Open Space Theft Fund

By John Bury | April 22, 2014

The Reason Foundation, in a new policy brief, wonders why With Pension Costs Soaring, Should New Jersey Commit Billions to More Open Space Preservation?

The New Jersey Legislature is currently considering a bill—Senate Concurrent Resolution 84 (SCR84)—that would amend the state Constitution to dedicate six percent of the state’s Corporation Business Tax revenues from FY2016 to FY2045 for the purpose of open space, farmland and historic preservation, and it would send this amendment on the ballot for voter approval in the next general election (presumably November 2014).

The new funding stream would be used to cover loans or grants for: (1) preserving land for recreation and conservation purposes under the state’s Green Acres program (as well as to expand the “Blue Acres” program to purchase lands in flood-prone areas, or lands that buffer such properties, and demolish all structures and improvements thereon); (2) preserving farmland; (3) preserving historic properties; and (4) covering the administrative costs associated with these efforts.

Yet the state government already owns nearly 15 percent of New Jersey’s total land area outright and, altogether, it has set aside nearly one-third of its total land area as protected open space, according to state figures. That is on par with the amount of total state land area already developed.

It is unclear why additional land preservation is needed when a significant portion of the state is already off-limits to development. Nor is it clear why there is a rush to lock in three decades of massive funding for land preservation when far higher spending priorities—primarily, rapidly rising government retiree pension and debt service costs—loom.

Look at how county Open Space taxes are being spent now and the answer becomes obvious.

New Jersey will steal the money raised for whatever purpose (even funding padded pensions) as convenient.  They would put a constitutional amendment to Preserve Cuddly Bunnies on the ballot as long as it meant more money to spend and they were allowed to interpret that “covering the administrative costs associated with these efforts” line as broadly as some counties have.

Based on the latest budget data sheets (with an  estimate for Bergen) put into a spreadsheet of expenditures at most 42% of Open Space spending ($76.7 million out of a total $182.1 million in 2013) is being used to acquire open space.  Among the other uses:

  • $10 million was being used to pay salaries ($6.7 of which for only three counties – Burlington, Essex, and Union).
  • $31 million for Other Expenses
  • $57 million for Debt Payments (which for Union County are made up numbers).

If New Jersey is becoming a “model for America” on pension reform then when it comes to misappropriating Open Space Trust Fund money Union County is becoming a model for New Jersey.

Pension Padding Payment Perversions

By John Bury | April 21, 2014

NJ Watchdog has yet another story about an elected official getting a job on the government payroll to obtain the 3 years of higher salaries that would greatly increase their pension.  This is particularly damaging to the New Jersey pension system since it creates massive additional late-service accruals which were not anticipated and, due to the simplistic way contributions are split among localities by overall salary, will not be properly funded.

There are several examples of this scam being played out and though I do not have the particulars on benefits that would be payable to former assemblyman and current Division of Motor Vehicles employee and Christie-backer Larry Chatzidakis there is the example of a former Union County freeholder that would serve just as well.

Citing a desire to spend more time with her family, Freeholder Deborah P. Scanlon announced on March 1, 2012 she will retire at the end of the year, ending her fifth term in office.  Obviously reassessing that family-thing it was later reported that “former Freeholder Deborah Scanlon was only out of office for a month before the county created a position for her in the Human Services department.”  How would this impact her pension assuming retirement after those three years of higher salaries are on the books:

Impact on Pension:

Participant: Deborah Scanlon
Date of Birth (est): 1/1/53
Date of Hire: 1/1/98
Assumed Retirement Date: 1/1/2016 – age 63
Annual Benefit accrued through 1/1/13: $8,182 = $30,000 x 15/55
Projected Benefit accrued through 1/1/16 as a freeholder: $9,818 = $30,000 x 18/55
Projected Benefit accrued with 3 years in Human Services: $24,545 = $75,000 x 18/55

The difference using state actuarial assumptions comes to an additional $150,000 in benefit values accrued over those three years (though it’s closer to $210,000 using real-world factors) with the contributions to fund that additional pension determined, according to the NJ website, based on salaries:

Under the current funding method, the normal contribution and accrued liability are derived by taking the second quarter (calendar) report of contributions salaries from 2 years prior, which are annualized (example: for the bills due 4-1-2008, the calculation utilized the 2nd Quarter ROC Report of Salaries from 3-31-06). The annualized salaries are then multiplied by the applicable annual rates determined by an independent actuary.

Assuming Union County is typical and using a contribution rate that has lately been around 11% overall this would mean that $24,750 ($75,000 x .11 x 3) will be contributed over three years to fund an additional $150,000 in benefit accruals and this is considered actuarially sound.

The obvious fix is to determine contributions on a straight Unit Credit basis based on what is being accrued for that participant annually.  Though that would take a little more work (basically computer time since the numbers would already have been calculated) the reason it is not done is:

  1. Contributions would inevitably be much higher
  2. Deborah Scanlon might not get hired if taxpayers had to pay the real cost to fund her pension instead of the mini-contributions that the system allows.

County Taxes 2009 – 2014

By John Bury | April 18, 2014

Union County officials are proud of their 2014 budget:
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But when you study these last five years there is absolutely nothing for Union County to brag about. According to comparisons of the Amount to be Raised by Taxation for 2009 and 2014 for all 21 counties based on their official budgets where available as linked to below  (with estimates for Burlington, Hunterdon, and Passaic projecting the 2012-13 increases for 2014) the average annual increase for all counties was 2.2% while for Union County it was 4.3%. But put those numbers into spreadsheets and it looks even bleaker.

In 2009 Union County taxes were $265,056,170, the seventh highest county taxes in the state and in line with having the seventh highest population.  In 2014 Union County at $327,061,905 will have the fourth highest taxes, leapfrogging Passaic, Ocean, and Monmouth counties.

Three counties (Burlington, Gloucester, and Hunterdon) actually saw tax decreases but Union County at $62,005,735 will have the highest overall dollar increase and at 23.39% the highest overall percentage increase over those five years all while stealing from the Open Space Trust Fund (comparisons by county on that coming in the next blog) and piling up obscene amounts of debt (also coming).

Atlantic
Bergen
Burlington-2013
Camden
Cape May
Cumberland
Essex
Gloucester
Hudson
Hunterdon-2013
Mercer
Middlesex
Monmouth
Morris
Ocean
Passaic-2013check back in June for 2014
Salem
Somerset
Sussex
Union
Warren

Renewable Energy Object Lesson

By John Bury | April 17, 2014

This is how government works in Union County.

A major campaign donor wants to move along a project that will generate massive fees for them.  The project also has the advantages of already hooking suckers in Morris and Somerset counties and the justification is sufficiently obtuse to dissuade the board from formulating any skepticism in those who might be so inclined.  This video from three years ago is an object lesson for anyone looking to get money out of the county:

  • think up a politically correct scheme
  • sell it to people you have bribed to listen and decide in your favor
  • ignore anyone who sees a naked emperor (last 3 minutes)

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Today this story came out:

In 2011, the county authority bonded $15.1 million, or about 70 percent of the cost to buy and install the solar panels, with Tioga paying the rest.

Williams said the solar systems generated low-cost power for the public buildings, resulting in a savings on energy costs.

School boards and municipalities paid Tioga for the electricity, and the company also received revenue from the sale of SRECs. Those funds were use to cover the county’s debt costs.

When Union County first contracted with Tioga to put solar panels on more than 25 buildings in 2011, SRECs were selling for $600 per certificate, according to an authority resolution passed earlier this month.

By spring 2013, the value had dropped to $120 per certificate, according to the authority. In May 2013, Tioga stopped making the full payments for the authority’s bonds and the authority declared Tioga in default, according to the authority’s resolution adopted earlier this month.

The authority filed for a $4 million guarantee that Tioga was required to pay under its contract with the county agency, the resolution states, but Tioga estimated it has about $1 million to pay the $25.7 million in claims from creditors, including the improvement authority.

Authority commissioners, in their resolution, told Executive Director Daniel Sullivan to seek at least $150,000 from Tioga, but Williams said Sullivan will seek more.

Of course they will seek more – to pay DeCotiis.  The cost of this project, as taken from Union County Improvement Authority bills paid, just topped $2 million:

  • DeCotiis, Fitzpatrick & Cole, LLP: $1,207,551
  • Birdsall: $475,097
  • Union County Allicance: $11,700
  • NW Financial: $7,425
  • Law Office of Brian Irion: $4,590
  • Well Fargo Bank, N.A.: $330,000

And what about those original suckers? They are in court which is where some representative concerned with Union County taxpayers should also be and this mess might well wind up in some court if DeCotiis can see a way to turn a profit off of suing themselves.

 

Questionable Budget Numbers

By John Bury | April 17, 2014

Today’s Westfield Leader reported my comments at last week’s county budget hearing (video of full comments at bottom):

John Bury of Kenilworth said some of the budget numbers appeared to be made up or simply “plugged in” every year, such as the sheriff’s office, where the 2013 “anticipated” and “realized” revenue were both listed at $1 million in 2013. He said the county anticipates $1 million again in 2014. “That seems really lucky,” Mr. Bury said. He also questioned how the county’s Open Space debt went down “exactly” a million dollars from $5.6 to $4.6 million.

It may sound felicitous that the Debt Service – Open Space revenue item (Sheet 8 of the Introduced Budget) decreased by exactly $1 million but it did not go from from $5.6 million to $4.6 million; it went from $5,639,826.00 in 2013 to $4,639,826.00 in 2014, an exact reduction to the penny that is virtually a mathematical impossibility in the world of debt repayments without the use of an all-too-common balancing technique that the county auditors seem to have adopted euphemistically referred to as ‘fudging’.

Since nobody at the state is going to dig behind what is reported the county through their well-paid auditors can stick whatever numbers are convenient in their budgets assured that they will not be asked for backup (and even if asked by the public in open comment time at freeholder meetings, county policy is not to answer).

Another example of an appropriation that  one would think the auditors would get right would be their fees.  In the introduced budget for 2013 $188,950 was appropriated for the Annual Audit and $145,225 for ‘Other Accounting and Auditing Fees’.  This total of $334,175 was the exact amount paid in 2013 according to the budget (which calls for an increase to $394,331 in 2014).  However when you go to the check registry Suplee, Clooney& Company (the auditor for the County and its agencies per the resolution hiring them) received $430,047 in fees during 2013.

Where did that extra $95,872 come from to pay the auditors?   Open Space Trust Fund money misappropriated under the cover of debt?
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UCCF 4/10/14: Sneaking in More Debt

By John Bury | April 14, 2014

Among the amendments to the 2014 Union County budget was a comparatively small number on Sheet 29:
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PAYMENT OF BOND ANTICIPATION NOTES   FROM 13,000 TO 66,927
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It only comes to $53,927 in additional interest but that this number changed at all is very interesting. Did this come out of the blue? Did somebody forget that there was an installment payment due?  But assuming some basic level of competence in drawing up these budgets you have to assume that Bibi Taylor is lying and this is new short-term borrowing.

In theory BANs are like bridge loans that are taken out to begin funding some project until the next bond sale brings in the main money later at a time when it is anticipated that borrowing costs would be lower. In practice it is often a way to get money a year earlier for whatever purpose you want if nobody catches you at it.

UCIA Gets More Money for DeCotiis, Sullivan et alia

By John Bury | April 13, 2014

Among the amendments to the 2014 Union County budget was an extra $100,000 for the Union County Improvement Authority (UCIA):
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What is it the UCIA needs the money for?

Their general counsel, DeCotiis, Fitzpatrick & Cole, LLP, gets well over a million dollars annually advising (i.e. selling a bunch of willfully ignorant political appointees on stupid projects like solar panels which cost taxpayers tens of millions of dollars for minimal, if any, real improvements but bring in big fees – officially over $1.2 million so far to DeCotiis alone) with billing since 2004 totaling almost $11 million.

But they also need money to pay people at the Union County Utilities Authority (UCUA).  Check out the UCIA approved bills from April, 2014 and you notice a payment to the UCUA for $120,000 labeled “Shared Svcs Agmt – 8 months @ $15K/mo.” to pay those stipends to UCIA/UCUA executive director Daniel Sullivan and selected staff, as reported here.

UCCF 4/10/14 Budget Hearing

By John Bury | April 13, 2014

The law requires these hearings for taxpayers and other interested parties to ‘present objections’ though nowhere in the law is there mention of a five minute time limit so if anyone has more than five minutes of objections there is no outlet to present those.

In order of appearance starting with the ground rules:
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UCCF 4/10/14: Political Bosses In Office?

By John Bury | April 11, 2014

Are our county political bosses in elected office or are they behind the scenes pulling the strings of those they choose for those positions? There seems to be an honest disagreement on this point:
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Since I was harassed and heckled off the podium I did not get to read these prepared sum-up remarks:

Your constituency is not the taxpayers but rather (a) those like the DeCotiis lawyers who get together $30,000 each election cycle to donate to your campaigns so they can get their $2 million in fees annually for things like putting up solar panels around the county for what they claim will be free but turn out costing $20 million in defaulted bonds and fees or (b) these department heads whose bloated budgets would put them in a position someday to hire one of you for a $75,000 job with full benefits for which you were not qualified.

You can still vote in our poll but now you can see the results:

Though you still can’t see the ‘Other’ responses so, as of 4/15/14 here they are, unedited (except for spelling when I was sure what was intended) and in the order they were cast:

  • someones bitch
  • Fat Douche
  • Leniak’s masseuse
  • joker
  • putz
  • Let’s just say the training wheels will never come off
  • Simply Corrupt’
  • A pompous ass
  • PUPPET
  • Creepy
  • Wtrte
  • Arrogant
  • slug puppet
  • Second Coming of Daniel Sullivan
  • as with some of the other freeholders he is surely in the wrong position.
  • Tool
  • None of the Above
  • boy who wants to be King
  • anal opening
  • incompetent
  • arrogant sob
  • SCUMBAG
  • Hudak is guilty of political malpractice judging by mayoral candidate in Linden

UCCF 4/10/14 – Cranford Against UCC Sports Complex

By John Bury | April 11, 2014

Several Cranford/Westfield/Kenilworth/Garwood residents spoke against building a sports complex on the Union County College campus where the tennis courts and 700 trees are now. In order of appearance:
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Freeholder lukewarm response:
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For more information: www.ucnu.org