Back to School

Former Township Committeeman Prakash Santhana recently stated that “strong financial leadership is necessary for Holmdel.” He’s absolutely right – but only because of the financial mess that he and his running mate, former Committeeman Greg Buontempo, left behind.

Buontempo and Santhana increased annual spending by $4.3 million and funded their reckless expenditures by piling on mountains of debt. How much debt did they leave us with? In just three years, the Buontempo and Santhana debt machine cranked out a total of $10.1 million of new notes and bonds. They also tacked on another $2.1 million of capital leases. When you add it all up, Buontempo and Santhana left Holmdel taxpayers with an additional debt tab of $12.2 million, a 43% increase from where they started.

Despite Mr. Santhana’s claims of financial expertise and his campaign’s boasting about his educational credentials, he seems to have trouble recalling his record of piling on debt.

Let’s take Mr. Santhana back to school and give him a refresher course on his financial legacy.

In a recent Patch article, Santhana references a June 2021 debt presentation prepared by the Township’s debt advisor. That presentation correctly points out that, yes, Holmdel had an awful lot of short-term debt in 2021 ($13.299 million, to be precise). And yes, it made sense for Holmdel’s CFO to convert that debt to take advantage of market conditions (that’s what good CFOs do).

But Santhana conveniently omits a crucial fact – it was he and Buontempo who issued the $13.299 million of short-term debt in the first place! That debt didn’t appear out of nowhere. Sure, converting it brought some savings, but they quickly wiped those out by issuing another $12.2 million of new debt. And who’s paying the price? Holmdel’s taxpayers. Funny how Buontempo and Santhana never seem to acknowledge that.

Now, a quick history lesson.

When Mr. Santhana took office in January of 2020, Holmdel had zero short-term debt. Not “nearly $16 million,” as Santhana has claimed. Not “close to $20 million,” as Santhana’s campaign surrogates have claimed. Zero.

How do we know there was zero short-term debt on January 1, 2020? Because Holmdel Township is audited every year and an independent auditor’s report details beginning and ending debt balances.

Exhibit 1, a screenshot from the 2020 audit report, shows a table of Township debt activity for the year. The data makes it clear that the Township held no short-term debt, categorized as Bond Anticipation Notes, as of January 1, 2020.

Exhibit 1 – Summary of Current Fund Debt Activity From 2020 Audit Report

What else does Exhibit 1 show? It shows that $13.299 million of short-term debt was issued on Buontempo and Santhana’s watch during 2020. This is the same short-term debt that Santhana continually talks about converting to long-term debt. But Mr. Santhana’s conversion of debt that he created, along with additional debt that he added, doesn’t make him a hero – it makes him RESPONSIBLE for this mountain of debt!

As a further history lesson for the Buontempo / Santhana team, I have put together an exhibit summarizing the Township’s debt activity throughout their 2020, 2021, and 2022 tenure. See Exhibit 2.

Exhibit 2 – Summary of Current Fund 2020, 2021, & 2022 Debt Activity

Exhibit 2 shows that short-term debt was issued in 2020, long-term debt was issued in 2021 (this is the “debt conversion”), and short-term debt was issued in 2022. Where did Holmdel wind up when Buontempo and Santhana’s term ended in 2022?

With MORE of every kind of debt! More short-term debt. More long-term debt. And $10.1 million more of total debt!

Add in $2.1 million more of capital leases issued under their regime, and Holmdel taxpayers wound up with a total incremental debt tab of $12.2 million.

How much did Buontempo and Santhana’s $12.2 million of new debt cost taxpayers? Take a look at Exhibit 3.

Exhibit 3 – Current Fund Debt Service Payments

In the year prior to Buontempo and Santhana taking office, Holmdel’s annual debt service payments were $2.458 million. But by the end of their term, debt service payments NEARLY DOUBLED to $4.487 million. And while Mr. Santhana claims that he reduced the Township’s interest expenses, Exhibit 3 clearly shows that was not the case. In fact, annual Township interest payments increased under Buontempo and Santhana’s tenure by 37.9%!

Holmdel can’t afford more of Buontempo and Santhana’s financial mismanagement. They had their chance and they blew it. And we are still paying the tab.

CLASS DISMISSED!