Minutes: March 4, 2019*

Township Council Special Workshop Meeting

The special workshop meeting of the Township Council of the Township of Vernon was convened at 1:00 p.m. on March 4, 2019 in the Vernon Municipal Center, 21 Church Street, Vernon, New Jersey with Council President Jean Murphy presiding.

Statement of Compliance

Adequate notice of this meeting had been provided to the public and the press on February 27, 2019 and was posted on the bulletin board in the Municipal Building in accordance with the Open Public Meetings Act, N.J.S.A. 10:4-7. The purpose of this meeting is to discuss Department Budget Presentations. Official Action may be taken.

Roll Call

Present were Council Members Sandra Ooms, Mark Van Tassel, John Auberger and Council President Murphy. Also present were Mayor Harry Shortway, Business Administrator Charles Voelker and CFO Donelle Bright.

Salute to the Flag

Council President Murphy led the assemblage in the salute to the flag.

Moment of Silence for Councilman Dan Kadish

Council President Murphy requested all in attendance to stand for a Moment of Silence honoring Councilman Dan Kadish who passed away unexpectedly on February 25, 2019.

Public Comments (For Current Agenda Items Only, Limited to 3 minutes per person)

Council President Murphy asked for a motion to open the meeting for public comments.
Motion: John Auberger
Second: Mark Van Tassel
All members were in favor.

Seeing no members of the public wishing to speak, Council President Murphy asked for a motion to close the meeting for public comments.
Motion: Mark Van Tassel
Second: John Auberger
All members were in favor.

Items for Discussion

Tax Collector Budget Presentation

Lisa Kimkowski, Tax Collector, came forward and asked the Council to seriously consider authorizing the part-time position in the collector’s office be made to a full-time position. She explained the need is because of additional duties given of MUA collections, daily department collections and also more time needed to address municipal liens and foreclosures for increase in revenue. Ms. Kimkowski explained the increase from part-time (25 hrs./wk.) to full-time (35 hrs./wk.) in salary would be from $22,000 to $30,000 for the remainder of 2019 and noted that employee would not take medical benefits at this time. Ms. Bright commented that Ms. Kimkowski does a great job delegating and using time wisely and feels this is not an excessive request.

Council Member Ooms questioned about the status of the municipal salary freeze. Mayor Shortway stated the hiring freeze is still in effect as this is not creating a new position. Ms. Kimkowski explained there are 700 liens and numerous foreclosures which need focused attention and this action would be beneficial toward that goal. She added the current part-time employee is eager to learn, trustworthy and a great service to the public. Council Members had no further comments.

Department of Public Works Budget Presentation

Ed Babcock and Pete Ribello came forward to present the Department of Public Works proposed 2019 budget. Mr. Babcock detailed the salaries of the employees which include contracted, overtime, seasonal temporary and administrative. Expenses include office supplies, uniform and meal allotment, safety programs and sign materials. Mr. Babcock explained the Road Material and sign budget was increased to allow preventative maintenance of crack sealing to be done on township roads due to heavy pothole damage and repaint all main roads with yellow only. Mr. Babcock commented the Snow & Ice budget was increased to $425,000 due to high number of snow events in early 2019. Most communities use 1:1 ratio of salt: grit except for Highland Lakes and Lake Panorama which are 1:2. Ms. Bright explained that Vernon Township supplies the school with material and any amount received from them that was more than expected would be shown as unanticipated revenue in the Audit.

Mr. Babcock commented he will research pros and cons to calcium chloride spray, it’s cost effectiveness using less grit and its effects on the fleet. He explained the budget needs of tools & hardware, removal of debris and deer carcasses, and random drug testing. Council President Murphy questioned status of removal of debris from the Township “pit” where road material was stockpiled for many years. Mr. Babcock explained the “pit” is a locked, fenced township property where excess road materials were stored temporarily until being reused or discarded but was not maintained properly and DPW is now working to remedy the situation.

Mr. Babcock explained the fleet budget includes Fire Apparatus, MUA fleet and township fleet made up of DPW trucks or equipment, police and inspector’s vehicles. He added increase in fleet budget is due to high cost of repairs in aging equipment or vehicles and in case of emergencies. Ms. Bright noted that Ambulance maintenance and repairs is also charged to the Fire budget and will amend name of account to reflect purpose.

Mr. Babcock stated that the budget request for $5,000 is desperately needed to replace antiquated radios in the DPW fleet and building. He noted the new radios if purchased will provide a GPS service which can replace the current GPS service the Township uses. Mr. Babcock explains the Building & Grounds budget has been increased to repair the Senior Center ramp due to safety hazards. Ms. Kirkman noted that there may be ADA grant funds available to buildings used as polling places. Mr. Babcock stated that seasonal temporary help salary budget and field maintenance remained the same.

Mr. Babcock explained the Municipal Services Act budget is $400,000 to reimburse qualified communities for snow & ice removal. Reimbursement is determined by the Township’s actual cost of salaries, equipment, material to maintain per mile of roadway and multiplied by 1.5%. Communities must submit detailed invoices of cost spent for snow & ice removal and is reviewed. The Community receives the lower of the Township cost vs. the Community cost.

Mr. Babcock requested a Tow-behind Sweeper for the DPW which will be beneficial in clearing grit off roadways and clean road drains. He added a forklift was previously requested but then removed as an additional 550 truck is more important at this time. The request for oil & stone projects was reduced from $200,000 to $100,000 to allow repairs to Sleepy Hollow and others as funds allow. Mr. Babcock suggested to use 3/8" stone which will last longer and provide better traction. He added that no funds for Guard Rails are needed in the 2019 capital budget as there are funds left from the 2017/2018 budgets and priority roads include Sandhill, McPeek and Edsall. Other items requested are a leaf collection box to be used in existing trucks and needed shop equipment.

Mr. Babcock explained the Township has applied for NJDOT grants to pave Warwick Turnpike from West Milford line to the State Park entrance and possibly Lake Pochung Road from RT 517 to Up-A-Way Drive. Vehicles requested include a 550 and a big body single axle truck with wing unit. Mr. Babcock noted that existing tandems#74 and #63 are in need of replacement but can still be used as spares and added that some older truck parts are very difficult to find. As winter is exiting, Mr. Babcock commented the Township should restock the salt and grit supply as prices may increase mid-year. Council Member Auberger suggested using auxiliary shed for mixed material to stockpile salt and grit for next winter. He questioned if Township is considering installation of fuel tanks. Mr. Babcock explained that the current gas vendor has assured delivery for four or more years and added costs for tanks and pumps could start at $108,000. Mr. Babcock added an updated Lighting System at the DPW Garage is requested.

Mr. Voelker commented the Township will be accepting Proposals for Landscaping Services, (mowing grass, trim trees or hedges, weeding) on municipal properties to allow DPW to concentrate on other areas. Council President Murphy asked which communities have secure areas for salt and grit supplies. Mr. Babcock stated that Highland Lakes, Lake Panorama, Lake Wallkill, Schools and some private contractors have secure areas; but Scenic Lakes and Barry Lakes does not. Council Member Auberger commented that buying a tow-behind sweeper is smarter that renting and is a much-needed item.

Recess

Council President Murphy asked for a motion for a short recess.
Motion: John Auberger
Second: Jean Murphy
All members were in favor.
Motion passed to take a short recess at 2:27 p.m.

Council President Murphy asked for a motion to return to the meeting.
Motion: John Auberger
Second: Mark Van Tassel
All members were in favor.
Motion passed to return to meeting at 2:35 p.m.

Administration Budget Presentation

Mr. Charles Voelker, Business Administrator detailed the proposed budget of salaries, supplies, equipment rental, postage, advertising, mileage and meeting expenses. He further explained the Planner services, QPA services and OEM budget. Council President Murphy questioned why the QPA expense is located in the operating expenses as well as included in the salary line item. Ms. Bright explained that should the Township revert back to an licensed employee rather that a consultant, the budget would not need to be altered. Council President Murphy opined it should be removed from the salary budget.

Legal Services and Engineering Budget Presentation

Mr. Voelker detailed the legal budget including Township Attorney retainer, In Rem Foreclosures, Bond counsel, Tax Appeals, Litigation, Conflict and Special Attorneys, and noted that labor is higher due to collective bargaining negotiations. Mayor Shortway added the major part of the litigation line item is the Mountain Creek Bankruptcy.

Mr. Voelker noted the proposed Engineering Budget is $25,000 plus any capital projects. He added the Township Engineer has saved money for Vernon Township with his expertise and guidance and is very reliable as well as accessible.

Insurance Budget Presentation

Mr. Voelker explained the group medical insurance saw a substantial decrease in 2018 by $500,000 due to going to the State Health benefits Plan and 2019 budget has a small increase. Dental, vision, life, prescription and insurance waiver budget is staying the same while the employee contributions are increasing in 2019. Mr. Voelker expressed hope that the School District will also follow suit by going to the State Health Benefits Plan to lower taxes. Council President Murphy questioned if the State Plan the Township uses is available for Board of Education members.

Recess

Council President Murphy asked for a motion for a short recess.
Motion: John Auberger
Second: Sandra Ooms
All members were in favor.
Motion passed to take a short recess at 2:56 p.m.

Council President Murphy asked for a motion to return to the meeting.
Motion: John Auberger
Second: Mark Van Tassel
All members were in favor.
Motion passed to return to meeting at 3:00 p.m.

Debt Service & Capital Budget Presentation

Mayor Shortway explained the Debt service through a power point presentation. He stated Municipal governments responsibility is to provide services such as police, fire, public works, animal control and permitting in the most cost effective means possible. Mayor explained there was a need to raise taxes over the last three years because of Mountain Creek Bankruptcy, Legends and Northwoods litigation, Municipal Building repairs and sewer hookup, the Silver Spruce struggle, Town Center water hookup, and rebuilding the Fund Balance.

He listed the Legal litigation fees Vernon Township paid out including: Mountain Creek $177,000; Foreclosures $115,233; Tax Appeals $65,884; Silver Spruce $41,000; Land Use Board Member Paladini $32,000; Legends $30,000; Stonehill—Lift Station ownership $12,748 and previous Environmental Commission $7,490.00. He added Vernon has been aggressive with foreclosures to increase long term revenue and noted there are many in Legends and Tall Timbers. Along with the Vacant or Abandoned ordinance, Vernon has seen an increase in revenue and has started to see improvements to neglected homes.

Mayor Shortway explained that even while addressing the legal matters and foreclosure issues, Vernon pays some of the lowest property taxes in the state, averaging $5,697.13, at #458 out of #566 municipalities. He added that many municipalities with lower average property taxes do not have police departments. Mayor Shortway explained past administration’s policies have negatively affected Vernon’s finances. He explained the use of trust funds, Ordinance #11-23 and Resolution #15-192 with the fund balance, were used to cut taxes and balance the budget when taxes should have been raised to pay down the debt, maintain assets and services. Specifically, Mayor explained that Ordinance #11-23 financed MUA operations for five years and created a revenue stream by washing money through the MUA back to the Township as revenue for services performed by municipal employees. The MUA currently owes the Township $2.4 million on Ord. 11-23 and $3.6 million on Ord. 11-22 and in 2022 these bond anticipatory notes will need to be moved to bonds with all other Township debt making all property taxpayers responsible.

Mayor Shortway explained that in 2012, pension payments were deferred for a 15-year payback period at a 10 % interest rate which the CFO has been working hard to pay down to save interest. He added that minutes of March 11, 2013 council meeting reflect the former governing body and mayor set up an appropriation for new line item ’Bond Sinking Fund’ to prepare for future bond funding. Former Council Member Lynch expressed support for plan and former Mayor Marotta added this was part of a 5-year plan for operating and capital funds. The ’Bond Sinking Fund’ was then cancelled by Resolution #15-192 with funds moved to Capital Fund. Mayor Shortway commented that tax revenue should have been raised during 2010-2015 instead of depleting the ’Bond Sinking Fund.

Mayor Shortway stated the fund balance was $901,498 in 2009 and was $3,352,767 in 2013 but then monies were used from the fund to prevent property tax increases and it was decreased to $1,603,388 by 2016. Mayor explained Vernon has generated new revenues through sale of municipal properties and through the vacant property ordinance increasing the fund to $2.2 million but urged Council to continue. He commented that Vernon now faces the unpopular decision to raise taxes again as a result of collective bargaining agreements negotiated by the previous administration and ongoing litigation. Vernon must address the debt by aggressively paying down the BAN’s otherwise $13.7 million of BANs will have to go out for bonding in 2022 with a short useful life.

Mayor Shortway stated that over $6,000,000 of debt is related to the purchasing & operation of the sewers and MUA but the MUA has only made minimum payments of $250,000 for Ordinances #11-22 and #11-23. The MUA also owes the Township $242,000 for 2018 revenues not realized by the Township. Mayor Shortway urged the Council that Vernon must continue to build the fund balance and move to a cash system for short term asset purchases and recommended budgeting $1,006,600 to pay down the BANS as it is their fiduciary duty to reduce debt and provide services.

Mayor Shortway explained that the County’s objection could affect the Mountain Creek agreement and disrupt municipal cash flow and lower our Moody’s rating. Council President Murphy requested a copy of the presentation sent to all of the Council. Ms. Bright referred to the debt summary previously distributed to Council and noted that BANS/notes were taken out every year since 2011 with a set payment schedule based on the useful life of the assets. Ms. Bright outlined a proposed payment schedule to pay down the older debt and continue aggressive payments. She explained it is in the best interest of the Township to move to a cash Capital budget and discussed this option with the Police and DPW departments for necessary items only.

Council President Murphy noted that Vernon will need to bond for the replacement of the Turf fields at Maple Grange. Ms. Bright agreed that the down payment would be paid by the Recreation Trust Fund and a loan taken out for the balance but also noted that Vernon has realized increased revenues. Mayor Shortway suggested adoption of a Short-Term Rental Ordinance which also will increase revenue and monitor safety issues occurring with private properties. Council President Murphy noted that certain departments are already requesting more help and the proposed Ordinance will create more work for Township employees. Mayor Shortway emphasized the safety concerns of visitors coming to our town and projected the Ordinance could bring in $100,000 vs. the cost of increased help estimated at $20,000. Council President Murphy stated the safety responsibility falls to the homeowner not the Township.

Ms. Bright explained the Recreation Trust Fund would be used to make the down payment for the turf fields and depending on interest rates capital notes or permanent funds would be utilized. Mayor Shortway recused himself from the discussion of Replacement of Turf Fields due to a conflict.

Other Budgetary Items (Not specific to a department)

Council Member Ooms questioned the amount of tax increase in the proposed 2019 budget. Ms. Bright noted the proposed budget show a $13/month increase for average home of $215,000.00 which is an 11% increase. Council Member Ooms opined the increase is high and stated that the Board of Education and County are also proposing increases and suggested the municipal budget be reviewed more closely. Ms. Bright added Vernon anticipates more from the MUA in 2019 including payments from Mountain Creek. She also noted that all SCMUA payments are paid in full whether or not the MUA pays the Township which primarily comes from the user fees. Ms. Bright explained that any unanticipated revenue coming from the MUA would be deposited as unanticipated and will not be available to use until 2020. Mayor Shortway added that Sussex County objected to our Mountain Creek agreement and interfered with our projected cash flow. Ms. Bright stated that Vernon has not given any funds to operate the VTMUA since 2016.

Council Member Ooms questioned what proposed increase from Board of Education is for 2019 and noted the Township has no control. Ms. Bright explained that the Board of Education is projecting a 6% increase over last year’s budget.

Council President Murphy asked the Council Members to review the proposed budget and propose recommendations to be discussed at next Council work session possibly 1:00 pm on March 11, 2019. Another work session will be scheduled on Wednesday March 20, 2019 to make final recommendations to the Mayor and Administration and anticipate the budget be introduced on March 25, 2019.

Public Comments (On any topic, limited to 3 minutes per person)

Council President Murphy asked for a motion to open the meeting for public comments.
Motion: John Auberger
Second: Sandra Ooms
All members were in favor.

Seeing no members of the public wishing to speak, Council President Murphy asked for a motion to close the public portion of the meeting.
Motion: John Auberger
Second: Mark VanTassel
All members were in favor.

Council Comments

There were no further comments from any Council Member.

Adjournment

There being no further items of business to be conducted on the agenda, a motion for Adjournment was made by Council Member Auberger, seconded by Council Member Van Tassel with all members voting in favor.

The meeting of the Township Council of the Township of Vernon was adjourned at 3:53 p.m.

Respectfully submitted,
Lauren Kirkman, RMC, CMR
Municipal Clerk

Minutes approved: March 25, 2019