Every municipality struggles with the same thing that we all do at our kitchen tables: looking at the money coming in and the stack of bills that precedes the money going out. Which things are most important, and which are luxuries we can do without when our resources are low?
We all have wants and needs, and everyone’s list is a little different. For our town, it is the same. There are fundamental things that are important basic services. These include public safety: things like policing, fire, and ambulance services. We want our roads to be free of potholes and our garbage picked up. In the winter, we want the ice and snow to be removed, and when storms hit, help in cleaning up the aftermath. We want our kids to be educated and have access to recreational activities to keep them out of trouble.
The other critical thing is anticipating needs for the future and planning for them. If we own a home, we need to anticipate maintenance: new roofs, replacing things that are no longer working, like heating and cooling systems. Defering maintenance can cost more in the long run, as things tend to snowball. An unrepaired roof can create water damage that adds to the total bill. If we own a vehicle, regular repairs can keep it in working order for much longer before it needs to be replaced, allowing us to put a bit aside each month in anticipation of that need. Our town is no different, except the price tag is bigger.
We have recently needed to purchase new fire trucks. The first one is here to the tune of over $600K. A pumper truck is next with a $1.5 million price tag. The first responders needed new radios to be compliant with the county, and those cost $600K and were purchased at the beginning of the year. Garbage trucks (two are on their last legs), ambulances, playground equipment, building maintenance, road work, the list is long and never-ending. Which takes priority and which takes a back seat for now?
As our town has become more complex and the budget has grown, it has become more important to have people who understand the complexities of the financial implications of their decisions in elected positions. We are fortunate to have a talented CFO on staff who helps taxpayers and council members alike to understand the finances. It is a daunting task, but one that happens in countless cities across our country.
Where the money goes
The 2024 municipal budget is about $30 million. You can find the user-friendly 2024 budget here.1 (I used the 2024 budget because it has year end numbers in it.) Of that, $10 million goes directly off the top to the schools. We have a high school, a middle school, and 3 elementary schools. About half of the remaining $20 million budget, $10 million, is for personnel in the borough. There were a total of 62 full-time positions and 24 part-time positions. Just for a little detail, in 2024, there were 35 full-time public safety/police officers with 4 part-time. There were 16 full-time public works personnel, 6 full-time general government employees, which include the Borough Clerk and Administrator, Tax Collector, Code enforcement, and Public Works director. We pay salary, benefits, and retirement for full-time staff in the borough.
Another chunk of the budget is for debt service. When the revenues don’t cover the expenses or there are unexpected expenses, we get loans to cover those costs. In 2024, our town paid about $2.6 million to service the debt we carry. Last year, the debt figure that we carried was $27 million.
We have had the sale of the sewers/water systems to American Water, which has added to the revenue side of the budget; the last payment of $1.7 million is this year. This will be some revenue that will need to be made up in some way if the budget for next year is similar to last year.
Benefit costs for all our employees will be rising 30% next year (last year they increased 17%), as was shared at a council meeting. That is an additional cost that will need to be covered in some way, either through more revenue or by reducing costs.
We will have costs of renovating the library; money has already been allocated to remediate the asbestos after a two-year wait, but a new estimate will need to be done for the ADA-compliant work. We are now in a period where tariffs and inflation will impact those costs, and it is over two years that it has been closed and unavailable to the people in Bound Brook.
Where the money comes from
On the revenue side, about 51% of the property taxes paid in the Borough go to fund the schools. About 34% of taxes go to the municipality, and 12% goes to the county. The remaining 3% goes to the county open space and the county library. There is also revenue from permits for construction and parking tickets. Every apartment that comes online in the city or changes tenants needs a certificate of occupancy (CO). Another revenue stream is from the new development in the town, sewer hookups, and inspections. We also get grants and money to help with road paving and other projects. As our federal government contracts, the reality is that many of these “extra” infusions of money may dry up.
Last year, our PILOT agreements (these are short-term tax incentives to get developers to do projects in riskier areas called Payments in Lieu of Taxes) and the taxes on the land that they sit on garnered almost $2 million for our city coffers. PILOT projects can only be done in areas that are designated in need of redevelopment. The taxes on PILOTs are in two parts: the land taxes continue to be paid at market rates, and the improvement part is an agreed-upon amount based on rentals for apartments that is paid for a certain period of time. These figures go through an audit process as well. When the timeframe of the PILOT is up, the taxes revert to the actual assessed value of the new building. To learn more about PILOTs, you can read an article I wrote to help people understand them better, either by clicking the link or the footnote.2
Not all of the development is under PILOT agreements. The new Allure apartments on Vosseller are not, and they will bring in $180,631 for this year, about what we pay our Chief of Police. Next year, the assessed total will probably be over $200,000. The Allure apartments are currently full; it took about 5 months for them to be completely rented. The apartments downtown are also close to being fully rented. New neighbors mean more revenue for our businesses in both of our commercial areas: both Main Street and Route 28. New Jersey is also in the middle of a housing crisis, which is why our apartments are filling up fast.
What is interesting is that people of a variety of ages are finding that apartment living is a good choice for them here in Bound Brook. There are folks in their 50s down to people in their 20s. Not everyone wants the burden of maintenance, and not everyone can afford a house. Some people are downsizing, some are working from home, and some are commuting using our transit facilities that are very convenient. People I have talked to love living in Bound Brook, as do I.
There are many opinions on development, but the impact on our budget is one we can’t discount. When you look at development, you need to look at what it brings in economic value to our city. Without it, we would be paying a whole lot more in taxes or having a whole lot less in services, or both.
How do you decide?
Budgets are hard. There are always competing interests. Different projects that people want and don’t want. Seniors don’t use the same things that our teens do, but both need to be represented in the budget as best we can. Things that you didn’t anticipate but suddenly need to be fixed or dealt with always seem to pop up. Just like when you are sitting at your kitchen table, you have to make choices and position yourself for the future by saving where you can and spending wisely.
https://boundbrook-nj.org/wp-content/uploads/2024/04/1804_UFA_2024.pdf
very informative. I am just wondering about all the empty retail space in the apartments on main street. What is the expectation that they will be filled soon?
Well sourced as always!