An increase in fund balance of 1.1 million, primarily derived from satisfaction of the tax lien on the property now occupied by Edwards Supermarket, was used to offset the increase in 1998 budget appropriations. That enabled us to adopt a municipal budget which calls for a ZERO increase in the municipal portion of the 1998 tax rate. A home assessed at $200,000 will continue to pay $2,100 for municipal services such as police, fire and public works, despite a significant capital construction program now underway.
The total increase in budget appropriations can be attributed to the increase in salaries and wages. Contractual obligations to the Police and Fire Departments account for over 83% of the total increase in salaries and wages. Township authorized strength was increased by two, both in the Recreation Department, as we prepare for the opening of the addition to the Richard Rodda Community Center. 'Ibis addition is truly and investment in Teaneck's future and will provide a service for every resident of Teaneck from the youngest child to the oldest senior citizen.
The elimination of the $375,000 annual appropriation to the general self-insurance fund accounts for the overall decrease in other expenses. Teaneck's self-insurance program was created in 1977 and has saved taxpayers millions of dollars in insurance premiums over the last twenty years. The Self-Insurance Commission now feels that the fund balance has reached a level where interest earned on the invested principal will offset annual payments for claims and legal expenses.
Interest of $157,200 (3.93 %) is due in April on the four million dollar loan in 1997 for construction of the Rodda Building Addition, which accounts for the increase in debt service. Principal payments on the loan may be deferred until the year 2001 after the last major part of the police building construction cost has been funded in the year 2000, but a final decision in that regard has not been made at this time.
A first payment of $519,376 for the early retirement incentive program authorized in 1994 for uniformed police and fire personnel accounts for the increase in the deferred and statutory item. Funds available from a one year moratorium on the regular pension payment and transfers from other budget appropriations reduced the original bill of 6.3 million to the current balance of 2.5 million. The Township has chosen an accelerated five year repayment plan, since interest continues to accrue at 8-3/4% on the unpaid principal, and the total cost using the 40 year repayment plan is staggering.
Capital improvements planned for 1998 are shown on Schedule D. The one million dollar authorization for replacement of the existing public works building supplements the two million dollar authorization in 1997. An architect has been selected, and a preliminary site plan is under development. Once a plan has been developed and approved by the Department of Environmental Protection, a cost estimate will be prepared to determine whether or not the three million dollar authorization needs further supplement in 1999. Our goal is to complete the planning process by the end of this year and start construction in the spring of 1999. Another half million dollar resurfacing program has been included in our effort to recover from the devastating winters of 1994 and 1996. Other capital projects funded include refurbishing of Argonne tennis courts and purchase of equipment for the Police, Fire and Public Works Departments.
The years ahead will provide many challenges, with special attention to our planned replacement of a very old public works building and conversion of the old police building to a municipal courtroom and court offices. It will take the cooperation of all our employees to maintain and increase existing services without a significant increase in the municipal tax rate. I am confident that the challenge can be met.
Please do not hesitate to call me or stop to see me at the Municipal Building if you need further information or clarification.
Gary A. Saage
Municipal Manager
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