A $760,000 budget for the expanded Special Improvement District (SID) would be almost six times larger than current budget, with almost half of it focused on a microloan program, marketing and capital improvements.

The tax rate for the special assessment will be $0.2518 per $100 of assessed value for the 544 properties, compared with $0.3 in the previous SID, which covered only 138 downtown properties. City officials initially anticipated a tax rate of about $0.351 under a new SID. That means the 138 properties in the original SID will  see what amounts to about a 28 percent decrease in the special assessment. For the several hundred new properties that were not in the original downtown SID, the new assessment would be somewhat comparable to an additional 4 percent of their overall property tax bill.

City Council introduced the 2015 Special Improvement District (SID) budget (AR-119-15) during a special meeting on May 14. First Ward Councilman Rodney Farrar and 6th Ward Councilman Raymond Giacobbe, Jr., both abstained. O-12-15 included a revised list of all affected properties. The budget will come up for a public hearing and final approval at the City Council’s June 16 meeting.

The largest expenditure in the proposed budget is $150,000, about 20 percent, targeted for a microloan program. The program “has yet to be developed completely will offer low-interest loans to businesses within the SID.” The SID will explore working with local banks and other agencies to “maximize these resources and the program, helping businesses that may have trouble obtaining traditional financing.”

Another $100,000 each is slated for marketing and capital improvements, comprising more than a quarter of the budget, along with $85,000 for special programs and events and $70,000 for a facade improvement program.

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The $100,000 is for capital improvements is yet to be determined but will be dependent on the input and requests of SID owners, City Administrator Cherron Rountree said. The facade improvement program is modeled after the program sponsored by the Redevelopment Agency and designed to help existing businesses improve their facades, such as the one pictured for Rahway Fried Chicken. The program can be used toward signage, lighting, awnings, window replacements, painting and other enhancements. Facade improvements were more of an interim program by the Redevelopment Agency, said Chief Financial Officer Frank Ruggiero. That’s not really what the the agency is tasked to do, he said.

Some $75,000 is budgeted for salaries and wages, which would fund two part-time staff: a director and a day-to-day person, according to Rountree. The SID budget also sets aside $50,000 for tenant recruitment and consulting. The budget anticipates services similar to the Pierson Commercial proposal (found within AR-119-15) but that is an example of the types of services; Pierson may or may not be the company to provide those services, she said. The SID offices would be headquartered in the former Elizabethtown Gas building on Central Avenue.

SID map For properties assessed at less than $1 million, the average SID tax will be $732 per year, or about $61 per month, according to Rountree. Some larger industrial properties throw off the averages, she said, while the average sized small business is typically assessed at less than $1 million.

My estimates projected an average $1,437 in SID taxes for the 544 properties, generating some $750,000, under the initial proposal, with an anticipated tax rate of $0.300 per $100. Those original estimates, with the new proposed SID tax rate instead, would look like this, though they don’t generate the $740,000, but rather about $632,000, or an average $1,211 per property. The difference could have something to do with tax assessments and equalization rates but I’ll have to take a closer look.

Two properties were removed from the original ordinance, adopted in December, because they were misclassified in the tax assessor’s computer system, Rountree said. One was 172 Monroe St. and another was an East Scott Avenue parcel (Block 381, Lot 16).

Additional programs will be determined by the Rahway Arts District (RAD) board, Rountree said, but more analysis will be needed to determine capital improvements. She described it as an opportunity for businesses — especially those that had not been previously included in the SID — to make capital improvements. The budget is similar, proportionally,  to previous budgets, she said.

For a look at how the RAD spent the $130,000 raised by annual SID funds previously, here’s a link to the most recent tax forms for 2012 and 2011.

Giacobbe said he would have preferred to have more specific information about special events and tenant recruitment prior to voting. City Council President Bob Bresenhan said this is the beginning of the process. Ruggiero likened it to the municipal budget, where the administration presented its budget to City Council for its review.

Bresenhan asked how many programs are anticipated from the RAD, and what kind of goals is the board attaching to this spending plan. It’s good to know what benchmarking against goals, he said.

The RAD provides an annual report, Rountree said, and the board probably will be polishing up its plans. She can ask for an estimate but in the first year,  it’s not set in stone.

It’s unclear what impact a lawsuit against the expanded SID might have on the upcoming budget. City Council approved the expanding the SID beyond downtown in December.