Jul 30, 2014

West Orange Almost Loses $656,000 To The State

A new development in state's affordable housing legislation prompts quick action from council

West Orange Almost Loses $656,000 To The State

At last night’s meeting of the West Orange Township Council on May 29, the council was told by Shirley Bishop that town is in danger of losing approximately $656,000 to the state by July 17 if it did not pass four of the resolutions on the agenda. 

With more than half a million dollars on the line, the council passed resolutions to retain that money. 

The state funds were budgeted in accordance with the Council of Affordable Housing, or COAH, in a 2008 plan that is scheduled to end in 2018. However, due to the prolonged effects of the slumping economy, it needed to be amended, said Bishop, who is the council’s consultant on affordable housing.

The township had to originally comply with state legislation when it entered into the plan, although the council noted then it was asked to agree even though it did not fully know what the long-term plan would be. 

“To me I don’t understand it,” Councilman Victor Cirilo said on Tuesday evening. “On our end we have been proactive but the state hasn’t.”

Cirilo continued later and said, “I’d like to [thank] the council president for putting [forward] that advocacy resolution calling [for] an extension of the Affordable Housing Trust obligations by the state. We want more time and the reason why [it is doing this]; it’s very unfair to try to pull money from a trust fund where [the state] hasn’t really shown us the rules that we were supposed to follow.”

The plan established by the council is to offer interest free loans to residents of low income housing that need major repairs to their domiciles -- such as replacing heaters and roofs -- so the homes can be brought up to public standard, said Bishop.

“It’s about getting money on the street,” said Mayor Robert Parisi. He explained it would pay off with taxes and a better town.

The loans also keep people in those homes, which correlates into additional tax revenue. The added incentive for a resident to remain in that home who receives the funds is a complete debt-forgiveness after 12 years.

Councilwoman Patty Spango and Councilman Joe Krakoviak both raised questions about why the loans would be forgiven. They said their understanding was that the loans were given out and then paid back so another loan could be distributed.

Parisi explained he believed the renovations and initial loss would benefit the town in the long run. He also said that if someone person were to take the money to do renovations and then just turn around and sell the property, the debt would still have to be paid. 

Cirilo said that compared to other models, where affordable housing is simply built, this plan was more conservative since it focused on rehabilitation of existing properties.

The council seemed content with the amended plan, in which $800,000 will go to senior citizens homes.

Parisi added that the town has offered the loans to multi-family homes in order to reach more residents.

Councilman Sal Anderton asked Bishop if the income-eligibility level could be raised so that the loans could be given to more residents. Bishop said the state has set the standards, which cannot be altered. 

Current income-eligibility levels for those to receive the COAH loans are:

-- $50,077 for a one-person household;

-- $57,225 for a two-person household;

-- $64,378 for a three-person household; and

-- $71,523 for a four-person household. 

Maintenance of municipal properties

The council also discussed a resolution for a new contract with D’Onofrio & Son Inc. Landscaping to privatize the landscaping of 95 municipal properties. The contract was for $125,000.

Parisi said the hiring of D’Onofrio & Son Landscaping will unburden workers at the understaffed Department of Public Works and allow them to do other more costly services such as road repairs and sewer cleaning, which if contracted would cost the town more money.

Anderton, however, did not agree. He questioned the privatization of municipal property and expressed concerns of standards and flexibility.

Nonetheless, the contract was approved. The contract extends from June 4 to November. Commenting on the brevity of the contract, Parisi said the town has not done something like this in the past, and he didn’t want the town to be stuck in a long-term contract.

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