Ne­wark pro­poses tax, fee in­creases

Newark Post - - FRONT PAGE - By JOSH SHAN­NON jshan­non@ches­pub.com

Ne­wark of­fi­cials are propos­ing a 4 per­cent tax hike in 2019, as well as in­creases to wa­ter and sewer rates and the stormwa­ter fee.

If ap­proved by city coun­cil, the in­creases would cause the aver­age res­i­dent to pay a com­bined $69 more per year.

The pro­posed in­creases were an­nounced last week when Act­ing City Man­ager Tom Cole­man and Fi­nance Direc­tor David Del Grande un­veiled their $94.6 mil­lion bud­get pro­posal.

“Ex­penses have been grow­ing at lev­els ex­ceed­ing in­fla­tion, and rev­enue over the years has not been keep­ing pace with ex­pen­di­ture growth,” Del Grande said.

Un­der the pro­posal, taxes would in­crease 4 per­cent, the wa­ter rate would in­crease 4.5 per­cent, the sewer rate would in­crease 3.8 per­cent and the stormwa­ter rate would in­crease 20 per­cent. The elec­tric rate would re­main un­changed.

Some of the in­creases were ex­pected fol­low­ing the pas­sage of the $27.6 mil­lion ref­er­en­dum in June. The city will use loans and bonds to pay for the Rod­ney stormwa­ter pond/park and other large projects, and then in­crease taxes and fees over the next sev­eral years to pay off that debt.

How­ever, only a quar­ter of the in­creases be­ing pro­posed for 2019 are di­rectly at­trib­ut­able to the ref­er­en­dum, Del Grande said. Much of the ref­er­en­dum im­pact is to the stormwa­ter fee, which will be used to pay the debt ser­vice on the Rod­ney project.

The rest of the in­creases are nec­es­sary due to ris­ing oper­at­ing ex­penses, in­clud­ing per­son­nel costs, which will go up 5.1 per­cent – $1.6 mil­lion – due to pre­vi­ously ap­proved union con­tracts and an in­crease in health­care costs, Del Grande said.

Of­fi­cials are propos­ing adding one po­si­tion, bring­ing the city’s to­tal num­ber of em­ploy­ees to 250. The added city plan­ner po­si­tion is needed to deal with an in­crease in de­vel­op­ment projects and plan­ning com­mis­sion ini­tia­tives, Cole­man said.

Del Grande ar­gued the city has cut as much out of the bud­get as pos­si­ble.

“There’s re­ally no fat in the bud­get,” he said. “All of our de­part­ments are run­ning as lean as they pos­si­bly can.”

Mean­while, the city’s 3-per­cent tax on ho­tels, which was ap­proved Mon­day night, will bring in $675,000. The lodg­ing tax elim­i­nates the need for an ad­di­tional 10 per­cent tax hike, Del Grande said.

City coun­cil will hold a pub­lic hear­ing on the bud­get Nov. 5, with a vote likely to come in early De­cem­ber.

The bud­get could change, though, as coun­cil weighs a num­ber of other pro­pos­als and ques­tions.

A ma­jor de­ci­sion – “the big bear in the room,” as Coun­cil­man Jerry Clifton phrased it – is how to fund the suc­ces­sor to the Down­town Ne­wark Part­ner­ship. Coun­cil ap­proved the new non­profit or­ga­ni­za­tion last month and com­mit­ted to con­tribut­ing fund­ing but did not de­cide on an amount.

The group is ask­ing for $150,000, but there is no money al­lot­ted for the group in the cur­rent bud­get pro­posal. The DNP has $84,000 in re­serves that can be trans­ferred to the new or­ga­ni­za­tion, but the city would have to find a way to come up with the rest of the money.

“If we want to avoid ad­di­tional rate in­creases, we’ll have to trim some­thing in the bud­get,” Cole­man said.

Mayor Polly Sierer, who is lead­ing the ef­fort to create the new group along with the Univer­sity of Delaware’s Dan Rich, said the city needs to find the money.

“Bot­tom line is I want to see the money in the bud­get,” Sierer said. “I want you to find a way to put it in there.”

Coun­cil­woman Jen Wal­lace, how­ever, was adamant she wouldn’t sup­port a tax in­crease to fund the DNP suc­ces­sor.

“I don’t want to see a tax in­crease to pay for that, quite bluntly,” Wal­lace said. “I know my res­i­dents are not go­ing to like that.”

Clifton sug­gested the city con­sider giv­ing man­age­ment em­ploy­ees a cost-of-liv­ing ad­just­ment. Man­age­ment em­ploy­ees typ­i­cally get a yearly 4-per­cent step in­crease un­til they reach the max­i­mum salary in their pay grade, but the bud­get pro­vides no ad­di­tional in­creases this year.

Clifton – who just last year ad­vo­cated lay­ing off sev­eral man­age­ment em­ploy­ees – said pro­vid­ing a cost-of-liv­ing ad­just­ment could aid em­ployee re­ten­tion.

“To me, it’s cheaper to pay a COLA than go through the hir­ing process, bring some­one in with no in­sti­tu­tional knowl­edge and re­peat the process three or four years later,” he said, not­ing that many city em­ploy­ees earn less than what they could in the pri­vate sec­tor.

Mayor Polly Sierer pro­posed adding money to the bud­get for a study to look at whether Ne­wark needs more po­lice of­fi­cers, a study that would cost be­tween $50,000 and $75,000.

Sierer noted the last study was done in 1987.

“Our city has grown sig­nif­i­cantly since then and in a va­ri­ety of ways. It is go­ing to con­tinue to grow,” she said.

Mean­while, coun­cil is also con­sid­er­ing a num­ber of op­tions to cut costs or in­crease rev­enue.

One pro­posal looks to re­coup some of the fees the city pays when cus­tomers pay bills us­ing a credit card. Credit card com­pa­nies take a small per­cent­age of the amount paid, which costs the city ap­prox­i­mately $1 mil­lion per year, Del Grande said.

Of that, $300,000 comes from park­ing fees paid with a credit card, and the rest comes from util­ity bills and other pay­ments. The city’s largest util­ity cus­tomer, UD, ac­counts for $400,000 in credit card fees.

In the past, coun­cil has been he­si­tant to charge cus­tomers a fee to use a credit card, but Cole­man sug­gested the city could im­ple­ment a ser­vice charge on large credit card pay­ments, which would re­coup some of the costs but also avoid af­fect­ing typ­i­cal res­i­dents.

“That wouldn’t be unique to Ne­wark,” he said. “I don’t think you can pay your tu­ition at UD with a credit card with­out pay­ing a ser­vice charge.”

An­other pro­posal is to reconsider the park­ing val­i­da­tion sys­tem, which costs the city $100,000 in lost park­ing rev­enue each year. When a busi­ness gives a cus­tomer a park­ing voucher, the busi­ness pays half the cost, with the city writ­ing off the other half.

Coun­cil­man Chris Hamil­ton said he re­cently went to a Main Street cof­fee shop, bought a $2 iced tea and was handed $3 in park­ing vouch­ers.

“They tossed them out like candy,” he said, adding that he’s heard some stu­dents trade park­ing vouch­ers like cur­rency. “I got paid to park in our lot. I find that pro­gram in­ter­est­ing.”

Sev­eral coun­cil mem­bers said the city should re-ex­am­ine a pro­posal to raise park­ing rates, which was re­jected ear­lier this year af­ter op­po­si­tion from busi­ness own­ers.

“We’re look­ing at ris­ing ex­penses, and yet we haven’t raised our park­ing rates since, I think, the Model T,” Hamil­ton said. “I’m a lit­tle he­si­tant as a coun­cilper­son to start ap­prov­ing tax in­creases and start ap­prov­ing all these other rev­enue streams that come on our res­i­dents when we’re leav­ing money not col­lected.”

Since 2015, the city has wres­tled with how to in­crease its con­tri­bu­tion to Aetna Hose, Hook and Lad­der Com­pany, which faces bud­get is­sues and has asked Ne­wark for more sup­port. Del Grande’s lat­est sug­ges­tion is a pub­lic safety fee on build­ing per­mits. That money could be split be­tween Aetna and the Ne­wark Po­lice Depart­ment, he said.

The city is also con­sid­er­ing charg­ing for bulk trash pickup – ex­tra pick­ups for large items like couches – which is cur­rently pro­vided for free.

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