A BOLD ACTION PLAN FOR A BRIGHTER FUTURE
In two weeks, we will be presenting our 2020 budget to the public. While the budget is still being finalized, I want to take this opportunity to provide some context behind the numbers, let you know what to expect in this year’s tax bill, and share our growth strategy for the future.
First and foremost, some background. For the past decade, the Town has taken a very conservative approach to budgeting which has effectively maintained the status quo while yielding a positive AAA bond rating and sizable surplus. It’s an approach that a financial advisor would apply to a couple in retirement, ensuring there is adequate funding to support basic needs for their remaining years, while leaving something for the grandkids.
For Westfield, this has resulted in a healthy nest egg, but has come at the expense of long term investment in roads, parks, infrastructure, and our downtown to adequately meet the reasonable expectations of taxpayers.
It’s a strategy that has also made us overly reliant on revenue sources that contradict good long-term policy, such as parking tickets and permits for tear downs, road openings, and construction. This not only undermines our neighborhood character, downtown vibrancy, and quality of life, but also makes us vulnerable to the whims of the economy, which has necessitated an excessive surplus as a safeguard.
Since I was elected, we’ve begun to take a different approach. Under the leadership of Finance Chair Councilwoman Linda Habgood, we have begun transitioning our financial approach to one that a financial advisor would apply to a growing family with a long and expansive future ahead. We made investments in roads, equipment, and automation, while returning excess surplus to the taxpayers in the form of a zero percent municipal tax increase last year. That reduction was a deliberate decision made, in part, to reduce taxpayer uncertainty over the impact of the county mandated tax revaluation, the final outcome of which resulted in a decrease in taxes for 57% of residential properties.
We have also made conscious decisions to reduce downtown parking enforcement, discourage tear downs and subdivisions, and protect our newly paved roads with a temporary road opening moratorium until a better long term solution was determined.
In the short term, while we have made these choices to positively impact issues that matter to residents, understandably they have resulted in a revenue shortfall that will force us to make some hard budget decisions this year. To offset that loss, there will be a tax adjustment for residents, and department budgets have been reduced so that our Town’s budget is anticipated to increase by only .05%, among one of the lowest increases in recent history.
It’s also important to remember that the Town only receives 16% of the property taxes we collect. 24% of our taxes are sent to Union County (we are their largest municipal tax contributor), while 58% of our taxes go to the schools, and 2% to the library. Also of note, 90% of our taxes are paid by residents, not commercial businesses, reinforcing the need to diversify and expand our tax base if we are to improve and enhance Town services.
Going forward, how will we accomplish our goal of increasing revenue to achieve our ambitious plans for parks, fields, and downtown revitalization, without relying on tax increases? The answer lies, in large part, in the economic benefits of redevelopment, a tool created by the State Legislature that has been employed by many NJ towns to jumpstart their revitalization, including Cranford, Summit, South Orange, Princeton, and Morristown, to name a few. Westfield is one of the few towns that has never capitalized on the financial benefits of redevelopment.
There has been a good deal of concern over the health and vitality of our downtown and, rightly or wrongly, there has long been a perception that the vibrancy of our downtown reflects the health of our Town generally. A thoughtful and well-planned redevelopment strategy allows us to control and drive the outcome of future development to bring our Master Plan Reexamination goals to fruition, prioritizing the downtown recommendations as a means to support its revitalization.
As a municipality, we have the authority to declare certain public or private properties as “areas in need of redevelopment,” a designation that the State allows if properties meet qualifying criteria. Once designated, a Town may enter into a redevelopment agreement with a potential developer which typically includes a Payment In Lieu Of Taxes (PILOT) and is beneficial for three significant reasons:
1) provides the Town significant control over a project, including the power to dictate architecture, building materials, green spaces, amenities and more
2) allows the Town to retain 95% of the negotiated fee, with only 5% going to the County (as opposed to 24%)
3) provides up to 30 years of consistent, recurring revenue to the Town
For example, the 333 Central apartment building was built without a redevelopment designation, therefore the Town was unable to dictate the project’s aesthetics nor reap the financial benefits of a PILOT agreement. As a result, the Town currently only receives 16%, or $72K, of their current tax bill of $451,500 (the County receives $108K). If it had been a designated redevelopment area with a PILOT agreement, the Town could be receiving a 30 year payment of approximately $380K/yr (vs $20K for the County) as a Payment In Lieu of Taxes. This $308K positive difference to the Town would be an annual recurring revenue stream that could be used towards improving our parks, adding new fields, and enhancing our downtown.
We also know it’s in our collective best interest to adequately invest in our schools. PILOT programs allow the opportunity for the Town to enter into creative agreements with the school district to support specific initiatives that benefit the community as a whole, a potentially very timely opportunity.
For reasons that are unclear to me, Westfield has never pursued a redevelopment designation. The adoption of our affordable housing settlement, however, has provided us with the opportunity to consider redevelopment designations to maximize the economic benefits of development that is already planned. It also enables us to ensure that these developments are in line with our vision, and addresses community concerns regarding traffic, school enrollment, and infrastructure. To that end, the proposed project at 418-448 South Ave East has already been designated a redevelopment area as a preface to an expected agreement with Elite properties, the owner of that development.
Tonight the Council will be voting on resolutions asking for redevelopment studies to assess all eight municipal parking lots and the property that the Rialto building occupies to see if they qualify as “non-condemnation areas in need of redevelopment.” Additionally, we will be asking for a redevelopment study of the Lord & Taylor sites as a result of our continued conversations with the owner of that property, Hudson’s Bay Company, in order to plan for the future of that location.
These potential designations do not necessarily mean that we will be proposing developments on any or all of these sites. But by designating them all, it allows us to take a strategic approach to identifying the best opportunities and locations for new parking solutions and revenue-generating residential, retail and commercial development; as well as planning for the possibility of a new firehouse, community center, and public plazas. As with the Master Plan, we will be seeking and encouraging public input into any proposed downtown plan, a process that will take place during the 3-6 months that the study will take to complete.
Additionally, in consultation with the downtown property owners, we will soon be seeking a study to qualify our entire Special Improvement District as an “area in need of rehabilitation,” a lower threshold designation which does not allow for PILOT agreements. It does, however, allow for agreements with property owners to encourage them to improve their properties through five year tax abatements on the value of their improvements. This designation would ensure that all downtown stakeholders have an opportunity to participate in and benefit from the revitalization of our downtown.
In closing, these opportunities have the potential to reshape Westfield’s future by establishing significant new revenue streams while transforming our Downtown to ensure the long term vibrancy of our community. I can think of no better legacy as we celebrate our 300th year. #W300 #ourfutureisnow
Photo of Mayor Shelley Brindle by Susan Cook