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Ridgewood Taxes Projected to Soar, 'Tiger Team' Says

Citizen financial group recommends the village act – and quickly – to avert major budget woes that it believes will force residents out of town.

If the village can't get its fiscal house in order, property taxes will soar to more than $25,000 for the average resident in less than a decade's time, a volunteer finance team commissioned by the mayor reported Wednesday night.

According to the finance group, known as "The Tiger Team," the genesis of the problem lies in the village's municipal budget. The municipal budget has increased 410 percent from $8.7 million to $44.5 million over the past three decades, Tiger Team member Bayard Demallie told the council.

"If we do nothing, the average property tax bill in Ridgewood is expected to increase 60 percent from $15,606 in 2011 to over $25,000 in nine years," Demallie said. "The largest drivers of the budget growth have increased 78 percent as a percent of the total budget in the last ten years and have accounted for almost 51 percent of the total budget in 2011."

The consequences could be dire unless "immediate and dramatic changes" are made, the report stressed.

"If the village council and village management fail to take bold steps, an increasing number of residents will no longer be able to afford to live in Ridgewood in the coming years," Demallie told the council. "The village, in our opinion, must start living within its means."

The Tiger Team's analysis did not include the school board's $90 million budget, which accounts for roughly 65 percent of the total tax bill.

Both local government boards are limited to increasing the tax levy to 2 percent thanks to laws that went into effect in 2011. There are, however, notable exceptions to the cap, like states of emergencies, pensions, health care, and debt service. Basically, the two percent is not an absolute.

Ridgewood's municipal budget rose 3.1 percent last year.

Disturbingly, said Demallie, the undisclosed three drivers (likely to be salaries, pensions and benefits) are "growing 11 percent faster than the overall budget and 143 percent faster than the rate of inflation over the last ten years. In nine years, three budget items alone are projected to be 20 percent greater than the entire 2011 budget."

Members of the team say the 50-page report contains 19 specific recommendations to potentially increase revenue and reduce costs.

The recommendations – by no means unanimous among the members of the group – don't necessarily align with the fiscal mantra espoused by the mayor or deputy mayor, nor the recent course of making tough personnel decisions.

"We don't think that widespread layoffs are an acceptable or long-term solution," Demallie said, hoping "more creative solutions" to reach long-term fiscal sustainability can be found.

The village laid off more than 30 employees in 2010 and acknowledged cutting too deep in 2011, hiring several workers back.

In recent months, Mayor Paul Aronsohn and Deputy Mayor Albert Pucciarelli have pressed management to craft a budget at a zero percent tax increase (acknowledging it may be higher when finally passed). Village Manager Ken Gabbert expressed hesitancy, telling the council that trimming millions is extremely difficult without forcing layoffs.

But the short-term road to zero isn't the solution, according to the Tiger Team.

"Our belief is that zero percent budget increases for a year or two would be an inadequate approach to address Ridgewood's financial sustainbility and quality of life," Demallie said.

As for the actual recommendations, the Tiger Team decline to elaborate on Wednesday night.

The only major sticking points noted by Demallie were the council creating an independent, resident-comprised fiscal oversight board by March 31, and the village developing a five-year fiscal strategy. Aronsohn favored those recommendations.

The report was not immediately made publicly available but is expected to be posted on the village website and will be on file at the Village Clerk's office.

Dan Schwalm January 15, 2013 at 01:57 PM
If you're looking for a great affordable place to go, NC is it! We just left Ridgewood in the Fall and bought a place that's twice as nice for half the price. Taxes went from $35k to $5k. Ridgewood or any town in NJ should not be providing a service that can be done by the private sector and trash collection is just one example.
Brian January 15, 2013 at 02:05 PM
Does the Tiger Team support building a larger tax base by investing in new apartments downtown? It would seem to me that given that the primary drivers are pension and benefits obligations which cannot be eliminated, the best solution is to increase the revenue pool instead of relying on more tax revenue from the homeowners.
Anne LaGrange Loving January 15, 2013 at 03:50 PM
Brian - We do not yet know what The Tiger Team supports. The report has not been made available to the public yet. Clearly they put a lot of work into it, so it should make for very interesting reading......once we get to see it!
Mike Kender January 15, 2013 at 07:07 PM
I'm glad that the group took the time to look at the projected budget numbers and the consequences for the taxpayers. Unfortunately, the ability of the current council to do anything about it is limited for the next few years, because the salaries and benefits for the police and fire departments, the two biggest cost centers in the municipal budget, were locked in for five years (with annual raises) in contracts that were signed off on by the last council. Some of the other departments are staffed so leanly that there is no fat left to cut. Unfortunately, the residents of RIdgewood are going to have to make some tough decisions. One possibility is evenually going to a volunteer fire department. Another is larger class sizes. A third option is combining police forces and/or other departments with HoHoKus, Midland Park, and/or Glen Rock. A fourth option is privatizing some of the municipal services, such as trash and/or water. With regards to the view that the proposed apartment buildings will help solve the budget problem, the anwers is "it depends". It depends upon how many school-age kids end up living in those apartments. Adding a lot of kids could add significant costs to the school budget, in excess of the additional tax revenues. The only way to make sure that such a scenario doesn't occur is to require that the new projects be for senior citizens only.
James Kleimann January 15, 2013 at 07:15 PM
Lots of good discussion here. The report wasn't available when I stopped by [Village Clerk] Heather Mailander's office yesterday but should be ready today for anyone who wants to ORPA the 50-page report. I'll read through it and report on the recommendations in the coming days.
Long Time Resident January 15, 2013 at 07:35 PM
Boyd, maybe you can tell me why you post anonymously on the Ridgewood Blog when you post there?
James Bombace January 15, 2013 at 08:05 PM
Any serious effort to control the property taxes in town must encompass municipal and school tax revenues. Looking at the property tax increases between 1994 and 2012 the overall percentage increase for the municipal side is 56.82% while the school tax increased by 69.88% for a difference of 13.06%. A quick examination of the typical property tax bill will show that the school tax is 64.50% of the total bill and the municipal services is 23.2% of the bill. The remaining 12.3% pays for the County tax, County Open Space Tax, Library Tax and Municipal Open Space Tax. After looking at these statistics it's clear that trying to make a serious impact in property tax reduction by only dealing with the Municipal part of the tax, which is only 23.2% of the overall bill, is not possible. This is not to say that the recommendations of this committed should not be done, but without a similar effort by the Board of Education, no substantial savings in property taxes will be achieved. Mr. Loving, I am in Florida now and yes the weather here is nice. Forget the Winnebago, you deserve one of these if you can afford it. http://outlawrv.com/
James Kleimann January 15, 2013 at 08:41 PM
Quick update: I filed an official OPRA request. I'm told it will be fulfilled within the seven day statute required by law. As I wrote above, I'll go into detail when I have my hands on the report.
Brian January 15, 2013 at 09:05 PM
Post it if you can. That would be great.
James Kleimann January 15, 2013 at 10:18 PM
Attention, everyone: I have posted a PDF of the full report. It's sure to generate lots of controversy. I wanted to make sure you all had the opportunity to read it as soon as it was made available. Not to sound like a broken record, but expect lots and lots of stories on the recommendations.
milly January 15, 2013 at 10:20 PM
Thanks James....You should run for Senate and maybe Hillary will be debriefed before she leaves office.....lying under oath as a Sec Of State...she would complete the duo for impeachment! Slick Willie and Hillary Rodham con them. Will make for good movie one day.
Anne LaGrange Loving January 16, 2013 at 01:59 AM
Wow, this report is certainly comprehensive - thank you for posting it James. A huge "thank you" to Mayor Aronsohn for initiating this, and to all the members of the Tiger Team for their detailed, professional report. It is really remarkable that this research and report were provided at no cost to the Village. Let's hope that the Village Council will be able to implement at least some, if not many, of these recommendations and get Ridgewood's budget back to a reasonable level. There will be some difficult discussions and decisions to be made, that is for sure. But clearly something must be done in order to bring our Village finances under control.
John Hahn January 16, 2013 at 03:37 AM
I like Boyd Loving's comments. He says what he feels. How do you know he has stress? If you speak honestly then you should have no stress. I applaud Mr. Loving for his honest assessment and willingness to post under his name and photo. I wish more took his lead. Anyone can post anything anonymously. When I see anonymous posts I discount them greatly. Keep it up Boyd A. Loving.
longtimer66 January 16, 2013 at 01:25 PM
Pls tell me where the link is to the PDF of this report - couldn't easily find it. Thx!
Cy Caine January 16, 2013 at 01:31 PM
Without commenting on the substance of the specific issues in this article, I want to John Hahn's comments about Boyd Loving. He expresses his views and doesn't hide behind the cloak of anonymity. And to suggest that someone with concerns or criticisms should pick up and move is a bit silly IMO.
Cy Caine January 16, 2013 at 01:32 PM
Without commenting on the substance of the specific issues in this article, I want to echo John Hahn's comments about Boyd Loving. He expresses his views and doesn't hide behind the cloak of anonymity. And to suggest that someone with concerns or criticisms should pick up and move is a bit silly IMO.
jp1 January 16, 2013 at 01:42 PM
Trash collection was done privately in the village many years ago by a company i believe was called Capasso and that turned out to be a disaster.
jp1 January 16, 2013 at 01:44 PM
Milly your comment brings nothing to this conversation.
James Kleimann January 16, 2013 at 04:12 PM
It's below the photo of Bayard DeMallie, under "PDFS" at the right of this article.
News Man January 16, 2013 at 04:36 PM
Click this LINK from my 1939 Underwood Typewriter, it should work (I hope) http://ridgewood.patch.com/articles/ridgewood-taxes-projected-to-soar-tiger-says#pdf-12972225 Whew.....
News Man January 16, 2013 at 04:44 PM
Perhaps, this will help; click here: http://ridgewood.patch.com/articles/ridgewood-taxes-projected-to-soar-tiger-team-says#pdf-12972225 (I hope)
longtimer66 January 16, 2013 at 05:53 PM
Thx James, appreciate it. Lots to read there.
longtimer66 January 16, 2013 at 06:21 PM
I spent about an hour just scanning through this and there seem many excellent points in it. Obviously much more time needs to be spend studying it. It's truly a major eye-opener and I hope everyone will read it. We need a group like this to also go through the BOE budget, too.
Mike Kender January 16, 2013 at 07:11 PM
It amazes me that the previous village council actually voted to approve the police and fire union contract terms that are included in the attached report. The weak economic times would have given them the perfect excuse to extract significant concessions. What were they thinking? Were they so focused on Valley that they didn't pay sufficient attention to the two biggest contracts in the municipal budget? These contracts seem to be very generous.
Mike Kender January 16, 2013 at 07:23 PM
Has there been any thought by the village council of freezing or at least limiting the property tax increases for senior citizens? It seems like we are in a tax spiral where taxes keep going up, seniors move out because they can no longer afford the taxes, they are replaced by families with children, which further overloads the schools, which means more school costs (more teachers, building expansions, etc.), which means that taxes go up further, which means more seniors move out to be replaced by families with kids, etc. How many seniors are going to stay in their current houses if taxes reach the $25,000 per house average that is outlined in the report? If you assume that a senior citizen's retirement funds earn 6% on average (which is aggressive in this environment), then they would have to set aside over $400,000 of their savings just to provide income for their property taxes. Or, they could watch $25,000 of their kids' inheritance disappear each year. Or, they could sell to a family with kids and move to a lower-tax state.
Chick Webb January 16, 2013 at 07:54 PM
Yes, the old larger tax base theory! You would think that this would fix the problem, but alas, just take a look at good old Hoboken. Massive development, massive Tax increases. There ya have it.
JAFO January 16, 2013 at 08:16 PM
There are some really simple, common sense, recommendations in this: Employees who work on Friday after Thanksgiving should not be entitled to overtime pay or holiday pay and should be compensated according to the employee's normal base pay rate. This is not a holiday and should not be treated as such. The maximum number of permitted paid sick days for any Village employee should be reduced from 15 to 7 days per calendar year, and unused sick days should NOT be accumulated beyond December 31st of the same calendar year During our conversations with Village management, we were informed that the Village has the ability to purchase vehicles under NJ state contract pricing. We were told that the discount is so significant that vehicles could be purchased and sold after two years of use for approximately the original purchase price. In effect, the Village could establish a two year replacement cycle that would allow the purchase of most vehicles at “no net expense” to the Village. We asked why this was not being done already and were not given any reason why this could not be done. Village employees who retire with 23-25 years of service are entitled to family health benefits, covered 100% by the taxpayer. When that employee dies, the spouse is still entitled to this benefit for the rest of their life, again 100% taxpayer funded. 40% of the Village health insurance premium goes to paying this expense.
Ron Valerio January 17, 2013 at 02:59 AM
Hi Dan, we did the same thing a few months ago. We moved to NC. There were several other factors but I still can't believe how low the taxes are for what you get! Taxes for a ~5,000 sq ft house in the more exclusive areas here are still only in the $6K range. Beaches are great and the weather is awesome. I saw it was 78deg today at Wilmington.
Kathleen February 04, 2013 at 04:56 AM
Tried to download a copy of the PDF. It appears to be blocked. Please provide a downloadable copy
James Kleimann February 04, 2013 at 05:22 AM
Your wish is my command. http://www.ridgewoodnj.net/main_recent.cfm?ArticleID=1128

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