Dear Editor:
I am a retired certified public accountant and Parsippany resident who regularly reviews town budgets. During the April 26 budget hearing, the sewer superintendent stated that the only big change in his 2025 budget compared to the prior year was a $1.5 million increase in health insurance costs. Separately, the town’s CFO stated that the town’s health insurance cost went up about 6% in 2025.
Councilwoman Hernandez addressed this sewer utility issue at the May 6 council meeting. She said that her budget package showed the sewer utility health insurance cost going up by $1.5 million to $4.2 million, a 55% increase. This confirmed the increase that the sewer superintendent stated. She added that the water utility increased by a similar percentage on a smaller scale since it had fewer employees than the sewer team of 49. She went on to say that the sewer and water utilities’ health insurance cost amounted to $6.7 million in the 2025 budget, roughly half of the town’s $13 million total cost of health insurance per the user-friendly budget.
This is absurd, so I spoke at the May 2 council meeting to question all this. I pointed out that the 2025 detailed budget on the town’s website shows the sewer department salaries and wages as $5.0 million, so the health insurance cost of $4.2 million is almost as much as payroll. That is crazy. A similar pattern shows up on the water budget.
Another way of looking at this is that the 49 sewer employees represent about 10% of the town’s 500 employees. Sewer health insurance of $4.2 million times 10 = $42 million and we all know that the town’s total health insurance cost is a small fraction of $42 million, $13 million or something in that range.
After I spoke, the town CFO said that there were some “errors” in the budget presentations that were given to the Council and sewer and water utilities by the administration. She said that the correct 2025 budget amount for sewer health insurance was $4,876,000, and for the water utility, it was $3,074,000, which totals $7,950,000, even higher than what Councilwoman Hernadez said!
The 2025 detail budget shows that Sewer salaries are estimated to be $4,983,000, and water salaries are estimated at $3,554,000, totaling $8,537,000. Now, the town says that the health insurance associated with these salaries is $7,950,000, so health insurance comes to 95% of salaries on these 2 utilities. This is crazy wrong. You don’t need to be an accountant to understand it.
This is another way to raid the sewer and water utilities to benefit the general fund. This year, these utilities are being charged at least $2 million, probably more, for health insurance that should be a general fund expense. In past years, the utility budgets showed the transfers of money to the general fund as a separate line item in the budget. Still, now it is hidden by overcharging these utilities for health insurance that belongs on the general fund.
The lack of transparency in all of this is only exceeded by the lack of integrity involved. The administration has actually bragged that it did not raid the sewer and water departments in 2025, but clearly, they have, by $2 million or more.
Bernie Clarkin
