March 19 Town Council meeting

The town council voted to raise the sewer assessment $65, or 35 percent, to cover increasing costs and to settle the town’s part in a huge pollution remediation lawsuit at the March 19, 2013, meeting. 

In addition, the mayor declined my request to invite the township’s lawyer and financial advisor for redevelopment to brief the council. Separately, I spoke about the results of my research that raise serious questions about the legitimacy of the process leading to the recent announcement of a new executive director for the Downtown West Orange Alliance (DWOA). The council voted 2-2 to reject my motion to open a formal inquiry.

The meeting agendas and related materials are here. Council President Victor Cirilo was absent from the meeting; Councilwoman Susan McCartney was elected to preside over the meeting.

The council voted 4-0 to approve changing the sewer ordinance to raise the sewer fee to $250 from $185, citing increasing costs to maintain the service and infrastructure. The new fee, which takes effect this year, was last changed in 2006.

The town chief financial officer provided the council with data showing that the sewer system is projected to cost $5.63 million, including a $2.66 million fee assessed by the Joint Meeting sewer authority that processes the town’s sewage. In 2006, the sewer system cost $4.63 million, including a $2.13 million fee assessed by Joint Meeting.

Although the Joint Meeting assessment rose nearly 21 percent for this year from 2012, the increase is much less (and more reasonable) if you average it out from 2006 to 2013. By my calculations, the data show that total annual costs have risen 2.8 percent compounded annually over the seven years – including just under 3.2 percent for Joint Meeting’s fee and 2.5 percent for town costs. While those numbers almost certainly exceed the inflation rate and require us to keep a close eye on the underlying expenditures, they are not necessarily excessive on their face.

The $185 fee would raise $3.74 million, or 66.5% of the cost this year. The $250 fee would raise $5.06 million, or 89.9% of the cost. In other words, we’re still subsidizing the cost of the sewer service with general revenues, just not nearly as much as we would with the previous fee. The administration and council have had a practice of not adjusting the fee annual to reflect annual costs. The ordinance is here.

The council discussed the possibility of changing the assessment charge and methodology to lessen the impact this year. But because of significant challenges and time constraints, the council decided to address the issue for next year’s budget. Sewer bills will be sent out a month later than usual, so residents have more time this year to pay the assessment.

The council agreed to join a proposed consent settlement of the huge and expensive Passaic River pollution lawsuit that’s pulled many New Jersey municipalities, including West Orange, into what’s known as the Occidental Chemical litigation. For more information, please see a recent Star-Ledger story.

The state, which is the plaintiff in the litigation, has required municipalities to sign confidentiality agreements as part of the negotiations of the proposed settlement. The council based its decision on discussions in executive session at both this and the March 5 council meeting. The state plans to make the settlement public before the council would consider and approve the related settlement payment. I’m not a fan of confidentiality in general when it comes to local government, but I believe in this situation it’s warranted given the eventual disclosure of the settlement and the council’s discussion of the related financial contribution.

Separately, I’ve been trying to get our redevelopment professionals to brief the council since February 7, when we received the audited 2011-2010 financials of the designated redeveloper, Prism Capital Partners. Deputy town attorney Ken Kayser made clear in a March 17 e-mail to the council and at the meeting that he and the mayor believe the relevant law gives the mayor sole authority to make decisions on the redevelopment project – even on the issue of whether the council can ask redevelopment professionals for advice.

I’ve pushed for the council and administration to take a tougher stand on the company’s tax delinquencies and failure to provide requested financial information – and to produce evidence that the company is moving forward with obtaining a required $50 million loan to start construction.

At the meeting, I asked council colleagues to state whether they joined me in favor of advising the mayor that the council wanted to:

- Invite the redevelopment professionals to brief the council

- Set a timeline/deadline for Prism to begin construction

- See Prism’s 2012 audited financials

- Send Prism’s notices of default

No more than one of my colleagues would support me on any of these issues. Business Administrator Jack Sayers said Prism does not have its 2012 audited financials. Mr. Sayers also said that the township has no legal authority to impose a deadline; he said the only deadline is the three-year duration of the town Planning Board’s approval from October 2012.

Separately, I disclosed results from my research into the process of hiring an executive director for the DWOA, which manages a $240,000 annual budget on behalf of a Special Improvement District for businesses and property owners along Main Street and Valley Road. Please see my prepared remarks for further detail. I said my research suggested serious questions about the legitimacy of the process and selection.

I made a motion that the council use its inquiry powers to further investigate (as well as to subsequently advise the DWOA on how it should proceed, ask the DWOA to suspend the appointment, and to stop any of the town’s $70,000 funding in the interim.) Councilwoman McCartney joined me in the vote, which failed in a 2-2 tie.

The council approved:

- A resolution indicating that the township’s total projected tax levy in 2012 of $201.9 million was reduced by $935,321 of tax appeals, which reflects the fourth consecutive year the town’s tax base has declined. The council approved a calculation reducing the reserve for uncollected taxes based on the lower post-tax-appeal levy, lowering overall required budget funding (and thus tax levy).

- Introduction of the township’s preliminary 2013 budget, which would raise the municipal property tax by 1.8 percent and spending by about 4 percent, or $2.93 million, excluding the reserve for uncollected taxes. The public hearing on the budget is scheduled for April 23. The proposed budget summary is here (on the budget page with related materials). 

- An administration request for review and approval of a revised five-year licensing agreement for operation of the town-owned Oskar Schindler Performing Arts Center, which I consider a significant town asset. The council expressed concern at aspects of the previous agreement when it was presented for review several months ago.

I argued against the new version, saying it still didn’t provide sufficient sharing of the potential benefits of turning management and leasing of the facility to the non-profit New Jersey Arts Incubator – while the township continued to pay operating expenses for the facility. Instead of the previous version where the town gets $1 per year, now the town would receive 5% of the net profit – revenues after expenses – of $150,000. I argued that we should get a percentage of the revenue, especially after other council members and administration officials insisted any such profit was unlikely.

Secondly, the license gives NJAI the power to charge whatever it wants to allow other non-profits to use the facility – without any required overview or approval by the town or council. I lost the vote 3-1.

- Renewal of the inter-local agreement with the Borough of Roseland for animal services through mid-2014 that will bring a projected $22,336 of revenue to the town, not including the related expenses for the service.

- An ordinance authorizing two paid positions and pay. The ordinance authorizes a coordinator for Council on Affordable Housing work at a maximum pay of $2,500 and coordinator for the Municipal Alliance, for $3,125. The town has paid these stipends for years, but couldn’t find the authorizing ordinance so created one. The ordinance is here.

Video of the council meeting is on the town website.

I’m a West Orange Township councilman since 2010, reachable at jkrakoviak@westorange.org. I am a business communications consultant in my spare time.