RED BANK: DEMS TARGET 'SLUSH FUNDS'

Council members Kathy Horgan, left, and Linda Schwabenbauer, seen at last year’s Halloween parade, are now at odds over the budget. (Photo by John T. Ward. Click to enlarge)

By JOHN T. WARD

Two weeks after it was shot down on the mayor’s tiebreaking vote, Red Bank’s first Republican-led budget in a generation faces its next test on Wednesday.

That’s when council members will square off over cuts suggested by Democrats to what they called “‘fluff’ and ‘slush funds.'”

The GOP’s spending plan, which called for a two-percent increase in property taxes, failed on May 25 when Mayor Pasquale Menna cast a tiebreaking vote that followed a 3-3 deadlock that included a “no” by a member of the budget-crafting finance committee, Democrat Kathy Horgan.

Horgan’s vote caught committee chairwoman Linda Schwabenbauer, a Republican, by surprise. She demanded that the Democrats specify cuts to reduce the tax increase.

Last Friday, Horgan and fellow Democratic Councilman Ed Zipprich responded with six line-item budget amendments they said would reduce the municipal tax levy by $85,000, or nearly one-third of the $250,000 increase contained in the GOP plan. That would trim the tax increase to just under 1.3 percent, they said.

Their approach is to eliminate what they termed “‘fluff’ and ‘slush funds’ that citizens assume is hiding in the Borough’s budget,” they wrote in a memo dated last Friday.

“I believe our proposed amendments represent the elimination of all ‘slush-funds’ from the Borough’s budget and none of these proposed cuts will have any effect upon municipal operations or services,” Horgan said in a press release.

Here’s the Democrats’ memo: Horgan Zipprich memo 060316

On Tuesday, Schwabenbauer responded in an email to redbankgreen that said, in part:

1. No expense cuts were proposed by the Democrats. Instead, they want to take down $70K of reserves, and adjust expense estimates by another $15K. This is meaningless. Anything not spent goes back into surplus to benefit future budgets.

2. Characterizing our reserves as “slush funds” is extremely misleading. Regulations limit how much we can reserve, and it all must be earmarked for specific purposes. I am troubled that the Democrats believe we are over-reserved. For example, one reserve, currently $334K, is meant to cover a liability of over $1.2M. This reserve is described as “healthy” in the Democrats’ memo. It is precisely this attitude that led us to borrow $750K in 2010 and $362K in 2013 to pay out retiring employees. I am hopeful they simply didn’t understand the magnitude of the 2016 liability.

Here’s her full response: Schwabenbauer budget memo 060716

In January, the GOP had a 4-2 majority for the first time since 1991. But Councilwoman Cindy Burnham, who’s up for re-election in November, was knocked off the GOP primary ticket in April, and is now running as an independent. She joined Horgan and Councilman Ed Zipprich in opposing the spending plan.

The council meets at 6:30 p.m. at borough hall, 90 Monmouth Street. Here’s the agenda: RB Council Agenda 060816