OPINION: Further scrutiny of our town’s budget, bonding

Point of View, By Joe Krakoviak

WEST ORANGE, NJ — Curious about the proposed 2018 municipal budget, its 2-percent tax increase and the proposed $9.2 million bond ordinance that includes a $110,000 “ice bumper car facility”? After the administration’s presentation at the May 22 council meeting, and the subsequent West Orange Chronicle article, it would greatly benefit residents to have additional key information and context.

John Gross, the chief financial officer, presented on the proposed 2-percent increase in the tax levy, which is the amount of taxes required to balance the budget after all other revenue sources. This would be the fourth straight year of a 2-percent levy, which is the maximum allowed under state law — with exceptions.

Gross emphasized what he called the town’s strong 10-year tax-increase record relative to other municipalities and lauded the town’s “relatively stable tax rate.” However, he didn’t mention the more recent four-year history — rate increases nearly double the cited 10-year average. I would argue the more recent record is much more relevant and concerning. Not to mention that the town’s tax base has declined eight years in a row, causing even higher tax rate increases to fund the levy.

Mr. Gross appeared to downplay the 4.4-percent spending increase, an additional $3.5 million to $83.2 million. He rightly pointed to a significant $1.3 million increase in grants. But then he appeared to suggest that we should not consider this amount as a spending increase because of the offsetting grants — as if the remaining difference of a $2.2 million increase should not be concerning.

In one graphic in Gross’ presentation, the years that ran along the horizontal axis of the graph were not a steady progression in one direction. Instead, most of the years appeared randomly placed, raising accuracy questions.

Another graphic, designed to show that West Orange property taxes pay for more services than surrounding municipalities, did not appear to have been updated from four years ago when the chart was first used. For example, it showed no senior citizen services in Montclair; I have spoken with the full-time manager of those programs — they exist.

The mayor also submitted a bond ordinance proposing to borrow nearly $9.2 million for a variety of barely described capital projects. If approved, this would raise debt to a record $82 million. That would represent a 37-percent increase of $22.2 million since the end of 2010. In that time, annual debt service — the payback of principal and interest on this debt — has risen 48 percent, or nearly $2.4 million, to more than $7.3 million. This increase is even more alarming for occurring in a historic period of low interest rates that now appears to be fading, pointing to higher borrowing costs. Gross didn’t include any of these facts except the bonding amount; I had to point them out. Instead, he cited other metrics he said indicated the borrowing was reasonable.

So what has all this borrowing brought us? Recent capital spending has included $200,000 for a skate park and $550,000 to buy a small lot at 665 Eagle Rock Ave. assessed at $103,200 to build approximately 20 parking spaces — when across the street Chase Bank is giving the town approximately 70 spaces for free.

The ordinance included spending on traditional road improvements and building repairs. But one item caught many eyes — $110,000 for the “ice bumper car facility.” Gross didn’t have much information, except to say that children tend to like it and that the mayor is leading the effort. Meanwhile, in a later discussion, the town engineer told the council the town’s fire stations continued in need of more than $2 million of repairs, but are only allocated $600,000 from this bonding.

So why are we even looking to build an “ice bumper car facility” and buy LED traffic signs for as much as $20,000 per unit when first-responder facilities have such tremendous need? Where are our priorities?

While Gross’ presentation made a case for reasonableness, one area of spending increases that he did not address was more than $90,000 in “special requests.” These were promotions and pay increases that were not required by law or labor contracts. Each item was uniformly approved by the council majority earlier, except for moving half of two $10,000 raises into the 2019 budget. I voted only for a $5,000 increase for an additional driver for badly needed senior-citizen busing.

Among those pay increases were the fourth and fifth consecutive annual raises for Gross. Since he was paid $140,352 in 2014, his pay has risen annually to $168,935 this year and at least to $173,935 next year. Over that period, Gross’ pay has increased a whopping $33,583, or nearly 24 percent.

Gross’ 2018 raise was only part of large increases given to him and three other employees in his department. Including him, three raises of either $10,000 or $11,000 were given to employees already making more than $100,000. The fourth employee, who received a $5,000 raise, was already paid nearly $65,000. In all, these four employees are due total increased pay of $36,000.

Is this a budget and bond ordinance that, in Gross’ words, deliver “tremendous value”? Not yet. Although I requested that he put some of this additional information on the town website, neither the presentation nor the Supplemental Debt Statement showing the impact of the bonding is online nearly two weeks later. Perhaps because more transparency would bring more skeptical scrutiny? You can watch the meeting by clicking on “Council Members & Meeting Videos” at www.WestOrange.org. Perhaps we’ll find out at the June 12 council meeting, where I hope residents will provide input.

Joe Krakoviak is a member of the West Orange Township Council.

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