The matter has not yet gone before the City Council for a vote.
The city's initial proposed State Fiscal Year 2007 budget of $74.9 million, which was introduced in September of 2006, was awaiting the state's approval before it could become official, pending an anticipated payment of $3 million from the long-awaited sale of the Observer Highway Municipal Garage.
In order for the budget to be balanced, the $3 million would have to be received by June 30, which is the end of Hoboken's 2006-2007 fiscal year.
Now, according to Mayor David Roberts, approximately $2.7 million will be infused into the 2007 budget by way of a $1.5 million Payment in Lieu of Taxes (PILOT) by SJP Properties in connection with their potential development at Second and River streets, and approximately $1.2 million that will be deducted from the city's anticipated health coverage reserve fund due to a decrease in medical claims filed by city employees.
An added bonus to the latest budget change comes in the form of a slight property tax decrease of a quarter of one penny on the dollar, meaning if you're paying $4,000 in yearly municipal taxes on your condo, you will save $10.
The decrease will appear in the last quarter of the 2007 fiscal year, from April to June.
The modifications will remove the city's controversial potential sale of the garage to a private developer.
Financial practices improving
"We're running a tight ship in regards to budget law," said Roberts last week. He noted that the city is improving its budgeting practices. He said that this year, when auditors from Ernst and Young looked at the city's finances, they made only seven recommendations, as compared with 42 recommendations five years ago, in 2002.
"The city's taxes have been increased only 6.5 percent in the last six years since I've become mayor, our economic picture has never looked better, and next year, for the first time in [many years], a one-shot revenue source will not be required to balance the budget," said Roberts.
Although the revised budget gives the municipality a greater amount of time to decide upon a contract with a developer for the municipal garage, the mayor warned that the garage must be sold in the next two months for the sake of the city's financial standings.
Currently, the city rents the facility for approximately $80,000 per month from the brokerage firm, NW Financial, in order to use it.
The new cuts and additions
According to city Business Administrator Richard England, the $1.5 million PILOT provided by SJP Properties acts as an "exclusivity extension" for the developer, ensuring the company will retain the sole rights over the property through June 30, 2009. Right now, they only have rights through June of 2007.
Current plans for the site include the construction of a commercial/residential complex slightly north of the Wiley Publishing Building and south of where the proposed "W" Hotel is to be built.
The city's other influx of funds comes in the form of a $1.2 million reduction to the city's medical reserve, which had been appropriated for in the health line item in the budget. The reserve is an anticipated amount created by Horizon Blue Cross Blue Shield of New Jersey (HBCBSNJ), which provides health coverage for city employees. The total is based on the previous year's health costs and was reduced from $2,531,301 million to $1,334,862 million as a result of a decrease in medical claims filed by city employees last year.
According to England, if the provider's estimates turn out to be incorrect and the health bills for 2007 are above $1.33 million, the city will be billed at a future date for the difference.
The slight decrease in property taxes for Hoboken residents next quarter is being made possible through an increase in revenue sources caused by a greater number of taxpaying residents, according to England.
In this year's budget, the city anticipates an increase of 18.9 percent in total general revenues, from approximately $24.4 million to $28.9 million.
Budget background and the garage saga
Why doesn't the city want to use potential funds from the sale of the garage?
Because no one knows when the garage would be sold.
After having used using anticipated garage funds to plug budget gaps in the previous two budgets, which has resulted in approximately $13.85 million in debt to NW Financial that technically owns the property, the City Council rejected a series of bids from developers last month, forcing the city to release another "Request for Proposals" (RFP) in order to get more bids for the site.
The controversy surrounding the garage is centered around a height dispute over the future residential complex that will be situated on the site. Residents, represented by the Observer Highway Advisory Committee, teamed up with several council people to argue against the administration's endorsement of an ordinance that would have allowed an increase from nine to 12 stories. As of now, it is not clear whether the new RFP will include options for a 12-story building.
If the resolution had passed, then almost two years of work by the committee, architects, and city planners who agreed to a nine-story, 240-unit proposal would have been negated.
Michael Mullins can be reached at email@example.com