Untangling The Town Council Meeting

By on February 20, 2014

TanglesTuesday night’s Town Council meeting opened with the withdrawal of the resolution to award the contract for the Hilltop sports fields and closed amid often angry debate. In between was a tangle of assertions and issues that have taken some days to unravel.

Town Manager Joe Martin told a packed audience in the Council chambers that he was tabling the resolution because two Council members had asked for more information on the contract, which would award the work to Landtek Group of Amityville, N.Y. The contract–which covers both mandatory removal of some contaminated soil and the construction of the actual fields–totals $5,281,300, appears to be somewhat more than the $5.125 million bond that the Council approved last April. But the soil removal was already funded through a capital ordinance, and we’ll have more on that in a bit.

Martin did not say which two Council members asked for more information on the contract. But MyVeronaNJ.com contacted Kevin Ryan, who voted against the bond last year. He said that he and Michael Nochimson had questioned Martin on Friday about whether the contract resolution and the ordinance appointing the Township of Verona as the redevelopment entity for the Hilltop could be voted on during the same meeting.

Normally an ordinance must “cure” for 48 hours after it is voted on before resolutions related to it can be addressed. Ryan said that town attorney Michael Ganniao confirmed to him that the resolution could not be voted on at the same meeting as the ordinance. The latter was put to a vote and the Council voted unanimously for it. But Ryan noted that the public should not read his approval of the measure–which he dubbed a “housekeeping” issue–as approval of the Hilltop project.

(Ryan noted today that he has still not seen the full contract with Landtek. Helb indicated Tuesday that three vendors had submitted bids, but did not name the other two bidders or what they had bid. Because the Hilltop has been designated an “area in need of redevelopment”, Verona was not bound to award the contract to the lowest responsible bidder, as it must do in other contract situations. Landtek has worked on Red Bull Stadium, and MetLife stadium, among others.)

The other big tangle of the evening started with a sentence at the end of the resolution noting that the funds were available for the project from seven pre-existing capital ordinances. This does not mean that the Council was doing away with the bond issue or that Verona has slush funds someplace. But it’s going to take a few words to explain what it does mean, so bear with us.

When municipal governments like Verona’s need funding for an action, they approve something called a capital ordinance. Ryan, at the meeting, likened it to a home equity line of credit, and he’s not far off in that analogy: The measure spells out the maximum that might be needed for the project, but doesn’t obligate the town to borrow it. Sometimes a town might not need to borrow as much as planned because funds come in from the county, state or federal government.

What is this?

If the town doesn’t borrow, the capital ordinance has no cost. If a town has to borrow, the capital ordinance becomes something like a mortgage with a defined borrowing cost. Buried deep within the dense budget book that Verona compiles every year is a list of funded and unfunded capital ordinances. An ordinance can be cancelled, and if it is, any balance goes to capital surplus.

Town attorney Jim Helb noted that there were seven existing capital ordinances on the Hilltop. They were drawn up to help Verona acquire the land from Essex County, build White Rock Road, put up the bleachers and walls at Centennial, and other things. Some have very little balance left: Ordinance 05-06 earmarked $5,030,000 to buy the property and there’s a balance of $22,430.83 in it. But ordinance 06-10, which asked for $550,000 for the Hilltop access road, has a balance of $240,756.99 because the county funded much of the work.

Once an ordinance is funded, the money in it cannot go to other unrelated purposes. Verona couldn’t take the $240,756.99 left in 06-10 and spend it fixing all the potholes that opened this winter. But by showing that Verona has $5.8 million available from the Hilltop-related ordinances, Helb was demonstrating that Verona has the ability to pay for the work sought under the resolution, which is a requirement in municipal finance.

When the meeting was open to the public for discussion, it was clear that a substantial divide remained between those who support the two new Hilltop fields and those who want Hilltop PILOT funds spent on existing fields, notably those at Verona High School. Bob DiTrani, a former president of the Fifth Downers football booster program, finally asked if the Council would postpone a vote on the Landtek contract until after the March 11 Board of Education referendum. (It seeks funding for building work, new heating and security systems, technology upgrades and field repairs.) Council member Frank Sapienza seized on the idea and the Council pushed the decision off until its March 17 meeting.

If approved then–a resolution needs three Council votes to be approved–construction would begin this spring and would be completed by spring 2015.


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5 Comments

  1. Jim

    February 21, 2014 at 2:16 pm

    It is usually a problem when some council members have no idea how municipal finances work.

  2. Michael Nochimson

    February 24, 2014 at 9:35 am

    The key to Municipal / Verona Finance is Transparency, Communication and Accountability. A Healthy debate and discussion is critical so that everyone fully understands what is occurring and its impact on our community. Secrets do not cut it…

  3. Walter

    February 25, 2014 at 4:07 pm

    I agree with transparency, communication, and accountability. These are key to the success of any Organization. This article does a good job in explaining some of the items that confused some of the council. All NJ elected officials should be mandated to attend training sessions on municipal finance in order to avoid public confusion like this. However, I am not sure you can consider something a secret just because you fail to understand it.

  4. Kevin Ryan

    February 25, 2014 at 5:52 pm

    I wanted to give.an update to Jim and the rest of the residents . I am still waiting to get my copies of the seven ordinances that were all passed long before Nochimson’ and I got on the council. Don’t you think we have a right to review them before we commit the town to a project in excess of 5 million dollars? There was never any mention of the possible need to tap these funds last April when the main Odinance was passed. It should have been part of the discussion then.

  5. Michael Nochimson

    February 26, 2014 at 10:53 am

    Walter, Full Disclosure is another requirement and expectation in Good Government. All relevant funding sources needed to be revealed and openly discussed w/ the Council and residents of Verona prior to approving the Hilltop Ordinance. Especially when we have a project of this scale ( 5.1 mil ). There is no excuse for a Councilman or resident of Verona to have to seek out hidden information. Full Disclosure is what we all expect. Again, there is no justification for Management withholding material information. This is just Wrong… Walter( no last name )no excuse…

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