be used as a passive park.  

  • The Township’s commitment to sustainability has recently been recognized by Sustainable New Jersey as we maintained our status as a Silver Certified Community (which is no easy task).   Most observable to the public is the recent completion of the installation of the car port styled solar panels installed at our municipal complex (municipal building and the police and court building) and solar panels on our Public Works roof.  We anticipate that will meet 85% of our energy needs with a realized savings of approximately $40,000 annually.                               
         Over the past several years, we continued to participate in the NJ BPU Direct Install Program which provides energy efficiency in all of our facilities that have resulted in a 30% reduction of energy costs.  It is interesting to note that our solar power program was to include a car port styled solar panels at the Senior Center on Darrah Lane, but after assessing it, our efforts through the Direct Install Program reduced the building's energy requirement to less than an  average household thereby disqualifying it from a car port solar panel installation.  However, we have recently been awarded a $10,000 grant from Sustainable Jersey which will be used for the installation of solar roof panels.  The goal being to have the building powered almost solely by solar energy.  And under this grant, we will own the system!
        The Township was also awarded grant money for the installation of two electric vehicle charging stations at our municipal building, and partial grant money towards the purchase of an electrical vehicle in this budget, and if approved, we will buy one more additional vehicle.  All  of these efforts are leading us to a pathway to achieve the Gold Standard in Energy from Sustainable Jersey (currently only one municipality has done so).

  • The completion and roll out of our new Township website which will improve the delivery of services to residents, business owners and others by taking advantage of the latest technology that today’s web designs offer (i.e., online payments, licensing and application processing for our varied departments). 
         It should clear from the descriptions above that the Township has focused its efforts towards obtaining grant monies to fund its various projects, and has been very successful in doing so.  The use of grant money combined with the socially and fiscally conscious effort towards sustainability demonstrate the commitment that we have towards reducing the tax burden on our residents for the operations of our municipal government.   It is our mission for Lawrence Township to continue to balance services while keeping the overall tax rate growth responsible. 

       This year the budget does not include any new positions to be added to our municipal operations. Throughout the year, however, we are committed to maintaining the strength of our police department by hiring new officers as current officers retire.  As we did last year, we provide you with the following fundamentals of this year’s budget [with a comparison to 2019]:
     The recommended municipal tax rate for 2020 represents a 1.75 cent increase [2 cent increase) from last year and is .5945 [“.577”].  1 cent = $463,052.32 [$462,589.71].

Ø The Amount to be Raised by Taxation in 2020 is $27,528,964.21 [$26,691,541.69] which is $837,422.52 [$927,471.69] over 2019.
Ø  The Levy Cap Bank available from 2017, 2018 and 2019 is $958,518 and we will use $0 to remain within the 2% tax levy cap.  NOTE:  2017 cap bank in the amount of $791,958 is expiring this year.  However, 2020 Recommended Budget is $385,848 under the Levy Cap and is available for “Banking”. This addition to, and the expiration of 2017 bank, will leave a usable “cap bank” of $554,626 for future budgets.
Ø  The 2019 year-end Surplus balance is $16,983,267.36 versus a 2018 year-end balance of $15,549,725.39, an increase of $1,433,541.97.
Ø  The Surplus balance remaining available after applying an amount as anticipated revenue, will be $10,133,267.36 [$9,899,725.39], an increase of $233,541.97 over the 2019 remaining balance.
Ø     The cash reserve balance for tax appeals is $4,119,491.18 [$3,444,491.18].
Ø  The decrease in outstanding debt continues.  The 2010 closing balance was $30,797,000.  The 2019 closing balance is $14,035,000 [$15,350,000].   
                Fiscal strength is evident as $5,650,000 in surplus (also known as Fund Balance) used in the 2019 budget has been regenerated at the close of 2019, with an increase from 2018 year-end Fund Balance of $15,549,725.39 to $16,983,267.36.  Further evidence is apparent as the Township’s Moody’s Rating has been upgraded in 2019 to Aa1 (Aa2).  Fund Balance is the excess in the following Balance Sheet categories:  Amount to be raised by Taxation, Miscellaneous Revenues Anticipated (MRA), Delinquent Taxes, Prior Year Appropriations Lapsed and Miscellaneous Revenues not Anticipated (MRNA). 

           In 2020, our recommendation is to utilize $6,850,000 in surplus (an increase of $1,200,000[1] compared to 2019), $15,218,097.43 in MRA, $830,000 in Delinquent Taxes and $27,528,964.21 in Amount to be Raised for Taxes, a 1.75 cent increase on the municipal tax rate. [2]

This equates a municipal tax increase of $49.24 on the average assessed home at $281,403.

     The level of appropriations contained in 2020 recommended budget was considered carefully when shaping this budget, all within the statutory limitations placed on revenues and appropriations.  The following are significant changes in appropriations leading into 2020:

Appropriation                            Increase/Decrease                  Reason
MCIA                                              $11,000                             Contractual Increase
ELSA                                             $220,000                            Pass Through Billing Increase
Salaries                                          $288,000                            Labor Contract
Trash Collection                              $40,000                            Contractual Increase
Pensions                                         $136,399                            Statutory Increase
Debt Service                                  ($15,140)                            Payment of BANS/Long Term Debt
Capital Improvement Fund            $475,000                            Funding Capital Program
Reserve for Uncollected Taxes      $91,430                              Statutory Increase
Health Benefits                             ($101,000)                          Rate/Participation Adjustment

        I would like to thank the Township Department Directors, Division of Accounts and Control, Payroll and Municipal Managers Office.  The Township Administration is prepared to fully cooperate in the review of this recommendation by the Township Council.

[1] $250,000 for additional capital expenditures, $450,000 to reduce the 2020 tax increase, and $500,000 to replace “Anticipated Court Revenue” as a line item.
[2] $50,427,061.64 (total Budget) = $6,850,000 + $15,218,097 + $830,000 + $27,528,964.21

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