Princeton merger begins to pay off as early tally shows higher than expected savings

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PRINCETON- “Savings” was the battle cry during the campaign for consolidation of the Princetons.

Proponents argued that the unified town would spend million less annually compared to the separated borough and township and reduce the tax burden, while opponents of the merger pooh-poohed the projected benefit as too little and too uncertain.

With the two municipalities now combined into one as of Jan. 1, the actual figures are starting to firm up — and it appears that the savings are real, and they are greater than consolidation planners projected last year.

The one-time cost to combine the towns is also higher than projected, but is being offset by contributions from the state and Princeton University and possibly by the earlier-than-expected departures of some employees.

When proponents were trying to sell voters on consolidation, they touted the expected annual savings at $1.6 million, which did not count various one-time costs.

However, Scott Sillars, head of the transition task force’s finance subcommittee, said the first-year savings without those costs is expected to actually total $2.8 million, due in part to the early departures of several police officers and dispatchers whose positions were possibly going to be eliminated as part of consolidation.

Planners had expected to reduce the size of the combined police force, but voluntary departures accelerated the process, which had been expected to take a few years.

Even when various costs are factored in — including $900,000 for expanded, townwide trash collection and $200,000 in one-time consolidation expenses, such as moving costs — the new municipality is still expected to spend roughly $1.7 million less on its operations than the former township and borough spent, Sillars said.

With the town still putting together its reorganized staff and the council months away from drafting its first budget, the numbers are in flux. But Sillars said he believes it is likely that the long-term savings could end up being higher.

“I think we are still being conservative,” Sillars said.

Looking ahead, calculations based on numbers in a December report indicate that savings in 2014, compared to pre-consolidation figures, could range from $1.8 million to $2.8 million, after the continuing payoff of consolidation costs.

The figures, provided by the firm hired to assist in the consolidation process, the Center for Governmental Research, suggest that in 2015 the savings number could be as high as $3.3 million.

The effect on tax bills remains unclear, but Sillars said homeowners could actually see a reduction in the municipal portion of their taxes of 5 to 7 percent, and possibly as high as 10 percent.

Contributions defray cost

At the same time that long-term savings have grown, the complicated process of merging the former borough and township has turned out to be more expensive than planned.

Before voters approved the merger, the consolidation commission had estimated the process would cost about $1.6 million. But the most recent data from the transition task force has pegged it at roughly $2.3 million, including building modifications, payouts to departing employees, legal fees and new police uniforms, among other items.

Setting up reorganized offices in the municipal complex — the former township complex — turned out to require renovations that added to the consolidation bill, Princeton town administrator Bob Bruschi said.

“There was a general assumption that we currently have a desk for everybody, so we’ll have a desk for them at the end,” Bruschi said in an interview last month. “We didn’t consider that the furnishings in one building would be different in the other.”

“Trying to fit six people in a workspace of four is going to cost you money,” he said. “You can’t just shrink the furniture down. We’re doing the best we can to reuse what we have.”

Legal fees for creating one town from two also have risen sharply, from an estimate of $180,000 to about $340,000, though the figure could still change. Creating the basic municipal code alone has cost more than $167,000.

“We’re plowing new ground,” Sillars said. “There is no template for consolidating a municipality from the legal viewpoint.”

Some costs did come in below the expected figures. In 2011 the consolidation commission budgeted $306,000 for police uniforms and weapons, but the cost appears to have come in at $78,000, according to the latest transition task figures.

Despite the overall increase in one-time expenses, Princeton may actually end up spending less than the initial estimate thanks to contributions from the state and Princeton University provided specifically to aid the consolidation process. Added savings from municipal employees who quit before their positions were eliminated could also help defray the spending total.

The state contribution has not been finalized because it has been promised at 20 percent of consolidation costs, which are themselves in flux. But it has been estimated at $460,000, while the university has promised $500,000. The reduced spending for departed employees comes to $700,000.

Those modifications would cut $1.7 million from the one-time consolidation ledger, reducing the cost to about $640,000. Under state statute, the town will pay that off over five years.

The council has the discretion to use the $700,000 in savings from early employee departures however it wishes, but Sillars said he would recommend it be applied to the transition costs.

Not included in the cost calculation are some $1.1 million in other expenses that would have been incurred even if consolidation had not been approved, Sillars said. They include $437,397 to move Corner House to the former Borough Hall and $612,109 to upgrade police dispatch services.

Job cuts tough but essential

A central argument for the merger, and for more municipal consolidations statewide, has been the cost savings from greater efficiencies — that is, having fewer workers.

“The hard part was wading through what this 250-person team would be,” Bruschi said last month. “It is unfortunate that we had to let some people go in order to get where we wanted from a personnel standpoint. Everyone understood that was going to the primary driving force of what would make us more lean and a little more efficient.”

In 2011, consolidation officials had expected the town would have to pay severance and other separation costs to about a dozen nonpolice employees. But some staffers, among them former township administrator Jim Pascale, left early on their own, and payouts ultimately went to eight people.

The $250,000 spent covered payouts to four staff members from the township and four from the borough, with the individual amounts pegged to seniority, deputy administrator Kathryn Monzo said.

The separation process was easily the most taxing part of the transition, Bruschi said.

“We had to go through layoffs about four, five years ago and to me it’s the single hardest thing you have to do. I’ve had to let people go for job performance or for doing something stupid on the job ...(but) this hurt because none of these people did anything to warrant getting terminated. It was a numbers games, and that makes it harder,” he said.

As consolidation approached, both uniformed and nonuniformed employees who anticipated that their positions would be eliminated soon found jobs elsewhere and left, creating the $700,000 in unanticipated early savings that may go toward trimming the tally of one-time consolidation costs.

The departures of nine police staffers — seven officers and two dispatchers — saved the town about $551,000. Those positions would have been phased out as Princeton sought to bring police staffing down to a baseline of 51 sworn officers. The borough clerk left, saving about $116,000, and the departure of a zoning worker saved $74,000.

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