December 3 Town Council meeting - municipal elections moved

Town council approved proposals to move municipal elections from May to November, create a self-insured healthcare plan, borrow $3.35 million to pay for the avalanche of successful tax appeals, and an energy-aggregation program to save less than $6 per month on average at its December 3, 2013, meeting.

The meeting agendas and related materials are here. Video of the meeting, downloadable and indexed to easily find specific discussions, is here.

The council also approved a financial agreement with the redeveloper of the Harvard Press site on Central Avenue for a tax abatement and payment in lieu of taxes (PILOT) of 10% of revenues from the 100-unit income-restricted apartment complex.

Also approved was a loosening of the ordinance governing the scheduling of council meetings. In addition, council accepted for consideration the 2014 proposed budget of the Downtown West Orange Alliance, which manages the Special Improvement District along Main Street and Valley Road. The proposed budget of $220,000 would include $60,809 from the town. Council will review the proposed budget at the next scheduled meeting December 17.

The ordinance on second and final reading to move council and mayoral elections from May to the November general election was approved 4-1, with me voting no. While I favor keeping the elections in May because of the threat to the non-partisan nature that we’ve maintained for decades, I believe the voters should decide such an important change with a referendum. The council and numerous residents contributed to the debate. A group presented a petition with 175 signatures asking the council to not approve the ordinance but to instead schedule a referendum, which the presenting resident said were obtained in a few days from across the town.

A 2010 state law allowed municipalities such as West Orange with charters that require separate, non-partisan local elections to change these dates to coincide with general elections. The law has led to some date switches among affected municipalities, but none in Essex County.

Approval of the ordinance extends the terms of the mayor and two councilmembers that would ordinarily expire shortly after the May 2014 election (as well as extend the terms of the other councilmembers). Under the new schedule, elected officials will take office January 1 of the following year. (For more detail and background, please see my opinion article.)

The administration received council approval to leave its current traditional insurance healthcare program with Horizon Blue Cross & Blue Shield and create a self-insured plan. The town would take on the direct risk of paying claims up to $200,000 per covered individual annually or $608,903 in aggregate per month, then rely on “excess loss” coverage from RTMS Nationwide if claims are higher.

A memo provided to the council from Fairview Insurance, the town’s insurance consultant and broker, indicates the town could reduce its current monthly premium of approximately $565,000 by 15% to $481,000 while keeping the benefits “equal to or better,” a requirement under the town’s labor-union contracts. In a separate document from Fairview, a detailed spreadsheet that includes the exact current cost and projections shows the actual projected savings of only 13.8%, nearly $6,600 less per month than the memo estimates. (I’ve asked the administration about this difference.)    

The costs of various plan elements are not specified in the proposed resolution or memo:

- a claims adjudicator, Insurance Design Administrators (IDA),

- access to a CIGNA healthcare provider network,

- third-party administrator IDA (which provides a similar service to Parsippany and Bloomfield),

- an on-site wellness-coach program for employees

- a “hot-line” health advocate service to advise and assist employees with problems  

(I’ve asked the administration for more details on the proposal, including costs.)

Creating the self-insured plan would be a prelude to obtaining state approval to join Parsippany and Bloomfield in a cooperative joint Health Insurance Fund that is projected to further reduce costs. This could happen in 2014.

Council also approved on second and final reading a proposal to issue $3.35 million in debt to pay for successful pre-2013 property tax appeals. The payback period will be determined by the state Local Finance Board for between three and seven years. The chief financial officer said funding the refunds now would add $200 to the average municipal property tax bill, while low market interest rates would not add significant interest costs and spread the tax impact over multiple years.

This borrowing raises the town’s outstanding debt to nearly $67.2 million.

A council majority voted 4-1 to approve a contract for the town’s energy-aggregation program that will save the average resident less than $6 per month on its electrical bill. That works about to approximately 8% of the electrical supply portion over 21 months. The program will produce as much as $100,000 in commissions to the town’s consultant, Gabel Associates of Highland Park. That will come out of the approximately $1.8 million in total savings, depending on how many residents decide to stay in the program. I voted against the contract because the consultant appears to benefit more than residents.

Council also approved a loosening of the ordinance on scheduling council meetings, following recent debate. The modifications include:

-  Changing the cycle from the first and third Tuesdays of each month (except once a month in July and August) to any Tuesdays of the month separated by at least two weeks.

-  Changing the allowances for different scheduling from a legal or national holiday to “holidays, special events and anticipated vacation schedules.”

-  Now allowing cancellations by majority vote of the council and also authorizing the mayor, business administrator or council president to cancel a meeting “summarily,” in an emergency.

The ordinance was approved 4-1, with me voting no. I don’t believe the mayor or business administrator, part of the executive branch of our government, should have any say over council meetings, which are part of our legislative function.

Council also approved the financial agreement with Valley Road Residential of Fort Lee, which is one of the last pieces of the proposed transaction that has languished for several years. The apartment complex is part of a larger redevelopment in adjacent Orange, designed to anchor increased residential and retail activity around the New Jersey Transit’s Highland Avenue station.

The major portion of project financing from the New Jersey Housing and Mortgage Finance Agency limits tenants to those with household income of approximately $65,000 or less and provides a tax abatement for the 30-year term of the mortgage. The PILOT is projected to result in annual revenue to the town of $105,260 once the building is completed and occupied – compared with approximately $35,000 now -- with small annual increases each succeeding year.

During public comment, a woman identifying herself as Karen Malone, a Montclair resident, alleged improper actions by three West Orange police officers at her home on November 4. She asked for an investigation and said she had made a formal complaint to the police department.   

Council also approved:

- Funding another $4,075 in successful property tax appeals

- A two-year contract with a one-year option for janitorial services to Ocean Clean of Cedar Grove for $49,825.

- A proposed ordinance on second and final reading that would require non-resident property owners of one- and two-unit rentals to register contact information, holders of mortgages and the fuel-oil service provider of the property. The ordinance would comply with a state mandate.

- A salary ordinance to pay the town’s emergency management coordinator a $4,500 stipend.

- An ordinance on first reading to add several bus stops along Pleasant Valley Way.

- Create a handicapped parking space on Dean Street.  

The administration withdrew its request for a proposed resolution continuing the town’s reverse-911 emergency communications service at an annual contract cost of $16,000, without providing a reason for the withdrawal.

If you’d like to contact the council with your thoughts on any of these issues, please send an e-mail to council@westorange.org or call 973.325.4155 to leave a message.

I’m a West Orange Township councilman since 2010, reachable at jkrakoviak@westorange.org. I'm a business communications consultant in my spare time.