Business & Finance

Sparta Council Tax Savings Vote to Refund Bonds Raises Questions

August 19, 2014 at 10:35 PM

SPARTA, NJ – The Sparta Township Council voted last week to refund several bonds as a cost-saving measure.

According to Township Chief Financial Officer Grant Rome, “The total projected savings over the life of the bonds is $727,248.06. This is subject to change up to the day of the final sale, which is in October. The maturity on this issue is 2027.

“This is the same maturity date as is in the original bonds; we are not extending the payoff period. The bonds that we are refunding are a combination of general bonds, water bonds and sewer bonds issued in 2005 and 2006.”

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Rome estimates that the annual average savings realized to the taxpayer of Sparta will be in the range of $50,000 to $60,000 per year, depending on the given year.

This vote was unanimous among the four council members who were present. There were some procedural questions from Deputy Mayor Jerry Murphy, whose concern arose from the requirement that a resolution regarding bonds is that a two-thirds majority of the full governing body is required for passage, whereas nearly any other resolution requires a simple majority. Murphy was seeking clarification on the wording of the bond refund resolution. 

He said, “It may seem like splitting hairs, but in Sparta’s case, two-thirds of five members is not an even number and results in the next higher number of members which is four. This is also known as a ‘super majority.’ It begs the question: what if one member is absent? Does the language apply equally? I’m a stickler for details like this because it eliminates discrepancies.”

Township Manager Bill Close confirmed that four council members would have to vote in the affirmative to pass a resolution regarding an issue pertaining to bonds.

The relevant ordinance states, "Local Bond Law N.J.S.A. 40A:2-1 et seq. November, 2009 Page9  - A bond ordinance shall be finally adopted by the recorded affirmative votes of at least 2/3 of the full membership of the governing body. In a local unit in which the approval of any officer is required to make an ordinance or resolution effective, such bond ordinance shall be so approved, or passed over veto before it shall be published after final adoption. "  

With one council member absent the resolution requires a 4-0 vote. Council member John Schon has not been present at 11 of the last 16 meetings, according to the published minutes. The dates of the meetings Schon has attended since the New Year were Jan. 7, March 25, May 13 and 27 and July 8. The meetings that Schon was marked absent were Jan. 14 and 28, Feb 25, March 11 and 31, April 8 and 22, June 10 and 24, July 22 and Aug. 12.

Schon’s absences do not appear to have jeopardized the passage of any bond resolutions as the other four council members have voted unanimously to support the measures. 

The councilman was contacted for a comment but, as of time of publication, Schon had not responded.

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