Tags

, ,

 

correct size blogAs you continue to prepare your 2018 municipal budget, we would like to bring to your attention Local Finance Notice 2017-26, recently issued by the Division, detailing CY 2018 Budget matters.  We would like to note that in 2018, the Division will automate the financial reporting process, which is explained below in further detail, resulting in a streamlined process, which will eliminate the need to file a separate User-Friendly Budget.

I.   CY 2018 Budget Deadlines

The Division of Local Government Services has extended the deadline to introduce your CY 2018 budget to March 16.  It is important to be mindful of these dates as you develop your budget.  First, in the past, the timely adoption of the municipal budget has been a best practices question.  Secondly, the Division has taken a harder line with municipalities that fail to timely adopt their budgets.  Governing body members who willfully fail or refuse to timely adopt their budgets can be subjected to a daily personal penalty of $25.

The proposed changes (absent referendum dates) are:

Introduction and Adoption of Budget – Non-Referendum Statutory Date Revised Date
Mayor/Council Faulkner Act (Executive) budget transmission to governing body 1/15 2/16
Municipal introduction and approval of budget 2/10 3/16
Municipal adoption 3/20 4/20

Notwithstanding the revised dates, a budget may be adopted anytime within 10 days of receiving the Director’s certification of approval of the budget. 

II.   FY 2019 State Aid

One of the unknowns you face when preparing your municipal budget is how much property tax relief funding the State Aid will provide to your town.  This number is not known until the Governor’s budget is presented.  At this time it unknown when incoming Governor Murphy is scheduled to deliver his State Budget address. As in the past with the first year of a new Governor, we expect the State Budget address to be late February or early March.   According to the Local Finance Notice, after the budget is proposed the Division will notify municipalities of the CMPTRA and Energy Tax Receipts amounts that can be anticipated in their budgets. For budgeting purposes, the Division is advising municipalities to use the 2017 funding amounts for the 2018 budget.

III.   Health Insurance Contribution and Waiver Accounting

The 2010 property tax levy cap law included an exception for health care cost.  The exception is based on the average State Health Benefits increase, which is 0.0% for 2018. Therefore, there will be no levy cap exception for Health Benefits.   The Division has also outlined how employee contributions for health insurance should be accounted and that the formal budget message must contain information or a schedule showing the amounts contributed from employees, the employer share, and total costs.  The disclosure may be broken down by employee group.

IV.   Financial Automation Submission Tracking (“FAST”)

The Division will be automating the budget process through their Financial Automation Submission Tracking system known as FAST.  All reports, documents, and information that was previously submitted on paper, email, or excel spreadsheets will be submitted through FAST.  Beginning January 1, 2018, all municipalities and counties must submit the following documents through FAST:

  • Annual Debt Statement/Supplementary Debt Statements
  • Annual Financial Statement
  • Budget/ User-Friendly Budget
  • Annual Audit/Corrective Action Plan
  • Budget amendments
  • Chapter 159
  • Dedication By Riders
  • All Emergencies

As a result of the FAST system, the Division will no longer require a separate submission of a User-Friendly Budget.  Instead, a separate User-Friendly Budget report will be generated through FAST.  Also, the CAP workbooks have been integrated into the FAST system and as such, municipalities will no longer be required to submit separate CAP workbooks.

In addition, all budgets submitted through FAST will be posted to the Division’s website upon introduction and adoption.  While it does not eliminate the requirement of N.J.S.A. 40A:4-10 to post your current and three prior year’s budgets on your municipal website you can satisfy this requirement by adding a link to the Division’s reports on your website.

The Division is providing training and information directly to your Chief Financial Officer, auditors, and financial professionals on FAST.

V.   Local Examination

If a municipality meets certain standards they are able to locally examine their budget in any 2 of 3 consecutive years.  This year the Division will be examining Group 3 budgets.  If your municipality is considered a Group 1 or 2 you can have the Division examine your budget but you first must pass a resolution prior to the introduction of the municipal budget.

VI.   Transitional Aid Application Process

Calendar Year municipalities in financial distress will have only one opportunity to apply for Transitional Aid.  For budgeting purposes, the municipalities that received Transitional Aid in CY 2017 may anticipate Transitional Aid in an amount equal to 85% of their CY 2017 aid allocation.  The due date for the application will be set shortly.

Local Finance Notice 2017-26  details issues that a municipality should consider when preparing their 2018 municipal budget.  We suggest you review the notice with your professional staff.

Contact: Lori Buckelew, Senior Legislative Analyst,lbuckelew@njslom.org,609-695-3481  x112.

 

 

 

Advertisements