Mayor Pushes for 5-Year Plan to Fund Retiree Payments

With as many as 16 township employees retiring by the end of the year, much of Friday's municipal budget session focused on Parsippany Mayor James Barberio's plan to adopt an ordinance funding payments to retirees over a five-year period.

The ordinance, which will be presented to the council as an emergency resolution sometime in the upcoming weeks, aims to help towns limit their budgets, while dealing with little to no funding

“This year we were able to adopt an ordinance to fund the payout of our retirees over a five-year period.” Parsippany Chief Financial Officer Ruby A. Malcolm explained. “So you’ll be seeing an ordinance and an emergency resolution to pay, mostly the police, but anyone who is retired, and we’re paying them over time. We’re going to do an emergency resolution and you’re going to have to budget 1/5 of it each year.”

With five retirements already confirmed (and a sixth coming on April 1) and the possibility of up to 16 town employees retiring by year end, Barberio believes the price tag is just too high to not use the new law.

“We didn’t create the law, but we need to take advantage of it now,” he said. “If we don’t take advantage of it and you put another [$700,000 plus] into the budget, you’re at a point now with the police department, where you have to deplete the daylights out of it.”

As many as 16 police officers were expected to retire this year, but Chief Michael Peckerman said at that amount could be as few as four.

Bob Crawford, a member of the Board of Education who has for council in November's election, disagreed with the mayor, explaining that delaying the payments would only cause more problems for the future, and that the township’s intentions should be “matching expenses with revenues.”

“We have an $850,000 responsibility, and what we’re saying is, we’re going to only take one-fifth of that and we’re going to push our current responsibility off for future years,” Crawford said. “And yet, what I’ve continually heard when I’ve been here is we don’t necessarily anticipate next year to be any better than this year. That is not good financial management. Deal with the issues you’ve got today, today.”

Barberio continued to explain the benefits of the five-year plan, pointing out that the town funding has come to a halt.

“This is a five-year, short-term bond, is basically what it is,” he said. “It’s an emergency fund, because as you know, prior we didn’t have a 2 percent cap. We’ve got fundings stripped away from the town—$1.2 million last year hasn’t been replenished. This is state law. The state put this in for a reason, knowing that we have to deal with our difficult times ahead of us.”

The mayor also explained that not utilizing the ordinance would most definitely lead to a higher tax levy cap.

“We have a potential 16 [employees] that could retire by the end of the year,” he said. “Right now we definitely have five retirements and [we’ll have] six as of April 1, so we have to anticipate those dollars. If you put all of those dollars into the budget this year, you’re just going to be way over the tax levy.”

Councilman Michael dePierro added to the discussion, explaining that the amount of retirements won’t be as robust in upcoming years.

“The mass exodus that we’re seeing right now is those employees, not just in Parsippany but throughout the state,” he said, “that fear they might lose their medical benefits or fear they’ll lose something in their pensions or their sick leave and vacation days. You’re not going to see that mass exodus in following years. We can’t recover that all at once.”

The municipal budget session continues at town hall Saturday morning at 9 a.m.