| Author | Message | ||
     Brian O'Leary Citizen Username: Brianoleary Post Number: 1274 Registered: 3-2002 |
I'm sorry that I have been away for a couple of days. Both my youngest and I have had alternating bouts of some intestinal malady that will not be described here. One of the primary reasons that the South Orange tax rate has continued to increase is the failure to do what the Atlantic Group report recommended: add ratables. Since 1993, assessed valuations in town have declined by more than $57 million dollars (almost 6%). If they had increased at 3% a year, the tax rate for the Village would have declined, even with the same spending. The second reason that taxes have increased is a shift in revenue away from schools and toward developers. As outlined here and elsewhere, the Village agreed to a tax payment of $500K (all to the Village) on a PILOTed property that would have increased assessed valuation in the Village by 2.5% If it were assessed at market value, the community would have received $1.25 million in tax revenue. Yes, the old property yielded $100K; the new one yields $500K. Why is the benchmark the $100K and not the $1.25 million we could have had? When a long-term PILOT abatement is struck, the balance of the Village pays the difference between what the developer could have paid and what it does pay. So, who picks up the $750K in unrealized revenue? You and I do. There is also the significant run-up in the Village's debt obligation. Since 1993, it has nearly tripled from $12.9 million to nearly $34.7 million - over $2,000 for every resident in town. Over the same period, bonded debt has increased from 1.2% to almost 3.5% of assessed value. The total indebtedness is $9 million higher than the that issued by the school district. It's clear who pays for all this debt. At some point, though, we need to ask how we managed to have (as noted above) "old equipment" that must be replaced while running up so much debt. The answer in no small part is the Village's commitment to own property and finance development. If we are so desirable, why is it necessary to buy commercial sites and offer long-term PILOT agreements when developing what any planner would tell you is a prime site? Finally, on the cost side, we have two small municipalities managing government services in towns smaller than either West Orange or Montclair. We need to coordinate with Maplewood (which also bid out a website ...) and the school district to find ways to share costs and lower tax impact. Clearly, having worked with all three governing bodies, I think our team is better positioned to do that. | ||
| woodstock Citizen Username: Woodstock Post Number: 87 Registered: 9-2002 |
I am concerned about many of the same things that Mr. O'Leary mentions. However with respect to the PILOT programs, the comparison shouldn't necessarily be with the $1.25 million that the property, as currently valued, would have brought in without the PILOT program. It should be based on the probability that a developer would have come in and built the same property if they were not given the tax break that Gaslight Commons has. I had though the reason for the PILOT programs was to bring in development that otherwise would not have been done. The developer may have scaled back the project significantly, had they been required to pay the full $1.25 million. Perhaps they wouldn't have built anything at all. Now that there's a development there, of course we'd like to have the full value of the building, come tax time. But before the building was built, that may not have been an option. | ||
| woodstock Citizen Username: Woodstock Post Number: 88 Registered: 9-2002 |
Oh, and Mr. O'Leary, my personal problem is less with SO's tax rate and more with the apportionment of taxes based on assessment. When a house is assessed should not be a factor in its assessed value. The assessed value should be based on the value it would have had at the last assessment. | ||
| doublea Citizen Username: Doublea Post Number: 45 Registered: 3-2003 |
Brian: Thank you for this explantion. In all of my postings, I have tried to present the numbers as they are and have practically pleaded to get some help, or at least a good faith effort,on the tax situation. To a large extent, all I've been getting are excuses from the current officials. It is clear to me that if I, and for that matter the entire town,am going to get at least some effort to clearly look at our problems and at least get straight answers, I must vote for you. I just can't keep incurring these $1000 per year tax increases. Maybe nothing can be done, but at least I know you will be listening, and not just have some prepared response. | ||
| Brian O'Leary Citizen Username: Brianoleary Post Number: 1278 Registered: 3-2002 |
The research we have done with people familiar with the issues related to residential development near mass transit outlined three considerations for PILOTs: 1) They should be used only where market forces wouldn't otherwise build (this echoes your concern); 2) They should not be used under any circumstances for residential housing in close proximity to a train station (these developments are a premium opportunity for developers); and 3) If they are used where market forces would logically go without any subsidy, the PILOT should be granted for the period of construction ONLY, not for extended time periods (e.g., for 30 years). Hence my question - if we are an attractive Village with great location, why are we offering subsidies that shift the tax burden from developer to residents? | ||
| newurbanist Citizen Username: Newurbanist Post Number: 10 Registered: 6-2001 |
Mr. O'Leary said: Since 1993, assessed valuations in town have declined by more than $57 million dollars (almost 6%). What is the reason for this? I realize that some properties have been taken off the tax rolls through purchase by the Village but this ($57M) seems like a lot. What are the other causes of assessment reductions? | ||
| woodstock Citizen Username: Woodstock Post Number: 89 Registered: 9-2002 |
Mr. O"Leary wrote: Hence my question - if we are an attractive Village with great location, why are we offering subsidies that shift the tax burden from developer to residents? Why do we have so much trouble getting rateables in town? Why do we have landlords that seem to really not want to rent out space? Perhaps we're not as attractive a Village as we think we are? I hope this doesn't come across as diasgreeing with what you're saying. I think the questions are valid ones. I just wish someone from the town other than Mr. Rosner were answering them here. I almost feel like he should change his username to LightningRod. And to the rest of South Orange, remember that you don't have to vote a line. Vote for the people you think will do the best job, to heck with the other people they're running with. | ||
| mrosner Citizen Username: Mrosner Post Number: 267 Registered: 4-2002 |
Woodstock: I don't see how anyone could know or even start a rumor about 2007. Different elected officials and a different housing market and nothing is definite about the quarry yet. I think there is a factor that is used to create an equivalent assessed value going back to when the revaluation was done. Brian: At a trustee meeting we were accused of following the Atlantic report too closely. Now you are saying we are not following the report. The increase in ratables that the report refers to is in the downtown area. The decrease in ratables that you refer to were mostly from appeals that were done after the last revaluation which was done when housing prices were higher. Those who appealed were given reductions (by the county tax assesor, not the village) and those who did not appeal are now paying an "unfair" share (see doublea's comments above). Seton Hall also purchased more property and although they have been paying municipal taxes on those properties outside the main campus, it represents a decrease in the total ratables. The Beifus project will be an increase in ratables. The Church Street homes represent an increase in ratables. The homes on Jessica Way (I know, not the downtown) are increases in ratables. The Irvington Ave. improvements will help to bring in new ratables there. The Gaslight Commons was an increase in revenue. They were given a PILOT because at that time there was no interest in a developer building residential property on a car dealership (see Beifus). The property because of the size and location was not ideal and yet the builder did a pretty good job (check out the articles in NY Times and Star-Leger newspapers the last two weeks - the links are on the village web page) and has won a "smart growth" award. The Atlantic Report also suggested that the village increase the number of parking spaces and we added 265 spaces in the NJ Transit lot which allows free parking in the evenings and weekends right in the heart of the village. There was also over 70 new commuter spaces added in three seperate lots near the train station. We now have jitney service to the Montrose and Tuxedo Park areas and will be expanding the service to other areas this year. The Atlantic Report also suggested improving the Supermarket and there is now a project that is working with the planning board to get an approval which will bring an increase in the ratables. Just as a reminder, I have been on the board since 11/98 and I know Brian's comments refer to the village as a whole. On the other hand I can only speak about the things I have tried to do for the time I have been on the Board. Trustee election is on May 13th. www.leadershipwithvision.org Vote Line A | ||
| mayhewdrive Citizen Username: Mayhewdrive Post Number: 212 Registered: 5-2001 |
Mark mentioned earlier that our taxes paid for the improvements to the playground at Waterlands park last year. Was the developer of Gaslight Commons (which borders that playground) asked to fund that project? Gaslight Commons received preliminary & final site approval in one single meeting of the Planning Board. For getting a "free-ride", they should have been "encouraged" to give something back to the community. This is quite a common practice in other communities. Mark also mentioned that commerical ratables will help at least stabilize our taxes. While I agree totally with that sentiment, that has been the criticism of South Orange since at least 1991 when Bill Calabrese became Village Preseident. The simple fact is that when it comes to improving our downtown, Bill has not gotten it done. Period. It's been twelve years. It's really time for someone else to try some new ideas, because obviously the current ideas have not moved us forward. | ||
| David Lackey Citizen Username: Davidlackey Post Number: 1 Registered: 4-2003 |
Woodstock raises a point that many in town do not want to think about. When people choose a place to live, many factors go into that decision. Most of us here would agree that South Orange is a great place to live. However, when a business owner chooses a place to set up shop, there are also many factors involved (and certainly not the same factors potential residents face). We must face the harsh reality that a prospective business owner would need a lot of persuading to come to South Orange after checking out the bustling downtowns of Millburn and Maplewood. Mark has posted that he is in favor of a redevelopment committee and manager, but it seems that he is the only one of the incumbents who is. Leaving it to landlords to fill their vacancies (and "providing help when asked") is not enough for our village government to do. We need to actively court new business and turn things around. It's time to try something new. ____________________________ www.opensouthorange.com Vote Line B on May 13 | ||
| woodstock Citizen Username: Woodstock Post Number: 90 Registered: 9-2002 |
Mr. Rosner, The 2007 date was a guesstimate based on when the quarry development was to be completed. This is very third hand. I don't want anyone to think it's anything more than something a neighbor mentioned. But forgetting the date for a moment, is there any discussion of reassessing the town when the quarry development is done? If not, does that mean that the new owners of any new houses built there will get screwed on taxes as well? As for a factor to bring the values back to the last assessment, if that were the case, new construction would not be assessed at a higher level than older houses. And I wouldn't have the problem that I do with unfair assessments. | ||
| nwyave Citizen Username: Mesh Post Number: 35 Registered: 1-2003 |
Mark, Couple of quick questions: - Is the Beifus development under a Pilot? - Re the Beifus development on an earlier post in a diff thread (awhile ago), I kind of remember hearing that there were no objections to the Beifus development. However, I do remember reading in a paper, that there was a draw at the Planning Board Mtg that approved it and there was in fact some objection. Can you if possible clarify. I am concerned about a 5 story bldg in the middle of the downtown (less about the proximity to the pool), as it would seem to tower above all else. What was the thought process there. - You mentioned "Seton Hall also purchased more property and although they have been paying municipal taxes on those properties outside the main campus, it represents a decrease in the total ratables." What does that mean? If SH buys a house in Montrose, does it pay the full property tax (muni, county, ed) on that house or not? If so why would it represent a decrease in total ratables? - Re. the firehouse - I thought the State Preservation was going to pick the cost after all. Could you explain status now - total cost and how much is being picked up by the State and how much by town - In retrospect, if renovations were done on a more timely basis (i.e. a few years ago), would we have not been subject to picking up a shortfall. - Re Debt - This was something that I alluded to in a much much earlier post in this thread. I was really very surprised when I read that one of the reasons for the high muni increase this year was the unexpected high financing costs. Can you explain how that can be? Seems like we would know w/i a very close range what our projected financing costs would be - especially in a favorable interest rate environment. Was there some unexpected debt incurred? I'm not saying this is what happened here at all, but an old budget ploy is to disguise current operating expenditures as capital expenditures - makes the operating budget look good and people may not be as sensitive to the cap ex budget. However, it may cause high interest costs - wondering if that happened here. Thanks for answering so many questions - just trying to get as much info as possible to really get up to speed.} | ||
| mrosner Citizen Username: Mrosner Post Number: 280 Registered: 4-2002 |
nwyave: Good questions. First I want to add that most of the increase in the municipal portion was due to an extraordiary increase in the health insurance costs. We projected the increase to be about the same as it has been the past few years and it was significantly higher. It actually is more than 50% of the total increase in our taxes. ( yes we are soliciting bids from other carriers). The Beifus project (Candlewyck properties) was presented to the planning board and all their concerns were met. The height of the building is still lower than the Verizon building nearby (that was why it was ok, although I would have preferred a smaller building). I stated I preferred an office building with retail underneath, but the developer and Mr. Beifus did not think that could be economically feasible. The main reason is you need significantly more parking. The formal presentation for this project went to the planning board and not the BOT. I have never called or asked a planning board person to vote a certain way and they have the freedome to approve or deny a plan on their own. I point this out because the planning board process is completely open yet it does slow down the process. This can help to overcome design flaws or other concerns and sets a goal for a developer to re-design a project (i.e. the shop-rite site). They also have the expertise in dealing with a site. By the way, both Beifus and Shop-Rite developers met with Main Street's volunteers who did have input into the project. The board has not voted or formally discussed a PILOT at that site. I would always assume that a developer would ask that we consider one and make some kind of presentation. When Seton Hall purchases property it legally does not have to pay taxes and is not considered a ratable for tax purposes. They have been paying at least the municipal portion but I don't remember if they are paying more the full amount. Since they legally do not have to pay a penny, we are trying to work with them to pay as much as we can get them to agree to. At one point, we looked into the possibility of moving the firehouse to another location as suggested in the Atlantic Report. The report led the village to believe that the cost of a new firehouse was going to be a lot less than what cost estimates turned out to be (maybe they got the information from Ford Farewell). At that point we agreed to renovate the firehouse. It took a while to get bids from the architectual firms that specialize in historical buildings and had experience with firehouses. The grant money from the state has always been a moving target. Nobody foresaw the complete elimination of these grants but when they are reinstated, we are hoping to get some of the funds that will become available. It is hard to say what money would have been available a few years ago or how much we would have received. However, I can only tell you that in my four years the firehouse was a priority, but I wanted to explore all the options and make sure we found a competent firm. And from the outside the renovations do look great. Yes, the exact amount of debt was known and the CBAC, the CFO and the BOT all have known that there was going to be a cost to the redevelopment work that started several years ago. The exact numbers along with all the information is available. The increases and decreases are part of the long-term projections that are calculated in the budget. There is no "creative accounting" and the budget is reviewed by the state auditor before being approved. There was no budget ploy. The only issue was that when the original redevelopment plan was created a lot of money was needed. The increases in the debt is attributable to those projects. The theory is that the increase ratables from the development would help to offset those increases that are coming up now. At one point there was a projection of a 10% increase in the municipal portion this year. However because of the recent increases in ratables, the revenue from the Gaslight Commons and some cuts in the budget helped reduce the impact. That brings us back to my first point about the increase in certain costs that we cannot predict and why it is impossible to promise or guarantee the future tax increases (or decreases). I hope this answers your questions. If I left something out, or was not clear, let me know. Trustee election is on May 13th. www.leadershipwithvision.org Vote Line A | ||
| doublea Citizen Username: Doublea Post Number: 47 Registered: 3-2003 |
M.Rosner: With regard to the municipal budget, I recall when it was first introduced, the increase was 11%. It was stated at that time the increase would not be 11% but that figure was being used since it might help us in receiving some state aid,although no one really thought we would.In one of your above posts in answer to nwyave, you say the tax increase this year will be 4.8%.When was this revised budget introduced/adopted? Will we still receive estimated third quarter bills as we have in the past,since we are always waiting to hear from the state? | ||
| mrosner Citizen Username: Mrosner Post Number: 282 Registered: 4-2002 |
The 10% number I referred to goes back to a five year projection we did a couple of years ago. Yes, the 11% is used with the hope that if we paint a bleak enough picture we would get extraordinary aid from the state. We will probably do estimated bills in the third quarter as usual due to the state. The revised budget will be adopted when we get the approval from the state. Trustee election is on May 13th. www.leadershipwithvision.org Vote Line A | ||
| joso Citizen Username: Joso Post Number: 68 Registered: 5-2001 |
M. Rosner: Regarding the increase in health insurance costs, is the village legally compelled to offer the extent of coverage it does to its employees? In the 20+ years I have been employed in private industry, my health coverage has consistently been degraded from top of the line, to HMO, to HMO with a mandatory employeee contribution. Reason - the company canot afford the ever increasing costs and still stay in business. What about the village? | ||
| mrosner Citizen Username: Mrosner Post Number: 283 Registered: 4-2002 |
It is a negotiated benefit and when the contract is up I am sure it will be up for discussion. Trustee election is on May 13th. www.leadershipwithvision.org Vote Line A | ||
| mayhewdrive Citizen Username: Mayhewdrive Post Number: 218 Registered: 5-2001 |
Mark, On the Village website, I noticed on the Agenda for Monday's meeting there will be a public hearing on the 2003 budget. Since most people are unable to come down to Village Hall during business hours, can the full budget be posted on the Village website and/or emailed to any resident upon request? | ||
| mrosner Citizen Username: Mrosner Post Number: 286 Registered: 4-2002 |
I don't know. I think Patrick Joyce is chairperson of Finance so I will pass the question on to him. I would doubt that it could be emailed since I imagine the size of the file would be larger than most email programs allow. Trustee election is on May 13th. www.leadershipwithvision.org Vote Line A | ||
| doublea Citizen Username: Doublea Post Number: 48 Registered: 3-2003 |
Is this budget resolution the one with the 11% increase or the 4.8% increase? |
