HomeMy Public PortalAbout1997/05/22
BAY 22, 1997
A Special Meeting of the Mayor and Council of the Borough of Carteret
was called to order by Council President Stanley Gutowski at 7:00 P.M.,
on Thursday, May 22, 1997, Municipal Court/Police Facility, 230
Roosevelt Avenue, Carteret, New Jersey.
SPECIAL
MEETING
May 22, 1997
Upon individual roll call, the following were noted present:
ROLL CALL
Councilmember Deborah Bialowarczuk
" James Failace
" Jack Fazekas
Noted absent were Mayor Peter 1. Sica, Councilmember John DuPont and
Councilmember William Feingold.
Also noted present were Borough Attorney Craig Coughlin, Patrick
DeBlasio, Treasurer/CFO and Gary Higgins, Auditor
Mailed to The Home News & Tribune, The Star Ledger and posted on the
bulletin board on May 16, 1997.
STATEMmT
OF MEE'fING
NOTICE
To discuss the 1997 Local Municipal Budget, Budget Amendments and
Potential Sewer Financing. Formal Action mayor may not be taken.
PURPOSE
OF MEETING
Gary Higgins said that based upon the sewer allocation study that was
presented last week, he prepared a resolution which would basically do
what the Council wanted with the excess monies, would be bring it from
the account entitled sewer reserve improvements over into general capital
ordinances fully without the authorization of debt. That's what the
resolution they have before them contemplates.
DISCUSSIOO
Mr Higgins read Resolution #97-173 in full:
RESOLUTIOO
i 97-173
"RE: GENERAL CAPITAL FUND - RESERVE FOR
SEWER IMPROVEMENT ACCOUNT"
WHEREAS, there exists an account in the General Capital Fund entitled,
"Reserve for Sewer Improvements"; and
WHEREAS, this account has been funded from current fund budget
appropriations with funds representing the excess sewer revenues over
sewer expenditures; and
1.
WHEREAS, the Borough undertook a review of the sewer expenditure
allocations previously prepared by administration for the years 1986 thm
1996; and
MAY 22, 1997
RESOLUTIOO
j~ 97-173
Can't
WHEREAS, the review has determined that certain additional
costs related to the sewer operations may be allocated against
sewer revenues in the amount of$I,015,090.00; and
WHEREAS, after the appropriate transfers are undertaken
between the 1997 Current Fund budget and the General
Capital Fund a cumulative excess of$726,535.00 will exist in
the account entitle, "Reserved tòr Sewer Improvements"; and
WHEREAS, the Governing Body wished to transfer this
excess to the General Capital Fund - Fund Balance.
NOW, THEREFORE, BE IT RESOLVED, by the
Governing Body of the Borough of Carteret, that the Chief
Financial Officer is directed to transfer $726,535.00 from the
account entitled, "Reserve for Sewer Improvements" to the
"General Capital Fund - Fund Balance."
OPEN TO
PUBLIC
Upon MMS&C, by Councilmembers Gutowski and Fazekas
and unanimous affirmative vote of the four (4) members
present, the meeting was opened to the public for input on the
resolution.
CLOSED
There being no comments or objections to the resolution from
the public present, upon MMS&C, by Councilmembers
Failace and Fazekas and unanimous affirmative vote of the
four (4) members present, the meeting was closed to the
public.
CLH1EN'.í'S
Councilman Failace asked if when the monies are moved over
into the general capital fund-fund balance throughout the year
any projects that they have or anything that they do could be
taken from this.
Gary Higgins said that it has to be appropriated through a fully
funded capital ordinance similar to what they've done with the
sewer improvements in the past. It'll just be a general
improvement and it'll be a fully funded ordinance. You can't
just spend from the account. You have to appropriate it but
that's what it is available for
Councilmember Bialowarczuk spoke but was inaudible.
Gary Higgins said that they still have a million and a half-
dollars left in the account entitled "Sewer Improvements".
After you take the seven and change, you have a million and
a half1eft for those other projects. In addition to this you have
another million and a half.
-
2
Council President Gutowski said that there is point two there
right now.
'N__
"'.
"'.
MAY 22, 1997
Mr Higgins said correct. After the 97 transfer off the budget, there is
approximately 2.2 million there.
cœMENTS
Cpn't
RESOLUTION #97 -173 was introduced by the Mayor and was referred
to the Council for action.
RESOLUTIOO
. 97-173
GmERAL CAPITAL
FUND - RESERVE
FOR S~
IMPROvmENT
ACCOUN'.í'
Upon MMS&C, by Councilmembers Failace and Fazekas
ADOPTED
RESOLUTION #97-173
"GENERAL CAPITAL FUND - RESERVED FOR SEWER
IMPROVEMENT ACCOUNT"
was adopted. Upon individual roll call vote, Council members Failace,
Fazekas and Gutowski voted in the affirnlative. Councilmember
Bialowarczuk abstained. Councilmembers DuPont and Feingold were
noted Absent
Mr Higgins said that he worked up some other general information
regarding sewer debt based upon their conversation last week.
cœMENTS
Council President Gutowski said that they could discuss that after they go
over the budget.
3.
GaIY Higgins explained that the second resolution they have before them
is an amendment to the 1997 budget. The Chief Financial Officer
presented a memorandum to the Governing Body last week outlining
certain items that have to be adjusted in the budget. The first one, he
believes everyone is aware of, is discretionalY aid. The allocation for
1997 was reduced by $50,00000 rrom $400,000.00 to $350,000.00 so it's
mandatory that it must be reduced in the budget. In addition to that,
they've received numerous other revenues or notification of numerous
other revenue to come into the Borough during 1997 that we were not
aware of when we prepared the budget back in February...the
Transportation Trust, the Drunk Driving Enforcement Fund, Municipal
AlEance, COPS MORE, Non-public Nursing and Library Development
Aid All those items have to be added to the budget and they have an off-
setting appropriation. There's no affect on taxation with any ofthose. In
addition to that, the Chief Financial Officer wishes to adjust two
appropriations within the CAP. Then we have to adjust the M.C.UA.
appropriation by a $40,000.00 increase. The net affect on this whole deal
is an adjustment to the amount to be raised by taxation of approximately
$60,000.00. What this ends up leaving you with is a flat 3-cent increase.
It was approximately 2.4, 2.5 cents. This will round it out to 3 cents and
MAY 22, 1997
~S
Can't
to the average home it's a $35.00 increase for 1997 for
municipal purposes only. That's what this resolution provides
for It does require a public hearing because you are
amending a line item in excess of 10% up or down in two
cases so it's required to be advertised and have a public
hearing which is scheduled for June 5, 1997.
The Municipal Clerk stated that the resolution has 8:00 P.M.
for the public hearing and it should read 7:30 PM.
Mr Higgins said that it would be corrected.
Mr Higgins continued to explain that the items here to be
adjusted are more or less the bottom line of revenue
adjustments in the budget on both sides.
Council President Gutowski asked Patrick DeBlasio if he was
okay with this.
Patrick DeBlasio said that he has something that needs to be
addressed.
Council President Gutowski said that they have to go into
closed session.
Borough Attorney Coughlin said that they would be
discussing a personnel matter and contract negotiations.
RESOLUTIOO
I 97-173 (A)
CLOSED
SESSIOO
RESOLUTION #97-173 (A) was introduced by the Mayor
and was referred to the Council for action
ADOPTED
Upon MMS&C, by Councilmembers Failace and Fazekas
RESOLUTION #97-173 (A)
"RESOLUTION TO GO INTO CLOSED SESSION"
was adopted. Upon individual roll call vote, Councilmembers
Bialowarczuk, Failace, Fazekas and Gutowski voted in the
affirmative, Counciimembers DuPont and Feingold were noted
Absent.
A closed session was held at approximately 7:20 P.M.
OPEN SESSIOO
Upon MMS&C, by Councilmembers Failace and Fazekas and
unanimous affirmative vote of the four (4) members present
the meeting was opened at approximately 7:40 P.M.
4.
RESQLUTIOO
I 97-174
AMmDMENT
- 1997 BUDGET
RESOLUTION #97-174 was introduced by the Mayor
."'~ .
~'I'Y 22, 1997
Gary Higgins read the resolution to the Council for action.
RESOLUTIOO
i 97·-l'I4.
Can't
Resolution Re: Resolution to Amend 1997 Budget
WHEREAS, the local municipal budget of the year 1997 was approved
on the 6th day of February, 1997, and
WHEREAS, the public hearing on said budget has been held as
advertised, and
WHEREAS, it is desired to anlend said approved budget.
NOW, THEREFORE BE IT RESOLVED, by the Governing Body of
the Borough of Carteret, County of Middlesex, that the following
amendments to the approved budget of 1997 be made:
Recorded Vote
(Insert last names)
(BlALOW ARCZUK
(FAILACE
(F AZEKAS
Ayes (GUTOWSKI
(
(
Absent
(
(
(
(
(DUPONT
(FEINGOLD
(
(
Nayes (
(
(
Abstained
CURRENT FUND From
Anticipated Revenues
To
3. Miscellaneous Revenues-
Sectiou B- State Aid
Without Offsetting Appropriations:
Discretionary Supplemental
Municipal Property
Tax Relief Act $ 400,000
$ 350,000
Total Section B 3,564,252
3,514,252
3. Miscellaneous Revenues -
Section F: Special Items
of General Revenue Anticipated
within Prior Written Consent of
Director of Local Government
Services - Public and Private Revenues
Offset with Appropriations:
N.J. transportation Trust Fund
Authority Act
Drunk Driving Enforcement Fund
Municipal Alliance on Alcoholism
and Drug Abuse
COPS More
NonPublie Nursing
Library Development Aid
3,613
210,000
4,502
16,764
39,534
12,871
2,388
5.
Total Section F
154,316
436,762
Total Miscellaneous Revenues
10,056,692
10,289,138
MAY 22, 1997
RESOLUTIOO From To
. 97-174
Can't 6. Amount to be Raised by Taxes
(a) Local Tax for Municipal Purposes $9,493,936 $9,552,897
Including Reserve for Uncollected Taxes
Tot~l Amount to be Raised by Taxes
for Support of Municipal Budget 9,493,936 9,552,897
7. TOTAL GENERAL REVENUE 21,250,628 21,542,035
8. Gcneral Appropriations
Operations - within "CAPS"
Street Cleaning
Other Expenscs 40,000 4,000
Service of Visiting Nurse
Other Expenses 4,000 4,770
Total Operations
(Item 8(A) Within "CAPS") 13,449,525 13,414,295
Total Opcrations Including
Contingent Within "CAPS" 13,459,525 13,424,295
Detail:
Other Expenses
(Including Contingent) 5,511,325 5,476,095
(H-l) Total General Appropriations
for Municipal Purposes within
"CAPS" 14,405,025 14,369,795
8. Gcneral Operations
(A) Operations - Excluded rrom
"CAPS" Middlesex County Utilities
Authority Sewcrage Treatment -
Contractual 1,168,000 1,208,000
Total Othcr Operations Excluded
from "CAPS" 1,876,864 1,916,864
Public and private Programs Offset
by Revenues:
Drunk Driving Enforcement Fund 3,613 4,502
COPS More 39,534
Municipal Alliance on Alcohol and
Drug Abusc 20,955
NonPublic Nursing 12,871
Library Devclopmcnt Aid 2,388
Total Public and Private Programs
Offset by Revenue 183,210 259,847
Total Operations Excluded from 6.
"CAPS" 2,060,074 2,176,711
Detail:
Other expcnses $ 1,854,074 1,970,711
MAY 22, 1997
From
To
Can't
(C) Capital improvements
Excluded "CAPS"
N.l TraI1sportation
Trust Fund Authority Act
210,000
Total Capital Improvements
Excluded from "CAPS"
1,310,000
1,520,000
(H-2) Total General Appropriations
for Municipal Excluded
from "CAPS"
9. TOTAL GENERAL
APPROPRIATIONS
5,495,603 5,822,240
5,495,603 5,822,240
19,900,628 20,192,035
21,250.628 21,542,035
(0) Total General Appropriations
excluded rrom "CAPS"
(L) Subtotal General Appropriations
BE IT FURTHER RESOLVED, that two certified copies of this
resolution be filed forthwith in the Office of the Director of the Division
of Local Government Services tòr her certification of the 1997 local
municipal budget so amended.
BE IT FURTHER RESOLVED, that this complete amendment,
in accordance with the provisions ofNJS 40A:4-9, be published in the
Homes News and Tribune in the issue of May 30, 1997, and that said
publication contain notice of public hearing on said amendment to be held
at the Municipal Court on June 5, 1997 at 7:30 P.M.
It is hereby certified that this is a true copy of a resolution
a!l1ending the budget, approved by the Borough Council on the 22nd day
of May, 1997.
It is hereby certified that the approved budget a!l1endment annexed
hereto and hereby made a part is an exact copy of the original on file with
the Clerk of the Governing Body, that all additions are correct. All
statements contained herein are in proof and the total of anticipated
revenues equals the total of appropriations.
Mayor Sica referred the resolution to the Council for action.
Upon MMS&C, by Councilmembers Fazekas and Failace
NOr ADOPTED
7.
RESOLUTION #97-174
"RESOLUTION RE: RESOLUTION TO AMEND 1997 BUDGET"
" .::,:'~; :"".1'~..\.~,
MAY 22, 1997
was not adopted. Upon Individual roll call vote,
Councilmembers Failace, Fazekas and Gutowski voted in the
affirmative. Councilmember Bialowarczuk abstained.
Councilmembers DuPont and Feingold were noted Absent.
cœHENTS
Gary Higgins informed the Council that the resolution needs
four (4) affirmative votes to pass. The resolution fails.
Mayor Sica said that they will have to vote on it next
Thursday again.
Gary Higgins stated that the problem is that it messes the
whole calendar up in the last paragraph because now he
doesn't think they can make the May 30th advertisement date.
The advertisement has to be three days before the public
hearing so then they won't be able to have the public hearing
on the 5th. You'll have to revise the whole bottom.
Mayor Sica said that then we'll just revise it.
Gmy Higgins said that then they will be further down the road.
He asked if that impacts the tax bills if they wait longer and
longer.
Patrick DeBlasio said that certainly the longer they wait it
does have an impact on the tax bills. they want as early an
adoption as possible.
Gary Higgins said that this isn't adopting a budget, just an
a!l1endment. There's going to be a separate vote to adopt the
budget after this. This would just keep the ball rolling. He
asked if they can re-entertain... change the vote.
Attorney Coughlin said that he would rather them reconsider
the motion and re-make a motion to adopt.
ADOPTED
Upon MMS&C, by Councilmembers Fazekas and Failace
RESOLUTION #97-174
"RESOLUTION RE: RESOLUTION TO AMEND
1997 BUDGET"
was adopted. Upon individual roll call, Councilmembers
Bialowarczuk, Failace, Fazekas and Gutowski voted in the
affirmative. Councilmembers DuPont and Feingold were
noted absent.
8.
_-'If'- -
IIAY 22, 1997
~.
Gary Higgins said that based upon their conversations last week, some
ideas were thrown around regarding debt service possibly funding all of
the projects somewhat up front and then trying to find a debt service
schedule trying to retire with the use if the excess surplus. A number that
was put out last week was eight million dollars in potential projects to get
the whole system up to the place where they want it to be. What he first
did was to take the sewer study that they went over last week and he
looked at the 1996 sewer surplus as adjusted after the reallocations. That
came to $1,102,743.00. Then he looked at what would change in 1997
with respect to our excess of sewer revenues over expenditures. The
M.C.U.A. bill has gone up $153,000.00 so that is going to decrease your
profit surplus. There's been a reduction of $300,000.00 in sewer fees
based on the $50.00 per home reduction so that would decrease the
number. Then he provided for 4% increase in the other areas of salaries
and other expenses which would also reduce the number. A projected or
estimated surplus or excess of sewer user fee over sewer fee expenditures
for 1997 is somewhere in the realm of$613,243.00. Based on that profit
assuming everything else remains fairly constant in the next few years
including debt service on the old issues. He tailored a debt service
schedule for six and a half million dollars which is eight million less the
one and a half million you still have on hand in the reserve for sewer
improvements that you wouldn't have to take any action to provide for
since it's already in the bank. Looking at current market rates at
approximately 5.6%, looking at level debt services the best they can do
within the constraints, they come up with a debt service schedule of
sixteen (16) years to payoff six and a half million dollars. This does
assume in order to maintain level debt service, the approval of a non-
conforming schedule which the Local Fiance Board must approve, which
is basically a rubber stamp if you have a good reason and level debt
service is typically a good reason. This gives you some idea of what you'd
have to incur to go ahead and get all of your money to do all of your
projects. It was also talked about last week that if we went ahead and did
projects, we were hoping for savings in various area in our operating
budget one being the MCUA charge, two, being the electricity utilized at
the pump stations and then other costs that possibly could be related So
just rrom an illustrative point he did a second schedule and lets assume we
get an operating cost savings of a hundred thousand dollars beginning in
the year 2000, assuming construction went through 1998 and the MCUA
charges based on the prior year flow, so that would be 1999 so we would
only see savings beginning in the year 2000. Lets take and throw that into
the payoff of debt service, which means he could bump his debt service up
by one hundred thousand from approximately six hundred and seven
hundred thousand beginning in the year 2000. What that shows you is
that same six and one half million dollars could be retired in fourteen years
verses sixteen years and keep in mind that the way this would be handled,
it would be totally offset by this surplus generated out of sewer fee. It
would no longer be transfered into Capital Fund. It would remain in the
current fund surplus and then just offset the debt service with no impact
to the taxpayers so you could accomplish hopefi.llly your savings, be all
your other health and welfare issues, and complaints issues, by getting the
money up front and going forward from there and that was just done for
illustrative purposes based on some ideas he heard last week.
DISCUSSlOO
9.
MAY 22, 1997
DISCUSSIOO
Can't
Mayor Sica said we are going to pay 3.5 million dollars of
interest. In tourteen years we based 3. I interest, rather than
pay as you go with them.
Gary Higgins said however you don't know what the savings
are going to be. The savings could more than offset that, if
the MCUA charge came down a couple hundred thousand a
year and electric bills went down and ..
Mayor Sica said the MCUA charges will not come down a
couple hundred thousand a year unless we go to court with
them.
Gary Higgins said he is saying for the future if we tighten the
system down and the flow becomes less, that wouldn't have an
effect. Plus you are talking a quality life issue. It is not all
financial. I think there are some intangible issues here too
with respect to quality of life
Councilmember Failace said they are talking about seven or
eight years of projects, are we also talking about 1997 dollars
verses the year 2000 in one, two, three, four, five, dollars.
Gary Higgins said your interest cost that you are paying would
be hedging the CPI increase so if you wanted to try to
compare them it should offset some of the interest costs too
The increase construction costs. This kind of crystal ball
material with respect to how much of the interest would offset
with CPI and MCUA reduction or with electricity savings, but
he is sure there is some numbers out there that are going to
upset this, but, keep in mind that the taxpayer doesn't know
the diftèrence in their bill anyway because this tailored to
whatever you would have been bringing over on an annual
basis into the sewer reserve. So you are giving up interest
costs, but at the same time you may be recouping CPI or
consumer price index increases. So, I don't know if it would
necessarily be a wash. CPR is not running at tìve, but there is
some offset. That is a good point.
Councilmember Failace commented when they were talking
about this other day, the Mayor said if they make it five lets do
this and think about it next year, so, he thinks with ballpark, he
thinks we should sit down and talk about it.
AillOURNED
Upon MMS&C, Councilmembers Bialowarczuk and Fazekas
and unanimous affirmative vote of the full Council present,
there being no further business or discussion, the meeting was
adjourned at approximately 7:50 P.M.
Re' e Jly submitted,
L'1.¿ ~~u!ý'
K THLEEN M. BARNEY, JŒrèíéM€---.
Municipal Clerk
lC