Council Delays Vote on Bond Ordinance for New DPW Facility

November 1, 2013 at 1:12 PM

LIVINGSTON, NJ – At Monday evening’s Township Council meeting, bond ordinance 24-2013 “providing an appropriation of $2,040,000 for acquisition of property in and by the Township of Livingston, in the county of Essex, New Jersey and authorizing the issuance of $1,942,800 bonds or notes of the township for financing part of the appropriation” was tabled once again.

The council expressed that because they were still discussing options for the fate of the Department of Public Works facility, they were not yet ready to vote on whether or not approving a bond would be appropriate, because the bond would be issued to purchase land on Industrial Parkway.

Although the bond has been temporarily taken off the table, residents Peter Boockvar and Larry Kohn expressed concerns.

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“After seeing this (town hall) monstrosity of a building, how does the taxpayer of Livingston have confidence that the money will be properly spent in creating this new facility?” asked Boockvar.

“That is what our commitments are,” responded Mayor Rudy Fernandez. “To make sure that whatever we spend we spend wisely and spend it efficiently, and not waste anything.”

Boockvar then addressed Township Manager Michele Meade, asking, “Last week you mentioned financing this with short term debt.  What’s the logic of financing a long term asset with short term debt?

“This has been part of our financial plan since 2008. The way we look at it is, by initially funding a capital project through short term notes, we are able to take advantage of historically low interest rates and then we extend the period of time over which the asset is paid for.”

Boockvar asked how long that period of time would be.

“It depends. It can be anywhere from three to five years, that is what we’ve done in the past.  And it depends upon the affordability also of adding the debt service into the municipal budget.”

Meade continued to explain that the purpose of doing it this way would allow the short term notes to fund the project initially until other expiring bond debt from the township could be rolled into the equation. “So we try to keep the debt service payments that the township has to pay year after year relatively flat, with as little increase as possible.”

Boockvar left the council with advice.  “My recommendation is that in three to five years, the cost of money in the short term, will be greater than larger money today. So I think it would be prudent, if you go ahead with this, to be borrowing at least 10 years at historically low interest rates instead of playing the short term bond market.  There is no point in financing this for three to five years when you can go 10 to 20 years at historically low interest rates and not put the Livingston tax payers at risk.”

Kohn, who once served as the assistant township manager for Woodbridge also approached the council with many thoughts and questions about the pending DPW project.  

“I think you clearly made the right decision with respect to delaying the vote on Ordinance 24,” Kohn told the council.

“One of the things you should have taken into consideration is the commitment you made--that you would involve the citizens of the town in a question and answer session, and further education them. You haven’t done that and unless/until you do that you should not take the vote on this issue. This town has always prided itself on the contribution from volunteers.  You haven’t reached out to the community and allowed them to participate in the review and in the decision making process.”

Councilwoman Deborah Shapiro told that a question-and-answer session will be scheduled for the public, with a date and time to be determined.

Related Links:

Bond Ordinance 24-2013 –scroll to page 7

Council Discusses New DPW Facility Options

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