Politics & Government
Bernards Twp. Aces Another Municipal Audit Report
Longtime auditor praises township for freeing itself from debt payments.
Auditor Robert Morrison returned before the Bernards Township Committee this week to give another favorable audit report on the township's municipal finances for 2012 — even going so far as to say that he and his firm have no recommendations to make regarding ways to improve the town's fiscal management.
Morrison said that as of last year, Bernards Township was one of about 19 municipalities in the state with a triple A bond rating — although he added that some of the others may have lost that status in the past several months. The township is likely to have no problems having that rating reaffirmed this year, Morrison added.
Morrison attributed much of the township's financial sturdiness to a total lack of debt payments. The township paid off its last outstanding bonds at 2011, and has been on a "pay as you go" basis as far as paying for township projects since then.
Interest payments eat up much funding at the local level in towns around New Jersey, he said. For every $1 million borrowed, a governmental entity is likely to have to spend another $1 million or so during 20 years of paying off bonds with a 20-year life, Morrison said.
Morrison said paying out of regular budgeted funds for capital projects and other expenses is gold standard.
However, he cautioned that the state's workaround loopholes for municipalities seeking to spend more than the 2 percent cap on local budgets could work against Bernards Township in case of an emergency.
Morrison said that since state regulations prohibit raising municipal property taxes above that cap, the only way towns can raise money for unanticipated expenses is by borrowing.
Morrison also said that spending in the 2012 municipal budget was $1.9-million less than 2007.
Morrison said the township's were funded by an increase in the past year of revenues, as the economy improves in this area.
He said the township had managed to increase its current fund balance (surplus) for the last three audited years to $13.7 million in 2012. The balance had been $13,630,875 in 2010 but dipped to $12,778,680 in 2011, he said.
Bruce McArthur, township administrator, said the results of operations that increased surplus from 2011 to 2012 were primarily increased construction code fees, collections of delinquent taxes, miscellaneous revenues, and picking up funds from prior year's appropriations never spent. However, he said the township had a shortfall from anticipated revenues in that category, McArthur said.
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Morrison and the firm Hodulik & Morrison from Highland Park have been performing required audits of the township's finances since 2006, McArthur said.
Morrison praised the Township Committee for holding the line on spending, especially in such areas as capping sick pay and eliminating health benefits for retiring employees. He thanked the staff, as directed by Chief Financial Officer Terri Johnson and also McArthur, for cooperating during the audit process, which he said is not always the case in all municipalities his firm audits.
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