2015 Municipal Budget Overview

Borough of Montvale

April 14, 2015

Key Questions What are the sources of revenue that the Borough

expects in 2015? What are the Borough’s key expenses and

significant expenditures in 2015? How will this affect our municipal tax rate? What is the current financial state of the Borough? What challenges do we face, and what is our

strategy to build upon Montvale’s strong financial footing?

2015 Budget Summary

Revenues

Budget Year

(2015)

Proposed

Prior

Year (2014)

Adopted

Change Percent

Surplus Anticipated (Utilized) 4,750,000

2,800,000

1,950,000

69.64%

Local 486,450 478,450 8,000 1.67%

State Aid 1,262,378 1,262,378 0 0%

Construction Code 210,000 225,000 <15,000> <6.67>%

Interlocal Agreements 166,427 166,381 46 0.03%

Public & Private Revenue 685,600 18,577 667,023 3590.59%

Special Items 329,305 300,744 28,561 9.50%

Delinquent Tax 210,000 215,000 <5,000> <2.33>%

Municipal Tax 11,839,107

11,499,918

339,189 2.95%

TOTALS 19,939,267 16,966,448 2,972,819 17.52%

2015 Budget Summary Appropriations

Budget Year (2015)

Proposed

Prior Year

(2014)

AdoptedChange Percent

Salary and Wages 4,445,012 4,245,485 199,527 4.70%

Deferred Charges & Statutory Expenditures

992,956 952,199 40,757

4.28%

Other Appropriations

7,931,257 7,640,232 291,025 3.81%

Debt Service 1,824,105 1,823,305 800 .04%

Capital Improvements

3,166,958 786,100 2,380,858 302.87%

Reserve for Uncollected Taxes

1,578,979 1,519,127 59,852 3.94%

TOTALS 19,939,267 16,966,448 2,972,819 17.52%

Significant Expenditures

Road Resurfacing Fire Engine Replacement Sewer Line Project at Pascack Brook Planning, Design, & Engineering Costs for

replacement of Montvale Firehouse

While capital expenditures, the Borough is paying for these projects and items with current funds, not additional debt.

Property Tax Levies2015

(Projected)

2014 2013 2012

Municipal 11,839,107 11,499,918 11,181,960 10,767,930

Open Space 102,808 100,465 100,623 118,762

Regional School 12,196,368 11,841,134 11,270,846 10,919,352

Local School 15,523,031 15,070,904 14,645,752 14,217,867

County 5,449,701 5,290,972 4,960,331 4,961,331

Total Levy 45,111,015 43,803,393 42,159,512 40,985,242

2015 Projected Tax Levy

24.61%

1.63%

34.41%

27.04%

12.08%

0.23%Percent

Borough

Library

Local School

Regional School

County

Open Space

Tax Rate Comparison2015

(Projected)

2014 Change Percent

County .265 .264 .001 .38%

Regional School .593 .590 .003 .51%

Local School .755 .750 .005 .67%

Open Space .005 .005 0 0%

Library .036 .038 <.002> <5.26>%

Municipal .540 .534 .006 1.12%

Total Municipal

.576 .572 .004 .70%

Total 2.194 2.181 .013 .60%

The average assessed value of a residence is estimated at approximately $514,300.

The projected increase in the 2015 municipal portion of tax for an average residence is estimated at approximately $31.

Montvale Surplus Overview

Surplus plays two important roles for the town: 1) it serves as a cushion against the impact of negative financial events; and

2) it provides liquidity for cash flow.

Year Utilized in Budget Balance at Year End

2008 $2,325,000 $3,058,780

2009 $1,800,000 $2,190,087

2010 $1,800,000 $2,955,738

2011 $1,800,000 $3,672,643

2012 $1,800,000 $4,448,600

2013 $2,100,000 $5,686,888

2014 $2,800,000 $6,707,625

2015 (proposed) $4,750,000 $4,572,090

Municipal DebtYear Bonds Notes

Authorized But Not Issued

Total

2010 10,198,000

1,900.000

46,616

12,144,616

2011 12,663,000

0

1,528

12,644,528

2012 11,175,000 0

0

11,175,000

2013 9,685,000

0

0

9,685,000

2014 8,155,000

0

0

8,155,000

Debt Service: Current Schedule

Combined Existing Outstanding DebtYear Principal Interest Total At End of Year

2015 $ 1,575,000 $ 249,100 $ 1,824,100 $ 6,580,0002016 1,595,000 200,950 1,795,950 4,985,0002017 1,630,000 152,450 1,782,450 3,355,0002018 1,625,000 105,900 1,730,900 1,730,0002019 875,000 47,563 922,563 855,0002020 425,000 21,375 446,375 430,0002021 430,000 10,750 440,750 0

Municipal Debt

The Borough’s bond rating is a AAA with a stable outlook.

The following factors (among others) were considered

in determining the rating:

- Surplus and the ability to replenish

- Outstanding debt and the ability to pay

- Tax Base

- Strong financial management practices and a stable financial position

Surplus vs. Municipal Debt

If Montvale has a significant Surplus, why don’t we just pay off our Municipal Debt?•Our current debt is at advantageous rates that might be difficult to replicate in the future•We are careful about economic changes that may place a call on our surplus•In a sense, we are holding down additional debt by paying for capital items with surplus this year•Also: the “fairness” issue…

Long-term Investments: Who Should Pay?

For major projects that will serve Montvale for 50+ years, like the new firehouse, financing a large part of it through debt shares the financial burden of paying for it between today’s taxpayers and future Montvale residents.

Challenges Ahead

Upcoming Infrastructure Investments– Firehouse Replacement

– Road Maintenance; Aging Sanitary Sewer System

– Fieldstone Turf Replacement

Changing Corporate Real Estate Environment– Are Large Corporate HQs Going to Continue?

– Will Tax Appeals Increase in Frequency and Size?

Employee Pension and Health Benefit Liabilities– Much of this Driven by Trenton & Overall Economy

– Continue Offering Services While Managing Salaries and Benefits

Strategies: Infrastructure

Firehouse Replacement– Explore financing that dovetails with paydown of

existing Borough debt

– Timing: Spring, 2016

Road Program– Develop a multi-year schedule and treat as a regular

line in operating budget

Fieldstone Turf Replacement/Sanitary Sewers– Projects require study

– Pursue Grants when Available

Strategies: Corporate Real Estate

Evaluate Current Zoning– Review Master Plan

Continue Outreach to New Corporate Tenants– Expand Scope to Nontraditional Tenants

– Target Entities with Strong Ties to Specific Location Infrastructure

Establish Increased Reserve for Tax Appeals

Strategies: Salary & Benefit Costs

Manage Health Costs; Explore Alternative Plan Designs– Reduced Costs by Approximately 8.2% in 2014

Achieve Greater Efficiency though Continued Successful Shared Services– Realized Savings of Over $300,000 in 2014 through

Pascack Valley DPW

– Consolidated Municipal Court continues to produce savings

Continue to Pursue Flexible Employment Approach in Administration, etc.

Questions?

APPENDIX & EXHIBITS

Grants Received

Clean Communities– 2012                       $13,601.29– 2013                       $15,976.00– 2014                       $14,984.21

Recycling Tonnage Grant– 2012 $6,892.00– 2013                       $12,143.68– 2014                       $10,627.30

Medical Benefits Comparison of Health Insurance Costs

for 2014 and 2013

Difference

Actual Cost Increase

Group Insurance 2014 2013 (Decrease)

Medical 631,079 690,014 (58,935)

Prescription 217,357 229,447 (12,090)

Dental 43,312 52,100 (8,788)

Total 891,748 971,561 (79,813)

% Decrease 8.20%

SHARED SERVICE ANALYSISBUDGET BUDGET (INCREASE)/2013 2014 DECREASE

ROAD REPAIRS AND MAINTENANCE: SALARIES AND WAGES $599,735 $0 $599,735 OTHER EXPENSES $306,525 $10,000 $296,525

PUBLIC BUILDINGS AND GROUNDS: SALARIES AND WAGES $101,426 $25,000 $76,426 OTHER EXPENSES $121,567 $40,000 $81,567

SEWER SYSTEM: OTHER EXPENSES $60,000 $10,000 $50,000

RECYCLING: SALARIES AND WAGES $8,550 $0 $8,550 OTHER EXPENSES $120,000 $5,000 $115,000

MAINTENANCE OF ALL VEHICLES: OTHER EXPENSES $123,000 $34,000 $89,000

OPEN SPACE: SALARIES AND WAGES $31,000 $0 $31,000 OTHER EXPENSES $23,899 $0 $23,899

OTHER EXPENSES - OTHER: FICA $56,664 $1,913 $54,752 WORKERS COMPENSATION $33,399 $1,051 $32,348 PENSION $70,377 $2,730 $67,647 HEALTH $217,104 $0 $217,104 VISION $4,500 $0 $4,500 LIFE $535 $0 $535

CAPITAL IMPROVEMENTS $60,000 $0 $60,000

SHARED SERVICE AGREEMENT: RIVERVALE $0 $1,503,000 ($1,503,000)

 $1,938,281 $1,632,694 $305,587

BOROUGH OF MONTVALECURRENT FUND

ANALYSIS OF REVENUES AND EXPENDITURES

2011-2016

2011 2012 2013 2014 2015 2016AUDITED AUDITED AUDITED UNAUDITED PROPOSED/PROJECTED PROJECTED

REVENUES

SURPLUS $1,800,000 $1,800,000 $2,100,000 $2,800,000 $4,750,000 $2,750,000 LOCAL REVENUES $535,317 $531,209 $569,432 $584,621 $550,250 $486,450 STATE AID $1,262,378 $1,262,378 $1,262,378 $1,262,378 $1,262,378 $1,262,378 UNIFORM CONSTRUCTION $404,853 $376,931 $310,703 $235,186 $225,000 $210,000 INTERLOCAL SERVICE $81,165 $156,071 $150,321 $157,538 $155,000 $167,710 PUBLIC AND PRIVATE $47,322 $379,888 $194,189 $271,394 $685,600 $0 OTHER SPECIAL ITEMS $359,545 $433,126 $444,506 $368,976 $386,397 $320,000 DELINQUENT TAX $289,677 $247,685 $587,019 $364,103 $250,000 $210,000 AMOUNT TO BE RAISED $11,632,913 0.444 $11,593,201 0.453 $12,310,558 0.555 $13,700,747 0.572 $12,939,107 0.576 $12,243,938 0.596 EXCESS REVENUES $1,250,000 MRNA $623,008 $593,843 $782,510 $537,452 $500,000 $500,000 RESERVES LAPSED $518,774 $808,966 $797,608 $743,307 $850,000 $750,000 OTHER $4,005 $9,945 $10,415 $26,401

$17,558,957 $18,193,243 $19,519,639 $21,052,105 $22,553,732 $20,150,476

EXPENDITURES

OPERATIONS: SALARIES $4,204,649 $4,460,047 $4,734,276 $4,245,485 $4,445,012 $4,533,200 OTHER EXPENSE $6,465,775 $7,038,105 $6,532,074 $5,804,571 $6,057,830 $6,168,729 INTERLOCAL SERVICE $330,219 $1,850,881 $1,873,427 $1,922,710 CAPITAL $25,000 $25,000 $350,000 $1,023,698 $3,166,958 $560,000 DEBT SERVICE $1,855,175 $1,820,788 $1,825,290 $1,823,305 $1,824,105 $1,795,955 DEFEERED/STATUTORY $1,090,674 $943,978 $918,864 $952,199 $992,956 $1,042,000 RESERVE FOR UNCOLLECTED $1,399,648 $1,435,562 $1,479,943 $1,519,127 $1,578,979 $1,627,882 OTHER $1,131 $3,806 $10,685 $12,102

$15,042,052 $15,727,286 $16,181,351 $17,231,368 $19,939,267 $17,650,476

$2,516,905 $2,465,957 $3,338,288 $3,820,737 $2,614,465 $2,500,000

ADJUSTMENTS $110,000

$2,516,905 $2,575,957 $3,338,288 $3,820,737 $2,614,465 $2,500,000SURPLUS 1/1 $2,955,738 $3,672,643 $4,448,600 $5,686,888 $6,707,625 $4,572,090

$5,472,643 $6,248,600 $7,786,888 $9,507,625 $9,322,090 $7,072,090SURPLUS ANTICIPATED $1,800,000 $1,800,000 $2,100,000 $2,800,000 $4,750,000 $2,750,000

SURPLUS 12/31 $3,672,643 $4,448,600 $5,686,888 $6,707,625 $4,572,090 $4,322,090

BOROUGH OF MONTVALEANALYSIS OF BUDGET REVENUES

FIVE YEAR

CUMULATIVEINCREASE/ INCREASE/ INCREASE/ INCREASE/ INCREASE/<DECREASE> <DECREASE> <DECREASE> PROPOSED <DECREASE> <DECREASE>

CATEGORY 2011 2012 PERCENT 2012 2013 PERCENT 2013 2014 PERCENT 2014 2015 PERCENT PERCENT

SURPLUS 1,800,000 1,800,000 0 1,800,000 2,100,000 300,000 2,100,000 2,800,000 700,000 2,800,000 4,750,000 1,950,000 2,950,0000.00% 16.67% 33.33% 69.64% 163.89%

LOCAL REVENUE 469,500 467,100 (2,400) 467,100 468,450 1,350 468,450 478,450 10,000 478,450 486,450 8,000 16,950-0.51% 0.29% 2.13% 1.67% 3.61%

STATE AID 1,262,378 1,262,378 0 1,262,378 1,262,378 0 1,262,378 1,262,378 0 1,262,378 1,262,378 0 00.00% 0.00% 0.00% 0.00% 0.00%

UNIFORM CONSTRUCTION CODE 225,000 225,000 0 225,000 225,000 0 225,000 225,000 0 225,000 210,000 (15,000) (15,000)0.00% 0.00% 0.00% -6.67% -6.67%

INTERLOCAL SERVICE AGREEMENTS 134,375 161,606 27,231 161,606 156,719 (4,887) 156,719 166,381 9,662 166,381 166,427 46 32,0520.00% 0.00% 0.00% 0.03% 100.00%

PUBLIC AND PRIVATE (GRANTS) 29,069 28,992 (77) 28,992 24,359 (4,633) 24,359 18,577 (5,782) 18,577 685,600 667,023 656,531-0.26% -15.98% -23.74% 3590.59% 2258.53%

OTHER SPECIAL ITEMS 288,422 366,155 77,733 366,155 376,970 10,815 376,970 300,744 (76,226) 300,744 329,305 28,561 40,88326.95% 2.95% -20.22% 9.50% 14.17%

DELINQUENT TAXES 250,000 205,000 (45,000) 205,000 205,000 0 205,000 215,000 10,000 215,000 210,000 (5,000) (40,000)-18.00% 0.00% 4.88% -2.33% -16.00%

AMOUNT TO BE RAISED 10,563,924 10,767,930 204,006 10,767,930 11,181,960 414,030 11,181,960 11,499,918 317,958 11,499,918 11,839,107 339,189 1,275,1831.93% 3.85% 2.84% 2.95% 12.07%

15,022,668 15,284,161 15,284,161 16,000,836 16,000,836 16,966,448 16,966,448 19,939,267