OLD BRIDGE TOWNSHIP COUNCIL
AGENDA MEETING
February 4, 2002
An Agenda Meeting of the Township Council of the Township of Old Bridge was held on February 4, 2002 in the Municipal Complex. The meeting was called to order at 8:00 p.m. by President Butler who asked all present to participate in a salute to the flag which was followed by a short prayer.
Roll call by Deputy Clerk Stella Ward showed the following answering present:
Councilmen Calogera, Greene, Hoff, Redmond, Councilwoman Panos, President Butler. Councilmen Baker and Maher arrived at 8:05 p.m.; Councilman Testino arrived at 8:08 p.m.
PROCLAMATION - (2/11/02)
Congenital Heart Defect Awareness Day
Councilman Redmond: Anyone who was here last year knows this is something that I have been involved with for a couple of years and the Mayor has agreed to do it again this year.
Governor McGreevey has done it along with a number of other states, 44 to be exact and we will be doing it at Monday night's meeting.
Move-up
GUESTS - (2/4/02)
Gene Farrell - Certification of Audit
Action Required 2/4/02 - Resolution Adopting Certification
CERTIFICATION OF AUDIT
RESOLUTION #80
WHEREAS, NJSA 40A:5-4 requires the governing body of every local unit to have made an annual audit of its books, accounts and financial transactions; and
WHEREAS, the Annual Report of Audit for the year 2001 has been filed by a Registered Municipal Accountant with the Municipal Clerk as per the requirements of NJSA 40A:5-6 and a copy has been received by each member of the governing body; and
WHEREAS, the Local Finance Board of the State of New Jersey is authorized to prescribe reports pertaining to the local fiscal affairs as per R.S.52:27BB-34 and
WHEREAS, the local Finance Board has promulgated a regulation requiring that the governing body of each municipality shall by resolution certify to the Local Finance Board of the State of New Jersey that all members of the governing body have reviewed as a minimum , the selections of the annual audit entitled:
General Comments
Recommendations
and
WHEREAS, the members of the governing body have personally reviewed as a minimum the Annual Report of Audit and specifically the Annual Audit entitled:
General Comments
Recommendations as evidenced by the group affidavit form of the governing body; and
WHEREAS, such resolution of certification shall be adopted by the governing body no later than forty-five days after the receipt of the annual audit, as per the regulations of the Local Finance Board; and
WHEREAS, all members of the governing body have received and have familiarized themselves with at least the minimum requirements of the Local Finance Board of the State of New Jersey as stated aforesaid and have subscribed to the affidavit as provided by the Local Finance Board; and
WHEREAS, failure to comply with the promulgation's of the Local Finance Board of the State of New Jersey may subject the members of the local governing body to the penalty provisions of R.S. 52:27BB-52 to wit:
RS 52:27BB-52 "A local officer or member of a local governing body who, after a date fixed for compliance, fails or refuses to obey an order of the director of the director (Director of Local Government Services), under the provisions of this Article, shall be guilty of a misdemeanor and, upon conviction, may be fined not more than one thousand ($1000.00) or imprisoned for not more than one year, or both, in addition shall forfeit his office."
NOW, THEREFORE BE IT RESOLVED that the Township Council of the Township of Old Bridge, hereby states that it has complied with the promulgation of the Local Finance Board of the State of New Jersey dated July 30, 1968 and does hereby submit a certified copy of this resolution and the required affidavit to said Board to show evidence of said compliance.
Moved by Councilman Hoff, seconded by Councilman Testino and so ordered on the following roll call vote:
AYES: Councilmen Baker, Greene, Hoff, Maher, Redmond, Testino, President Butler
NAYS: None.
ABSTAIN: Councilman Calogera, Councilwoman Panos
Prior to the resolution, the following discussion took place.
President Butler: I think that a week or so ago, we felt that we needed an update in reference to the budget audit and we asked Mr. Farrell to come and give us an overall presentation, which he has agreed to do this evening. Also, I would like to advise the Council members that we have to sign-off on the resolution adopting the Audit Certification this evening.
Gene Farrell: The audit has been filed with the State of New Jersey and what I would like to do this evening is go over the highlights of the report and what I consider that you as members of the governing body should primarily focus upon as it relates to this report. For the benefit of the new members, when an auditor makes a report the key issues that you want to look for from the audit itself is the type of opinion that is rendered regarding the financial statements; the management letter of comments and finally what is unique in government is the report on compliance and internal controls. Basically, the opinion that we render is an unqualified opinion which is the highest level an auditor can render to any form of financial statements and if you take a look at the management letter of comments on the back of the report, you will see that they are very minimal. One relates to the collection of dog licenses, and basically to eliminate that problem, someone within the finance office should review that report and then reconcile that report to the revenues that are collected. The other issue relates and it is more of a timing issue in the tax office. You have a very large community and sometimes significant dollars related to the overpayment of tax collections and monies are remitted back to the tax payers, this information has to be entered into your system and what happened last year and the previous year, that information was not entered on a timely basis and so the information recorded in the finance office basically, did not correspond to the tax office records because the refunds themselves were not entered. For the most part one of the key indicators when you look at the management letter of comments itself, there are three categories, material weaknesses, reportable conditions and other matters. The ones that are of dire significance are material weaknesses and reportable conditions. If you take a look at our report, the category that these items fall under are listed under "other matters".
Currently, the State of New Jersey is looking into converting over to the general accepted accounting principles and they have drawn on seven professionals within the industry and basically one of municipalities they were going to utilize as a test basis insofar as how difficult it would be convert from the -------basis to the general accepted accounting principles with the Township of Old Bridge, so I was pretty proud to hear that and you should be proud as members of the governing body. Ten years ago, we were in a lot of trouble here and to go from that point to be almost at the pinnacle of the industry itself and the fact that they want to use the Township's financial records and your resources to pretty much gage and understand the cost impacts that would be imposed on municipalities that would be going through this transition.
Insofar as your overall financial position, again as Council people one of the things you want to take a look at is your ability to replenish your fund balance itself, and also some of your exposures. It is my responsibility as an auditor to give you my opinion regarding your exposures. If you take a look at the balance sheet, the vitality of the township is very high you have a very significant fund balance, substantial reserves that are on the balance sheet in support of liabilities related to accumulated sick and vacation benefits to your employees, you have money set aside for tax appeals, which are fairly significant. Your debt is roughly 1.73%, and the threshold established is predicated on the percentage of your assessed valuation, which the maximum amount is 3.5%, so you can see you are way below. The only thing I would like to bring to your attention is the exposure. The State is in a dire financial position right now. Governor Whitman passed a provision where they were allowed to bond for pension benefits.
We have all read about the loss related to their investments in Enron Securities, which loss and devalued the fund itself. As a result of these events taking place you will probably have some significant pension costs added to your existing operating budget. The other thing is you are a developing community. One of the most critical things that you have is the tax base. You have significant ratables that have come into the community and one of the most significant things you can do is open the lines of communication with your EDC and other similar organizations.
At some point in time when the economy starts going south, as what happened in the late 80's, early 90's, you might have that same experience, so my recommendation to you is really monitor these areas because they will have a traumatic impact on your overall operation and what we don't want to have is to relive that experience we had in 1992, so it is very critical to monitor the tax base and try to get as many clean ratables to the township as you can.
Himanshu Shah: I think as Gene indicated over the years we have come back from significant difficulties not only in finances, but in management reporting. I am glad to hear that we are considered a model for the future financial systems changes that the State is contemplating and I want to take this opportunity to thank my staff because a lot of my success and the finance department successes depends on the staff and I am proud to have a very good staff. They are very hardworking and provide a very good reporting system. The last two years with the addition of Kathy Silber in the tax office, I feel she has done an excellent job in improving the operation of the tax office and I think that the comments that you see about the over payments are now resolved. I think our performance is very good, if you look at the other comments page of previous audits, there are only the two items on it whereas in the past there were pages of comments. I think that we have come a long way. In reference to the financial budgeting and the tax base, we have been advising the Council and the Mayor to make them aware of these conditions during the budget hearings. Hopefully, we will be able to deal with it in a proper manner. Also, part of my job is to provide Council corrective action plan on the two items mentioned in the report and perhaps next year we will see an audit with no comments.
Councilman Calogera: Were the tax overpayments the result of tax appeals that we lost or simply overpayments?
Gene Farrell: It is a combination of both. Basically, the issue at hand is when the checks themselves are reimbursed to the taxpayers, what you want to do is the tax system is based on a subsidiary ledger of the general ledger and they were not in agreement. You always want to have those documents in agreement because you have a high volume of transactions with low dollars so one of the control mechanisms is that you always want to have these documents in agreement with each other, that is really the issue.
Mr. Shah: I can expand upon this problem. I think what you were referring to related to the tax appeal was that in the early 90's we had significant tax appeals, probably about 2000 and a lot of issues related to that are carried forward. We have been reviewing and looking back historically to make sure that the property taxes are refunded. When I came here in 1993 we had over two million dollars in overpayments sitting on the books, we are now down to a couple of hundred thousand dollars, which is not unusual for our size community. We have 20,000 property records on file and we collect about $20,000.000.00 quarterly taxes within a ten day period so there is a tremendous turnover of transactions in that period. Our records are pretty much up to date and with the changes in the tax collector position, this matter is now under control. The Finance Department was making sure that all of these records were appropriately recorded, the Tax Office was supposed to maintain a separate ledger so that it was in balance with the Finance Office, that was not being done, now it is.
Councilman Calogera: With all the problems that are going on in the financial market and the housing market, how safe are we with the existing surplus that we have in the event of a downturn?
Gene Farrell: The thing you really want to focus in on is one of the reasons we had a problem in the early 90's was that we went through a reevaluation, so the values placed on all the properties in Old Bridge were at the highest point in the market. The market drove substantially down, so when you go through a period like that, usually it is two years before those values wash out and you get a true picture. My warning to you is that the State through the County Board of Taxation pretty much mandates reevaluation, so what you want to do is work with Brian Enright as far as where are we with the market values and what you don't want to do is get into a situation especially when you have significant commercial ratables because as soon as you have a downturn, the first thing that will happen is that they will appeal the property taxes that they are paying to the township and they will probably have strong support to win the appeal because the appeal is predicated upon the volume their volume of business decrease that would drive down the value that the property holds. Insofar as the surplus, you have a significant one it is over $8,000,000.00 and one of the things is and I caution is that your added... taxes, you've been generating between three quarters to one million dollars there and you have significant monies that are reserved for tax appeals. Also, if the township is so devastated because of appeals you have the opportunity to minimize that impact by bonding. The main objective right here is to always maintain a good book and monitor your tax bases because it not so much the refunding of the appeal, but the impact is going to be when you strike your budget, it is predicated upon the values and when you go through the appeal process, it is a double hit, it is not only refunding the money, but your percentage of collection can go from 98% to 92% . If you take a look at what happened in the early 90's, one of the biggest factors was the percentage of collection dropped such that it had a direct impact on the reserve from collected taxes, which really drove the tax rate up.
Mr. Shah: It is important to point out that the percentage of collection rate has a significant impact, every percent is almost one million dollars, so if we are short 1% that is a one million dollar shortage, that is why I have been stressing that we maintain some level of surplus.
Gene referred to the $8, 000.000.00 surplus at the end of 2001 fiscal year, keep in mind that most of that surplus we use in the budget, approximately $7,000,000.00, so we are left with about $900,000.00 in surplus balance. If we don't generate the $7,000,000.00 it immediately starts that double whammy impact. I can tell you that we are going to be looking into this and soon bringing to the Council's attention the financial situations relating to the budget. Like every other town in the State we will be facing financial difficulties and I will be keeping the Council informed. One thing I want to inform you is that Moody's kept our rating as AA-.
Councilman Greene: Actually Mr. Farrell, you have just basically covered what I wanted to discuss. I just want to add or clarify that Old Bridge's revenues are generated through real estate taxes. Over the past years for better or worse, we have gotten a tremendous amount of growth both residentially and commercially and when you say add or omitted taxes, what you are saying is that from one year to the next you are getting an additional one million dollars in real estate taxes, which is a windfall.
Gene Farrell: Your tax rolls are developed October 1st of the previous year. Every one who buys a home or opens a business in not always in by October, so what happens is that CO's are issued to these properties and they have to pay their share of the renewals, those values however are not built in to the tax base, so when they pay their tax bill, that is a "windfall".
Councilman Greene: I bring this up because I want to really show the positive side even though there is a downturn in the economy. I want to point out that there is a certain lag between when things start affecting the economy and when the township would actually feel the impact. Because what has to happen is the housing market has to gradually decrease and that does not happen overnight, but rather over a course of time. If you go back to the problem that Old Bridge had in 1992, it probably began in 1987.
Gene Farrell: Also, you have representatives from the EDC , and one of the things that we always recommend to our clients, is that if you have this type of organization that you listen to their concerns and their recommendations.
Councilman Greene: That is certainly the key to help us financially in the township.
Councilman Testino: You said permits and projects are indicators, what are some other projects to use as barometers?
Gene Farrell: The interest rate itself is a good indicator, but the biggest issue I feel are the pension costs themselves. Basically, in the past two years you have not been paying anything for your pension liability. With regard to pensions you lost 12 billion dollars as a result of valuation and you lost 60 million dollars as a result of their investment in Enron, so people are going to receive their benefits depending on the actuarial estimates and someone is going to have to pay for that loss. So make up the deficit there is either going to be an increase in contributions on the employees part or the employers have to kick in.
Councilman Testino: I have not seen the home valuation drop in Old Bridge recently.
Gene Farrell: One of the things I explained when I talked about the revaluation is the ratio. If the ratio drops such, what happens is there will be a mandate imposed to do reevaluations on the properties. The worst possible thing to happen is to do revaluation when the market values are high, that happened to you in 1988.
Attorney Ruggierio: When this happens, people will be more successful in tax appeals because of the ratio problem.
Councilman Testino: I know that I am getting calls regularly from the State investigators that they want to come in and see my files on the closings, but for the most part I have not gotten wind that they are thinking of downgrading the ratio.
Attorney Ruggierio: Brian can probably give you the information neighborhood by neighborhood. We have dropped to the 80's and the worse it gets, the more potential there is for tax appeals and the more we will be paying out because they will be successful.
Gene Farrell: You should develop a strategy for dealing with this in the event that it should happen and you should be monitoring these things. What you have to do is either set aside money for the appellants when they appeal and also make an adjustment in calculating the reserve fund for collected taxes otherwise you will have a tremendous spike in your taxes.
Mr. Shah: I just want to alert the Council that when Gene makes a statement about the numbers he is referring to the position as of June 30, 2001, so when we start looking at the budget, we will be looking at the current positions because some of the trouble areas we have to start looking at are more recent.
Councilman Testino: We are going out for bonding now, do you agree with the timing?
Gene Farrell: Yes, the rates are good especially for long term.
Councilman Testino: Do you have an opinion on our overall indebtedness?
Gene Farrell: The benchmark that the State uses is predicated on the value or your ability to pay. They establish the benchmark at 3 ½ % and you are at 1.71% so you are okay.
Councilwoman Panos: Are we in trouble with the pension fund?
Gene Farrell: It is not you, you are a member and you participate in the State Pension Fund and what has happened here is there was a projected liability because everyone who is in the plan at one time will retire so the strategy is you want to fund this predicated upon what the actuaries figure will be your expenses. So you go out and fund the liability today and based upon the earning potential and the value of the fund you can either decrease your funding or increase your funding. When the governor went out and funded these bonds, we had a very good economy and the market was increasing and the rate of return was double digit. What has happened is here and you can use Enron as an example, they brought this stock when the value was $80.00 a share, now it is worthless. So when they sold all these bonds they were reinvesting and unfortunately what happened we do not have that growth in the market so we are not meeting those expectations of the 8%-12% growth and the rate of return is now single digit, so someone has to make up that difference.
Mr. Shah: When you ask this question are we in trouble, the answer is right now our budget has a very small contribution for the pension fund because we this year we were advised by the State that we did not have to fund the pension so we removed that item from our budget and we used it for other purposes. Now what he is saying is that in fiscal year 2003 that we may have to come up with the contribution.
Mayor Cannon: This whole new accounting system, you're saying that they are using us as a model, or are we going to be guinea pigs?
Gene Farrell: What's happening here is New Jersey is unique in its accounting principles and what they would like to do is have New Jersey pretty much in-step with the other states using the general accepted accounting principles. Most of your finance officers in the State are not adept in G.A.A.P. accounting and there is going to be a cost associated with this. Some individuals feel that this added cost the State should pick up insofar as training, et cetera. They want to get an idea of the cost associated in going through this transition. You have been recognized by the Division as being adept and also you have the ability to get information readily
and quickly to them and it will give them a good indication of how many hours it would take to change over from their present system to the G.A.A.P. So the person who is in charge of this came up to me and stated he would like to use Old Bridge as an example in going through this process, which is really a "feather in your cap".
Mayor Cannon: We thought that going to the fiscal year was a "feather in our cap" too, so I am a little leery as to whether or not they have their act together and they know what they are going and there is a support system.
Gene Farrell: That is the issue at hand. One of my chief complaints is that there is going to be a significant need for training of these accountants and they must make the provisions for this. The other thing is that they are used to a cash basis of accounting and that is completely different from GAAP accounting and this will be a tremendous task to undertake. So by taking a township like Old Bridge and using it for a model, it will give them a benchmark.
Mayor Cannon: They are not going to force us to do it, they are just going to use our numbers, correct?
Gene Farrell: Yes, that is correct.
President Butler: My question is regarding departments who are not recording funds in a timely manner, do we have one department doing this or are there many?
Gene Farrell: What you have here is a statute that pretty much mandates that funds have to be deposited within 48 hours. What you have is some departments that don't get a high volume and it is impractical for them to do it. It is more of a housekeeping issue.
Mr. Shah: We don't have that problem this year, we did have it last year, but it has been corrected. We monitor that and if it is significantly out of date, then we take action with the departments, but did not have that situation this year.
President Butler: We have new businesses in town like WalMart, Lowes, Home Depot, I would have thought that we would have projected the taxes for these entities especially in the times we are in right now.
Gene Farrell: The nuances associated with their evaluations and you should have Brian come in and give you a real good insight insofar as the way you value property. You don't know what that store is making right now so what happens here they take a look at their operations and they see if they are getting a viable return on their investment and then they come back and if they don't they took a look at their costs and one of the easiest things to reduce is the cost that they pay in property taxes. What happens then is Brian takes a look at the profit and loss statement for some indication, so in that capitalization factor it can fluctuate depending on their volume of business. It is something that has to be monitored.
President Butler: I have a question about reevaluation. I know there is a percentage, what percent are we at right now with regard to evaluation throughout the township?
Mr. Shah: We are somewhere in the mid 80's. We are not in the stage where the State will force us to do reevaluations, but the issue we have to deal with is the tax appeals will be more successful.
Councilman Redmond: We have a K-Mart Store in town and we know that they are having financial difficulties and they are talking about closing stores, and we have a Lowes and they are building another one in Marlboro, how does something like this affect the real estate taxes; does the tax rate change if K-Mart closes the store?
Gene Farrell: Two things happen, you lose the income from that ratable and the second thing is the value that you have on your books in really not representative of what the value is currently if they close the store. So, they will come in and file an appeal on the taxes and it can have a devastating impact on your overall tax rate.
Mr. Shah: If K-Mart were to close it would not have a great impact on our ratables.
As Gene indicated they will go for an appeal, but I don't want everyone to panic if K-Mart closes because it will not have a significant impact on our ratio. One of the things preventing us from going into a chaotic state is that we are a residential community and 80% of our ratables are from the residential community and so although the commercial property does play a significant role it will not have a severe impact. If the housing market drops like it did in the 80"s and valuation goes down then we have significant problems.
Gene Farrell: When I walk out of here tonight I want to stress to you that you have to have an excellent communication with your EDC and the question should be what can we do to help you and vise-versa.
President Butler: Mr. Farrell, we appreciate the work that you and your firm have done over the years and we thank you very much.
GUEST
Patrick Gillespie (Chairman) - EDC Redevelopment Plan
Mr. Gillespie: My way of introduction, I am Pat Gillespie, President of the Economic Development Corporation and this is Russ Azzarello, the Director of the EDC and Roman Sohor is here also, who is a member of the EDC Board. Mayor Cannon, Councilmen Calogera, Testino, and Redmond are also all Board Members on the EDC. At our last meeting on January 23, 2002, the Board adopted a resolution unanimously requesting that the Council designate that the EDC be named the entity to prepare a redevelopment plan for the five hundred acres that were formerly owned by Olympia & York and located on the westerly side of Route 18, near where Route 9 and 18 interchange. The Council had determined some time ago that this tract of land was suitable for redevelopment and caused a preliminary investigation to be done by the Planning Board. The Planning Board rendered an opinion that the property was in fact suitable for redevelopment. Sam Rizzo, the Township Planner concurred and the Council at a later date accepted the recommendation from the Planning Board and declared the area in need of redevelopment. The next step in the process is to have a redevelopment plan prepared that would then be submitted to Council for review prior to further action by the Planning Board. At this point by unanimous resolution asked that we be considered by the governing body to be the group that prepares this plan. Ed Testino who is on the board and is the prime mover of this resolution asking that we be considered the entity to perform this plan.
Councilman Testino: The Council sub-committee did meet and came back and reported that this was the road map we wanted to follow before we actually voted on designating making the EDC the entity to develop the plan, we wanted to see if they were interested. So, we went to the EDC and asked them if they would spend their money and spend their time and personnel into developing a plan gathering input from other entities or professionals here in town, but more than likely, they would need to engage professional assistance with whatever resources they had and bring back said plan to the Council. That was a unanimous vote. The Committee is eager to take the assignment and the EDC has been looking for such a mission, they really feel energetic about it and I am excited about the possibility that we could see something really materialize within a few short months. I would like to formerly move that we designate the EDC the entity to develop the plan. I am sure that Russ would like to get to work on things as soon as possible.
We have a lot of talent on that board and if there ever was a time that we could get together and agree upon a plan it is now.
Councilman Redmond: I suggest that we move this up to the consent agenda for next Monday evening.
Councilman Maher: With respect to the cost, who will be paying for it?
Mr. Gillespie: We have a budget in the EDC and we are looking at using funds that are in our current budget.
Russ Azzarello (Executive Director): We currently have a balance due to the fact that there had not been an Executive Director of the EDC for awhile and the major portion of the contribution that given by the governing body goes toward that salary and since it has not been applied, so that contribution has basically sat dormant, that is the funds we can use and I think it is a wise use of the money in the effort that we need. You follow up on Mr. Farrell's comments and if in fact there is an issue to look at relative to reevaluations and where we stand with the upcoming economy, one of the things about a down-turn economy is that you cannot look at major corporations to make infrastructure or capital investments. It is a perfect time to make this kind of an investment because it prepares the Township for when people are ready to make their moves and there is no better time to get ourselves into a business friendly environment, than right now. So if we put the plan in place for the redevelopment area it lends itself to when the market gets better and we have something to sell.
Councilman Maher: In terms of time frame, and what costs are we talking about?
Mr. Gillespie: I would like to say that we can start with our in-house staff to work on a plan, but I think that we will have to go to an outside firm. I would like to say to this board, that I will not be back for another dime for planning work, but I don't feel confident that I can make that statement this evening. I think that you are going to want to see a plan that has more rather than less. I think that in order to do a plan properly I would ask that if the Council wanted to consider a time frame it would be a period of months rather than a period of weeks. We have to have the time to bring our board together and also have the opportunity to conduct some type of public process so that we can solicit proposals from outside people including the public and the other boards in town, so we can make use of all the expertise available. The more work that we do, I believe it will lessen the burden on the Council. The next step in the process after we prepare a plan, would be to submit it to you for consideration and you would refer it to the Planning Board for their consideration and once it came back from the Planning Board, then you would be in a position to adopt the plan and you would then incorporate it into the Master Plan of the Township.
Councilman Greene: I want to go back to your statement as to how we got to this particular point and I do want to emphasize the fact we are looking at this piece of property as a redevelopment parcel because under normal conditions it is something that a developer would come in and develop for us. We have to go through this process where it is classified as a redevelopment area because that effect would enable us to draw funds to make the project possible. One particular thing of note is that there is no water or sewer there and the Township recognizes that in order to do that it would be a very expensive proposition, but as far as how we got here, I know the Planning Board took a vote to designate that property be recommended as a redevelopment area. As far as I am concerned that is where I have gone with this. There was a meeting of the Council and the EDC members and we discussed about moving forward. Now in order to go further, we need work on the part of the EDC as well as Council approval to ultimately determine who is awarded the contract based on the recommendation of the EDC.
Mr. Gillespie: You're right the it was initiated by the Council, who referred it to the Planning Board, then the Planning Board recommended that it be a redevelopment area and we got a report from Sam Rizzo and their recommendation came back to the governing body and the governing body adopted it declaring it a redevelopment area. What we are asking you to do now in the next step in this process is to have someone develop a plan that would then be used as a blueprint and we can bring in people to turn this property into productive use. That is where we are this evening and we are asking you to give us the authority to go out and look for consultants and bring people in to help us prepare the plan that we would be willing to endorse.
Councilman Greene: How actively are you preparing a plan or are you just going out seeking developers to put the package together?
Mr. Gillespie: What I would try to do in this process is one, consult with the Board and hopefully if we are designated as the entity to prepare the plan, then I can go back and we can write a plan as to "how we are going to write a plan". As part of that you would want to have a public solicitation of plans from engineers with experience in this type of project . I would even envision at some point that you would want a public solicitation and have a marketing person come in to tell us more about what they think this real estate is worth and what it could be used for. Then I would think at some point you might want to have public hearings and we could conduct to solicit the input of the other groups in town, so that going into the plan we would have all of this information in front of us. I think it would be beyond our power at this point to go to a developer and ask what we should do here and what it would cost. First we have to come up from a planning and engineering stage as to what we would like to see there.
Councilman Greene: I am glad that you said that you are going to open it up to the public because obviously in the past we all talk about increasing our ratable base to bring in clean ratables and that would be advantageous. I just want to say that I am going to reserve judgment on this until I see the end result. I cannot give my blessing on this at this particular time.
Mr. Gillespie: We are not asking you to endorse a plan here this evening, we are asking you to just let us make the plan.
Councilman Greene: Do you see any possibility that when the plan is all said and done that you see "housing" on that property?
Mr. Gillespie: Again, what we want to do is let the experts come in and tell us what is the best use for that property. It has been said for a long time that we have to diversity in the town and we need to attract clean commercial ratables and we need to attract industrial property.
Councilman Greene: If you bring clean ratables, I have no problem with that, but adding construction of homes, I would certainly have a major concern with that.
Mr. Azzarello: I think that the Mayor will concur, that I believe it was Councilman Hoff, and myself to remember where O&Y were bringing this back to the community in the early and mid 80's. We at that point in time designated that area would be for economic and commercial development. Right from the beginning, including O&Y's plan for significant housing said that it fit the site because of its location for commercial development. To say that housing would be proposed is probably a real far reach and certainly not one that is in the vision of the EDC and/or the community and certainly the Mayor has been pretty vociferous over the fact that she would not want to see housing and as the Mayor know the direction that we want to take on this property, which is commercial development. We would certainly want someone to give us an objective plan, but I think that they would know clearly that the direction that we are taking is not towards housing.
Councilwoman Panos: I would like to know if the Council could get an Agenda in our packets for the EDC meetings as well as a copy of the minutes?
Mr. Azzarello: We can see that the Council receives an agenda and we certainly invite you to attend any of our meetings.
Councilman Baker: Am I missing something, what is the downside of this? Did everyone read the letter, what is the discussion, move on go do it.
Mayor Cannon: I would just like to say that in this case I do agree wholeheartedly with Russ that I do not think that housing should be an option. A lot of developers that wanted to come in and develop that property were mostly interested in the housing because that is the easiest and quickest to develop and assures them of a dollar amount. We have enough areas in this town designated as residential and we are trying as a result of the new Master Plan and the new zoning code that is coming forth to reduce the number of residential areas and to increase the number of areas designated for economic development and there is no way I would every support any plan that would include housing. We want economic ratables, we want the highest value for that land and bring significant income into this town.
Councilman Calogera: If I am not mistaken, I think that the LOI is expiring on this property?
Mayor Cannon: It expired.
Councilman Calogera: So we need a new LOI and I believe that from the original inception it was kind of strict and maybe we can get some State representative, when they come down to walk and redo and figure out if it is as stringent as the original one. It may open up some more property which I believe to be uplands which is now designated as wetlands, so we might get some more acreage out of it.
Councilman Testino: We don't want to spend that money yet.
Councilman Redmond: I just want to remind everyone that the reason that we declared this an area of redevelopment was because the only thing the township could do with it as such was put it out to public bid and sell it to the highest bidder and then we have absolutely no control over what went there outside of zoning.
Attorney Ruggierio: As we said with the Barsel piece, you can sell a piece of property developing a plan in such a way as to sell it to the highest bidder, but you have to comply with the following developmental details.
Councilman Redmond: Before we declared this in need of redevelopment, it was simply a piece of property that we owned and we did not have that ability.
Attorney Ruggierio: Sure we did. Anytime we sell a piece of property we can restrict the details of how we sell it, saying we will only take a hotel, or something like that.
Councilman Redmond: What I am saying is that way back when, we all agreed this was the way we wanted to go with this and EDC seems like the logical next step for this piece of property.
Alayne Shepler: I would just like to interject with regard to Mr. Calogera's inquiry, I had been following the LOI and it did expire on December 31, 2001, and we had one five year extension which the DEP allows and I have updated the figures and to do an LOI now would be approximately $65,000.00; $15,000. 00 for the environmental consultant to file the permits and the major cost is obviously getting the stakeout and do the filing with the DEP.
President Butler: Mr. Gillespie, I thank you for giving us this input tonight. And we will move this up for our next meeting.
Move-up
GUEST - (2/11/02)
C.E.O. Cynthia Joy - Western Monmouth Y.M.C.A.
HEARING (2/11/02)
H-1 Release/Reduction Performance Guarantee - Wawa Store #934 (Rt. 34 & Steamboat Landing Road) - Attorney requests postponement - RE-NOTICE REQUIRED.
CONSENT AGENDA
C-1 Parade Sayrewood South Little League - Saturday, April 13, 2002 at 10:00 AM
C-2 Parade - Madison Park Little League - Saturday, April 13, 2002 at 9:00 AM
C-3 Parade - Laurence Harbor Little League - Saturday, April 20, 2002 11:00 AM
President Butler: I see that Sayrewood South is going at 10:00 AM and Madison Park is going at 9:00 AM, are we going to be able to resolve this so we are not running all over town.
Alayne Shepler: I believe Council has agonized over this every year. I know that we have spoken to the leagues in the past about the logistic difficulties and neither league was willing to budge.
President Butler: Alayne, can you do us a favor and try to speak with the leagues and try to resolve this?
Alayne Shepler: I will be happy to reach out on your behalf.
Move-up
DISCUSSION RESOLUTION
DR-1 Resolution designation EDC entity to prepare plan (O&Y redevelopment plan)
Move-up
DR-2 Waiver of fees - Laurence Harbor First Aid & Safety Squad for site plan application (Application fee $1353.70 and Escrow fee $4058.00 = $54711.70)
Move-up
Alayne Shepler: There is a question on this as to whether or not these fees could be waived. You have to realize that in some instances these are not internal professional fees that we pay to Mr. Rizzo and the engineering, but they include outside board attorneys so it might be rather onerous to waive these fees. I am waiting for additional information, so if you could hold up before you move on this. I understand the spirit in which you would want to do this, but I would not want to distribute the tax burden unequally. I will get back to you with more information.
Councilman Testino: If I recall we try to give them whatever break we can.
Alayne Shepler: We give them all of the permitting fees which include all of our internal inspections. We have never in the past, to my knowledge, waived an application fee and that is what I am questioning.
DR-4 Resolution for refund of real estate tax overpayment because of 100% Disabled Veteran Status - Arthur Kitson
Move-up
DR-5 Resolution authorizing Cancellation of CDBG Mortgage for Helen Smith in the amount of $7029.00.
Move-up
DR-6 Resolution to D.O.T. to fast track shoulder into acceleration lane instead of entering into traffic lane - Wal-Mart/Home Depot.
Move-up
DR-7 Professional Services Contract Corporate Defense Strategies for project supervisor in the amount of $7600.00 (Surveillance cameras ) (Cert. # ) (Affirm. Act. #)
Move-up
DR-8 Award Professional Service Contract to M.J. Barone & Associates for architectural services to the Laurence Harbor Recreation Center Building in the amount of $6800.00 - (Cert. #1027) (Affirm. Act.)
Move-up
Alayne Shepler: I will have the information available to you on Monday or I will request that you table this item.
DR-9 Waiver of Fees - Community Covenant Church for installation of two furnaces in the amount of $174.00
Move-up
DR-10 Old Bridge Lions club 5K Race for vision - Sunday, June 2, 2002 9 AM - 11 AM
Move-up
DR-11 Award Professional Service Contract to Geraldine Bohunicky in the amount of $3900.00 for CDBG Annual Action Plan FY2002 - Quotations solicited only one received. (CERT. #) (Affirm. Act.)
Move-up
DR-12 Resolution authorizing agreement between M.J. Barone and the Township for electrical repairs to the Old Bridge Library repairs (CERT. #) (Affirm. Act.)
Move-up
DR-13 Reject Contract #02-06 Closed Circuit Television Monitoring and Recording System (Surveillance cameras)
Move-up
DR-14 Resolution canceling taxes on Block 8003, Lot 12.11 (Kahr's Enterprises)
Move-up
Attorney Ruggierio: This is a very old tax matter where the bankruptcy court foreclosed some of our taxes in 1993 and we are trying to clean up the records so we don't have to carry it.
DR-15 Authorizing mayor and clerk to sign agreements with county for $2 million dollar grant for Woodland Trails.
RESOLUTION AUTHORIZING MAYOR AND CLERK TO EXECUTE AGREEMENT WITH MIDDLESEX COUNTY FOR A GRANT RE: WOODLAND TRAILS
RESOLUTION #81
WHEREAS, the Township Council is aware of a $2,000,000.00 grant being offered by Middlesex County for the acquisition of the property known as Woodland Trails; and
WHEREAS, the Township Council wishes to authorize the execution of an agreement with the County of Middlesex to receive said grant.
NOW, THEREFORE BE IT RESOLVED by the Township Council of the Township of Old Bridge, County of Middlesex, State of New Jersey as follows:
- Authorization to enter into an Agreement with the County of Middlesex for the $2,000,000.00 grant toward the acquisition of property known as Woodland Trails is hereby granted.
- The Mayor and Township Clerk are hereby authorized to execute the documents necessary to effectuate the Township's participation in entering into the agreement with the County.
- The Township Authority shall review any and all documents prepared in furtherance of the agreement with the County of Middlesex
Moved by Councilman Redmond, seconded by Councilman Baker and so ordered on the following roll call vote:
AYES: Councilmen Baker, Calogera, Greene, Hoff, Maher, Redmond, President Butler, Councilwoman Panos
NAYS: None.
Prior to the roll call vote the following discussion took place.
Councilman Redmond: This involves the grant for the $2 million dollars and we need to file for this.
Attorney Ruggierio: I do have two pages of proposed modifications to the County and I would like them included in the resolution. If you give us authority to have the Mayor and Clerk sign this I think we will be able to get the $2 million dollar check from the County. I am kind of jammed up against a deadline so I am asking for you to do this tonight.
Councilman Maher: So you saying that we are voting on a subject that your amendments and modifications we have not seen, correct?
Attorney Ruggierio: Yes.
President Butler: The Mayor and Clerk have to sign these agreements and the County is waiting for this.
Councilman Maher: I want to know am I voting on changes that I have yet to see or am I just voting on giving the Mayor and Clerk permission to sign off?
Attorney Ruggierio: You are authorizing the Mayor and Clerk to execute the Agreement.
According to what the County submitted, I have about eight or nine suggested changes that I am suggesting. The County has submitted it subject to legal changes and they are relatively minor.
DR-16 Adopting amendments to 457 Deferred Compensation Plan
Move-up
DR-17 Supporting Township's transportation entitlement program grant - Cottrell Road
Move-up
DR-18 Supporting Township's transportation entitlement program grant - Ferry Road
Move-up
DISCUSSION
D-1 Library Problems
Councilman Testino: First of all there is going to be a meeting on February 20, 2002 with the Library Committee. Generally, I want to discuss whether we should be getting more involved with the maintenance of the building and how that is handled so we can head-off quarter of a million dollar expenditures in the future. God knows what else is going on over there and perhaps we should get more involved with this ten year old building that is acting like a thirty year old building. I don't care we can discuss this in front of the public on Monday night.
Mayor Cannon: I want to know if the purpose is just to talk about it or try to get something accomplished. We have put together a report asked for a meeting with the Council Committee. The Library has had several meetings on their own I think it is premature to say what should and should not happen until you get all the facts. I would just say hold off for a few weeks until you get all the information because you are making some judgments that may not be valid.
Councilman Testino: I would like the facts to come out too, so if you know something and you are not sharing it with us, we would be glad to look at them.
Mayor Cannon: I don't have everything I am trying to get everything together so by the meeting of the 20th, we will have all the information at one time. To give you little bits and pieces does not make a whole lot of sense.
Councilman Testino: Can we get Mr. Barone at that meeting?
Mayor Cannon: If you like we can arrange to have him there too.
Councilman Hoff: I just want to say we found out about problems in November that existed since May and then we had emergency situations. We were told by the Library people that it is there business and they do what they want to do. I read the minutes from the last Library Board meeting and they seem upset because the bids are being read in the Clerk's office and they feel it should be done by the Library. I'm not sure, if we are responsible for the bills, then we should be informed of problems. I certainly take exception and mean no disrespect to Mr. Barone, but why are we engaging an architect to do all this mechanical work that should be done by a mechanical engineer and we don't have anybody monitoring what is going on, which is apparent that things were happening and we did not know about it. There has to be a way on monitoring this building. If it is the their business, then everything should be their business including the paying for the repairs and they should not be running to the Council for money. We have to get a new system.
Councilwoman Panos: Has the Library Council Committee gone to a Board meeting and did they discuss this only at our meetings?
President Butler: I don't know. At some point they were supposed to go to a meeting, but I don't know if they got there or not.
Councilman Testino: As I told you Mr. Butler, the first meeting is being held on the 20th and we will be attending. First of all, the Library Board will come to the subcommittee, we are not going to go to them. This is an investigation by the Council and we will proceed whatever way we feel is appropriate.
D-2 Satellite Locations for Agenda Meetings - Update
Councilman Testino: I know the Clerk was working on that. Do you have a report on that?
Deputy Clerk Ward: We had a phone call early this morning from the School Board and we can use their facilities. We have not had any other response, other than those who were not in favor of us using their buildings and we have forwarded those to the Council.
Councilman Testino: Can we get Cooper School and Madison Park School and set a meeting date?
Councilman Hoff: According to the memos from the Clerk, two offices rejected the offer.
Councilwoman Panos: Ward 6 likes it here, why should you open a school for x number of people.
Councilman Testino: I f you don't want a meeting in your ward that is up to you. I will start in Ward 1 and work my way down.
Councilwoman Panos: Why don't you do that start in Ward I and work your way down.
Councilman Baker: I'll get us something in Ward II and have the first meeting.
Councilman Testino: I want to meet some people and shake some hands, how's that?
Councilwoman Panos: What stops you from doing that on a daily basis?
Councilman Testino: I do that on a daily basis.
Councilman Hoff: Is the public going to be a part of these Agenda meetings?
Councilman Testino: My proposal was that the Council President recognize them at the Monday meeting after the agenda was over.
D-3 Strategy - Crystal Lake @ Aberdeen
Councilman Testino: I was glad to see Bill's letter on Crystal Lake, I thought it was a good point and I hope that you follow up with that. I think we can make some hay with that I would like to see the professionals develop a long term strategy. We may eventually be involved in some litigation and I would like to see Sam here to discuss this perhaps in Executive Session giving us a briefing on what the potential legal issues are so that we are well advised when we have to make our appearances.
D-4 Guidelines for awarding Professional Contracts
Councilman Maher: I just put this on because of the questions I am having with DR8, the awarding of the Professional Service Contract to M. J. Barone and I want to hear from Administration about the spirit and intent of this resolution.
Alayne Shepler: We do this every year in fact the architectural is up this year and the ad has been placed and we are on a tracking system. There are two separate sets, the engineers and the architects are on a separate schedule.
Councilman Maher: For the new Council members, these are some guidelines for securing professional service contracts, such as engineers, architects, engineers and consultants.
Councilwoman Panos: What are the guidelines?
Councilman Maher: When offering a professional services contract three bids must be procured and if you don't you must advise why.
Alayne Shepler: If I might back it up, it is the alphabet soup, it is the RFQ for the RFP.
Basically the ad states it is a request for qualifications, please send me your qualifications along with a paper that tells me what your prior experience is plus all the sheets listing your outside construction. When a project comes up and we are soliciting for an outside contractor, we go to that list of those that are prequalified and we then we submit to all of that list. Professional contracts are not always awarded to the lowest price, but on experience and other criteria.
D-5 Status of preparation of Municipal Budget
Councilman Maher: I believe we covered this. Where do we stand with the preparation of the budget and has the letter gone out to the department heads and what type of guidelines have we given to them?
Himanshu Shah: I think the letter will be going out this month. In April the departments will return their budgets and we will be holding budget hearings. Our deadline is July 15, when we must present the Mayor's budget to the Council. In reference to the request advising the departments to lower the budget, as you are well aware we have never been successful in getting a reduction, they come to the Council with their additions, so Administration does not have a leg to stand on with regard to reductions in the budget. What we have done in the past is give a guideline on how to prepare the budget with as much detail as possible so when the Council reviews it they have a better understanding. It is the job of Administration to review the budget and make adjustments before it is presented to Council; and then Council has the prerogative to review it and make a final adjustment. As we get closer to March, we will be projecting our revenues and the expense side of the budget is pretty much decided. As you know 70% of our budget is employees and over the last three years you can ask for reductions, but we are increasing our police department, so I don't know how you can lower our budget by 10%. You have heard some of the other challenges such as the pension issue and we will be presenting all of this to you.
Mayor Cannon: I would just like to add that all of the contracts are up as of this June so we will be in negotiations with all of the unions, which usually is a tumultuous time, so all that has to be taken into consideration and we will be glad to share the information with you. If you have any suggestions of areas we should specifically look at you can share that with us.
Councilman Maher: I would like to have some strong recommendations as to what we are going to do with the area utility. I am looking for Tom to take the lead on that.
Himanshu Shah: I would not say that we are breaking even, but we are in better shape than last year. Remember we had a significant loss last year and it was replaced with a house program that has generated a significant amount of those lost revenues.
Councilman Testino: I know Dennis is ahead of us, but we still don't have the capital budget, when will we get this?
Mayor Cannon: The capital budget is put together, and you should have it by the end of this week.
REPORTS
R-1 Report on how the township vet was chosen. (Report by Administration and Police Department)
R-2 Morganville Road/Ticetown Road (Report by Administration & Traffic & Safety)
R-3 Morristown Road & Laurence Parkway - Delayed green for left turn. (Report by Administration & Traffic & Safety)
Off
R-4 Lambertson Tract - acquisition details ( Report by attorney)
Move-up
SET DATE
SD-1 Release/Reduction Performance Guarantee - Emporium Gas/Rocket Industries Suggested Date: Tuesday, May 28, 2002 at 8:00 p.m.
APPOINTMENT
A-1 Council concurrence on corrected term for the Library Board Appointments.
Motion to adjourn made by Councilman Hoff, seconded by Councilwoman Panos and so ordered on the following roll call vote:
AYES: Councilmen Baker, Calogera, Greene, Hoff, Maher, Redmond, Testino, Councilwoman Panos, President Butler.
NAYS: None.
_____________________________
Reginald Butler, Council President
______________________________
Rose-Marie Saracino, Township Clerk
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