Category Archives: Finance Committee

January 18th meeting of the Middletown Library Board sets the tone for the year. The Demands, the Numbers, and the Possibilities Part 1

by guest blogger Linda Baum

This is my second post about the 1/18/12 Library Board meeting. See my January 24th post to read about the controversy over the Board’s leadership. A lot has happened since the January meeting, as you all know. Library Trustee Sherry Miloscia resigned from the Board for personal reasons effective January 20th. Trustee and Board President Randall Gabrielan resigned from the Board effective February 7th. Seven out of nine members remain, and the Township Committee now has majority control of the Board with 4 out of 7 votes. If they fill the two empty seats, the Township will have 6 out of 9 votes and a two thirds majority.

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The January 18th meeting was the first for the newly expanded 9-member Board. The five new faces on the Board presented a challenge for Library Director Susan O’Neal, who is to be commended for responding to a great many questions with patience, good humor, and

expertise.
Throughout the meeting, there was harsh, often aggressive criticism from the new Township appointees, who had clearly decided in advance what their collective approach would be. They seemed ready to air all of their complaints on day one. There wasn’t time for all of it at that meeting, but “just wait till the next meeting”, as an anonymous commenter on this blog warned.

The next Library Board meeting is this Wednesday, February 15th at 7:30 p.m. at the main branch on New Monmouth Road. I encourage you all to attend. (FYI, the meeting actually begins at 7:00 p.m., but the Board will go into closed session for about a half hour right after the meeting is called to order.)

Much was discussed at the January meeting, which ran almost 5 hours. Since there is incorrect information “out there”, I wanted to provide all the facts, making this my longest post by far. I organized topics by heading to make things easier for readers, and had to break up the post into three separate parts for the blog, each still long. This is part one.

THE PARKING LOT EXPANSION

Early in the meeting, it was announced that resources now exist for the parking lot expansion that was put on hold last year. The initial traffic study for the lot expansion has already been completed by Maser Consulting. The key parts of the project are improvements in safety (more lighting, traffic calming, crosswalks), more handicapped spaces, a drop off zone for short term parking, and additional parking spaces (approximately 35 more spaces).

The project is expected to cost roughly $122K-150K. Available monies include reserves, largely from expense savings that the Library was able to achieve last year, plus state aid monies.

Recall that per the 2011 agreement with the Township, the Library has two options for paying for capital improvements – they can pay cash or pay the debt service on bonds/notes issued by the Township. Libraries are not allowed to themselves issue debt, so the two payment options may not represent anything new. The Board has always preferred to save up until they have enough money for a project rather than to incur debt and pay interest. The Township does the opposite.

Also, the Library is now required to use the Township’s consulting engineer, T&M Associates, for any engineering work. T&M is not on retainer with the Township, so will bill for its services. Since the work is being directed to T&M without competitive bidding — the Library Board would normally request bids/quotes for this job — the cost could be higher than what the Library would otherwise pay.

THE POSSIBILITIES: “Restricting” about $150,000 in reserves for the lot expansion is to be discussed at the Board’s February 15th meeting. Since, by law, library reserves that are restricted for capital projects cannot be taken by the Township, the new trustees are sure to be opposed to it. I suspect they will make the case for allowing the Township to sell bonds/notes to raise money for the work. I suppose the new trustees could take a different tack and say the lot expansion isn’t necessary. However, part of the reason for the project is to improve safety, and I don’t think the Township would want to be seen as being against that.

Aside from leaving more reserves on the table for the Township’s use, the Township would benefit from the debt sale in several ways that I won’t get into here.

THE NUMBERS: If the Library pays cash for the lot expansion, their current budget will show the total cost of the project, or about $150,000. If the Library pays debt service, the budget for each of the next 20-25 years will show the lower debt service payment, say $15,000. The latter option results in a higher budget in future years, but a budget cut of about $135,000 for the current year.

A $135,000 cut in the Library budget increases the “take” by the Township by MORE than $135,000 — by $162,000. Here’s why. Per law, the Library can keep a portion of its unrestricted reserves equal to 20% of its annual budget. If the budget is cut, that “frees up” some additional reserves on top of the amount cut from the budget. In short, for every $1 cut from the Library’s budget, the Township increases its take by $1.20. A CAVEAT: The new Board could vote to hand over 100% of the Library’s reserves to the Township. If so, then one dollar cut from the library’s budget is just one dollar of reserves available for the taking.

State aid monies are off limit to the Township, so would remain with the Library. Any restricted reserves are protected, but can always be unrestricted by a willing Board.

THE 2012 BUDGET

Ms. Murray objected to the 2012 budget being approved in December before the new Board came in and said that it should be re-opened.

Ms. O’Neal pointed out that the Township typically requires the Library Board to have the budget for a year in place by October of the prior year. The Township didn’t need the Library’s 2012 budget as early as usual, so the Board had a couple of extra months to incorporate more finalized information. So the December approval was later, not earlier, than usual. Ms. O’Neal emphasized that the budget was adopted in line with required procedure, not in anticipation of a different point of view, as has been suggested by anonymous commenters.

Board president Randy Gabrielan advised that the budget is a planning document only that is not written in stone.

And while it wasn’t said, the budget for a year is supposed to be ready before the start of that year — that is the way most well run organizations do it, even if the Township doesn’t.

Because the January agenda was already full, Mr. Gabrielan suggested that a detailed discussion about finances be postponed until the February 15th Board meeting.

Marjorie Cavalier suggested that specific financial issues might be better handled by an ad-hoc committee. There was agreement that the Finance Committee would be reconstituted, and Ms. Murray will be on it.

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Filed under Board of Trustees, Finance Committee, library board, Linda Baum, Middletown Library, Randall Gabrielan

Letter: Taxes Sky High in Middletown

The Following letter to the editor appears online today over at the Atlantic Highlands Herald:

Have you heard that the Middletown’s mayor and his running mate want to hold the line on taxes? Hold it where, exactly? Somewhere in the stratosphere?

I think the joke’s on us. Municipal taxes have gone up over 22% just during Mister Fiore’s 3-year term in office. Mr. Fiore voted for tax increases every year. Based on his record, I think we can expect more of the same.

Republican candidates keep talking about making Middletown an affordable place to live, and then keep doing the opposite once they’re elected. You’d think they’d be too red in the face to keep talking about it.

Mr. Fiore doesn’t seem to feel responsible for our high taxes since he is always talking about forces beyond his control. Well, that doesn’t inspire my confidence in his ability, and I won’t be voting for him.

I think it’s time we had representatives who stopped making excuses and brought sound judgment to the job. Jim Grenafege has been a voice of reason for many years now. He is both informed and vocal about issues that are important to residents. Jim strongly supports televising town meetings so that we can all see what our local government is doing. He also feels the Township desperately needs the oversight of a Finance Committee, which almost every other town has. After seeing taxes double in such a short time, I have to agree with him.

Please join me in supporting Jim Grenafege for Middletown Township Committee this Election Day.

William G. Butler
Middletown, NJ

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Filed under Atlantic Highlands Herald, Carol Fowler, Finance Committee, Jim Grenafege, letter to the editor, property taxes, Tony Fiore

>Video: Sean Byrnes on Planning for Budgets and Projects

>Middletown Township Committeeman Sean Byrnes discusses the Planning (or lack thereof) of Township budgets and projects that drive up the tax rate and cost local tax payers, at a Town Hall Meeting which took place at Panera Bread on September 27,2010

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Filed under bonding. Panera Bread, budget planning, Finance Committee, project planning, Sean F. Byrnes, tax increase, town hall meeting

Letter: Is Middletown’s Mayor Attempting To Divert Bond Money Away From Sports Fields

The following letter was received in my email last night:

Middletown is engaged in a controversy over the installation of artificial turf fields, but the debate is indicative of a much larger issue with how our Township spends taxpayer dollars.

The Township took out a bond in 2006 to fund the turf fields, but the money has sat idle, accruing interest on repayment, because Middletown failed to reach consensus on where to locate the fields. During a number of Township Committee meetings, the Mayor, Administrator, and Township Attorney all emphatically stated that the bond could only be used for the rehabilitation of fields at Middletown parks. However, objections to this usage have recently intensified, prompting Mayor Gerry Scharfenberger to announce he would call off the field construction and divert the bond funds to pay for shortfalls in the Township budget. I have serious concerns about the Mayor’s new course of action.

First, the Mayor appears to be acting independently of the Township Committee. Our committee consists of five members, one of whom is selected as Mayor to lead public meetings and sign local legislation. Nowhere in Chapter 4, Article II of our Township Code, which outlines the duties of Mayor, does it give that person authority to make solitary decisions on funding. A vote of the full Committee is required.

My second concern is that the Mayor, Administrator, and Township Attorney have been lying to residents about the potential uses for the bond money. First, they insisted the money could only be used for the turf fields. Now, the Mayor wants to try and amend the ordinance so it can be used for other projects. If Mayor Scharfenberger has not been deliberately misleading us, he, at best, does not care enough to understand the rules on spending taxpayer dollars; at worst, he is incompetent.

Finally, I am concerned about using bond money to patch holes in Middletown’s budget due to shortfalls in state aid. A single bond will not fix the fiscal reality our township must face as a result of the national economic downturn. The Mayor must stop looking for quick, politically convenient, fixes and present to township residents a fiscally sound plan that does not place us further in debt. Perhaps it is time to stand up that Finance Committee that Committeeman Sean Byrnes keeps calling for. When will Middletown’s Mayor start to listen to the Committee, which represents all taxpayers, and stop acting alone?

Don Watson
New Monmouth NJ

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Filed under artificial turf fields, Budget Shortfall, Finance Committee, letter to the editor, Mayor Scharfenberger, Middletown

Speaking Of Budgets, Middletown’s Is Done Through Osmosis

Back on Reorganization day in January, one of the many things that Gerry Scharfenberger addressed during is speech after being re-appointed as Mayor of Middeltown, was the upcoming budget process.
He told the crowd in attendance that the Township was facing a huge budget shortfall of nearly $7 million but not to worry because there was a plan on how to deal with it.
He state that even though …“no one here is a super expert on finances by profession but if you sorta do it by osmosis…”
Which I suppose means, that if you sit around long enough thinking about it, to let it sink in you become a expert in how to deal with a $7 million deficit without a Chief Financial Officer to help in the process! Unfortunately however the process of osomsis isn’t good enough now that budgets need to be submitted to Trenton by the end of the month.
Where’s a Finance Committee when you need it? Oh that’s right, Middeltown doesn’t need one because Gerry and the boys can handle the budget process on their own.

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Filed under Budget Shortfall, Chief Financial Officer, Finance Committee, Mayor Scharfenberger, Middeltown Township, osmosis

A Blueprint For Middletown To Follow On How A Finance Committee Could Be Structured And Utilized

For the past few years Middletown Committeeman Sean Byrnes has been advocating for a “Finance Committee” to be form in Middletown so that the Township can get a better grasp on it’s finances and not have to wait several months into the calendar year before adopting a budget.

Byrnes has argued that the way the budget process is now handled is inefficient and antiquated and needs to be restructured in such a way that would provide better over site of spending and identify in advance any trends that may prove problematic during the year.

Each time Byrnes has suggested the idea of a finance committee he has be rebuffed by the Republicans that have controlled the township committee for the greater part of the last quarter century.

Their reasoning behind opposing such a committee is weak at best. I have heard everything from the cost of setting up new committee (which would be negligible being it would be staffed with members of the Township Committee, the Town Administrator and volunteers) to the reasoning that Township Committee members act as their own finance committee to oversee and question spending (even though none are qualified to due so).


Sean Byrnes has counter argued that other towns, major corporations and most charities group and non-profit organization have them. It is simply a good business practice.
Recently Jack Archibald, a councilman in Atlantic Highlands and a contributing columnist for the Atlantic Highlands Herald, wrote a column explaining how the budget process works in Atlantic Highlands. Can you guess what is mentioned in that column? That’s right a Finance Committee.

Archibald pretty much lays out the blueprint for Middletown on how to structure and use a Finance Committee:
“…our municipal budget began to take shape in December. At that time, our administrator, Adam Hubeny, and Chief Financial Officer Gerry Gagliano, hold kick-off meetings with various department heads and discuss their needs for the coming year. Once that is compiled, a rough draft of a budget is presented to the finance committee. In general, the finance committee is comprised of three council members who report back to either the Borough Council or Township Committee as a whole.

In a few towns, the governing body has formed a citizens committee to review and make suggestions to the budget. While this public input is welcome, municipal accounting is a very specialized practice, and crafting a municipal budget is subject to many state regulations and caps that do not seem to make much sense to the average citizen….”
It makes perfect sense, the administrator, the CFO, 3 Committee members and maybe some input from qualified residents get together make recommendations and then draft preliminary budget document to be submitted to the Mayor and other members of the township committee to consider.
The only reason I can think of for not forming a Finance Committee is that the majority in charge doesn’t want others to see where and how the Middletown taxpayers money is being spent on needless pet projects or salaries and benefits for loyal GOPers who make a living from the town in one way or another.

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Filed under Atlantic Highlands Herald, budget planning, Finance Committee, Middletown, Sean F. Byrnes, tax payers

It’s Payback Time In Middletown: So Far Township Facing $4 Million Budget Shortfall For 2010 – Layoffs Pending

I attended the Middletown Township Committee Workshop meeting last night to hear what would be said about the Emergency Appropriation Resolution 09-277.
This resolution was for the purpose of borrowing ~ $1.5 million from next years budget to pay for worker’s compensation claims and other employee medical benefits that the township did not budget for this year.
There was a lively discussion on the subject that lasted nearly an hour. Committeemen Sean Byrnes and Patrick Short questioned the Township Administrator about how and why, with less than 30 day left in the calendar year, did the township find that it needed to borrow such a large amount of money against next years budget when the projected budget for next year was already a few million dollars short.
The simple answer was the Township did not foresee that worker’s compensation claims and other employee health benefit claims would be at such a level as to need more money than budgeted for in the previous year’s (2008) budget. And after all, the bills needed to be paid.
The money that was set aside this year for health benefits and claims was ~ $2 million less than last year. The reason being was because recent trends over the past several years showed that health claims rose and fell from one year to next. With this in mind, the powers that be who shaped the 2009 budget decided to gamble on the trends downward slope and under funded the Township’s health care plan.
In the 2008 budget ~ $6 million was appropriated for benefits but at the end of the year, much like this year, an emergency appropriation 0f $500,000 was needed as opposed to an ~ $1.5 million. I would say that their gamble did not pay off.
Committeeman Byrnes was relentless in his questioning and would not support the resolution as written without assurances from the rest of the committee that further review of township finances would be made before the end of the year. To get these assurances Byrnes only agreed to support a resolution for $800,000 of the $1.5 million emergency appropriation at last nights meeting. The other $700,000 will be appropriated through a new resolution at the December 21st committee meeting if Byrnes receives proper answers to his questions about how next years budget will be addressed.
The reason why Sean Byrnes is being such a stickler over the 2010 budget is because at this present time it is being projected by the Township Committee, that there will be a minimum of a $4 million shortfall in revenues next year with this resolution and by the time January or February comes around it could be a couple of million more dollars short.
When Byrnes pressed the Township Administrator over what plans he intends to present to the Committee to curtail costs next year the administrator, Tony Mercantante said that among other things, plans were in the works for employee layoffs starting in either January or February of 2010 but paper work must first be filed with the State before any layoffs could take effect.
With this in mind I have to ask once again, why not listen to Sean Byrnes and establish a nonpartisan Finance Committee that could identify problems like this in advance and work towards budget solutions before they become problems in the first place?

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Filed under anca, budget resolution, Budget Shortfall, Finance Committee, Middletown, Patrick Short, Sean F. Byrnes, Tony Mercantante