All meeting minutes posted on the township website are unofficial minutes. Official copies of minutes may be obtained from the township clerk.
Minutes: March 19, 2016
A. OPENING OF BUDGET MEETING
1. Call to Order
A budget meeting of the Randolph Township Council was called to order at 8:30 a.m. by Mayor Hirniak. This meeting is held pursuant to the New Jersey Open Public Meetings Act. Adequate notice of the meeting has been provided by posting written notice of the time, date, location and to the extent known, the agenda of the meeting in Randolph Township. This notice was posted on the Bulletin Board within Town Hall, it was filed with the Township Clerk, and it was provided to those persons or entities requesting notification. Notice was also provided to the Randolph Reporter and the Morris County Daily Record on December 4, 2015 by e-mailing them the annual resolution adopted by the Council on December 3, 2015. The annual resolution, which included this meeting date, was advertised in the Randolph Reporter, the official newspaper of the Township of Randolph, and the Daily Record on December 10, 2015. The time change for this meeting was advertised in the Randolph Reporter on February 18, 2016.
2. Roll Call
Councilman Forstenhausler (via phone)
Councilwoman Veech (via phone)
Deputy Mayor Carey
Also present: Township Manager Mountain
3. Pledge of Allegiance
Mayor Hirniak led the Pledge of Allegiance.
B. OPEN TO THE PUBLIC
Judith Stewart, of 114 Everdale Road stated again that she found several typos in the budget document. She had given them to Jessica Losey, so she is hopeful that they won’t appear in the final budget.
Seeing no one further from the public, the public portion was closed.
C. FOLLOW-UP DISCUSSION—PREVIOUS BUDGET MEETINGS
1. Review of Debt Position
CFO Maloney provided a handout to the Council & explained the following:
- There are three schedules, township, water and sewer, and open space. The 2007 bonds are expiring at the end of 2017. There is a dramatic reduction in debt service from 2007 to 2018; it continually drops until 2036. The 2007 bonds are comprised of fire equipment, the Community Center repairs, and various capital improvements. The 2015 bonds include the DPW facility, the Library and the Community Center, and several other items.
- The township has an arrangement with the Board of Education to get a portion of the debt reimbursed for the DPW building. The reimbursement from the Board of Education ends in 2032.
- Debt service is in good shape.
Manager Mountain added that on the general obligation debt, effecting the general budget, the Council’s policy to direct more projects be funded with cash, particularly the roads, will result in the increase being less dramatic. While the debt figures go down, they will be supplemented by additional borrowing; however, the Manager doesn’t expect the levels to jump back up to the levels of 2016 and 2017 because of the way the projects are being financed.
Manager Mountain explained that Randolph had already been AAA rated by one of the agencies, and the township has been upgraded by a second agency to what amounts to an AAA rating for their agency as well. The township’s management of debt is a large factor in that rating; the second factor is surplus. The rating helped with the bond sale last September. CFO Maloney added that there are additional hidden costs, one of which is called Bond Insurance. When a township is AAA rated, it doesn’t have to pay that cost.
CFO Maloney explained the following related to Water and Sewer debt:
- 1999 NJEIT Loan—will be paid off in 2020
- 2015 water bonds—to cover the Sussex Turnpike project
- Sewer debt from the 2015 bonds—to cover the Butterworth projects
CFO Maloney explained the following related to Open Space debt:
- Green Acres Loan
- 2007 bonds to cover Freedom Park and the synthetic turf field
- 2015 bonds
- Nothing was included related to the Parks Master Plan. CFO Maloney and Manager Mountain have been working behind the scenes to ensure that any debt service schedule that the Parks Committee wants, the township will be able to pay for. Manager Mountain added that the final draft book will contain a page that takes the background document, and factors in the recommendations that come from the Park Master Plan, to show how it would affect the overall 10 year financing picture for the township, if the Council were to adopt the 10 year plan and do every project.
2. Review of Cash Management Plan
Darren explained the Municipal Investment Options:
- There is not a lot of flexibility in what the township can invest:
- Bonds and other obligations of the U.S.A.
- Government money market mutual funds.
- Any federal agency or instrumentality obligations authorized by the Congress that matures within 397 days from the date of purchase, which has a fixed rate of interest not dependent on any index or external factors.
- Bonds or other obligations of the local unit or school districts of which the local unit is a part.
- Any other obligation with maturities not exceeding 397 days as permitted by the Division of Investments.
- Local government investment pools such as New Jersey CLASS, and the New Jersey Arbitrage Rebate Management Program.
- New Jersey State Cash Management Fund
- Repurchase Agreements
- The interest rate environment is changing; the rates have been raised, and there will be additional rate increases this year.
- He negotiated a 6 month CD for 0.755%; previously the township was getting 0.15%. The New Jersey Cash Management Plan was getting 0.09%.
Manager Mountain added that he spoke to Darren about exploring the idea of loaning money to the school district through a lease agreement. He explained that the schools cannot build surplus like the municipality, and they are restricted in how they manage their capital. The Manager explained how this had worked in Mendham Township.
D. REVIEW OF OTHER BUDGET CONSIDERATIONS
1. Discussion—Capital Plan
Manager Mountain distributed the updated Capital budget page, which included the changes discussed at the previous budget meeting; the change from borrowing to cash funded projects utilizing surplus for the Millbrook Avenue paving project and the retaining walls project. The Manager highlighted projects that weren’t previously presented:
- Fire engine replacement—the Fire Department requested the replacement of Engine 31 at Mt. Freedom Company #3, a 1995 engine; it is 20 years old and requiring increased maintenance. They want to replace this engine with one that has a foam component, a better agent in fighting certain fires. The process in acquiring a new fire truck takes approximately 2 years. The acquisition would be financed.
- Turn out coats and pants—the Chief completed an inventory of the gear and found that close to 75% of the inventory was beyond the standard number of years; therefore, the request is higher for 2016.
- Mobile Data Terminal for the Rescue Squad—this would allow for the squad to receive more detail associated with the call prior to the rig arriving at the scene. They are also requesting equipment to supplement their ice rescue response. Also requested were a small enclosed trailer and a vital sign monitor.
- Upgrade siding on the Randolph Museum—in addition to the painting, there is a lot of wood work that needs to be fixed before the painting. The Facilities Master Plan group walked the perimeter of the building.
- Replacement of the boiler serving the Library and Community Center—this is a singular unit that supplies both buildings; there is an engineering and a construction estimate.
- Former Animal Shelter—the line item is not what the Fire Department wants to do with the building; there are still a number of items which need to be done to close out the building, whether or not it is repurposed.
- VFW—there is some supplemental funds in the budget for the elevator. The grant provides funding for an elevator from the back of the building to the second floor. The budget includes an additional $50,000, in order for the elevator to provide accessibility to the entire building. The Federal Government requires this to be a bid project.
- Gas Boy—on the revised 2016 page—this was originally put in the Capital Outlay as a repair. This is the gas depot at the DPW; there have been a number of issues for the last few months. The technicians have stated that they have done all the troubleshooting possible; therefore, the replacement of the fuel management system has been moved to the 2016 Capital budget as the first step. The actual replacement of the pumps will be in the future.
Councilman Loveys clarified that the original request for $7,000 in Capital Outlay was just to repair the fuel management system. Manager Mountain stated that was correct; the $7,000 will now be removed from the Capital Outlay, and an additional $13,000 will be from Capital improvements, equaling the $20,000 for the system.
Councilman Loveys questioned the figures for the Improvements to Municipal-Owned Property. There is $423,000 of which $75,000 is coming from Park Open Space; there is $75,000 missing. CFO Maloney and Manager Mountain agreed that there had been a mistake, and Manager Mountain stated that it will be corrected.
Mayor Hirniak noted that the Road Overlay Program and Millbrook Avenue Paving equal $1,900,000, of which $289,000 is in an existing Capital Ordinance. The Mayor clarified with the Manager that the remainder of the funding would be cash. Manager Mountain explained that the bulk of it would come from surplus, and it will be a one-time investment to move the road program forward. He anticipates the amount being reduced in 2017.
Councilman Guadagno asked for more information on the underground tank removal line item. Manager Mountain explained that the tanks had been removed from all the buildings approximately 20 years ago. A few years ago, a project was initiated to complete the paperwork required by the state, as well as the testing required by the state. The township is paying for a consultant to do the soil testing, and complete the reports.
CFO Maloney distributed a twelve-year history of the township’s surplus. He explained the following:
- A lot more surplus is anticipated this year.
- If surplus is budgeted, it’s good to regenerate it. If it is not regenerated from operations each year the ending surplus balance will be reduced by the difference of what is budgeted less the difference of what is generated. He feels that in 2016 the amount of surplus budgeted will likely be regenerated worst case is it will be $300,000 short. If it is $300,000 short, it will come out of the year-end surplus. He is comfortable with this if it happens.
- CFO Maloney and Manager Mountain have been trying to generate a plan to bring the surplus down to levels that the rating agencies find acceptable, and with which he and the Manager are comfortable with. He is comfortable bringing it down to approximately 12 million dollars over the next four to five years.
Mayor Hirniak commented that bringing down the surplus could potentially bring property tax relief. Manager Mountain explained that it provides services at a level of tax impact that is reasonable. At the very least, it would keep any recommended increase in taxes at a relatively low impact on the tax base. The Manager explained that he and CFO Maloney are looking for ways to utilize excess surplus in investments on costs that are non-recurring. They are very attentive to the regeneration figure; they have left enough buffer, in a one-year time frame, to absorb that deviation and not see the overall surplus number taken below the targeted number.
Mayor Hirniak commented that the township has a flat number for sewer that residents pay on a quarterly basis; this causes concern from residents each year. He noted that the sewer surplus has risen each year, and asked Manager Mountain to discuss the quarterly sewer charge and the fact that it goes into surplus as opposed to a new approach to the sewer usage fee. Manager Mountain explained that the reason the surplus has been driven in the sewer utility is that there was a future view established by John Lovell and Mike Soccio to reserve for the Butterworth project and for any costs that may result from the litigation with the RVRSA. Now that the Butterworth project is moving forward, some of the surplus will be utilized. The Manager also explained that there has been discussion in the past about the flat fee for sewer. He stated that in the near future there will be a fee analysis for both water and sewer utilities; however, he doesn’t see it affecting the surplus because the surplus is a separate entity from the established fees. CFO Maloney added that when the surplus is drawn down, it has to be done equitably along the three drivers, municipal, water, and sewer.
Councilman Guadagno stated that he would like to see more of an aggressive program to extending the water lines, especially given the amount of surplus. He hears from many residents who would like to have public water. The Councilman said that he spoke to Ralph Carchia and there are no restrictions from the DEP to add to the water lines. Manager Mountain explained that there are no restrictions for the small projects where permitting is not required, but for bigger projects or those that are part of the ten year plan for expansion, there are potentially restrictions from the DEP. There is not an infinite supply of water; they don’t expect the DEP to increase the reserve allotted to Randolph. Also, depending on where the township is in a given cycle with regard to water conservation, the amount of capacity allotted by the DEP can be affected. In the six year plan, improvements for expansion as well as repair to the existing system are anticipated. The Manager felt the township is restricted less by the willingness to spend down surplus as it is the need to space out the improvements in a way that allows for approval for the projects.
Councilman Loveys asked for clarification from CFO Maloney as to his explanation of drawing down surplus. Darren explained that there is currently 14 million dollars in surplus, and since they plan to draw it down to 12 million over the next several years, they do not want to draw down too much from one of the three drivers and not the others.
There was some more discussion on the surplus being used for the road overlay program and the Millbrook Avenue paving, as well as the retaining wall project.
Councilman Loveys asked about the 5 million dollars allocated for park improvements in 2017. Manager Mountain explained that the number is a place-holder in anticipation of the approval of the Parks Master Plan; it would primarily be the 90 acre parcel. There was some discussion on the 10 year plan, and the potential ways for funding.
Councilman Loveys asked about the funding for the revaluation. Manager Mountain explained that the township is following the concept that John Lovell and the Council established with the budget. The mechanism that was used in order to have the cost spread over five budget years was a “special emergency”; this allows for certain activities to be spread over five budget years, but there is no interest, it’s just the total amount divided by five. The Manager further explained that the township is taking the money budgeted in 2013-2014 as a reserve for the project to offset the installments.
Councilman Guadagno reiterated that the taxes would not be increased due to the park improvements resulting from the Parks Master Plan. Manager Mountain agreed, stating that the new ten year plan is designed to remain with the funding range of the prior ten year plan and that an increase in the Recreation and Open Space Tax would not be necessary to support the plan.
2. Library Funding
CFO Maloney explained the following:
- Municipal expenditure generally comprises the largest percent of income for the library
- N.J.S.A. 40:54-8—the governing body shall annually appropriate and raise by taxation a sum equal to one-third of a mill on every dollar of assessable property within such municipality based on the prior year’s equalized valuation of such property
- Increase to the library may be limited to 15% of the previous year’s municipal expenditure to the library
- One-third mill definitions:
- Equalized valuation is the true value of real property within a local taxing district, computed from the aggregate assessed valuation and actual sales of property, and used to distribute equitably State school and library aid, apportion county taxes, and measure municipal debt limits
- One-third mill is the equalized valuation times 0.000333333
- There is $483,506 in township costs for the Library
- Total library appropriations is $944,939
CFO Maloney explained the following key drivers of revenues:
- Miscellaneous Revenue Not Anticipated (MRNA)—in 2015 $863,678 was collected. The amounts for 2014 and 2013 were also listed on Darren’s handout.
- Lapsing Appropriation Reserves—these will trend downward in the future.
- Tax Collection Rate Reserve for Uncollected Taxes—the high collection rate helps generate surplus. The township has really good collection rates, this year it’s 98.96%.
- Delinquent Taxes Collected—in 2015 $894,293 was collected.
- Various Miscellaneous Revenue Items which Exceeded Budget—because the revenues are conservatively budgeted, it helps to generate surplus.
Mayor Hirniak asked how the revaluation might affect the collection rate. Manager Mountain explained that he didn’t feel it would have a dramatic effect.
There was more discussion on driving down the surplus over the next several years. Manager Mountain added that another reason why the surplus is being drawn down conservatively is because surplus can be affected by tax appeals. There are still a good number of outstanding tax appeals.
E. COUNCIL QUESTIONS/COMMENTS
Mayor Hirniak asked Manager Mountain if there were other scenarios to look at with regard to the final numbers. Manager Mountain distributed a summary, and explained the following:
- There are three tier levels:
- He explained that they did not go to these levels in the Manager’s recommendation because he felt the items were important enough to keep them in; however, he anticipated the question of what he would recommend if the Council wanted to make reductions. In his summary, he listed them in ascending order in terms of their impact to the organization.
- Tier I—would reduce to a one cent increase—he explained each item.
- Tier II—would reduce to a one-half cent increase—he explained each item.
- Tier III—would reduce to a zero increase—he would not recommend the majority of this tier. He explained each item.
- He felt that the budget that was presented provided the right balance between a support of services/further investment in the infrastructure of the community while seriously considering the impact of the budget on taxes.
Councilman Guadagno asked to see more detail for the Capital Outlay items in the various tiers; however, he is not looking to make any reductions since he felt the budget was good. Councilman Guadagno asked for clarification on personnel. Manager Mountain stated the only change to personnel in the recommended budget is the conversion of the position in the Clerk’s Office, which is currently about a 3/4 time position, to a full time position. The other change is the temporary part-time person in Fire Prevention. The Intern was part of the 2015 budget that was carried over to 2016.
Councilman Napoliello asked what the change, in terms of dollar amount, would be with a one cent reduction. Manager Mountain explained that it would lower the budget by $56,851. Councilman Loveys stated the tax impact of the recommended budget is approximately a $40 increase on the average assessed house. CFO Maloney stated the tax impact with a one cent reduction would be a $33.68 increase on the average house; at one half a cent is $16.91 increase on the average house; and Tier III would be no increase.
Mayor Hirniak asked the Council if anyone wanted to explore any of the three Tiers, or any of the line items, before the budget is introduced on March 31st. Councilman Loveys asked for clarification on the full time position in the Clerk’s Office. Manager Mountain explained that it is taking a current part time position, and making it a full time position; the adjustment salary-wise is roughly $5,000. The benefit portion is not shown because CFO Maloney keeps a differential in the benefits area to anticipate changes in any aspect of the benefit package in any department.
Councilman Napoliello commented that 10-15 years ago there were no tax increases and the reason was that there was still houses being built to generate more tax revenue. Manager Mountain stated that was correct, and now the township is close to fully built out. Councilman Napoliello asked about the impact of the Brightview development on tax revenues. CFO Maloney replied that the overall assessment increased 0.57% from 2015 to 2016. Manager Mountain explained that surplus could be used to further drive down the tax increase; however, then surplus would be used for supporting recurring costs, which would affect the future budgets.
Deputy Mayor Carey asked for clarification on the firehouse rental increase. Manager Mountain explained that there are two ways in which the township supports the individual fire companies; there is a direct aid line and a rental line. The theory is that the rental is used for elections, but it’s a legal way that the money can be transacted. The differential would be between the dollar amount at its current level and increasing it as requested.
Deputy Mayor Carey also asked if Manager Mountain was thinking the EDC Interim would be a college student during the summer. The Manager said his vision was for a local student who could fill the position for a certain number of hours year round.
Mayor Hirniak recapped by stating that it seems no one on the Council is interested in considering one of the Tiers or a line item within one of the Tiers. Deputy Mayor Carey replied that she felt the budget was solid, and despite no one liking to raise taxes, she didn’t feel cutting some of the line items to save just a small amount was a good approach. Manager Mountain agreed with the Deputy Mayor’s comment.
Mayor Hirniak reviewed the line items in Tier I, and stated that by eliminating those requests, the savings would be 58 cents per month on the average house. He did not feel that was beneficial to the community. Councilman Loveys felt that increasing taxes by $40 per year for the average house was reasonable for the services residents receive. Councilwoman Veech and Councilman Forstenhausler agreed with Councilman Loveys.
Councilman Guadagno stated that the column he created two years ago is meaningless. What he was trying to track was the budget increase for the various departments. Manager Mountain clarified that Councilman Guadagno would like to see one column as the percentage change from budget year to budget year, and the other column would be the budget change for the prior year. So rather than the percentage change from the estimate to budgeted, he would like to see the prior budget to budget (i.e. 2014 to 2015 and 2015 to 2016). There was more discussion to clarify what Councilman Guadagno was requesting. Manager Mountain concluded that next year he and CFO Maloney will create a mock-up version to determine if they accomplished what Councilman Guadagno is requesting.
Mayor Hirniak stated that he felt the Board of Education was doing a fine job with the resources available.
Manager Mountain thanked the Council for their work on the budget.
F. OPEN TO THE PUBLIC
Judith Stewart of 114 Everdale Road provided the background as to why she and her family moved to Randolph. She stated that although Randolph’s population has doubled since she moved here, the township has maintained itself as a very nice community. Mrs. Stewart also prefers the Council-Manager form of government. She added that 2/3 of the taxes collected go toward the schools. Mrs. Stewart spoke highly of the library and its staff, she also commended all the township staff for responding to the needs of the community. She thanked the Council for the time they spend on the budget.
Seeing no one further from the public, the public portion was closed.
Prior to adjournment, Mayor Hirniak reminded the council that the MAC had a program with Matt Bellace on March 22nd at 8 p.m. at RMS. Manager Mountain stated that the Parks Master Plan sub-committee meeting is still on, but it has been difficult to find a mutually agreeable time for the public hearing. He asked the Council if it would be acceptable to hold the public hearing on a Council meeting night, but start the business meeting a little early so it doesn’t run late. The Manager asked if either the May 5th or the May 19th Council meeting date would be good for 100% attendance from the Council; he proposed the business meeting begin at 6 p.m. and the public hearing begin at 7 p.m. It was decided to have the meeting on May 5, 2016 beginning at 6:00 p.m.; Donna Luciani will advertise appropriately.
Deputy Mayor Carey made a motion to adjourn the meeting at 11:50 a.m. Councilman Guadagno seconded the motion, and the following roll call vote was taken:
Deputy Mayor Carey