Wednesday, April 6, 2011

My Proposal for the Calendar Year: An Idea Whose Time Has Come!

Two years ago, when I returned to the Plainfield City Council, I recommended to the Mayor and to my council colleagues that the City of Plainfield should revert from a fiscal year to a calendar year. At the time, I was told that the absence of a CFO would make it somewhat challenging for the administration to do the work that would be necessary to prepare the application to the Division of Local Government Services in the New Jersey Department of Community Affairs.

However, I never gave up on the goal of having the city revert to a calendar year. Out of the 51 municipalities that were previously on a fiscal year, roughly 26 have already reverted. When the 2011 goals of the Finance and Administration Committee were announced earlier this year, we knew that reversion had to be a priority. As the Chairman of the Finance and Administration Committee I laid out the steps that would be necessary in the process of reversion as well as the advantages to doing so.

As has been reported by the current CFO, the city faces a budget gap of $3.4 million. The gap has been expanded as a result of the Council’s decision to restore funds to two of the city’s operating divisions, and will expand even further when the city receives a bill from Union County for the county’s 5% share of all PILOT revenues paid to the city since 2005. Prior to 2005, all PILOT revenues went to the city, with none going to the county or to the local school district. However, due to a change in the law dating back to 2005, all counties must now receive 5% of PILOT revenues. Therefore, what was thought to be a $3.4 million budget gap could easily balloon to over $4 million, depending on the bill that has been or will be sent to the city from the county.

Hence, in light of the rising expenses, declining revenues, and a budget gap that continues to grow, the idea of reverting to a calendar year, which I first proposed in 2009, is one whose time has come. I am happy to report that the city now has a CFO who is savvy enough to be able to put all of the required pieces together to assists the council in making this idea a reality. The primary benefits of reverting from a fiscal year to a calendar year are as follows:

  1. A fiscal year that runs with the calendar year from January to December would be aligned with the election cycle and would allow newly elected official to participate in the budget process from the outset. Newly elected official would no longer be able to say that they had nothing to do with the budget.
  2. The confusion stemming from the use of two tax rates, one for the fiscal year and one for the calendar year, will disappear and property owners will be better able to understand their tax bill.
  3. The city will be able to pull in all state aid into the transitional year budget between July 1 and December 31, thus regenerating surplus and regaining a more solid financial footing.
  4. On January 1, the City would become eligible for a new round of state aid as a calendar year municipality.
  5. The potential loss of jobs and services that could result from the challenge of complying with the governor’s mandated 2% CAP (when faced with a potential budget gap that could reach over $4 million) would be minimized.

Although what I have outlined above are key benefits of reverting from a fiscal year to a calendar year, I must caution that this is not a panacea; these financial benefits must be viewed as one-time hits. They do not eliminate the need for the city to be fiscally prudent and for the collective bargaining units to come to the table in good faith to work with the Mayor and Council to find long term solutions to the financial challenges the city faces. All parties must now work together to ease the property tax burden while, at the same time, preserving as many jobs as possible and maintaining quality municipal services.




Rob said...

I agree that this is a good idea that is long overdue.
But, remember, as a municipality the idea is to maintain services, not maintain jobs.
Those 2 do not go hand in hand. Civil employment has long been know to be the 3 people doing the job of 1. That thought process is now impossible to maintain.
If in fact the city needs to modernize and coordinate all administrative functions with a real computer system then that should be priority #1. Of course, prior to hiring someone to be the "I.T." person, there should have been a study on what the city needed to do to coordinate this task so when an "I.T." person was hired they had a clear and simple goal to complete ( although, yes, not really simple ).
The hub-bub over the city budget and everyone screaming, "We need to save jobs" is as wrong as it gets. We need to preserve quality necessary services. That's it.
My bosses have yet to utter their purpose is to retain jobs.
The job of a company is to make money not employ as many people as it can. The job of a municipality is to provide necessary services, not provide jobs. Let's all stay focused on that.
Police, Fire, Highways, Sanitation and yes the Recreation Department ( with actual accountability - could you imagine the police department only responding to calls on Watchung Avenue and somehow expecting the citizens of the city to think it's ok ??? )

olddoc said...

You may be aware that I have spoken for a revert to the Calendar FY(as well as semimonthly meetings) for years. It is more logical since our taxes are based on the year.

However, does not your point 3 represent the same bookkeeping manipulation that led to the change to the present FY? And will there not be a major impact on your #4?

Adrian Mapp said...


Absolutely not! There is no financial manipulation involved in reverting from a FY to a CY. Unlike what happened in 1991, there are no fiscal year adjustment bonds that are allowed to be floated; therefore there is no debt to repay.

The aid received in the TY budget is the aid the City would have gotten had it remained a FY year municipality, and the aid it will receive in 2012 is the proportionate aid that all calendar year municipalities will receive.


Adrian Mapp said...


I agree with you. Jobs should only be preserved if the preservation of jobs means the preservation and/or the expansion of services. I do believe in doing more with less. I had to do that in corporate for many years.