PARSIPPANY — The Parsippany-Troy Hills Township Council tabled Ordinance 2021:09 “Special Emergency Appropriation in the Amount of $5,000,000” at the meeting on Tuesday, May 18.
Statement from Council President Michael dePierro:
The Mayor wants the Township Council to approve a budget that is not statutorily correct, including a $5 million loan, plus interest that must be paid off within five years; a Fund Balance of $1 million that may not be used; overestimating revenue and underestimating expenses. He blames the previous administration for not leaving him enough surplus.
Council President Michael dePierro said if the township’s revenue shortfall is not resolved, residents may face a 14.6% municipal tax increase in 2021.
During a Mayors first year in office, he can blame the previous administration for almost anything and get away with it. During the second year, not so much. By the third year, the Mayor owns the budget and any poor fiscal practices are completely on him. If the Mayor has not started developing a Fund Balance to protect the Township in the last three years, that omission falls on him.
The Township Auditors have identified a number of serious errors in the budget and Cannot Certify the Budget that was presented to the Township Council. The Mayor has the responsibility of presenting to the Township Council a statutorily correct and balanced budget. The only good news is the “American Rescue Plan” allocation of $2,850,000 which helps to make up some of the deficit caused by the Pandemic. That sum will also be available in our budget next year.
So where does that leave us? If the Administration submits to the Township Council a statutorily correct budget, the budget would show a Revenue Shortfall of $6,147,176.37. This would result in a 14.6% tax increase in 2021. As a starting point, however, we could then enlist the help of Tina Zapitchi from the Department of Community Affairs (DCA) and Valerie Dolan, our Township Auditor, to exhaust all other possibilities to reduce the shortfall and reduce the tax increase.
Statement from Councilmember Janice McCarthy:
Councilmember Janice McCarthy issued the following statement to the Township Council regarding the Soriano Administration’s proposed use of a five million-plus dollar bond in order to balance the budget.
At the request of Finance Committee Frederick C. Carr and Chief Financial Officer Juan Uribe agreed to work with the township auditors to clarify outstanding issues with the State Division of Local Government Services on whether the town will be allowed to borrow $5M. So, the borrowing decision is pending with the State. The resolution on the agenda is tabled again by the council pending clarification.
If the $5M or a lower amount is allowed by the State Division of Local Government Service it cannot be included as revenue in the 2021 budget. Whatever amount the State allows, it is only for COVID-related expenses and not any underlying issues inherent to the budget.
Based on whether Parsippany will be able to borrow the $5M will determine how the administration goes forward with the 2021 Budget and what steps or actions will be necessary to balance the budget.
Recent remarks criticizing the council for trying to fully understand how borrowing $5M fits into the 2021 budget were unnecessary. This budget is very complicated because of structural deficit issues made worse by the pandemic. We would like this to be a collective effort.
Just to clarify any misunderstanding, as of today Parsippany does not have a 2021 budget. So, there is no budget for the council to approve. Any decisions on taxes, proposed capital projects, raising or reducing expenses which include staffing levels, pay increases, etc. are the responsibility of the Administration in preparing the budget prior to giving it to the council.
Once the auditor signs off on the budget and the town council is given a balanced, legal budget the council can review and offer recommendations.
So again, just to clear up any misunderstanding the town council does not have a budget from the Administration to approve.
Also, there were comments at the last council meeting claiming the township auditor made a mistake in preparing the annual financial statement which it was claimed caused the town to reduce the proposed revenue that was being anticipated.
However, the revision made by our auditors and the financial statement the auditor prepared was correct. So, we would like to apologize to them for any misunderstanding.
Finally, the fact is that while other municipalities, just as Parsippany did, suffered revenue shortfalls related to the pandemic and need relief, Parsippany’s fiscal mismanagement in the last 12 years has created an unsustainable structural deficit that everyone, all elected officials past and present, are responsible for. The deficit has only been made worse by the pandemic. These 2 events should not be conflated. Resolving an estimated $9M structural deficit if it begins in 2021 will take several years to correct.
But more immediately the Administration has to prepare a 2021 budget and make decisions on addressing the current year deficits.
The next Township Council meeting will be held on Tuesday, June 1 at 7:00 p.m. at the Parsippany Police Athletic Building, 33 Baldwin Road.
