How does the Annual Budget process work?
The Borough of New Providence is funded by annual Operating and Capital budgets, which must be approved by Borough Council. These proposed budgets are prepared by the Borough Administrator and CFO, who meet with each Borough department to review departmental needs for the next fiscal year. They also meet with the Finance Committee (comprised of the Borough Administrator, CFO, Council Chair, Council Vice-Chair, and Mayor) and consult the Master Plan to ensure that Capital investments are aligned with the Borough plan.
The Operating Budget includes personnel costs, annual facility operating costs and debt service. It is funded primarily through local property and sales taxes, licenses (such as building and department fees), charges for services and other similar sources of revenue.
The Capital Budget funds major improvements to the Borough and its infrastructure (such as paving roads and major building projects) and resources that have an expected lifetime that extends beyond the acquisition year. It is supported using multiple funding sources, including various types of bonds (debt), grants, cash, as well as other sources of funding.
Once the Operating and Capital budgets are drafted, they are reviewed by the Finance Committee. The budget is then formally introduced at a regular Borough Council meeting.
When does the budget process take place?
During the months of January and February, the Borough is in the process of closing its books for 2020 and preparing the Annual Financial Statements, which must be filed before a budget can be introduced.
These Financial Statements serve as the foundation to ensure projections that were used in the previous budget are correct and that all reserves are in accordance with our financial policies.
The Finance Committee will then review the budget to ensure that none of the decisions and assumptions utilized in the prior year will result in a future year budgets structural imbalance.
Once the budget has been reviewed by the Finance Committee, the budget will be formally introduced at a regular Borough Council meeting.
The Borough files the Introduced budget with the Division of Local Government Services, within 3 days of approval.
Next, the budget is publicized. There are official rules around advertisement of the budget introduction and adoption meetings. A 28 day period is required between the budget introduction and the public meeting where the budget can be formally adopted.
Prior to being adopted, there is a Public Hearing to allow the public to ask questions and/or comment on the budget.
Once the Public Hearing is closed the governing body can now either adopt the budget in which the hearing was held or amend the budget. Depending on the amendment, the budget may not be able to be adopted on the same night. There may be a need for further advertisement and an additional public hearing. If no amendments, the budget will be adopted by a majority vote.
Can the public get involved?
Yes. The public has an opportunity to review the budget during the 28 day advertisement period leading up to the budget hearing and adoption meeting. There will be a Public Hearing of the budget at which time the public is given the opportunity to ask questions and/or comment on the budget.
To review the 2022 budget introduction please click this link: 2022 User Friendly Budget
It is important for residents to understand that this only relates to the Municipal portion of your tax dollars. A significant portion of your overall tax dollars are allocated to the Board of Education and Union County, which are beyond the control of Borough Council.