$3.25M budget deficit may lead to layoffs and furloughs

IRVINGTON, NJ — It was recently revealed that there is a $3.2 million deficit in Irvington’s Calendar Year 2017 Municipal Budget, and that more than $30,000 owed to former police Chief Michael Chase was unaccounted for — until he was inadvertently sent a W2 tax form for funds he said he never received. Irvington Finance Director Faheem Ra’Oof manages the town’s financial records.

Ra’Oof was also the finance director in 2008, when state Sen. Ron Rice asked the state Comptroller’s Office to audit Irvington due to questions about finances and transparency. In a letter dated April 28, 2008, to all township taxpayers, Rice said he’d asked the NJ Department of Community Affairs to “perform a thorough audit of the municipal finances and an investigation into the issue of the township having to pay back funds to the state of New Jersey.”

At the time, Rice said he was taking action after receiving hundreds of calls from residents complaining about skyrocketing taxes and declining services.

“I’m in there, trying to get $3 million for Irvington, but then the township gets a letter from the state saying they owe $8 million, and a letter from the Department of Environmental Protection asking about grant money that was supposed to be used for brownfield remediation,” Rice said in 2008. “I’m concerned because we’re not hiring police or delivering services. I’m in a quandary because, if I’m fighting for $3 million and the township has to pay back $8 million, that’s a $5 million deficit.”

The 2008 state audit found that 19 township employees had traveled to Atlantic City and stayed at Harrah’s Hotel & Casino for a three-day conference on municipal government, but did not get documentation for the hotel stays, which ended up costing Irvington $2,271 in overpayments; failure to account for $10,000 in recently purchased computer equipment, believed to have been stolen by 24 terminated employees who still had access to Irvington’s computer network; $36,371 in cell phone overage charges during a 13-month period, because of employees downloading games and ringtones, text messaging and international roaming for calls from the Dominican Republic, Cayman Islands and Mexico; the existence of 34 separate bank accounts to conduct township business, even though officials only acknowledged 29; and failure to notify the state Department of Education that it had overpaid Irvington $8.1 million from 2002 to 2007, because officials had refinanced debt, and now the township has to repay the money to the state in $400,000 increments for the next 20 years.

Now Mayor Tony Vauss has announced there is a $3.25 gap in the 2017 budget and the only way to fill it is by laying off some municipal employees and asking others to accept unpaid furloughs. The last time Irvington township employees had to accept layoffs and furloughs was in 2009 with former Mayor Wayne Smith at the height of the Great Recession, when the township was facing a $17 million deficit in the Fiscal Year 2010 Municipal Budget.

This time around, according to a memo from Ra’Oof addressed to business administrator Musa Malik and Wally Riglicki, who is auditing the township’s fiscal and financial records, there are two reasons municipal employees are facing furloughs and layoffs this year: an unanticipated increase in expenses and the rising cost of health care.

“As per my discussion with the auditor, as of Dec. 31, 2015, the township audit will reflect the following: Unanticipated increases for joint sewer charges, municipal debt service, deferred charges and pension costs that the township has no control over,” Ra’Oof noted in the memo dated Tuesday, April 4. “These increases are the result of state statute, regulatory control or debt service before the Vauss administration; and an over-expenditure noted in the 2015 audit, which was recently completed.”

Ra’Oof’s memo went on to state: “The township of Irvington Audit Report will show that we have the following: Total current fund deferred charge of $5,163,924.44 and a total current fund surplus (fund balance) is: $4,518,742.80 and excess of deferred charges over surplus $645,181.64.

“However, the township has a fund surplus that we are legally prohibited from accessing to cover the above two items,” said Ra’Oof. “State of New Jersey Statutory Law does not allow surplus to be appropriated when deferred charges exceed surplus. In addition to the surplus identified above, the township also has a general capital surplus (fund balance) $3,785,000.56. If the township were allowed to appropriate our surplus, it would result in no furloughs for 2017.”

Ra’Oof also stated that the “over-expenditure noted in the 2015 audit” was due to health care costs, not any actual overspending by the administration. But Irvington NAACP Vice President Kathleen Wither and Chase are wondering what is going on with the bookkeeping practices in the Vauss administration. Witcher is a longtime homeowner and taxpayer in town, while Chase still resides in Irvington, but said he can’t file his 2017 taxes because the township has not actually paid him everything Ra’Oof’s financial records say they did.

“It would be against the law for me to knowingly file my taxes with false information,” said Chase on Monday, April 24, days after the national tax filing deadline had passed. “I’m not going to break the law on purpose, after spending 30-plus years upholding and enforcing it.”

Witcher said Chase’s issue is indicative of the larger accounting issues facing Irvington. She agreed with former IHA maintenance worker Caleb Bryant, the Service Employees International Union Local 617 shop steward, that the shared services agreement the Vauss administration entered into with the Irvington Housing Authority probably was not a good idea with a looming budget deficit.

“When they have reported that no funds can be used from HUD federal money, then it means the township and the IHA must pay funds due,” said Witcher on Friday, April 7. “Layoffs cannot accumulate enough funds. Furloughs alone won’t close the gap either. Why did they move to think about this plan for shared services if they did not know how it was supposed to operate? What happened to the funds that were spent for other purposes?”

Thanks to their contracts and the natures of their jobs, members of the fire and police departments can’t be laid off or forced to take furlough days unless agreed on by a union vote. So, technically, the township can’t make them take the layoffs or furloughs that the Vauss administration is considering implementing for other municipal employees covered by Civil Service, which means the township would have to submit a layoff and furlough plan to the state for approval before taking the action.

“That’s the same explanation my union was given about the situation,” said PBA Local 29 President Maurice Gattison on Monday, April 10. “The furlough option was voted on by the PBA and the union agrees to take furloughs by majority vote.”

As the Irvington Herald went to press this week, there was still no word from IAFF Local 305 President Mike Scott, who represents the rank-and-file members of the Irvington Fire Department. But Bryant of the SEIU had plenty to say.

“So it has taken two years to receive findings from an audit from 2015 and, while taking office, they had to be notified the audit was being conducted and, if those statutes were in place, the administration had the responsibility to be versed in how it would potentially affect town’s budget,” said Bryant on Wednesday, April 5. “What better way to prove your accounting than to prove the previous administration is at fault? This letter doesn’t prove that. For that matter, where’s the audit report? This all should be on the table, so the township employees can make an informed decision,” Bryant said Wednesday, April 5.

  Faheem Ra’Oof, Michael Chase