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A city ordinance that allows property owners to apply for tax abatements for improvements made to existing structures and new construction throughout the city expires at the end of this year.

Under the state’s five year abatement and exemption law, cities that qualify may adopt an ordinance to provide local property tax abatement or exemptions. The law allows such municipalities to offer diverse abatement and exemption options to improvements made to residential, commercial and industrial structures, with the end goal being to increase the ratable base over time.

“The statute allows the exemptions to be chosen,” Glen Scotland, city redevelopment attorney, said at the Nov. 26 city council meeting. “It’s a menu, you are not obligated to do any of these things.”

Past members of city council first adopted an ordinance to offer the 5-year abatement in 2003 and voted to renew it under the same terms in 2008. The 2008 renewal expires Dec. 31.

Scotland and Don Sammet, city director of planning and redevelopment, gave a presentation to the council during the Nov. 26 meeting.

The Asbury Park City Council has discussed renewing the ordinance both as-is and with modifications during the past two council meetings, but have tabled the discussion without any solid decision in both sessions.

For the past ten years, residential properties that do any sort of improvements which would increase the assessed value of the dwelling — as long as they apply for the abatement within 30 days after the certificate of occupancy is issued — are given a 5-year abatement for up to $25,000 of assessed value, Erick Aguiar, city tax assessor, said in an interview with the Sun.

For instance, a residential improvement that increases the property value by $15,000 of assessed value would receive an abatement for $15,000 a year over five years. If the improvement increases the assessed value by $40,000, a five year $25,000 abatement would be granted, he said.

New residential construction and condominium conversions receive a five year abatement for 30 percent of the improvement portion of the assessed value with no $25,000 cap. These projects also require the abatement application to be submitted within 30 days after the certificate of occupancy is issued.

Improvements made to existing commercial properties fall under different categories depending on the type of improvement. Some receive five year abatements for the total sum of their added value, others begin to pay for the costs of their abatements in percentages that increase over the five year time span, according to Aguiar.

All commercial applications for abatements are subject to further approval of city council under the existing ordinance.

The almost 2.4 million of assessed value in abatements the city saw during the 2013 tax year were split about 50/50 between commercial properties and condominium conversion projects — “very few” abatements were associated with single family residential dwellings, he said.

Even if the ordinance expires and is not renewed by city council, abatements granted prior to the expiration of the ordinance continue until their respective five year time periods are up, Aguiar said.

It is an issue of some debate among members of city council, as the abatements cause a shift in the tax burden — they inflate the tax rate due to the lower ratable base.

In a discussion during the Dec. 3 meeting of city council, Councilwman Amy Quinn said she might like to see a more “quadrant-centric” use of the abatements, instead of them being offered city-wide.

“It’s a catch-22,” said Councilman John Moor. “It’s an abatement for them and a burden for everyone else.”

Councilwoman Sue Henderson would like to see it continue to be offered to commercial businesses, she said.

All five members agree that if the ordinance is kept to allow residents the opportunity to make improvements to their homes, the program should be marketed so residents are made aware of it.

“However we do a better job of letting people know this is available to them, we should let them know it,” said Councilman John Loffredo.

The issue is expected to be addressed at the Dec. 17 council meeting.

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