Insurance Reimbursement Provides Residents Tax Relief
A budget amendment that passed on first reading Tuesday will offset the proposed increase in taxes on the average assessed home by 9 percent.
The borough's hard-won battle for reimbursement of its pool trailers will have a direct impact on residents' pocketbooks.
The insurance reimbursement received last month for the cost of demolishing, removing and replacing the damaged pool trailers with rental ones will reduce the proposed tax increase on the average assessed home by 9 percent -- from $121.75 to $110.63, borough manager Tom Metzler said.
On Tuesday, council unanimously approved a budget amendment on first reading that will formalize the change.
Deputy Mayor Ed Trawinski thanked the borough's financial administrators and insurance advisor who spent months arguing back and forth with the town's insurance carrier that the trailers should be reimbursed.
“We, as a council, know that you and our insurance advisor, Mr. [Frank] Covelli, worked very hard for us to get this claim and bring it in in time so we could pass that benefit of modest relief along to the taxpayers of Fair Lawn," Trawinski said to the borough manager Tuesday. "Thank you, thanks to the CFO and thanks to Mr. Covelli.”
In addition the $365,000 that went toward tax relief, chief financial officer Karen Palermo also appropriated $175,000 to buildings and ground, for the continued repair costs associated with last year's storms, and $48,000 to pay off the note she took out last year to pay for damages caused by the storms, in lieu of insurance and FEMA reimbursement.
The amended $46.4 million budget passed, 3-1, on first reading, with councilman Kurt Peluso voting in opposition. Councilwoman Lisa Swain was absent at Tuesday's meeting, but had previously expressed opposition to the budget when it was introduced. At the time, both said they believed it asked residents to shoulder too much of a tax increase.
“It wasn’t too long ago that I was out campaigning and the number one concern that I heard from all the residents in Fair Lawn was their taxes,” Swain said in May. “I’m not about to turn my back at them…the residents are not ready for this."
Metzler said that a tax increase this year and in future years is unavoidable given rising operational costs.
"I’m certain taxes will go up again next year because it’s going to cost more to run the borough next year than it did this year," he said. "But I think the ultimate goal is to address those deficits that you know are coming -- which we’ve done – and to minimize the increase by keeping government as lean as possible."
He said the argument that the borough should have tapped out its surplus to hold taxes flat this year is not legitimate.
"Once the surplus is gone we then would be into deficit spending," Metzler said. "We would be borrowing money to pay our quarterly bills or to transfer money to the board of education, we’d be taking tax anticipation notes. And that’s not good, that costs money."
This year the borough will take almost $2 million less from surplus than it did last year, when the Democrat-controlled council took nearly $5 million from surplus and capital surplus funds to hold taxes flat -- a move that current Republican members of council have called an election year gimmick.
"The way out of this is a stable surplus and that’s the goal that the CFO and I are on, and we’re going to continue on that goal," Metzler said.
Total reserves will be down to just over $2 million at the close of this fiscal year, but the generation of new revenues should replenish the declining surplus, or at least stabilize it going forward, Metzler said.