Hopatcong introduces 2025 budget as auditor flags fund-balance decline, lists 15 fixes

Hopatcong officials introduced the 2025 municipal budget on April 17; the package complies with state levy and appropriation caps but calls for an 8.5% increase in the municipal tax levy.

Ray Cerinelli, the borough’s auditor, presented the budget framework and a draft audit. Cerinelli said the levy increase would translate to about $180 a year for a homeowner with a $380,000 assessed property and described the drivers of the increase: a sharp reduction in available fund balance, inflationary pressures (including sizable increases in employee health insurance and pension costs), and a shift toward a longer-term capital financing plan.

Ceroinelli told the council that fund balance — the borough’s primary reserve — declined from about $6.47 million at the start of 2024 to roughly $5.40 million at year-end, a drop of approximately $1.1 million. He said the decline reflected several factors: a decrease in tax collections year-over-year, smaller-than-usual lapsing appropriations (less unspent budget returning to fund balance), and increased interfund receivables that “restrict” the usable fund balance.

On the draft audit, Cerinelli listed 15 recommendations to improve controls and reporting. The items include: better segregation of duties where feasible; maintenance of fixed-asset records; timely deposit and correct posting of receipts; monthly bank reconciliations; posting prior-year journal entries to keep the general ledger in sync with financial statements; tighter review of third-party payroll remittances; stricter card and purchase-order controls; and improved accounting for trust assessments and grant receivables.

Cerinelli said some issues reflect turnover in the borough’s finance office during 2024 and that many recommendations are already being addressed by the recently appointed finance staff. He singled out the need for timely bank reconciliations and consistent recording of receipts as high priorities.

The council voted to introduce the 2025 budget on a roll-call vote: Bongiovanni, Falcone, Johnson, Kucovic, Rodriguez and Smith all voted yes. The introduction begins the public-notice and hearing process required under state law.

Ending: Council and staff said they will publish budget details and that the borough’s finance team will produce clearer public materials showing the dollar impact on typical residential properties and the separate school-tax effect. Auditor Cerinelli and borough finance staff agreed to continue working with council to implement the 15 audit recommendations.