You readers all know that your household – like every other household in Teaneck has – IN THE LIGHT OF this Spring’s 2020 Covid-19 pandemic and its LOCKDOWN – been recalculating the family budget (what we each have and have coming in and what we can spend). We also know that every public body in NJ (state, county, municipal, school, etc.) is engaged in a self-described desperate efforts to perform a similar budget rework for their agency.
ALL EXCEPT TEANECK! Council keeps assuring us that in 2020 there will be a zero tax increase. In the last Council meeting (3/24 – virtual) all but one on Council devoted all of the 8 minutes prior to unanimously introducing that so-called zero (0) increase budget to what? – mutual self-congratulations.
At least Councilman Jim Dunleavy prefaced his equally congratulatory praise of all concerned by admitting: “With all that has happened right now, it is very unlikely that will we be able to come up with an adequate or accurate set of revenues or expenses. It is just impossible because with all that has happened there is no solid ground” [Dunleavy was immediately contradicted by Deputy Mayor Schwartz; first thing the next morning Deputy Mayor Katz posted a bold and unqualified zero increase budget claim].
Not a single budget item was discussed at the 3/24 meeting about a budget that had been entirely created before the pandemic hit. In fact – excluding the Manager’s 20-minute Power Point on 2/27 (click here) – in none of the 2020 meetings of Council has any actual budget item or budget $ number even been cited let alone reviewed.
By contrast, currently Bergen County Freeholders are deciding whether to schedule either 4 or 5 WebEx virtual budget meetings replete with full opportunity for public input before the Freeholder Board schedules the introduction of a budget known to have been radically altered to respond to evolving changes triggered by the pandemic’s assault on County residents and required County responses.
Amazing non-public fiscal decision making here in Teaneck? Or is it just incompetence. But wait – when in April will all the fiscal churning that must eventually be considered in addressing this unprecedented Covid-19 challenge to all Town operations next be aired by the Council and get input from its residents? Never in April! And not before the election!
And what about that emergency appropriation loan from the State that assumes Teaneck will again be granted a second, identical 5-year payout bond so it can pay retirement benefits of $1.34 M – an expense fr which it plans to provide only $1 this year? Will that item which is so essential to the $0 increase claim about this introduced budget actually be made available by the State? It may well be a non-starter. (Watch this space!)
Actually, it turns out – we learned on just 3/31 in an official notice – a Sunshine Notice, in fact – that there would be no Council meeting on 4/6 because there is/was literally nothing to discuss or decide. The Council schedule called for just a single April Council meeting. Instead that Sunshine Notice coolly announced that the April meeting is cancelled – “because there are no matters necessary for the continuing operation of government “ (italics and print colored added).
How did Council decide that? Well, two members of Council found out about the cancellation literally by email – as the Sunshine Notice simultaneously went up on the website The hundreds of decisions about town fiscal and resource deployment and other priority issues that we deserve to know about and Council should be carefully considering are being made by ……..?
So what – and when – have we residents been allowed to know about this 2020 Introduced Budget?
We have to-date only 3 public documents that provide direct information of/about that Teaneck 2020 budget. We have another document that, although produced and published 16 days late, provided very important budget information. We are missing one document – one that would provide lay officials and residents with the most useful information – that by OPRA we now know has never been been yet been produced.
Let’s first review the 4 currently produced documents & provide you a way to access each of them:
The Township Manager’s Proposed 2020 Municipal Budget – Dean B. Kazinci, Township Manager – This Power Point document was delivered in the year’s only Council “budget meeting” on February 27 – a week late in what was originally scheduled to be the 2nd Council Budget meeting. It can be accessed if you click here
Township Manager’s Board Book – This 210-page compendium of budget data is both the largest, more comprehensive but unfortunately for most of budget season the least publicly accessible discussion of the data that went into actual introduced budget. It was originally accessed by OPRA in early March (that version can be accessed in a page on this website (click here). Finally, with pressure, on April 1, a revised version of that document was finally placed on the Town website (click here)
The Introduced 2020 Budget – in the almost impenetrable format required by the State – is still in April located only one obscure place on the Township website. One literally must go to the 3/24 virtual council meeting’s full agenda packet and make your way to packet pages 42-114 of the that agenda – which you can access if you click here. It made it to the agenda 1 business day before the virtual meeting. Do you believe that your elected representatives wanted you to review it before they acted?
The 2019 Annual Financial Statement – The all-important nearly always late Annual Financial Statement for last year (2019 provides the Township’s fiscal managers with the key data – for example the actual official surplus numbers from the prior year that must be used enable completion of a draft budget. That delayed document is now available at click here
What is still missing for 2020? Teaneck is legally obligated – before its Council introduces and then again before it adopts – an annual budget to publish its state mandated User-Friendly Budget -a document the state has well-designed so everyone can readily understand what a town expects to receive and to spend for the year.
(The only 2019 User-Friendly budget is the one for the approved 2019 budget. In order you you to see how useful that document is, click here.)
Teaneck – in violation of state requirements simply does not produce that User-Friendly budget until all public input has ended and the Town’s budget process is complete. Why? Because it does not want the public to know? You decide!
10 more proofs that the Council mantra is wrong: Teaneck taxpayers will in 2020 pay more in property taxes for the municipality than they did in 2019 – or the previous 5 years
TTT has tied to analyze what documentation is available for the introduced 2020 budget — and to test to see whether the Council candidate assertion that it is a Zero Increase budget withstands scrutiny. In fact, we have discovered 10 separate proofs that the claim is unfounded. The 1st proof can readily be found here on Teaneck Transparency – just click here. We summarize the other proofs truly holes in the zero budget claim – below.
Again in that text box snip from Elie Katz’s Tid Bits on 3/25/2020 is the incumbent Council’s unwavering political promise – what is the Reality?
That promise assumes that both Township revenues and expenditures for 2020 are stable, knowable and = 0
But – for Revenue? Teaneck’s Introduced 2020 municipal Budget assumes that the Town tax office will collect 99.02% of all the property taxes due in 2020. Taxes are next due to the Township by May 10th, and again (for the 3rd Quarter) on August 10th. So we will soon find out just how totally baseless is that assumption about 99% tax collections. Several realities help illustrate what will significantly hurt 2020 tax collectability.
1) We all know that massive unemployment and uncertainty have led the Governor to work with most mortgage lenders to allow property owners to skip mortgage payments. Will residents, many of whom make their mortgage and tax payments in person, be able to make their payments on time, this quarter or next? And since shuttered small businesses are racing to get federal loans just to pay released/furloughed employees, where will retail small business of all sorts get the financial wherewithal to pay either their property taxes or rent to their landlords?
- Permit and construction fees – Over the past several few years, a tide of new construction has meant that builders and homeowners doing renovations have paid permit and construction fees collected by the Building Department. Economic data shows an abrupt slowdown in all new proposed projects as the few remaining projects already in progress are struggling toward completion or are expected to sit largely unoccupied for some time (1500 Teaneck Road).
Indeed, recently approved projects either never started (140 State) or are now believed very unlikely to ever start (100 State)
- The township’s approved 2020 budget predicts hotel occupancy fees are budgeted at $900,000 in 2020, up 71% from the budgeted $640,000 in 2019. Who among us believes Teaneck’s hotels occupancy will buck the trend – since nationally hotel occupancy rates have plummeted as the nation’s residents are literally frozen in place and stopped traveling/lodging. Incidentally, long-term stays at hotels are exempted from such taxes.
- State Aid – The Introduced 2020 budget assumes that state aid of $3.4 million will remain unchanged. When, if ever, will the State receive those aid resources? The Governor has already frozen all discretionary expenditures for the remainder of the fiscal year, and has extended 2019 income tax payment for everyone for 3 months. In fact, the State – citing serious revenue shortages – has now delayed completion of its own budget until September 30.
- Declining fund balance – the township’s Annual Financial Statement for 2019, published in March 2020, shows that the township’s fund balance – the bottom line of cash available that is not legally dedicated to other purposes – declined from $7.2 million at year-end 2018 to $6.5 million at year-end 2019 because spending actually exceeded revenues for calendar year 2019. If our fund balance declined in an exceptionally good year by 10% because of a spending imbalance, what can we expect in a challenging year like 2020? And legally a Township’s budget projected surplus is limited by its prior year’s fund balance performance.
These and other revenue source uncertainties /assured shortfalls on the REVENJUE side of the 2020 Introduced Budget are never even hinted in any public discourse or official document – but we in Teaneck with our introduced Budget are solid on the EXPENSE side, right?
Not so much
1) Every other public body in NJ (except Teaneck, apparently) is scrambling right now to try to project how much more it will have to spend to provide the “same or equivalent” services when the costs of providing them during the pandemic roll in. The County budget is said to be being completely taken apart before presented to County Freeholders – and by placing tens of millions of dollars in a huge, totally new Coroniv 19 expense category. We know of no other municipality in NJ (EXCEPT, say Teaneck Council leadership, where this fundamental recalculation of expense process is not a first or second priority and of urgent governing body review and seeking public input[1].
2) Even In Teaneck, public safety and public works employees are working where coronavirus exposure is great – in the Town where the infected % of the population is highest in the State. Already some Town employees are said to be infected. That inherently means the Town will have to make paid sick time off – and the corresponding necessity to provide emergency (higher cost) overtime to those who must fill in, often on an emergency basis. The higher and unplanned costs are inherent. The Town’s fire, police and public works staffs were already at some of the lowest levels in 20 years. The calculations of unavoidable cost of overtime to “cover” police and fire protection as 911 calls increase – and to provide ever more protective gear has not yet even begun. Clearly understaffed DPW recycle pickup crews are understandably falling behind. Municipal Expense projections are certain to remain fluid, pointing higher, as the pandemic relentlessly requires more public resources (both human and physical) and in the process equally relentlessly chews up those resources and demands more.
- And unplanned capital costs. OK, we tax payers will now [finally] pay for 20 years the cost of just initiated Rodda Center repairs – a project whose costs exploded to more than a million $ because so long postponed. But will 2020 be the year the liability/regulatory chickens come home to roost for other systematic infrastructure neglect? As examples, the Town’s longstanding disregard for 2 key disintegrating infrastructure projects – with their serious environmental and worker/resident safety threats – could well force immediate and major unplanned expenditures. Whether in the form of regulatory ultimatums or court-ordered compensation for human injury, forty years of knowing failure to remedy the multi-hazard 1600 River Street DPW and the disintegrating CSX bridge dangle dangerously over the Township’s fiscal stability. The cost estimates are in and well-known. At least $6 million to resolve the many hazardous/dangerous elements of the egregious DPW facility which is entirely the Town’s responsibility. And the collapsing CSX bridge – where intermittently chunks of concrete fall on Windsor Road or Palisade Avenue – will cost $2 million or more to replace. Those costs will now sky rocket since the new Votee Field House is now planted on the footprint needed to cost-effectively to meet ADA requirements for the bridge. How much is currently set aside for these two projects? $0
- Unplanned tax appeals, long-standing and new – The Sanzari family has a sequence of tax appeals on its $180 million dollar complex at Glenpointe filed against the Township for every year from 2007 going forward. The case was actively heard before the State Tax Court since 2017/2018. The likely amount due will be several million dollars, with the Town having set nothing aside to cover the amount due. A successful Sanzari appeal will also mean that a required interest rate of 5% per year will be applied, going back as far as 2007. It is unlikely that the Sanzari’s – their firm certain to be under intense financial pressure in fallout from the pandemic – will continue to allow this tax appeal to drag on just to collect that 5% interest. Caching could well coke the order to open in 2020 town’s metaphorical cash drawer. Bhut that’s just a slice. Indeed, tax appeals have been filed by virtually every apartment building owner over the past few years. The impact of as many as 40% of tenants being unable to pay rents will mean that a flood of tax appeals will be on the way. Its not just that landlords and property owner will likely not be able to pay their taxes – but as those property values fall, Teaneck will have to repay what tax authorities and courts award for prior overpayment of taxes to the Town. Last time these tax appeals were an issue the bill the Town paid was $2 million just for the single-family properties. Likely this $2M amount could fall far short of what happens in 2020-21 under the pandemic
- OK – so revenues are going to take a major hit – possibly 10-30% But then we would – to get to budget 0% increase need significantly to reduce all Teaneck public expenses. But whoops – Teaneck is the financial collector / steward of all public revenue for not just itself as municipality but also its public schools and the county! Put too simply, that means that the Township’s municipal government is required to provide Board of Education and the County at 100% of its legitimate budget – The township collects $160 million in property taxes ($40 million per quarter) of which 65% goes to the Teaneck Public Schools and by formula its portion owed to the County of Bergen. The township is legally obligated to provide the school district and county with 100% of the property taxes collected on their behalf from residents. A drop of 10% in overall collections for the Second Quarter due by May 10th would mean that the $4 million shortfall would significantly impact the township’s resources to address municipal expenses. A shortfall of 20% (or $8 million) would be in excess of all of the township’s available fund balance. This trend could well continue into t99he Third Quarter, with payments due by August 10th. So much for the Council and Town management to use lots of expense discretion for the municipality.
The mayor announced on March 24 that FEMA payments would rescue the Town as pandemic care, cleanup, mitigation costs explode – an implicit admission that the huge costs just illustrated would receive eventual compensation. But this is a national pandemic and the relatively new role being given to FEMA in the pandemic. There is no precedent for any analogous nationwide call for FEMA reimbursement – either its criteria and/or amount. The mayor is simply out in front of his headlights. Even if there were an analogy, when did FEMA reimburse Teaneck for the expenses the Town had incurred in 2012 for some of the regional impacts to Teaneck of Hurricane Sandy. Answer: 2019!
Summary: In sum – inevitable revenue shortfalls, unavoidable school/county funding commitments and large increases in near-term expenditures make the claim that Teaneck will on either the revenue or the expense side be able to keeping the current Council’s commitment to a 2020 zero budget increase either a cruel lie or a clear indicator that more competent people need to take the helm.
[1] Perhaps the most disconcerting recent Teaneck Township announcement is the “Sunshine Notice” announcing cancellation of the only scheduled Council meeting in April – the only one scheduled to occur before Teaneck’s 5/12 election. Here word-for-word is the Sunshine Notice: “Please be advised that as a result of the COVID-19 crisis and current State of Emergency, and because there are no matters necessary for the continuing operation of government, the Council Meeting scheduled for Monday, April 6, 2020 is cancelled.” (Signed Doug Ruccione, Acting Township Clerk). It is unclear who made this cancellation decision. Two Council members were made aware of this decision when they received this Sunshine notice.
