A 1992 readjustment of taxes for residential properties may have cost the town millions in tax appeals, town officials said two weeks ago, as the Town Council introduced a bond ordinance that will repay as much as $2.5 million to local corporations.
Although nearly 90 percent of homeowners benefited from the 1992 15-percent reduction in assessed value on residential land, local officials claim legal appeals by local corporations caused the town to spend more paying back taxes.
The bond ordinance introduced at the Oct. 24 meeting would pay for numerous appeals that were either lost in court action or settled by the town.
“These are all old cases that go back years,” said Mayor Dennis Elwell said, noting that the large number accounted for the high amount needed to be repaid.
Peggy Barkola, the town’s chief financial officer, is seeking permission from the state to pay off these bonds over a five-year period rather than over three years, as in the past.
In the early 1990s, the town faced several years of massive tax appeals because of a downturn in the economy. Over that period, the council passed numerous bonds to pay back taxes to corporations. The last bond was passed in 1997. Most of these have been paid off.
Elwell said that while he cannot predict the future, he hopes not to face a similar high volume of appeals again, noting that while the 1992 tax reassessment for residential owners eased the burden on local home owners, it often hurt local business owners who had to pick up the burden.
“One small business owner had an increase of $1,000 in that first year,” said Councilman Robert Kickey.
The proposed $2.5 million bond will have an impact on the town’s budget for the next five years – if the state approves the request – but should not significantly increase taxes in the future.
Elwell said Barkola is working on a possible five-year spending plan. While this would not cover every expense the town will have over a five-year period, it will project most of the significant costs and allow the Town Council to better plan predictable purchases – such as major items like fire engines.
Library financing questioned
The Town Council, at its Oct. 24 meeting, approved a $1.5 million bond ordinance that would provide payment for making various public improvements in town and purchasing equipment. Included in this bond is $848,000 that could go towards the construction of a new public library.
Elwell said that without the money for the library, this would be the lowest capital improvement in many years.
Even with the additional money, the proposed improvements do not cost much more than in other years, according to Town Administrator Anthony Iacono.
In the portion of the meeting for the remarks of citizens, former mayoral candidate Frank MacCormack asked if the money is specifically dedicated to the library or if it could be used for something else. Elwell said the money would have to be used for the library.
In October, the town received bids on the project ranging from $2.9 million to $4.4 million. Elwell said the lowest bidder is currently being investigated to determine if the bid meets the town’s specifications.
If the company measures up, the town will likely award the bid. Elwell said if the town rejects the current bids, a new round of bidding could result in the town being forced to cut back on the size of the project. Even then, the cost might not be much lower.
Elwell used the construction of Secaucus High School as an example. Voters rejected the project twice before finally approving it in the early 1970s. But the final cost was the same as the original proposal’s, only without many of the features. The original high school project would have provided the school with a swimming pool and auditorium, both of which were not part of the final plans.
Other things included in the municipal bond were $130,000 for sidewalk replacement, $60,000 for storm sewer improvements, $72,000 for fire equipment, $96,000 for Department of Public Works equipment, $100,000 for police and fire communication equipment, $26,000 for computer equipment, $52,000 for the replacement of ice-making mats at the ice rink and $125,000 for repair of public buildings.
The Town Council also introduced an ordinance that would alter the current street sweeping hours on a section of Front Street to allow parents to drop off kids at the pre-kindergarten sessions being held there.
Elwell said that parents dropping off kids were ticketed because the Recreation Center opened at the same time as the sweeper was scheduled. Elwell said that by delaying the sweeper for a half-hour, parents could safely drop of their kids without fear of receiving a ticket.