EGG HARBOR CITY — City Council held its 2013 budget hearing Thursday night, but won’t vote on adoption of the $5.7 million spending plan until after a May 8 hearing with the Local Finance Board.
The proposed 2013 budget is based on figures dependent on planned bond refinancing, said city Chief Financial Officer Jodi Kahn.
The city is applying to refinance a maximum of $5.5 million in water and sewer bonds from 2002, 2004, 2005 and 2008 into one bond issue. The refinancing would save more than $1 million in debt-service costs, and allow the city to pay off the bonds five years early — in 2043 instead of 2048, Kahn said.
As long as the refinancing is approved by the board, City Council will likely pass the budget during its May 9 meeting, Kahn said. If the refinancing is not approved, council will have to amend the budget May 9 and vote on it May 23, she said.
Under the budget as introduced, the municipal tax rate increases about 5 percent. Council members and city officials have blamed rising costs of pensions and health insurance for city workers, and increases in police salaries, for the increase.
The new rate jumps 8.9 cents to $1.80 per $100 assessed value. So the tax bill for municipal services alone will be $2,565 on the average home, which was assessed at about $142,500 in 2013, according to city Tax Assessor Bill Johnson.
City residents must also pay a local school tax rate of $1.29 per $100 assessed value; Egg Harbor City’s share of the Greater Egg Harbor School District tax rate of $0.543; and a county tax rate of $0.34. So the total new tax rate for city residents is $3.97, which amounts to $5,657 for that average home.
Kahn said when the budget was introduced that revenues are down $93,000, even though the city had $400,000 in land sales this year. She warned that when the land sales slow or stop, “There's going to be quite a large hole in the budget.”
In addition to police and insurance costs, the increase in spending is driven by a required extra principal payment on debt this year, she said. Each penny of the tax rate equals $22,500, Kahn said. So 5 cents of the increase goes toward rising appropriations, and 4 cents makes up for falling revenue, she said.
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