Daily Archives: February 21, 2011

>Looking At Both Sides

>by guest blogger Sean F. Byrnes, former Middletown Township Committeeman

Last week we saw the Township of Middletown enveloped in a dispute over the Township’s effort to convince the Board of Trustees for the Library to turn over a significant share of its surplus to the Township Committee for budget relief purposes. Unfortunately, the manner in which the township chose to solicit these funds lacked tact. Although the township had previously made less threatening overtures to the Library in an effort to win the Board of Trustees’ support for a funds transfer, when that effort failed, the Township pursued an aggressive campaign to convince the public that a transfer would be in their best interest. Spearheaded by new Committeeman Kevin Settembrino, this effort, whether intended or not, seemed rooted in tactics of intimidation and threats to de-municipalize the library and combine it with the County Library system. This effort also suggested that a failure of the Board of Trustees to abide by the wishes of the Township Committee would result in the loss of ten police officers, the layoff of a significant number of Township employees and, if you heard the comments at the Library Board of Trustees’ meeting, an effort by Township Committee members to replace existing Board of Trustees members.

Based on the comments from Board of Trustees’ members at their meeting on Tuesday, it would appear that the resolve of the Board of Trustees has not wilted in the face of these threats. Led by Randy Gabrielan, the Chairman of the Board, the Library challenged the assumptions, numbers and legal authority for the Township’s demand for a funds transfer. Looking ahead, as a Township resident, I would hope that both sides could retreat from the current level of heated rhetoric and restart their discussions.

I think it would be in the interest of all taxpayers for the Township Committee and Library to continue their discussions. It might make more sense to have the Township Administrator meet with the Director of the Library to discuss how the Library might be able to assist the township in this time of budget crisis. From the Library’s perspective, the Board has worked hard to build a reserve that could be used for future capital projects, and there is an understandable reluctance to use these funds to satisfy operating expenses for the Township. From the Township’s perspective, the Library has a protected stream of revenue that is not subject to the same stresses and demands that the Township must face when health care costs increase, pensions become more expensive and the cost of doing business generally continues to go up. There may be opportunities for these two parties to cooperate in other ways that would provide relief to the Township without exhausting the reserves of the library.

There is no question that the Township finds itself in a perfect storm of budgetary constraints. To be fair, some of these strains are beyond its control. But the Township moved at a glacial pace over the last several years as this financial crisis approached. A quicker response to the approaching financial storm would have made the Library ask a smaller one. Accordingly, before the Library turns over any of its reserves to the Township, it would be nice to see an acknowledgment that a swifter response from the township in 2009 and 2010 would have avoided the seriousness of the budget crisis that the Township currently faces. The Township did lay off approximately 16 employees last year, but did so only mid-year. Other municipalities took action much sooner and in more dramatic fashion. The former Mayor’s claims of 40 layoffs include retirements.

Other cost-saving measures were proposed over the last several years, but were rejected as too extreme. Unfortunately, as a result of the Township’s failure to act, the Township Committee must now contemplate cuts that go far beyond those that were previously considered “extreme.” Until the Township forms a subcommittee whose function is to focus on budget recommendations, track existing and anticipated debt, look for opportunities for consolidation and sharing of services and generally manage the Township’s finances on a more regular basis, the Township will always be reacting to rather than planning for increased demands for Township resources.

Once again, in fairness, the unfortunate timing of the Township’s reevaluation in 2009, just prior to a steep decrease in property values, set the Township up for a tax appeal nightmare in 2010 and 2011. (Of course, the township had mistakenly put off its reevaluation for approximately 14 years – had the township completed the reval when it should have, the steep drop in real estate prices would not have resulted in such a large number of tax appeals.) But regardless of the failure to conduct a timely revaluation, the Township has a legitimate reason to gripe, because when a resident or commercial property owner prevails on their tax appeal, the township must return to the taxpayer not only the municipal share of the taxes received from the taxpayer, but must also reimburse the taxpayer for the funds received by the School District during the year for which the tax appeal was filed. This reality is difficulty for some to believe, but true. And, in light of the fact that approximately two-thirds of the tax dollars go to school district activities, the Township ends up paying back the taxpayer for School District funds that the Township never received in its budget.

Consequently, the steady decrease in real estate value over the last couple of years has produced a field day for those filing tax appeals. The Township is now struggling to repay multi-year tax appeals that are probably worth nearly $4 million. Unfortunately, the Legislature has failed to assist municipalities facing this dilemma. Under the circumstances, given the unique circumstances facing municipalities, including picking up the tab for the Legislature’s bungling of pension contributions for public workers, the Legislature should provide assistance to townships by creating opportunities for public entities to finance the tax appeals or extend their repayment terms. In several years, the Township will be through this unique period where tax appeal refunds are substantial and hopefully return to a more predictable budget cycle. The Township Committee took the first step in this direction in 2010 when it decided to conduct a reassessment. Even thought the reassessment cost $400,000 the savings achieved in 2011 from reduced tax appeal filings will be far greater.

The realities of the tax appeals as set forth above increase the pressure for some agreement with the Library. At the same time, the Library will see its share of funding decrease by more than 10 percent next year, due to the fact that its revenue stream is dependent solely upon property values. With a 1.3 billion drop in the total assessed real estate in the Township of Middletown, the Library’s stream of revenue will be reduced considerably. Given this dynamic, it may make sense for the Township and Library to discuss mutual relief. In other words, the Township needs money now most desperately. The Library in the out years may need assistance as its funding stream declines. Perhaps assistance from the Library during the current year could be received in exchange for promises by the Township to return the favor several years down the road.

It might also make sense for the Library to consider some sort of partnership with the Arts Center. While the Arts Center has its own Board of Directors, this arrangement, as far as I know, is not routed in any legislative scheme. Indeed, the Township has effectively turned over the operation of the Arts Center to a non-profit corporation and the Board supervises these activities. Resident Jim Grenafege was the first person to suggest that the Library Board of Trustees might consider assimilating some of the Arts Center’s operations into its activities. A casual review of the websites for these two entities suggests that there is some degree of overlap between the artistic and cultural offerings from these two bodies. Given that they both have buildings that are relatively new and both are focused on improving the education of the citizens of this Township when it comes to arts, literature and music, there may be some opportunity for the Library to assist in the operation of the Arts Center, including some of its expenses. It is exciting to contemplate what the far larger Library work force might be able to provide to the Arts Center when it comes to running the day to day events and offerings at the Arts Center.

At the end of the day, the current legislation when it comes to Library transfer to municipalities, amended in October of 2010, will likely allow some transfer to take place. From the Township’s perspective, the amount of money to be transferred under the current legislative scheme will fall short of what the Township needs to avoid drastic reductions in personnel and services. However, somewhere within the circumstances discussed above, creative minds on both sides should be able to work out an arrangement that provides some additional relief for the Township, even if it may not be a direct transfer of funds of the magnitude the Township seeks. My hope would be that the time and energy on both sides be spent working toward that goal, rather than on blaming the other.

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Filed under 2% cap, budget deficit, budget surplus, Middletown Cultural Arts Center, Middletown Library, Middletown Township Committee, Sean F. Byrnes, tax appeals

>Meeting Minutes From Library Board’s January 19th Meeting Contradicts What Was Said By Township Committee Members At Last Wednesday Night’s Meeting

>Over the weekend I took the time to read through the January 19th minutes of the Middletown Library Board of Trustees meeting which are posted on the Middletown Library’s website.

Having sat through most of last Wednesday night’s Trustees meeting and now subsequently reading through the minutes of the January 19th meeting, it is extremely hard for me to believe that Middletown’s acting mayor, Tony Fiore and the rest of the Township Committee members that were in attendance, including Kevin Settembrino who is now sitting on the Library’s Board of Trustees as the Mayor’s representative, weren’t being honest or sincere about Middletown’s budget situation, the amount of money that the Township expected the Library to hand over, the threat to make the library pay market value rent to the Township for the 3 township owned builds that house the Library system or the future of the library.
In his comments to the Board of Trustees, Tony Fiore stated the Township wasn’t asking for specific amounts of cash from the Library’s perceived surplus and that their were no plans to make the library pay rent or turn over it’s operations of the library to the County. However, based on the minutes from January 19th, Kevin Settembrino made it very clear to other members of the Library’s Board of Trustees that this wasn’t the case.
At one point during the meeting Board President Randall Gabrielan, felt it necessary to “reminded Mr. Settembrino that the Library is a separate board and that it has been so designated for 130+ years to specifically keep libraries out of politics. He also mentioned that the first and utmost role of a Library Trustee is to be advocate of the library.“, when arrogantly told that Library Trustees were appointed by the Township Committee and that the Library should be working toward township goals.

Below are the excerpts from the January 19th meeting minutes that pertain to what Committeeman Settembrino stated to the Board of Trustees that night. I highlighted the passages that I see as contradicting from what we heard at the February 16th (last Wednesday night) meeting:

…Ms. O’Neal handed out the 2011 organizational chart as well as a cost analysis for Sunday operation at the library that had been requested by Ms. Miloscia.

Ms. O’Neal mentioned the newly revised “Budget Reduction Worksheet” had now about $160,000 in potential savings to be applied to the 2011 budget and beyond.

Ms. O’Neal reported that her 2001 Budget meeting with the Township Administrator, Asst. Administrator and CFO went well. She said that she and Mr. Trasente had a productive meeting and that she was confident that they could reconcile some of the budget issues.

Mr. Settembrino spoke candidly to the Board and told the Trustees that it is the Township Committee elected officials that have appointed them and that the Library Trustees should be working together with the Township to achieve the Township’s goals. Mr. Gabrielan reminded Mr. Settembrino that the Library is a separate board and that it has been so designated for 130+ years to specifically keep libraries out of politics. He also mentioned that the first and utmost role of a Library Trustee is to be advocate of the library.

Mr. Settembrino told the Board that the Township sent a letter of appeal to DCA in regards to the rate-ables for Middletown. Settembrino said that the Township Committee wants the Library Board agree to take a $333,000 cut in its budget before the reassessments are completed. He said that the impact is inevitable in 2012 and that they would like to see the Library buy into this reduction to help contribute to reducing the budget deficit. He will come to February 16th meeting and reopen this issue for a vote from the Board of Trustees so that the Township can introduce its budget for the March 15, 2011 Township Committee meeting. Mr. Settembrino detailed the situation.

  • • Tax appeals in 2010 cost the Township 1 million dollars

  • • The revals were done near market peak so tax appeals were expected to continue to be high in number

  • • Reassessment will more accurately reflect market values

  • • The 2011 Township Budget will not exceed 2% cap


Ms. O’Neal replied that since DCA hadn’t yet agreed to the lower evaluation amount it stands currently that the library will receive approximately 3.7 million dollars for its budget. Mr. Gabrielan said that the library will operate under the State’s formula. Mr. Settembrino replied that even if the formula doesn’t change for 2011, the Township would like the library to send those funds back to the municipality and that there is no restriction on the amount of money the board votes to provide to the municipality. Ms. Cavalier said that if the 1/3 of a mil goes down considerably the library board is going to have to study what its options are and the procedures. Mr. Milne said that the board needs to know the outcome of the appeal on the published October equalized valuation or the new numbers before any decision can be made. Mr. Milne added that he needed to review all the material before making comments on a budget reduction or giveback of that magnitude.

Ms. O’Neal said that $333,000 is a large sum of money to add to the already known 4.5% reduction for 2011 and that the lower rateables in 2012 will make it very difficult for the library.

Ms. Breen asked if this completed Mr. Settembrino’s agenda with the Library Board and he said “No”.


Mr. Settembrino brought up the debt service payments of Main. He said that the library was bonded for 7.243 million dollars and that 3.1 million dollars is the balance that has to be paid by 2022. Mr. Settembrino said he speaks for the entire Township Committee that the Township expects the library to start paying for the debt and expects a payment of $543,000 per year from the library. Ms. Miloscia asked if any other Township buildings are paying their own debt for Township buildings specifically the Arts Center. Mr. Settembrino responded “No” and that the Arts Center is generating revenue to offset its operational cost. Mr. Gabrielan said that this is a significant impact to the library.

Mr. Settembrino also informed the Board that the library should be paying market value rent for the three town-owned buildings in which it occupies. Mr. Gabrielan and Ms. O’Neal said that NJ Administrative Code specifically prohibits libraries from paying rent. Mr. Settembrino said that he would forward the payment schedule and all information that he was discussing with the Board for them to further review and help them make a voting decision during the February meeting when he expects to re-introduce these issues. [See document attached]

Ms. Cavalier said that the library board would have to explain to the community why library services have been cut. Mr. Settembrino said however you decide to communicate that to the community is up to the Board. Ms. Cavalier asked if the Township Committee will accept the responsibility for these cuts. Mr. Settembrino didn’t answer her question. He restated that it is the Board’s decision on how they chose to inform the community of such cuts should they take place. Ms. Miloscia asked Mr. Settembrino if he used the library; does he had a library card? His response was no.

Mr. Settembrino informed the Board that he will be meeting with County Freeholder Lillian Burry to gather information about the County Library system. He said that his intention was to have the library stay as a municipal library. Ms. Breen said that she was glad to hear him state that. Ms. O’Neal asked if it would be appropriate for her to attend the meeting as well and Mr. Settembrino said “No”. Ms. Miloscia then asked if it would be appropriate for her to attend and he responded “No”. Ms. O’Neal informed that board that she had a meeting scheduled with Ken Sheinbaum, Director of the Monmouth County Library system.
Ms. Breen said she would like to see this done in the spirit of cooperation for what is good for everyone, what is good for the library and for the Township. Mr. Gabrielan reiterated that the duties of the Board are to be accountable and informed and that the number one job of a library board member is to be a library advocate.

Before Maser Consulting came to do their presentation, Mr. Settembrino criticized the library for undertaking studies that the Township didn’t know about, and for which it was planning similar action, citing the solar project for which the library contracted for a structural assessment of the roof and also the parking study. He said that such expenses/studies should be approved and communicated with the Township before any action is taken by the library. Ms. O’Neal responded saying that the library was moving faster than the Township following the energy audit and didn’t proceed with hiring a solar engineering firm once it was known that the Township was soliciting similar proposals, and that the parking study was well known to the Township Administrator and two members of the committee more than a year ago….


Based on this minutes, I think the Township Committee’s agenda is clear. They want money and they don’t care how they get from the library, even if it is illegal to ask for and would have potential crippling effect on the functioning of the daily activities that the Library provides. It is also very clear that if the Township does get what it wants, it will hand over the Library to the County to run, even though the County Library system is considered by many to be wasteful and the personal, political patronage, dumping ground for Monmouth County Freeholder Director Lillian Burry.

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Filed under budget deficit, budget surplus, Kevin Settembrino, Meeting Minutes, Middletown Library, Middletown Township Committee, save our library, Tony Fiore