If passed, the proposed $496 million Monmouth County budget will be supported by a projected tax levy of $313 million, a $10.5 million or 3.48 percent increase over last year's levy, county officials said.
The Board of Chosen Freeholders discussed an early draft of the 2011 budget, which represents a $2.6 million increase over last year's, at a public hearing held at the Monmouth County Library Headquarters in Manalapan Tuesday night.
Salaries account for $179.9 million of the proposed budget, up $1.6 million from 2010, and other expenses round out the remaining $316.1 million.
If the majority of the board agrees, they will introduce the budget at the Hall of Records in Freehold on Thursday night.
"That budget will not be the adopted budget, that will just get the statutory clock running so the board can continue the process of getting the budget adopted within thirty days," said Freeholder Director Robert Clifton.
The board still has four county departments to meet with, as well as scheduled public workshops in which they will make additional cuts as the process is finalized. They can and often do take public commentary into consideration in their amendments, which they may make up until the budget's final adoption on March 24, according to Clifton.
County Chief Financial Officer Craig Marshall, who led the presentation, said offsetting revenue declines and fixed cost increases were the major challenges in balancing this year's budget.
Marshall stated the market value of all property in the county is $119 billion, down $6.3 billion from 2010, which has decreased the ratable base. He noted that is back to 2007 levels, with the largest declines on the commercial side, which adversely effects residental values. With new construction and total value declining, new revenues are not being generated, Marshall said.
Additionally, the county's fund balance declined by $12 million. To counter this, Marshall explained the county cancelled their accounts payable, reducing the fund's deficit to $7 million instead of $12 million.
There was also a $2.8 million decline in miscellaneous revenues, and county care centers saw a decline of $665,000.
Despite measures to cut fixed costs such as changing the county employee healthcare administrator from Aetna to Blue Cross Blue Shield, the county saw a $10.8 million increase in fixed costs. Pension increases accounted for $4.5 million and rising insurance premiums drove fixed costs up $4.3 million.
Marshall said the county had to find ways to offset their fixed costs and focused on decreasing budget allocation in other areas, saving the county over $8 million. These measures included a county-wide hiring freeze was instituted for all non-essential positions. The county workforce has been reduced by 338 full-time, 36 part-time and 155 seasonal workers since 2008, with 90 full-time, two part-time and 155 seasonal positions cut in 2010. Overall workforce has been reduced by 10 percent in the last year alone, according to Marshall.
Individual department allocations have been reduced by approximately $5.6 million since 2009. In 2010, Marshall said the county requested departments submit budgets with five percent reduction, which most departments were able to comply with or reduce their budgets or generate additional revenues to offset their required cuts.
The county also reduced their allocation to Brookdale Community College by $6 million and asked the college to use their additional fund balance in order to offset the decrease in their funds. Marshall also noted a shared services agreement with Middlesex County to house juveniles from Youth Detention Center which began in July 2010 will save the county $2 million annually.
Monmouth County has maintained a AAA bond rating with Moody's, Standard & Poor's and Fitch since July 1999. Using a $71 million bond issued in 2009 as an example, Marshall said the county saved $1.1 million over the life of the issue opposed to if Monmouth was AA rated, or $4.4 million if A rated.
"The county issues bonds every year, so if multiplied year-over-year, rating is very important to maintain," said Marshall.
In accordance with state statute, the county library system, which has its own tax levy, will now be contributing their full indirect cost rate. The rate covers their finances, buildings and grounds and support services. Marshall said this increases revenues by $2.4 million. Over the last two years, the library was only charged 1/3 of the indirect cost rate.
An additional $1 million in capital surplus is anticipated over and above the $2.5 million anticipated in 2010 as a direct offset to the debt service increase contained in budget. When the county did their bond sale in 2010, it had a $1 million premium, which was used to offset the county budget.
The county also sold stimulus program "Build America" bonds and "Recovery Zone Economic Development" bonds, which contain 35% and 45% subsidies respectively, which help decrease interest rates for the county.
Monmouth County received $11 million in stimulus money for roads and bridges alone in 2010. The county is also anticipating additional contribution from the open space trust fund and from the park system in the amount of $1.3 million to offset park maintenence, as is permitted by the fund.
When the meeting opened for public comment, James Martin of Spring Lake Heights asked how much money is in the open space fund, to which Marshall replied "probably somewhere in the neighborhood of about $22 million." According to Marshall, $2 million of the fund also goes to co-operative municipal grants, which help towns put together park projects, and $7.5 million of that is earmarked for land acquisition, which was passed by a resolution.
Stan Rosenthal of Holmdel, who obtained an income statement from the parks by virtue of an OPRA request, suggested the county should further look to its parks department in order to help balance the budget. Reading from the income statement, Rosenthal said the parks generated income of $14.4 million, $7 million of which went to the county, $7.4 which went back to the parks.
"The parks themselves pay about $8 million in expenses," said Rosenthal. "So the county is basically paying 75 percent of the expenses and getting 48 percent of the revenue. If they got the same revenue, approximately 75 percent, they would be getting $10.6 million, an increase of $3.6 million, which could help you in balancing your budget."
Other residents raised concerns over the salaries in the county's sheriff's and corrections departments. Jeanette Misretta of Freehold cited Monmouth County's corrections department as the highest paid in the nation.
"This is not exactly Juarez, Mexico," stated Mistretta.
Members of the board said the issue is in arbitration.
The budget has been trimmed down significantly since the board began work on it. They began with an initial figure of $511.4 million and an anticipated shortfall of $35.8 million.
Marshall showed the progress the board has made in getting to a .53 percent budget increase, citing the average annual county budget increase of $19.6 million or 5.18 percent from 1999 through 2007. From 2008 through 2011, Marshall said the average increase was $6 million or 1.26 percent.
Amount raised by taxation to balance the budget has also fallen, according to Marshall, who cited an $11.6 million or 5.02 percent annual increase from 1999 to 2007, and a $6.6 million or 2.24 percent increase from 2008 to 2010.
Still, some residents thought the county could do better.
"I don't know how the state can cut 2.6 percent of their budget and Monmouth County can't," said Bayshore Tea Party group member and Keyport resident Russell Cote. "But I'm giving Freeholder Clifton the benefit of the doubt, we'll wait for the next one and we'll hope that number goes down significantly."
Once the budget is introduced Thursday, it will be available for the public to view on the Monmouth County Board of Chosen Freeholders Web site.
The next public hearing will be held March 3 at 7 p.m. at Monmouth County Library's Eastern Branch in Shrewsbury.