To the Editor:
I would like to take an opportunity to clarify the facts, as they relate to Hopewell Township’s budget, and also to respond to a recent letter to the editor by Harvey Lester.
First, Hopewell’s 2019 municipal budget decreased core operating expenditures by -3.04% vs. 2018 as we continue to do more with less. And 2019 spending remains well below 2015 levels. Mr. Lester likes to blame his 2015 budget increase on the Public Works fire, but even after accounting for one-time costs, net spending in 2015 increased +8.99% year-over-year.
Making an apples to apples comparison, if you remove the cost of the new Public Works trucks funded in the 2015 budget to replace those lost in the fire ($606,800) and also the one-timers in the 2019 budget (primarily the $120k legal funds we had to repay from 2018), net spending in 2019 comes to $22,579,319 vs. $24,008,641 in 2015.
Next, let’s address a few of the fallacies and other half-truths in Harvey’s letter.
He claims that the 2019 budget included $4.4 million in new debt. That much is true; however, what he fails to tell readers is that we will also pay-off $4.3 million in debt principal in 2019, so the Township’s net debt is essentially flat year over year. Moreover, in Mayor Kristin McLaughlin’s three years on the Committee, Township debt has cumulatively decreased by $7.5 million or ~11%.
This is important, as debt service consumes almost 1 in 4 budget dollars (about as much as we pay for our Police and Public Works Departments combined) and we pay $1.6 million in interest costs each year.
Next, let’s talk about Lester’s comments on our surplus or fund balance account. In 2017, we negotiated a new payment schedule with the schools that freed-up $2 million in monies. It made no sense to hold onto these “surplus” surplus dollars, so we used them for the direct purchase of capital items, avoiding going into debt and paying interest on those purchases.
We were transparent on what we were doing and why. I would also note that after these actions, our fund balance remains 30% higher than its past 20-year average and Standard and Poor’s reaffirmed our AAA-rating, stating “Hopewell Township has a demonstrated history of sound financial management … the Township has been granted the highest bond rating available in the market.”
Looking ahead, our goal remains to deliver the services residents demand in the most cost-effective manner possible. We have more work to do, but so far, we have reduced the average tax levy increase from +6.3% per year in 2013-15 to +2.37% in 2016-19. Benchmarking ourselves vs. other neighboring municipalities, Hopewell Township has the lowest equalized municipal tax rate in Mercer County.
One of my personal goals is to reduce the budget’s reliance on residential property taxes by identifying new potential revenue streams for the township. If anyone has other concrete and constructive suggestions on the Township budget, please email me at firstname.lastname@example.org.
Kevin D. Kuchinski,
Hopewell Township Committee