The Borough of Ringwood has four major financial responsibilities:
to secure and disburse funds for the operation of the Borough
to secure funds for the operation of local schools
to perform the same function for the regional school district
to secure funds for Ringwood's share of county expenses. (The amount is determined by Passaic County, based on equalized assessment values in its municipalities).
The assessment and collection of taxes, preparation of the municipal budget, disbursement of funds and investment surplus funds are performed by Ringwood's various financial officials. The New Jersey Division of Local Finance has general regulatory powers over the municipal finances. It has the power to supervise the preparation of the budget to ensure that Ringwood appropriates funds properly for the payment of debt obligation, to review audit reports, and to require the filing of financial statements. State law specifies the form and content of the municipal budget.
Areas of the Finance Department:
The Chief Financial Officer (CFO) is a state certified, salaried, full-time employee appointed by the Manager for a four-year term, reappointed for a second term and is automatically granted tenure after the fifth consecutive year.
According to Borough ordinance, the CFO oversees the following functions of the Department of Finance: budgetary accounting, fiscal control and reporting, custody investment, and disbursement of Borough monies; designation of public depository or depositories; assessment of real estate for tax purposes; purchasing, bills, and payroll.
Payroll: At the reorganization meeting of the governing body in January, the Council designates an account for payroll. At each regular Council meeting, the payroll must be approved.
Bills: All claims against Ringwood for services and materials are overseen by the Borough Clerk. The Council must then approve the bills at the regular meetings. The Borough Clerk records the claims as part of the regular Council Meetings.
Budget Procedures: During the first few months of each year, while the governing body is working to adopt a budget, a temporary budget is approved, consisting of a twenty-five percent maximum of the previous year's total. This provides financing while the current budget is being created. To establish what the local municipal budget will be, each department head forwards a projection of needs to the Borough Manager, who reviews them and sends them on to the Mayor and the Council. The Borough Auditor and Manager determine what the anticipated revenue will be, and the budget is then finalized by the governing body. The budget is introduced at a Council meeting and seconded. Legal publication follows, with the date of the public hearing included in the advertisement. The public hearing is held, and then the budget, like and ordinance, is adopted.
Actually this procedure is combined with the budgets from the local School Board and the regional School Board, as well as input from the County, which has determined Ringwood's share of taxes. Senior citizens and veteran exemptions are added as another revenue requirement. These figures are then added together. Anticipated revenues are subtracted, and the amount left represents what is to be raised by local tax levy. Anticipated revenues include state aid, surplus, fees, fines, and anticipated interest earned on the investments of taxes and franchise taxes.
The total property value in Ringwood is divided by the figure noted above, and that produces the tax rate. Ringwood does not assess personal property or personal effects.
The tax rate is expressed in dollars and cents. If the rate is said to be $5.76, this means that for every $100 of assessed valuation, the tax is $5.76. Each cent of rate is referred to as a point.
The Tax Collector is a State certified, salaried, full-time employee, appointed by the Manager for a four-year term, with tenure beginning after one term plus one day has been served. Once each property is evaluated and the tax rate established, it is the function of the tax collector to receive all pertinent taxes.
It is the duty of the tax collector's office to: bill local taxes; receive and disburse all money; handle senior citizen exemption applications; and invest money collected in 30-day, 60-day, or 90-day notes of deposit.
Delinquent taxes are a problem in every municipality. No interest is charged if the payment of any quarterly installment is made within ten days after the date it becomes due. Taxes are due February 1st, May 1st, August 1st and November 1st of every year. The rate of interest charged for the non-payment of taxes or assessments is eight percent per annum on the first $1,500 owed, and up to 18% per annum on any amount in excess. Since not all taxes are collected, state law requires Ringwood to plan in its budget a reserve for uncollected, based on the prior year's percentage of collection.
Unpaid taxes become a lien against the property one day after they are due. Anytime after April 1, the tax collector must hold a tax sale for prior years' taxes. A tax sales certificate is issued for each lien sold. If the certificate is purchased by someone seeking to buy property from tax default, the individual must retain the certificate for two years and begin legal action, called an "in rem foreclosure," which bars the right of the owner to redeem the property by paying back taxes and penalties. If the municipality becomes the lien holder it is only required to wait six months before starting the foreclosure action. The prevailing practice in Ringwood, however, has been for the foreclosure action to be held off until the latter part of the year.
Other procedures: All money received by the tax collector must be deposited within forty-eight hours in an official corporate account in the name of the Borough of Ringwood. The Mayor and Council designate the official bank.
The tax collector also receives and handles money for the Borough's water utility. This is a separate account. The rate of interest on delinquent bills for water usage or stand-by charges (the right to have a large amount of water on call), is 1.5 percent per month charged from the date the bill is rendered. No interest is charged if the bill is paid within 30 days. The water utility is supposed to be self-liquidating, with income equaling expenses. It can, however, spend in deficit for one year, and then the difference is supplied via general taxation, even though the utility serves only a portion of Ringwood.
Bonding, the final means of financing local government , is borrowing money through bond sales and bond ordinances. The Borough has incurred such debts for large local projects, construction of the municipal garage, and other projects that require money beyond the scope of local taxation. Ringwood's bond rating is A-1, considered excellent for a Borough of its size. The rating determines the interest rate Ringwood must pay for the bonds.
The extent of municipal debt is limited by state law to 3.5 percent of equalized assessed valuation averaged over a three-year period. The debt limit would normally increase each year for a growing town. School debt is considered separately and is set by state law at 4 percent of evaluation with the exception that when a school district has reached its debt limit, it may draw upon the unused credit of the municipality. In the event that the need of the community is greater than the combined capacity of the school and Borough, both have the right to petition the state for an extension of their credit.