When Captain Billy Tyne of the fishing vessel Andrea Gail set out on a routine fishing trip from Gloucester, Massachusetts he had no idea of the weather problems that were developing into what eventually became the “perfect storm.”
As I embarked on the duties of mayor of Toms River on January 1 of 2008 (my first elected office), I too had no idea of the events that were developing into what could only be described as a municipal “perfect storm.” While my problems were not 60’ waves, the crisis was generated by a series of major events that all hit at the same time.
Prior to my election, the township had undergone a revaluation. As the revaluation was completed and the results were to be certified to the Ocean County Board of Taxation it became apparent that the real estate market had undergone an overall decrease in value. As a result, with the consent of the governing body and permission from the County Board of Taxation, a request was made to the revaluation company to go back and revise their valuations to reflect changes in the market. By the time that work was completed the following year the real estate market had plunged even further, but our request to the Ocean County Board of Taxation for a further one year extension was denied.
As a result, the values placed on the books as of October 1, 2008 generated a record number of tax appeals, beginning in 2009. There were over 4,000 residential appeals in 2009 alone and the appeals are still being filed. The situation was further aggravated because the tax rate and tax levy had been lowered the previous year.
At the same time, the contracts for the township’s eight collective bargaining units required mandated salary increases each year for the ensuring two years.
Even the weather conspired against us. Severe snow storms began in November of 2009 and continued through the winters of 2010 and 2011. This added costs for overtime, contractor’s fees and related expenses for snow removal to our “perfect” budget storm.
Then came a record setting decrease in state aid; Tom’s River saw a 24 percent aid drop and faced a reduction in our available surplus. A similar cut to the Toms River Schools District resulted in an increase in the reserve for uncollected taxes, which negatively impacted our budget further. At the same time the township was obligated to pay double-digit increases in health insurance and pension costs.
Finally, we had a record number of employees retire, especially police officers with a substantial amount of accumulated sick and vacation time. This all coincided with the implementation of the new 2 percent levy cap and the continuation of the appropriations cap limits.
Fortunately, the township developed a process to cope with our “perfect storm.” Unlike the ill-fated fishing vessel Andrea Gail, we have managed to stay afloat. How did we manage? We took some aggressive actions.
First, we assigned all the tax appeals to our in-house Township Attorney and an Assistant Business Administrator, rather than outsource the files. They were successful in negotiating settlements of a large number of tax appeals.
In dealing with the eight bargaining units, we were able to establish unpaid furlough days for three unions, and reach agreement to defer contract mandated pay raises for all eight units. We also implemented a hiring freeze and, as a result of attrition, 34 full-time positions were eliminated.
A new salary scale was established for newly-hired police and community service officers (EMTs).
To address healthcare costs Tom’s River transferred employees, with the cooperation of our bargaining units, from the Traditional Health Care Plan to a PPO Plan. The move provided substantial and immediate savings.
As a result of careful attention to a work schedule, overtime expenses were reduced by 1.5 million dollars in the each of the past two budget years. All department heads were required to reduce their “other expense line items” by over 10 percent.
Additionally, the township entered into shared service agreements for trash collection and recycling collection with Ocean County College and Toms River Schools, saving money for all parties. Also, by expanding our automatic, single-stream recycling program the number of personnel required on a recycle truck was reduced from two or three to one. It also made it possible to eliminate some overtime, particularly in the summer months. The increased volume of recycled material saved us money on landfill costs, while generating fees for our pro rata share of recycle material sold.
Finally, we increased certain fees to reduce the burden of programs on
tax revenues. As a result of all these measures, our 2011 budget was 1.2 million dollars under the levy cap and about 4 million dollars under the appropriation cap.
All the steps we took to weather our “perfect storm,” are going to be an ongoing process in order to comply with the 2 percent cap. We will continue to have ongoing discussions with our bargaining units because 50 percent of our budget is spent on salaries, wages, and employee benefits.
This process could not have been accomplished without the cooperation and support of the rank and file of all eight of our bargaining units. We are very proud of the fact that this cooperation resulted from the trust that was created between the administration and the leadership of all of our unions.
We created an atmosphere of transparency and opened all of our financial books for inspection by the unions. The union leadership was convinced of our sincerity and was very cooperative.
Our “perfect storm” has subsided, but has not gone away. As Mayor, I guess there is always the risk of a new “perfect storm,” but I am confident we can weather it.
Originally published in New Jersey
Municipalities, Volume 89, Number 5, May 2012