Budget Drama Unfolds in City Hall

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SOUTH AMBOY – The governing body is wrestling with a series of complexities in order to avert a property tax increase as homeowners struggle in these tough economic times.

Council President Fred Henry said the municipal spending plan was adversely put out of balance by the new governor, who took away state aid that previously offset higher taxes, and increased costs of public employee pension contributions.

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A reduction in state aid and increased pension contributions were largely to blame for a $911,000 shortfall, said Gary Higgins, the city auditor.
Higgins noted that state aid had declined from $4.3 million in 2009 to $3.8 million in 2010 and mandated pension costs virtually doubled in one year.

“The state continues to force local governments to fund the pension plan, and at the same time they skip their payments,” Higgins said.

“We have weathered some fiscal storms but this is like a tsunami,” said Henry. “While Gov. Christie is talking about cutting, he is actually making cities spend more while reducing the share of our property tax burden carried by the state and taking away rebates from middle-class workers and seniors.”

Among the cost saving measures used by city officials were consolidating services with other towns and streamlining operations but there’s only so much that can be wrung out of any organization before it becomes unable to function.

The Council President said he is not willing to sacrifice public safety while other options remain available.

Along those lines, officials are laboring to attract new development that would provide new sources of revenue.

Officials want to include an anticipated $800,000 in the city’s budget that would come from waterfront property the city’s redevelopment agency agreed to sell to O’Neill Properties Group, a development firm based in King of Prussia, Pa.

That revenue would lower the expected municipal tax increase for a home assessed at the city average of $266,000 from about $250 to $30.
After initially giving a green light to the proposed funding, the state Department of Community Affairs decided not to recognize the $800,000 in revenue for the 2010 budget.

Consequently, the City Council did not vote on an amended $15.49 million spending plan that called for $7,852,425 to be raised from property taxes.
Mayor John O’Leary said he is proud that council members are standing firm against state bureaucrats.

“There’s no valid reason why South Amboy homeowners should have to pay higher taxes this year,” said O’Leary. “After all the hard work done by President Fred Henry and the other City Council members and the enormous effort by our redevelopment team, this city overcame every obstacle set against us by the state,” said O’Leary.

O’Neill’s specialty is decontamination of toxic chemicals to clear the way to put damaged property back into use.

According to the company’s website, “O’Neill Properties Group, LP, founded in 1988 by J. Brian O’Neill, is a leading privately owned real estate development company specializing in identifying and acquiring abandoned or underutilized industrial sites, remediating and transforming them into high-quality, Class A commercial space or luxury multifamily live, work, and play communities.”


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