West Deptford Trades $3.6M Surplus for Flat Budget

At its last regularly scheduled meeting, the West Deptford township committee adjourned discussion of a flat-increase budget powered by surplus spending for 2013.

Yet the same body convened a special session Tuesday night to amend the budget resolution it will send for state review to do just that, against the stated caution of its financial advisers, auditors and township administrator Eric Campo.

The amended budget resolution, proposed by Committeeman Sam Cianfarini and approved 3-2 along party lines, relies on $3.6 million in surplus spending to achieve the one-year, zero-tax increase. 

It also cuts $800,000 in funds allocated for services like waste disposal ($150,000), snow removal ($100,000), waste collection ($75,000), road improvements ($70,000) and leaf collection ($60,000).

"It might be a nice break for taxpayers this year, but it’s a big problem for next year," Campo said during the meeting.

"To decrease those expenses does not allow for a problem that comes up," he said. "When there’s a snowstorm, we lose two transmissions [on public works vehicles]. "We always are losing a truck body part. 

"Last year we had a very good year," Campo said. "But I cannot guarantee that that’s going to occur again."

'You don't seem to be thinking outside this one year'

Committeewoman Denice DiCarlo was critical of the proposal for its potential impact in subsequent budget years as well as on the municipal bond rating of West Depftord.

"I’ve reached out to our financial consultant, who says he’s not 100 percent comfortable," she said. "I’ve reached out to our financial advisers, who said that dipping into our surplus could have an effect on our rating with S&P.

“It’s scary because you don’t seem to be thinking outside this one year,” DiCarlo said to Cianfarini.

“I’m trying to bring essential services and every other portion in line with what we actually spent last year,” Cianfarini said during the public comment portion of the meeting.

“We have not cut any essential personnel," he said. "We have not cut any services for the people of this town. We have just cut fat.”

Cianfarini also countered that other, larger, nearby communities, like Washington Township, are carrying far less than the $722,000 surplus with which his budget proposal would leave the township.

When Campo voiced his objections to the proposal, Cianfarini pointed out that West Deptford had allowed its own surplus to dwindle in prior years.

"What did you do in 2008 when you had $15,000?" he asked Campo.

“Develop a plan to never be back there again,” Campo said.

Public hearing to follow

After casting his vote in favor of the budget resolution, Deputy Mayor Sean Kilpatrick reminded the audience that "there's no final adoption of anything at this point.

“What this really is, is we have a recommendation as a board and seeing then what the state would say about it," Kilpatrick said.

Procedurally, the passage of the resolution sets up some discussion about individual line items at the next two upcoming township committee meetings, which are slated for July 11 and 18.

In fact, given those back-to-back meeting weeks—the next regularly scheduled session would have fallen on July 4, a township holiday—Campo couldn't discern why the special session had been called.

"I’m not aware of what the time sensitivity was," Campo said. 

"However, I think given the amount [of surplus money] in question and the amount of information that needed to be shared with everybody, perhaps this would best not have been done while several people were away, and during the holiday week."

Campo was on vacation last week; during the meeting, DiCarlo said that one of the township financial advisers is currently on vacation, and had been difficult to reach on short notice.

In terms of the municipal bond rating, Campo pointed out that West Deptford had "worked very hard" to build its surplus and get a "stable" bond rating from Standard and Poor's. 

Five or six years ago, Campo said, when he started the job, West Deptford "had very, very little surplus.

"One of the key goals of mine was to make sure that we returned the key reserves to a structural position that was favorable to the town’s operating budget," he said.

He referenced the 2010 S&P summary statement that mentioned the township's "return to structural balance and management’s continued efforts to replenish the township’s reserves" as a key factor in achieving its A- rating. 

"The rating agencies have tightened their belts when it comes to issuing credit ratings," Campo said after the meeting. "One of the first things they’ll think of is the fund balance."

In addition to the surplus spending, Campo was also critical of the $800,000 in services-related cuts proposed by the amended budget resolution the committee approved Tuesday.

"No parts of these would I support as reasonable cuts," he said. "The benefit, I believe, does not outweigh that risk. 

"Somebody may be very happy to get a break this year," Campo said. "It’s going to cause significant increases in successive years. That’s what you want to spread out and mitigate."

The impact of the proposed cuts could also have an impact on how state auditors view the township's finances moving forward, Campo cautioned.

"If there are overexpenditures, those amounts will have to be raised as deferred charges, so it will tighten up the amount that the 2-percent cap amounts are applied to you in future years’ budgets.

"To use a one-time gimmick…and leaving us exposed to potential overexpenditures I don’t think is worth that effort," he said.