Middle Twp. Adopts $20-million Budget

COURT HOUSE – At its May 2 meeting, Middle Township Committee adopted its $20.3 million 2016 budget. The budget calls for no increase in the local purpose tax levy. Mayor Michael Clark called it a “strong budget” and one he had “complete confidence in.” Committee member Timothy Donohue did not agree. The budget was adopted by a 2 to 1 vote with Democrats Clark and Deputy Mayor Jeffrey DeVico in favor and Republican Donohue against.
In what seemed like an early sounding of the bell for the 2016 partisan elections, Donohue and former committee member Dan Lockwood criticized the manner in which the budget achieved its zero increase, saying the goal was achieved through a series of one-time decisions that were not sustainable over the long term. Clark and DeVico, both heavily involved in formulating a municipal budget for the first time, admitted that they had “learned a lot,” but defended the decisions made to achieve the no tax increase goal.
One of those decisions had to do with the use of PILOT funds. The developer of Middle Township’s low-income housing projects was granted a payment in lieu of taxes, or PILOT, as part of the project agreement. A $126,000 payment figured into the budget dispute. Legally the township is required to pay 5 percent to the county. The rest is used at the discretion of the township. Clark explained that the township elected to retain the remaining 95 percent and used it to off-set expenditures in the budget.
Both Donohue and Lockwood maintained that 4 percent should have gone to the Fire District to help with the additional scope of their coverage area and that $30,000 should be set aside for possible distribution to the school district if the addition of students from the affordable housing projects has a discernable, “adverse impact” on the district’s expenses.
The budget also benefits from a decision not to make a capital debt payment. It is a payment that is not required by law, but Donohue indicated concern about the decision while Clark and DeVico both supported it. Clark had the auditors present provide details of past years when the township has skipped an optional payment.
A similar dispute arose over the decision to use the $100,000 reserve set aside for tax appeal situations. Clark noted that the reserve has been there unused since 2006. Donohue indicated that he thought some reserve should remain.
Prior to a vote on the budget, Donohue spoke at length concerning his objections to the methods employed to achieve a zero increase. He argued that the budget was not based on long-term, “sustainable” plans. It did not contain cost-cutting aimed at long-term reductions in spending. It did, according to Donohue, incorporate a trend toward greater use of the township’s surplus. For Donohue, the zero increase was achieved by relying on one-time stop gap measures that do not improve the overall financial health of the township.
Clark praised the budget. He talked about the decision that he and DeVico made to replenish the capital improvement fund, “That funds sat at almost $2 million dollars a few years ago and the previous administration reduced the balance to $109.”
The structure of capital debt was a significant item of debate. The budget incorporates a plan to move from a string of continuously renewed temporary notes to a long-term fixed rate bond. For Clark, skipping the legally-optional capital debt payment was part of a larger agenda aimed at transferring the accumulated debt to a fixed rate instrument. Clark noted that the move reduces the uncertainty of future payments which a system of temporary notes left at the mercy of market rates. “Rates are low now, but they will be going up,” Clark said.
Things turned even more overtly political when Clark said that Donohue had provided an email with suggested changes to the budget at 3:30 Friday afternoon just a weekend away from the Monday committee meeting. “That was political,” Clark said. “What would you call it when his suggestions come in on Friday at 3:30?”
Donohue said he wished he had more involvement in the budget process. He then retaliated by reminding the public that Clark has repeatedly said in the past that he supported small incremental growth in the tax rate as a prudent way to maintain services. For Donohue, a push to have a zero increase in the year when Clark will run for reelection smacked of politics as well.
When the debate was over, the budget passed on a 2 to 1 partisan vote without change. There was little doubt that discussion of this budget will be an election issue in the fall when Lockwood challenges Clark for his seat on committee.
To contact Vince Conti, email vconti@cmcherald.com.