May 6 Town Council meeting

A council majority approved proposals to borrow nearly $7.26 million through three bond ordinances, adopt the 2014 municipal budget that raises total municipal property taxes 0.87% and borrow an additional $600,000 to pay for snow removal at the May 6, 2014, council meeting.

The meeting agendas and related materials are here. Video of the meeting -- downloadable and indexed so you can quickly find the topics you’re looking for – is here.

The administration asked the council to approve the 2014 municipal budget several months in advance of tradition, typically in the fall. Chief Financial Officer John Gross said at the April 22 council meeting that the operating portion of the budget is in place and that future additions of pending grants and the associated expenditures would offset each other and keep the budget in balance.

The amended $73.38 million budget, which at present increases spending $85,147 from 2013 (and will increase more throughout the year as grants and their offsetting associated expenditures are added), projects a total municipal tax increase, including the library and Open Space taxes, of 0.87%. Under the budget estimates, taxes for the owner of the average assessed value single family home in town, $339,808, would rise 1.22%, or $38.18, to $3,158.86. (Taxes for this average homeowner will rise more than the tax rate because the administration is projecting a 0.35% increase in the 2014 average assessed value single family home from 2013.)

During the budget discussion, I made a presentation addressing the issue that the mayor and some council members were calling this a “no-tax-increase” budget. Their claim is based on the fact that the combined municipal tax and library tax are identical, to the penny, from last year. Using numbers directly from the budget and a board replicating a portion of a key page from the budget, I showed the increased tax rate that all property owners will pay this year. The rate increased to make up for the decline in the town’s total assessed value of property. The video excerpt of the presentation and the ensuing discussion is here.

The budget vote was 4-1. I voted against this budget because it raises the total municipal property taxes you pay, when I believe the council could avoid this increase.  

Council also approved the second amendment to the budget, provided just before the meeting started. The amendment corrected an error in the pool budget to clearly show the town moving the $29,677 surplus into the operating budget.

The council majority approved on 4-1 votes three bond ordinances on second and final reading. The approvals raise the town’s outstanding and authorized debt to $70.87 million, up 14% from $63.6 million at the end of 2013 – with as much as another $3.5 million likely to come before the council later this year to cover successful tax appeals.

- Borrowing $550,000 to contribute to the Llewellyn Park sewer and road improvement project. The original bond ordinance, approved in 2012, authorized the $4.18 million project to borrow up to $3.68 million. The entire project was to be repaid by Llewellyn Park property owners through a special assessment. The ordinance was designed to give Llewellyn Park property owners access to the township’s low borrowing cost to avoid much higher interest rates they would otherwise face.

Debt service projections from John Gross, the town’s chief financial officer, indicate that by borrowing through the township, the total 30-year savings to Llewellyn Park residents will range from $1.1 million to $5.1 million (midpoint $3.1 million). Mr. Gross’s projections estimated private financing of 6%. (I made a mistake in my interpretation and calculation of his numbers at the meeting, understating the potential low and mid-point of savings.)

The council majority agreed to the administration’s request to borrow $550,000 more to cover cost overruns that will be repaid by all the town’s property taxpayers as part of the town’s responsibility for community health and safety. Mr. Gross estimated this will cost the town about $750,000 over 30 years. The project cost has increased by 14% to $4.78 million. The project engineer said at the meeting that the sewer infrastructure was in worse shape than expected, raising sewer costs from $1.1 million to $1.6-$1.7 million.

I voted against this ordinance, pointing out that even the higher sewer estimates were still less than the original project cost. This means the town had already addressed the health and safety issue in the original agreement – and the town and its taxpayers have no additional responsibility to cover cost overruns.

This proposal appears at odds with Mayor Robert Parisi’s comment at the April 8 council meeting that “… As members of the council know that we’ve approved bonding for Llewellyn Park and we’ve approved bonding for redevelopment. Those are not, that’s not debt service that the taxpayer, the average taxpayer is responsible for.” (The comment is at the 10:30 timemark of the council meeting video.)

- Borrowing $6.65 million to fund a wide variety of capital improvements ranging from traffic cones, cots, hoses and desks to an aerial ladder fire truck and asphalt roller to street re-surfacing and sewer upgrades. The total estimated cost of the purchases is $7 million. The administration provided a 10-page summary of the proposed investments that I’ve posted on West Orange Grassroots here. (The administration eventually posted the document on the town website as I requested.)

I voted against the ordinance for a number of reasons: concerns at the large amount of borrowing, lack of specificity of need for many of the projects and excessive requests. The ordinance requests more than $100,000 for new computers, most of them justified as compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA, although it’s misspelled throughout the document). I pointed out that HIPAA requires software that can be updated for security and privacy reasons – and doesn’t require replacement of the entire computer. Mr. Gross said the town planned to review each computer to see if it’s possible to simply replace the software and would not buy new computers unless it found such a need.

- Borrowing $57,000 to replace bleachers at the high school athletic facilities. Although the ordinance specifies “for the replacement of bleachers at various fields,” Town Engineer Leonard Lepore told the council the project was to replace and raise the third-base-side bleachers at the baseball field to improve the sight-line. When I asked him at the meeting why the town was paying for a project on high school property, he said he didn’t know.

In an e-mail sent just before the April 22 council meeting started, Mr. Gross wrote: “It is my understanding that the BOE does not have such funding.” The town has funded millions of dollars of improvements at the high school athletic facilities in the last decade – in at least one case borrowing money that the school district repays -- sidestepping the state law requiring most major improvements by school districts to pass voter approval.

I voted against this proposal because the town should not make capital improvements on school property.

The council approved an administration request for an Emergency Appropriation for what it calls “extraordinary expenses incurred, or to be incurred, by the emergency response and clean up from This (sic) winter’s snow storms …” The resolution calls for “special emergency notes” of at least $120,000 each for the next five years to repay the appropriation. This will raise our debt service during this time period.

Shortly before the meeting started, the administration responded to my latest request to review the bills by providing council a spreadsheet listing vendors and their bills totaling $796,483. The spreadsheet is here. Business Administrator Jack Sayers refused to provide the bills for the council’s review, but he said once the administration asked council approval to pay the bills, I could request the documentation.

The resolution passed 4-1. I voted against this proposal because I need to review the bills to determine if the amounts and the borrowing are warranted.

Other approved agenda items included:

- An executive session, closed to the public, to discuss the town’s litigation with Link Communications Ltd. over the town’s claims that electronics, including computers and cameras, for the town’s police cars didn’t work. After the session, the council voted to accept a settlement in which the town would receive $100,000 that the town’s attorney said would roughly cover legal costs. The town had paid $320,000 originally for the equipment. The lawyer recommended the settlement because of uncertainty about the town’s ability to adequately prove it had received faulty equipment and had not itself caused the problems.

- An award of the 2014 food and beverage concession at Ginny Duenkel Pool to Verona Bagels & Deli (Bagelwich Bagel Bakery) for $6,500. The contract was competitively bid but resulted in only one bid.

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.