And now for Lakewood;
SOMETHING FOR NOTHING-Editorial by Joyce Blay-Posted June 13, 2007
Taking a cue from the Lakewood Board of Education, members of the Lakewood Township Committee avoided public comment at the June 7 budget hearing.
In the recent past, members of the board of education often evaded public criticism of their financial management of tax dollars by going back into executive session for hours until members of the public tired of waiting and left. Members of the board of education also asked board attorney Michael Inzelbuch to research legal precedent, at taxpayer expense, that enabled them to refuse to answer comments by members of the public.
Last week, it was the township committee's turn to avoid their constituents.
At the April 26 introduction of the 2007 municipal budget, Mayor Raymond Coles announced that a public hearing of the municipal budget would be held June 7 at 5 p.m. so he could attend his daughter's 8th grade graduation from Holy Family School.
Coles could have telephoned in his vote on the budget or the committee could have scheduled an emergency meeting on a day and time when it was convenient for other residents and township taxpayers to also attend the hearing. Ironically, the day and time convenient for Coles was not convenient for Committeeman Menashe Miller, who did not attend the June 7 meeting and did not call in his vote.
Miller did not return a request for comment the following week.
Last year and this year, committeemen did not vote on a resolution to establish the cost of hiring school budget consultant Frank Marlow, as they did in years past. The change deprived taxpayers and residents of a public forum to discuss the defeated school budget.
Township Attorney Steven Secare told NJ News & Views last year that Marlow was not hired by resolution based on a provision of the state Pay to Play law. Marlow told a reporter he was not a political contributor to any Lakewood candidates or parties.
Committeeman Robert Singer, who is also a state senator, corrected Secare in a May 2007 interview. Singer said the committee's decision not to vote on a resolution to hire Marlow was made under the Open Public Meetings Act. The Open Public Meetings Act permits the governing body to award some professional contracts without putting them out to bid - including the position of township attorney.
In 2006, Lakewood taxpayers paid $366,135.30 for the township's legal services, which were budgeted at $441,534. This year, the township has budgeted $457,410 for legal services provided by Secare and other attorneys hired by the township.
Secare did not request an increase in the $170 per hour fee he is paid under his new contract, which NJ News & Views requested under the Open Public Records Act (OPRA).
Taxpayers will pay a great deal more for the school district's legal services during 2007-8; despite two consecutive school budget defeats last year and this year, members of the board of education voted to approve an increase in the hourly rate billed by board attorney Michael Inzelbuch. Inzelbuch billed taxpayers $175 per hour during the 2006-7 school year. For the new school year, he is billing taxpayers $200 per hour for his services.
On May 9, the board of education held an 8 a.m. meeting to approve the increase in Inzelbuch's contract, which no member of the public attended. One month later, the committee's 5 p.m. budget meeting generated almost as low a turnout.
Seven people attended the June 7 budget hearing: Joanne LaRocca and her adult son, Joe LaRocca; husband and wife John and Pat DeFillipis of Toms River, who own a Lakewood business, and Eileen Faggiola of North Carolina, the sister of Mrs. DeFillipis; Lakewood resident David Drukaroff, who is employed by the township as an Inspections Clerk; and Fairways resident William Hobday.
According to information provided by the township manager's office, total appropriations of $59,988,600.31 in 2006 rose $2.9 million to $62,912,009.05 in 2007.
Total non-tax revenue, including surplus, dropped $1.3 million from $28,971,655.51 in 2006 to $27,642,648.10 in 2007.
The 2006 tax levy of $31,016,934.80 will increase by $4.3 million to $35,269,360.95 in 2007. As a result, the municipal tax rate per $100 of assessed property value will increase by 4.4 cents from the 2006 rate of 41.1 cents to the 2007 rate of 45.5 cents.
The 2007 net valuation taxable is $7,735,617,454.
Township information stated that a property owner with a home assessed at $300,000 would pay $1,365 in municipal taxes in 2007.
Areas of increased expenditures included insurance, utility cost, salaries, pensions, trash disposal costs, debt service, fuel and reserve for uncollected taxes. The township has set aside $5,469,096.70 as reserve for uncollected taxes. The 2007 Municipal Budget Summary of Current Fund Section estimates that 95.65 percent of property taxes will be collected.
Media reports of the April 26 committee meeting, in which the 2007 municipal budget was introduced, quoted Coles referring to the 2006 rate of tax collection as "abnormally" low, requiring a larger tax increase in 2007.
Lakewood Tax Collector Patricia Tomassini told NJ News & Views the following month that the township usually averages a 97-98 percent tax collection rate.
Drukaroff was the first member of the audience to discuss the budget during the June 7 public hearing. He cited an article recently published in the Asbury Park Press that reported Lakewood's rising municipal taxes. Drukaroff commented on public reaction to the report.
Drukaroff also referenced recent contract negotiations involving his union, AFSME Local 3790, which represents township municipal workers.
In an April interview, Drukaroff told NJ News & Views that the rank and file of AFSME Local 3790 ratified the new contract by a vote of 42-14.
The 4-year contract, retroactive to January 1, 2007, gives the union a 3.35 percent salary increase the first year it takes effect. Employees that earn less than $30,000 per year will receive an additional $250 as a one-time payment. In 2008, union members will receive a 3.50 percent raise. Employees earning under $30,000 per year will receive a one-time payment of $225. In 2009, union members will receive a 3.65 percent raise. Employees earning under $30,000 per year will receive a one-time payment of $200. In 2010, union members will receive a 3.75 percent raise. Employees earning under $30,000 per year will receive a one-time payment of $200.
Committeemen discussed the contract during the April 12 committee meeting before voting to approve it by resolution.
Committeeman Charles Cunliffe praised Township Manager Frank Edwards, despite his failure to negotiate a new contract requiring union members to make a monetary contribution toward their health benefits. Cunliffe asserted that such an agreement would have enabled the township to reduce the escalating cost of health insurance, which the state had requested the committee try to cap.
Cunliffe voted not to approve the contract. Deputy Mayor Marc (Meir) Lichtenstein said he was reluctantly voting yes. Mayor Raymond Coles and Committee Menashe Miller also voted yes. Committeeman Robert Singer was absent from the meeting.
Drukaroff told NJ News & Views why his union refused to pay anything towards their health benefits. He said union negotiators said during negotiations that their membership would only consider contributing toward health and dental benefits if management and elected officials did the same.
"Of course, they lost interest after that," Drukaroff said.
According to the township manager's office, part-time salaries of committeemen will increase from $19,710 in 2006 to $21,538 in 2007. The 2006 mayor's salary of $22,210 will increase to $23,098 in 2007. However, committeemen's health benefit packages double the cost of most of those salaries.
Chief Financial Officer William Riker told NJ News & Views on June 12 that the township pays $2,050 per month and $24,600 per year for Lichtenstein's health benefits.
Lichtenstein is self-employed as a principal of MSL Management, a firm he co-owns with his wife, Sara.
Riker said the township pays $1,818 per month and $21,816 per year for Committeeman Menashe Miller's health benefits.
Miller is employed as a United States Air Force chaplain.
Riker said the township pays the same amount for health benefits for Committeeman Robert Singer and Mayor Raymond Coles. Each man receives health benefits that cost $2,048 per month and $24,576 per year.
Coles is self-employed as a co-owner of Tek-Net, a company that repairs medical equipment.
Singer is state senator. He is also employed as a vice president of Kimball Medical Center.
Committeeman Charles Cunliffe, employed as a refrigeration products sales engineer for Sporlan Valve Co. of St. Louis, Missouri, generates the lowest cost in health care benefits. Riker said the township pays $135 per month and $1,620 per year for his health insurance.
During the June 7 budget hearing, Drukaroff suggested the township committee form an advisory committee to recommend technology that would provide more efficient methods of delivering municipal services if the cost of labor was too expensive. The following week, Drukaroff told NJ News & Views he did not think an advisory committee's recommendations would result in lower municipal taxes. He said that even if the township utilized technology in place of employees, the cost of other services would continue to increase. Drukaroff said taxpayers expecting to see their tax bills go down were unrealistic in their expectations.
"You can't get something for nothing," Drukaroff said on June 7.
Joanne LaRocca, the next speaker, disagreed. She said other property owners were receiving lower tax bills through abatements she was too late to apply for due to illness.
"I am a property tax payer," she said. "I've never objected to my taxes. (However), I heard I could file for an abatement, (but) was told I was too late."
Committeemen and Secare corrected LaRocca and her son, who also referred to property tax assessment appeals as abatements.
All Lakewood property owners are entitled to appeal their tax assessment each year. The 2007 deadline for filing an appeal was April 1, according to the Lakewood Tax Assessor's Office.
LaRocca blamed developers for the revaluation that was completed in January 2006, but was not reflected in some property owners' increased taxes until July 2006.
Municipal and county officials have said in past interviews that both new construction and the passage of time create the need to reassess property values so that each property owner is paying his or her fair share of taxes.
Abatement programs approved by the township committee provide graduated exemptions on new construction of commercial property. The abatements reduce the tax obligations of commercial property owners over a 5-year schedule.
The first year of the abatement, the property owner is not liable for payment of any property taxes on the building, but must pay all property taxes owed on the land. Each successive year of the abatement, the building is taxed at an additional 20 percent of the total taxes owed. After the fifth year of the abatement, the property owner begins paying 100 percent of local taxes owed on the building as well as the land.
Riker told a reporter that 25 commercial properties were receiving a tax abatement in 2007, according to information provided by Tax Assessor Linda Solakian. The cost to taxpayers is reflected in the 2007 municipal budget.
In 2006, abatements that were not broken out by tax abatement year generated a total of $384,041.71 in miscellaneous revenues. The amount was greater than the anticipated 2006 tax abatement revenues of $323,408.29. In 2007, the township anticipates $324,344.96 in tax abated revenues.
Tax revenue that is lost to township coffers through the abatement program could be estimated at several times that amount, depending on whether the property owner is in the second, third, fourth or fifth year of the abatement schedule.
Under provisions of the state Constitution, the state Department of Community Affairs (DCA) permits qualified municipalities to grant tax abatement of real property taxes for new construction. In 1971, Lakewood adopted a revised ordinance permitting tax abatements.
Riker disputed previous assertions by some township officials who have said in past interviews that only commercial properties are eligible to apply for a tax abatement. Whether residential or commercial property owners receive the abatements, the township can no longer afford to give them away.
At the June 7 committee meeting, committeemen approved on second reading an ordinance granting a tax abatement to SES Holdings LLC. During a public hearing on the ordinance, resident Joe LaRocca asked the committee who had applied for the tax abatement. Coles said that to his knowledge, Commerce Bank owned the property.
Township documents state otherwise.
On June 8, NJ News & Views made an OPRA request to view abatement documents for the 3,700-square-foot masonry building that will be used as a bank. Among the papers were short-term and long-term lease agreements signed in 2006 between Commerce Bank, which will be the tenant, and developers Samantha Weitzen, Elihu Weinstein, and Simcha Shain, then a member of the Lakewood Board of Education.
Shain and Weinstein are investors and developers of many other commercial and residential properties in town that are either already built or approved for construction. Last month, Shain received a continuance of a tax abatement on a property the previous owner was still receiving at the time of sale.
Tax abatements are corporate welfare the township can no longer afford to give away, especially with a reduced number of property owners paying their taxes. The committee enacted a tax abatement program to stimulate needed urban renewal in Lakewood back in 1971.
Giving away something for nothing will no longer stimulate business in Lakewood. Despite the incentives of the township Urban Enterprise Zone program (UEZ), businesses are leaving Lakewood. Last year, Walgreen's and Community Surgical moved out of their storefronts in Seagull Square, a shopping center owned by investors Shain and Weinstein. The businesses moved to a new location less than a mile away in Toms River.
Under terms of a 2001 contract, the committee gave a 35 year tax exemption to the Cedarbridge Urban Renewal Development Corporation (CDC), the construction division of Beth Medrash Govoha, a non-profit rabbinical college. The CDC was contracted to build 100,000 square feet of office space per year in a 201-acre corporate park located in the UEZ. To date, the CDC has built nothing in the corporate park other than roads. Those roads lead nowhere.
Last month, Tax Collector Patricia Tomassini told NJ News & Views that Lakewood has a higher number of tax exempt properties than many area townships. Giving away tax abatements only makes the problem worse and her job that much harder.