Special Council Minutes from 3/19/2009
 

SPECIAL MEETING OF THE MAYOR AND COUNCIL OF THE BOROUGH OF KENILWORTH HELD ON THURSDAY, MARCH 19, 2009.  MAYOR KATHI FIAMINGO PRESIDED.

ROLL CALL

Roll Call at 8:00 P.M. showed the following Council Members present: Sal Candarella, Brian Joho, Kevin Leary, Jr., Scott Klinder, Fred Pugliese, Toni Sosnosky. 

Mayor Fiamingo read the requirements of the Open Public Meetings Act.

The Salute to the Flag was led by Mayor Fiamingo.

Mayor Fiamingo stated the purpose of the meeting is to discuss the 2009 budget and the possible sale of Borough property.  This is not the introduction of the budget nor is it the budget hearing.  She said in light of what has gone on over the past week she feels it is important to get the facts out in the open as to what the budget issues are this year and explain what it is the Council intends to do.  She said there are a lot of rumors and innuendos that she needs to dispel.  She thought she had dispelled the rumors but apparently it didn’t work.  She said she wants to make sure everyone knows where the Council is coming from.  She said there have been a lot of baseless rumors about lay-offs of Borough employees.  She said there are no intentions currently or otherwise to lay off anyone in the Borough.  The Council does not have a problem with spending and everyone who works in the Borough has done a fantastic job in keeping down their budgets, with the possible exception of one department.  She said we have a reasonable increase of 3% which comes to a total of $405,000.00.  However, the Borough has an increase from the Rahway Valley Sewerage Authority of $378,000.00 and also we are required to pay the library $53,000.00. She said a lot of the increases are things we cannot do anything about. We cannot reduce the RVSA budget and we are required by statute to pay those monies to the library.  We also have things like utilities that have increased by approximately $65,000.00.  She said all of that all of these costs are more than the $405,000.00 increase that we have this year.  She said spending is not the problem but the revenues are a problem because they are down. She said anyone who has any monies in the bank or the stock market knows that the return on their investment has decreased significantly over the past couple of years.  The Borough has reduced interest on their investments and return on investments of almost $150,000.00. Although the State Aid only decreased by $43,000.00 this year, we had a total decrease in the prior year of $371,000.00.  She said we cannot ignore the fact that the $400,000.00 has to be made up. She said the bottom line is, due to no fault of anyone but the economic conditions, the amount that we had available from surplus to use toward paying down the tax levy for our budget this year was significantly reduced. The amount that we had to raise in addition over last year’s budget from taxes is 1.2 million over and above what last year’s tax levy was, even though our spending increased by $400,000.00.  She said the 1.2 million is $673,000.00 more than the state allows the municipalities to tax. The Borough is in the position of what to do? We legally can’t charge the $673,000.00 but we need to plug the hole.  Until recently the Finance Committee’s recommendation was to introduce the budget with the $673,000.00 gap and then apply for Extraordinary Aid and hope that Kenilworth is one of the lucky ones that will receive the aid. She said there is going to be fierce competition for Extraordinary Aid this year. She said if we don’t get all of the Extraordinary Aid then we will go for a Cap Waiver which means, unfortunately to everyone who is a resident,  taxes will increase extraordinarily. She said when the council was faced with this they tried to think of something to make this more palatable to the taxpayers. The Council asked the Finance Committee to discuss with the PBA the concept of furloughs and wage freezes. The Council never ever

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discussed layoffs.  She said maybe they were naive or just not thinking ahead or maybe they did not want to think about layoffs because that is not what anyone wants.  She said the council has never discussed layoffs but the Finance Committee discussed it with the PBA and they came back with the proposal of why not sell the Girl Scout property.  The Mayor said this administration as well as the prior administration always thought that the girl scout property would be used to defray the cost of the construction of the public safety building. She said the PBA said they do not care about the public safety building, they just want to take care of their guys.  The Mayor said the solution to sell the property to reduce the tax levy of $673,000.00 makes sense and it will keep our people where they belong which is working for the Borough.  Mayor Fiamingo said that unfortunately they were not given an opportunity to explore selling the property too much before the rumors started flying  throughout town.  She said she is very distressed and she is feeling especially bad for the three officers who felt that their jobs were in jeopardy.  She said she cannot apologize because it was not her doing. The Mayor said she is making a recommendation to the council that they discuss terms and conditions for the sale of the girl scout property at the next work session and set that property up for sale as soon as possible. She said there are procedures that have to be taken into account. She asked Councilman Joho to call the auditor to see what has to be done to put this sale into action. She said that since  they do not have any idea what they can get for the property, they cannot take that money into consideration at this time and they will have to introduce the budget with $673,000.00.  She said they will apply for Extraordinary Aid and in the meantime if her recommendation is adopted and accepted by council to sell the property, and  those proceeds come in, the 673,000.00 gap will be reduced. She said she is sure they will make more than $673,000 from the sale of the property and those extra funds will be used for surplus and to keep our employees exactly where they are.  She said we need a public safety building but under the circumstances facing the Borough today and with the sale of the girl scout property not being available to fund a portion of the project she thinks the council needs to have a frank discussion among themselves and with the public as to what the next step will be.  She said she has done what she said she would do when she spoke to some of the folks last Saturday. She hopes she has dispelled the rumors.

Motion was made by Councilman Pugliese and seconded by Councilman Candarella for council to commence the process for the sale of Borough owned property, commonly known as the Girl Scout property which exists on the 300 block between North 18th and North 19th Streets.  And that council review and discuss the conditions of the sale at the next work session and that the property be advertised for sale as soon as possible and the proceeds from the sale be utilized to reduce the tax levy and to the extent that it would not exceed the tax levy cap and the proceeds of the sale be used to quell any concerns that the town or employees have regarding layoffs.   

Roll Call:  All in favor.

                                   

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GENERAL BUSINESS

Councilman Klinder said that in the economic times it might be hard to sell the girl scout property.

The Mayor stated that is why they have to discuss what terms and conditions they are going to place on the sale. She said she has no fear the property will sell but the questions is on what terms.  She said it is not in the best interest of the Borough and the residents not to sell the property.

Motion was made by Councilman Candarella, seconded by Councilman Klinder to open the meeting to the public.  All in favor.

MEETING OPENED TO THE PUBLIC

Bob Herbert, 363 Coolidge Drive – Mr. Herbert asked if there was anything we could do about the Rahway Valley Sewerage bill.  Mayor Fiamingo said she goes to meetings with all the Mayors in Union County and they are in discussions with the RVSA. She said one of the reasons they have such big increases is because of the debts for the rehabilitation of the sewerage authority which was imposed upon them by a court order.  She said the Mayors are getting together with the RVSA about refinancing the bonds so that the expense is not as great as it has been over the past couple of years.  She said that will not kick in until next year, assuming they get that done. Mr. Herbert asked if we caused the problem and if we did not cause the problem why do we have to pay for the lawsuit? The Mayor said we are members of the RVSA and the funds that we are now paying represent the interest and the principal on the bonds used to construct improvements to the authority of which we are a member. Mr. Herbert asked why were the people that are overseeing the RVSA not telling anyone that what they were doing was illegal? The Mayor responded by stating that the situation is a little more involved than that.  The Mayor said there is an overflow from storms that goes directly into the Rahway River and for many years that was not considered terrible. She said the environmental law clinic at Rutgers decided it was and they sued the RVSA.  As a result of an administrative consent order the enormous renovation of the RVSA went into place. She said she does not know all the details.  Mr. Herbert asked if the judge was a form of government?  He said they abused the taxpayers again. He said that some of the tax problems Kenilworth is having are no fault of anyone and he said it is definitely not a local level situation, it is a state level.  He said it is our politicians in Trenton that are causing all our problems.  He said they misuse our tax dollars.  He said as an example, the lower urban towns get allocated state aid because they are people in need and he does not oppose that.  He said tax payers who run their town efficiently and keep their town nice are penalized. He said that is not very fair.  He said every local Mayor and Councilperson and every taxpayer can change Trenton. He said just because people have a title of Mayor or FBI agent they are still a taxpayers and can change things by pulling together. He said at the rate we are going if we just sit back and doing nothing then there is no future for our grandchildren.

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Tony Peters, 531 Monroe Avenue – Mr. Peters asked if the Mayor and Council are going to opt out on the pension payments to the police?  The Mayor asked if he meant the deferral? He said yes.  The Mayor said it not a matter of opting out again. She said this year the Borough has an option to defer about $300,000.00 in pension payments.  The $637,000.00 that she mentioned before is taking in account the full deferral, which the Borough has to do in order to apply for Extraordinary Aid.  They will not give any money unless the Borough takes all steps necessary to reduce our tax levy which would include this deferral.  She said the council has not discussed this but in her opinion the deferral is not a good thing because it is going to cost us a good deal of money down the road. She is going recommend to council that when the money comes in from the sale of girl scout property that they use some of it to pay down the deferral.  Mr. Peters said the Borough should optimize the amount of money they get from the sale of the property  by setting a minimum price on the individual parcels.  He said contractors will buy the entire parcel and sell each plot for more money than the contractor will pay the Borough.  He said it might be more cost effective for the Borough to sell the land to individuals.   The Mayor said the only concern she has with selling the land to individuals is the length of time it would take to sell the lots. She said the Council is going to look at all alternatives which is why they are not going to make the decision tonight.  Mr. Peters asked when the budget has to be done?  The Mayor responded that the budget has to be introduced by April 15th.  She said if the property doesn’t sell they still need to go through the budget process.

Motion was made by Councilman Joho, seconded by Councilman Candarella to close the meeting to the public. All in favor.

ADJOURNMENT

There being no further business to come before the Council it was moved by Councilwoman Sosnosky, seconded by Councilman Klinder and carried, that the meeting be adjourned to the call of the chair. All in favor.

7:25 P.M.                                                                                Respectfully submitted,

                                                                                                Hedy Lipke, Borough Clerk  



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