Sandy Impact Slowing Budget Process Along Jersey Shore

The impact of Superstorm Sandy continues to be felt by the State of New Jersey as it embarks on its first fiscal year following one of the biggest storms in state history.

For various reasons, many towns have been forced into a holding pattern, waiting as the state approves their budgets.

Indeed, 32 towns impacted by the storm have applied for Community Disaster Loans, which are reviewed by officials from the Federal Emergency Management Agency and must ultimately be approved by the state Department of Community Affairs' Division of Local Government Services.

Some towns, such as Sea Bright in Monmouth County, see this loan as an absolute must. The borough applied for about $1.25 million in the loan, and has not even introduced its budget at this point.

"We need this loan. Without it, we're just not going to make it," Sea Bright Acting Administrator/Clerk Joseph L. Verruni said. " ... We have to delay our budget process to make up for the money we missed out on."

According to Verruni, Sea Bright brought in no revenue during the last quarter of 2012, after the storm struck the region.

"In the first quarter of this year we haven't made anything, and for all of 2013, we're not going to make a whole lot," Verruni said.

Verruni said without the approval of the loan, Sea Bright would have to hold a referendum to exceed the 2 percent cap in order to make up for lost revenue.

"That's not an ideal situation," Verruni said.

Business is slowly returning to town, and Sea Bright is trying to bring more back all the time. Many residents also have yet to return to their homes.

"We have side streets that are still empty," said Verruni, who was unsure how many residents still had not returned. A side street curfew is still in effect from 7 p.m. to 7 a.m. every day.

Sea Bright remains in the rebuilding stage, but is moving forward all the time, Verruni said. The last paperwork for the loan was submitted last week, he said. He said May 21 is the target date for the town to introduce its budget.

"The sand is back on the beach and the debris is picked up," Verruni said. "Whether it's in 2013 or 2014, we will be back as strong as we were before the storm."

Toms River is working on its budget, but has not set a final date for introduction.

Other municipalities are further into the recovery process, and some are further along in their budget process.

Brigantine, in Atlantic County, introduced its budget on March 20. The state told townships that if they can reasonably expect to be approved for their Community Disaster Loan request, they may include it as a line item in their budget.

Although the city introduced its budget prior to the typical deadline, it may take an additional month for the budget to be approved.

“It has slowed the approval process,” Brigantine Chief Financial Officer Christian Johansen said. “It’s being held up until we’re approved or denied. We’re kind of in a state of limbo right now.”

According to New Jersey State Public Information Officer Tammori C. Petty, 39 local governments are actively pursuing these loans. These include the 32 municipalities, none of which can approve their fiscal budget until a determination has been made concerning their loans.

Additionally, the state is reviewing about 20 additional budgets this year as a result of Sandy, Petty said. Each municipality has its budget reviewed and approved by the State’s Department of Community Affairs (DCA) once every three years, and typically, about 200 budgets are reviewed each year, Petty said.

Brigantine submitted its application in February, and officials met with Federal Emergency Management Agency (FEMA) officials March 15.

Johansen was hoping for a response this week, which would allow the process to move forward and put Brigantine in a position to approve its budget May 15, one month later than usual.

“The process gets prolonged, and it just leaves you in a position where you can’t close things out,” Johansen said. “Work continues to stack up.”

Prolonging the approval of a budget can impact other, non-storm related items.

“It can prolong bond ordinances if we need them done this year,” Johansen said. “Any work related to infrastructure, things that we need to rebuild, that can be delayed.”

Despite the delay in approving their budgets, municipalities can take advantage of emergency appropriations, which generally equal 26.25 percent of the previous year’s budget.

“It won’t produce any undue problems,” Johansen said.

Brigantine was hit directly by the storm when it touched land on Oct. 29, but recovered quickly. It has also been reimbursed $1,600,000 by FEMA, with more applications pending.

The city could move forward with certain projects, legally, but is choosing not to until after the budget is approved.

Bay Head, in Ocean County, is in a similar situation to that of Brigantine.

The small borough of less than 1,000 people has introduced its budget, but postponed approval until either May or June as it awaits a response. Typically, Bay Head has approved its budget in compliance with the state’s standard due dates, Municipal Finance Officer April J. Yezzi said.

“But the storm changed everything for the barrier islands,” Yezzi said. “ … There’s a lot more that has to go into this year’s budget than in past years, and they’re just making sure everything is in there, and is done properly.

“It’s been a unique year. We’re always on time, but this is a different set of circumstances.”

While Bay Head didn’t recover as quickly as Brigantine did following the storm, Yezzi said signs of normalcy are returning to the small borough consisting of less than 1,000 people.

“It’s getting better every day,” Yezzi said. “I know where we were before the storm, and I know where we are now with the debris cleanup and everything, and it just seems like everything’s coming back. The residents seem to be reacting with a more positive attitude.”

Yezzi added she felt comfortable that Bay Head’s governing body had things on track to get back to where they were before the storm.

“People are coming in and paying their taxes,” Yezzi said. “To me, that’s a good sign.”

Not all delays are due to Sandy recovery issues, including Manchester Township, which was forced to delay its budget hearing and approval despite not having any major issue with Sandy recovery.

The State has not certified Hazlet’s proposed budget, but that township held its public hearing on April 18 and is awaiting word from the state.

Marlboro also postponed the adoption of its $32.92 million budget.

Little Egg Harbor Township, which did apply for a loan, was set to introduce its budget Thursday night, April 25.

And some municipalities haven’t been impacted at all. Galloway Township approved its budget on Tuesday, April 23.

Petty said that although the state is reviewing more budgets and there is a delay, it’s not a “huge” delay.

The complete list of governments applying for loans is as follows: Atlantic City; City of Brigantine; Borough of Little Ferry; Borough of Moonachie; Cape May County Bridge Commission; Downe Township; Asbury Park; Atlantic Highlands Borough; Avon-By-the-Sea Borough; Borough of Belmar; Highlands Borough; Keansburg Borough; Little Silver Borough; Manasquan Borough; Monmouth Beach; Oceanport Borough; Sea Bright Borough; Union Beach Borough; Bay Head Borough; Beach Haven Borough; Berkeley Township; Brick Township; Brick Township Municipal Utility Authority; Lavallette Borough; Little Egg Harbor Township; Little Egg Harbor Municipal Utility Authority; Little Egg Harbor Fire District #2; Borough of Mantaloking; Ocean County; Ocean Gate Borough; Point Pleasant Borough; Point Pleasant Beach Borough; Seaside Heights Borough; Seaside Park Borough; Stafford Township; Toms River Municipal Utility Authority; Toms River Township; Toms River Fire District #1; and Tuckerton Borough.