Residents get look at twp. budget process
Forum provides insight into municipal balancing act
BY ERIN O. STATTEL Staff Writer

HOLMDEL — Some township residents now have a better understanding of the municipal budget, after attending a presentation by the township's administrator, sponsored by a local advocacy group.

Citizens for Informed Land Use (CILU), a group dedicated to encouraging intelligent land-use policies, held its monthly meeting Oct. 1 at the Senior/Community Center and featured Joseph Annecharico, township administrator and chief financial officer, as the guest speaker.

"When our former administrator left, I decided that the next administrator would need to come to one of our meetings and explain things so we would get to know him," said Jenni Blumenthal, vice president of programs for CILU. "Little did we know that we already knew our new administrator."

Blumenthal referenced Annecharico's 20 years with the township as chief financial officer.

"This serves as a nice forum for citizens to know what township employees do, without being confrontational," Blumenthal said. "Besides, it is a social setting."

Blumenthal said she had suggested a meeting of this type because she wants Holmdel residents to understand their town's budget process.

"I want people to have a better understanding of the budgeting process and financial setting of the town," she said.

Annecharico agreed.

"I want residents to have an understanding about our municipal budget and the process of how we get there," he said. "If they have questions, they are always free to ask me." Resident RobertaKauf attended themeeting for exactly those reasons.

"This is the oil that keeps the town greased," she said. "I think holding a presentation and discussion like this is a good forum, because people in the long-run can make educated decisions regarding the town."

Kauf said she attended a previous meeting with Township Engineer Ed Broberg, of T&M Associates, Middletown.

"I came to the meeting with the town engineer, and it was interesting," she said, "so I came to this one hoping to learn something."

In his presentation, Annecharico, who has a bachelor's degree in business administration from Monmouth College (now Monmouth University), explained that the state of New Jersey is one of the most heavily regulated states when it comes to municipal budgets.

"Of the 566 municipalities in New Jersey, municipal budgets range in size from $140,000 in the borough of Tavistock to $600 million in the city of Newark," Annecharico explained. "The forms and procedures apply to all municipalities no matter their size. There is also a large degree of regulation in terms of oversight on the part of the DCA [Division of Community Affairs]. This is not the case in other states."

Annecharico explained that the township uses a software program to create a budget worksheet.

"In the fall, we receive from all township departments requests for funds and what they need for the year ahead," he said. "We put that in the computer, and the administration reviews all the requests in the second column of the worksheet. In the last column, the Township Committee looks at the requests and makes their recommendations. That usually happens around January."

Annecharico said that as for the hiring of personnel for new positions, departments would be out of luck.

"We are in a hiring freeze and have been [for] some time now," he said.

Annecharico went on to explain how the township raises the funds to cover the budget.

"New Jersey requires a municipal budget to be balanced; in other words, the expenditures have to be equal to the revenue raised — in this state, by property taxes," Annecharico explained. "New Jersey is the most heavily taxed state in the nation."

Annecharico listed the sources of revenue that fund expenditures.

"In order to maximize profits, we include fines from court, building permits and state aid into our revenue," he said. "After we balance all that out, all that is left is the property tax levy, and the township is only one out of several taxing authorities."

He said that in Holmdel, 68 cents of the taxpayers' dollar goes to the public schools. He also explained that there are a few aspects to the municipal budget, generally referred to as the operating fund, such as the sewer system, the swim club and the capital budget, which have separate books.

In July, the Township Committee adopted a $20 million municipal budget for 2008.

"Once the budget is approved, we have to enter it into our books, and we are obligated to monitor the various departments and their spending for the year," he said. "We have a completely automated and strict system. We issue purchase orders, and that ensures us to continue to comply with state regulations in purchasing."

Resident Mike Sockol asked Annecharicowhere the township stands on the budget and if it is on schedule spending-wise.

"We received our status report and we are running very well," Annecharico said. "There are a few items which I am worried about, but I am worried about something every year. They really aren't anything for concern though."

Sockol, Democratic Party candidate for Township Committee, also asked Annecharico if the town was finding it hard to bond for funds, given the current state of the economy.

"The state has accorded a high credit rating because of the way we tax, and this makes it very desirable for investors in regard to municipal bonds and their strength. They are also safe in that the interest they accrue has a taxexempt status," he explained.

Resident William R. Neihart raised a question regarding surplus.

"What does the township do in the case of a surplus in revenue?" he asked.

"In the case that a surplus arises, it is carried forward to the following year," Annecharico responded.

Isabelle McFarland asked Annecharico if it is common practice for purchase orders or expenditure requests to be turned down.

"Absolutely things get turned down," Annecharico said. "I monitor the purchase orders very closely, and I receive every expenditure request. The police department is different because they want their vehicle replacements on a mileage turnover schedule. They have three shifts at eight hours each, and they have more mileage accrued on their vehicles."

Residents raised additional questions regarding the use of a township engineer and if it would be possible to have an in-house engineer whose company would not have a financial stake in the jobs he or she would be recommending firms for.

"Can we hire an engineer who doesn't do the project he recommends?" Sockol asked.

"This town considered it years ago," Annecharico answered. "The numbers came in, and they decided not to hire anyone else at that time. But that would definitely separate the township engineer from other firms. In the case we are in now, you are asking someone who has a financial interest to be objective, and that is something that the Township Committee has struggled with over the years."

The next CILU meeting will take place Nov. 12 at 7:30 p.m. at the Senior/Community Center. The speaker will be Audubon naturalist Scott Barnes, who will speak about the birds of Holmdel and central New Jersey.