City presents bud­get pro­posal

Tax hike un­likely, but stormwa­ter fee and other charges sought

Newark Post - - FRONT PAGE -

By JOSH SHAN­NON jshan­non@ches­pub.com

For the first time in sev­eral years, it ap­pears likely Ne­wark’s 2018 bud­get will in­clude no prop­erty tax hikes or in­creases in the wa­ter, sewer and elec­tric rates.

How­ever, res­i­dents could still face a num­ber of new fees and charges, most notably the long-dis­cussed monthly stormwa­ter fee, which for the av­er­age home­owner would be equiv­a­lent to a 7 per­cent tax hike, of­fi­cials said this week.

On Mon­day, res­i­dents and city coun­cil mem­bers got their first look at the bud­get pro­posed by city ad­min­is­tra­tors. The pro­posal may change based on coun­cil feed­back be­fore it is ap­proved in Novem­ber or early De­cem­ber.

Un­der pres­sure from coun­cil to avoid a tax hike, city ad­min­is­tra­tors took a dif­fer­ent ap­proach than in past years when they pro­posed large tax in­creases and of­ten made cuts later in the process.

“We cut first,” Act­ing City Man­ager Tom Coleman said.

Coleman’s bud­get re­lies only on the stormwa­ter fee. He rec­om­mended a 2 per­cent tax in­crease to help off­set cost in­creases, re­duce the need to rely on util­ity trans­fers and keep up with in­fla­tion; how­ever, the bud­get is bal­anced with­out the tax hike.

On Mon­day, the ma­jor­ity of coun­cil mem­bers re­fused or were hes­i­tant to sup­port a tax hike.

“I will not vote for a tax in­crease, pe­riod,” Coun­cil­man Jerry Clifton said. “The city has been ham­mered over the last three years.”

Taxes have in­creased nearly 20 per­cent since 2010. An ad­di­tional 9 per­cent hike was pro­posed last fall, but was dropped af­ter coun­cil balked.

Even Mayor Polly Sierer, who last year stated her be­lief that yearly tax in­creases are nec­es­sary to main­tain the city’s high level of ser­vices, said she won’t sup­port a tax hike this year.

“These other in­creases you’ve pro­posed are more im­por­tant, more crit­i­cal and more fair,” Sierer told Coleman.

The stormwa­ter fee, which has been dis­cussed for more than two years, is fi­nally set for a vote this com­ing Mon­day. If ap­proved, res­i­dents will pay be­tween $1.77 and $5.31 each month — based on the amount of im­per­vi­ous sur­face on their prop­erty — to fund the city’s stormwa­ter op­er­a­tions and fix ag­ing in­fra­struc­ture. Large com­mer­cial prop­erty own­ers will pay even more.

Coleman said the stormwa­ter fee is more eq­ui­table than fund­ing stormwa­ter im­prove­ments through a tax in­crease, be­cause even tax-ex­empt prop­er­ties — i.e. the Univer­sity of Delaware — will pay the fee.

Coleman also pro­posed monthly ser­vice fees of $1 each on wa­ter, sewer and elec­tric bills as a way to re­coup some of the fixed costs of pro­vid­ing the ser­vices.

“Tech­nol­ogy, the con­ser­va­tion of re­sources and ed­u­ca­tion has led to lower con­sump­tion by those we serve, re­sult­ing in the in­abil­ity to prop­erly re­cover the rev­enues nec­es­sary to meet our ex­penses,” Coleman wrote in his pro­posal. “In­fra­struc­ture needs to be there re­gard­less of us­age lev­els. Al­ter­na­tive en­ergy users still rely on the city’s grid.”

The fee on the elec­tric bill would be used to in­crease the city’s sub­ven­tion pay­ment to Aetna Hose, Hook and Lad­der Com­pany from $74,000 to $224,000. Aetna is a mostly vol­un­teer fire depart­ment and has seen its calls for ser­vice in­crease while its fund­ing has de­clined.

City of­fi­cials pro­posed a sim­i­lar fee to help Aetna two years ago, but coun­cil did not ap­prove it.

Another pro­posed change in­volves the way home­own­ers are charged for city garbage col­lec­tion. Coleman pro­poses adding a trash col­lec­tion fee onto the monthly util­ity bill, while de­creas­ing the tax rate pro­por­tion­ally.

The re­sult would be that home­own­ers with a high prop­erty as­sess­ment would end up pay­ing less over­all, while res­i­dents with a lower as­sess­ment would pay more. Coleman ex­plained that ap­prox­i­mately 20 per­cent of res­i­dents’ tax bills aren’t high enough to cover the $315 cost of garbage col­lec­tion, let alone the other city ser­vices res­i­dents re­ceive.

Of­fi­cials are also ex­plor­ing ways to get more money from UD, such as hav­ing the univer­sity as­sess a fee on all stu­dents to help cover their im­pact on city ser­vices. Another idea is charg­ing a $1 to $2 venue ser­vice fee on each ticket UD sells for its var­i­ous events.

Both pro­pos­als rely on UD’s ap­proval. Of­fi­cials said that un­der the As­sa­nis ad­min­is­tra­tion, UD has been more will­ing to chip in, but Sierer noted the per-student fee would be “an in­cred­i­bly hard sell” based on con­ver­sa­tions she has had with univer­sity ad­min­is­tra­tors.

The city is also weigh­ing charg­ing res­i­dents a small fee for pay­ing their util­ity bills via credit card, which costs the city money due to fees from credit card com­pa­nies.

One of the big­gest changes in Coleman’s bud­get pro­posal is the way it funds the cap­i­tal im­prove­ment plan, which in­cludes ex­pen­sive projects meant to serve the city for many years. Rather than pay­ing for the projects with cash in this year’s bud­get, the city would use bonds that could be paid off over a num­ber of years.

“We shouldn’t be us­ing to­day’s money to fund a 50-year project in one shot,” Fi­nance Direc­tor David Del Grande said.

The CIP is ap­prox­i­mately $13 mil­lion and un­der the pro­posal, $8.25 mil­lion would be fi­nanced through bonds, and $1.5 mil­lion would be funded with cur­rent rev­enue, with the rest cov­ered by grants and other ser­vices. Last year’s bud­get funded $4.1 mil­lion of the CIP with cur­rent rev­enue.

Do­ing so would re­quire tax­pay­ers to ap­prove a ref­er­en­dum au­tho­riz­ing the city to take on debt. The city is al­ready plan­ning a ref­er­en­dum on the Rod­ney stormwa­ter project next spring, and the CIP bonds likely would be placed as a sec­ond ques­tion on the same bal­lot.

The next bud­get hear­ing is set for 6 p.m. Nov. 6 at city hall.

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