NJ News & Views

[Editor's Note: On November 28, 2009, this story was edited for style, content and accuracy.]

One week before Thanksgiving, Lakewood parents may or may not have had reason to be grateful to local government.

The Lakewood Township Committee is financing their children's education through a bonding ordinance they as taxpayers will have to fund.

On Thursday, November 19, committeemen held a second reading and vote to approve bonding for three capital improvement projects totaling $1,774,846.

The committee approved first reading of the ordinance at their October 29 meeting, which was recorded at the Lakewood High School auditorium.

Committeemen seek to purchase upgraded equipment for the Lakewood Police Department at an estimated cost of $464,736. The equipment will include a radio system and mobile computer systems, as well as the cost of equipment and installation. Committeemen will make a down payment of $22,131 and bond to a maximum of $442,605 in bonds or notes. The estimated life of the purchase is 9.1622 years.

Committeemen also seek financing for the remount of an ambulance chassis for the township Emergency Medical Technicians Department at a total cost of $54,600. Committeemen will make a down payment of $2,600 and bond to a maximum of $52,000 in bonds or notes. The estimated life of the repair is five years.

The most expensive project will cost taxpayers $1,255,510 for replacement equipment for the township Public Works Department, including single stream recycling containers, a roll-off truck with plow/spreaders, and equipment and labor to perform unspecified renovations to the Clifton Avenue School playground. Committeemen will make a down payment of $59,787 and bond to a maximum of $1,195,723 in bonds or notes. The estimated life of the purchases is 12.7461 years.

According to Lakewood Township Manager Frank Edwards, the cost of the equipment for the Clifton Avenue School playground is $54,000 - which the Lakewood Board of Education is not paying out of the $1,274,677 surplus the district reported at the end of the 2008-9 school year.

NJ News & Views asked district Business Administrator/Board Secretary Robert Finger if the board planned to finance any capital improvements projects using the surplus. In a November 24 e-mail, Finger said no.

"At this time there are no funds available for any capital projects for the Lakewood schools," he wrote.

In 2006, the board publicly discussed a lease-purchase agreement to fund repair of the Lakewood Middle School roof, as well as replacement of the Lakewood High School roof. To reduce the cost of the project, board members voted to approve the 5-year lease-purchase agreement at an annual cost of approximately $700,000 for only the replacement of the high school roof.

Former board President Chet Galdo discussed district capital improvement projects with NJ News & Views before resigning from the board this year. Two years ago, Galdo estimated the middle school roof repair at the same cost as the high school roof replacement one year earlier - about $3-4 million.

Prior to the 2007 school election, board members initially budgeted approximately $1.5 million for capital improvement projects in most of the district's public schools, including repair of the middle school roof and the Spruce Street School's crumbling façade. Members also proposed installing a back-up boiler for Clifton Avenue School priced at $50,000 - about the same cost as the playground equipment committeemen are bonding to replace.

Neither the board of education nor the township committee has available funding for the project out of public budgets they oversee.

Finger did not disclose how much the district currently has in surplus, only the amount the district reported to the state five months ago.

Each year, the board's public policy has increased the cost of school district services subsidized by taxpayers.

Despite a record of more back-to-back school budget defeats than approvals the last decade, the board has continued to provide bus transportation to all students that request it, even if they live within walking distance of school. For years, the cost of the service has outstripped the ability of Lakewood taxpayers to finance it.

On October 15, 2008, Lakewood reported to the state that a total of 18,690 students received bus transportation to public and non-public schools. Finger said 14,097 students were bused to non-public schools and 4,593 students were bused to public schools.

By October 15, 2009, that total increased to 20,400 students. Finger said 16,200 students were bused to non-public schools, while 4,200 students were bused to public schools. Students bused to most Lakewood non-public schools are transported by gender and religious affiliation - increasing the cost of the service.

While the number of public school students bused to class dropped by a total of 393 students, the number of non-public school students bused to class increased by a total of 2,103.

Bus service provided to students at distances under state guidelines is referred to as non-remote busing and is not eligible for state reimbursement.

According to media reports, the majority of Lakewood non-public school students receive non-remote transportation.

In October 2008, the state auditor began a forensic audit of the Lakewood School District after the board of education ended the 2006-7 school year over $1 million in deficit. The audit is expected to be completed by January or February 2010. Under state legislation enacted in 2006, members of the board could face criminal charges if auditors find evidence of malfeasance.

Lakewood committeemen could face similar charges.

At their November 19 meeting, committeemen approved a resolution authorizing emergency appropriations to close a municipal budget shortfall that township Manager Frank Edwards attributed to the large number of property owners appealing their assessments.

The resolution petitioned the state Director of Local Government Services for permission to exceed the $1,605,702 budget cap of three percent to close a $2,880,872 shortfall in the 2009 municipal budget line item for uncollected property taxes.

On December 31, 2008, the township certified it had $7.5 million in budget surplus. Less than half a year later, committeemen closed a $4.5 million budget shortfall by deferring payment of more than $10 million in July school taxes owed to the district. The deferred payment of school taxes, approved by the state, created a $5.5 million surplus.

Earlier this month, NJ News and Views asked Edwards how much the township currently had in surplus. Edwards, like Finger, did not provide the amount.

"No one keeps track of surplus until the end of the year," Edwards said on November 5.

On November 19, Edwards told the public the township had virtually no surplus.

At Mayor Robert Singer's request, Edwards explained to resident Larry Simons why the committee was adopting a resolution to authorize emergency appropriations. He said the township needed to cover a budget shortfall due to insufficient funding budgeted for uncollected taxes in 2009.

In May 2009, the township budgeted $43,594,338.78 for local tax, including reserve for uncollected taxes. In 2008, the township budgeted $39,655,923.77 for the same line item, but realized only $38,989,872.61 - a difference of $666,051.16.

Last year, the committee budgeted $4,100,000 for receipts from delinquent taxes, but realized $4,462,004.69.

This year, the committee budgeted $4,500,000 for receipts from delinquent taxes.

Edwards told Simons that 4,500 Lakewood property owners had appealed their assessments this year, which he said was the cause of the township's cash flow problems.

"Don't increase our negative collection rate, don't make our budget worse next year, and then you get to pay it off over time," Edwards said.

Despite the possibility that committeemen may have to go further into debt to close another municipal budget shortfall in 2010 if Edwards is incorrect, all five committeemen unanimously approved first reading of an ordinance to grant another tax abatement at the same meeting.

According to documents on file with the township clerk, which NJ News & Views requested under OPRA on November 25, Avallone Partners LLC of Woodbridge constructed a 130,000-square-foot building on a subdivision of 145 Lehigh Avenue that will be leased by American Van Lines, formerly located at 1985 Rutgers Avenue the past 20 years. Both addresses are located in the Lakewood Industrial Park.

The building was completed in September 2009 at an estimated cost of $9 million. Papers submitted by the applicant's attorney, Abraham Penzer, stated that American Van Lines would employ an estimated 110 employees in the facility over the next two years.

The papers did not state how many of the employees would be new hires or the current size of its work force.

According to online county tax records, Avallone Partners, a family-owned business, received tax abatements for new construction completed on other subdivisions of Block 1606, Lot 3, which each received a new lot number and address.

Tax abatements provide property owners that receive them with a 5-year graduated tax exemption on new construction, not on the land they own.

Public property, school property, religious property, property owned by certified non-profit organizations or charities, and cemeteries and graveyards are all eligible for a tax exemption of their land as well as improvements to it.

Avallone Partners LLC qualifies for none of those categories. However, it does fall into the category of Other Exempt, according to Lakewood Tax Assessor records, which reported that Avallone Partners is receiving a tax exemption on the 15.1-acre site.

So is the owner of a commercial building constructed in Washington Square, a mixed-use development facing Cedarbridge Avenue.

Both sites are located in the township's Urban Enterprise Zone (UEZ) - the largest in the state.

The state approved the UEZ program in designated municipalities to bring urban renewal through increased job and business opportunities.

Businesses that receive a 15F tax exemption classification may or may not be creating new jobs for Lakewood residents - a goal of the UEZ program - at a cost taxpayers can no longer afford to subsidize.

Residents of neighboring Howell Township are also paying a high cost for the commercial ratables local government brought in to reduce property taxes.

From 1998-2005, the township hired consultant Barry Lefkowitz of EDC Consultants Management and Government Resources of Lumberton at a cost of $4,000 per month, plus expenses. According to his contract, Lefkowitz was to receive a commission ranging from 2-3 percent.

On October 16, 2009, a reporter for NJ News & Views requested all Howell contract files for Lefkowitz. Township officials did not present all of them for inspection, even though the state Department of Archives and Records Management (DARM) requires that at least one copy of the contract files be kept for audit purposes.

Effective January 22, 2009, municipal contract files must include plans and specifications; bid proposals; progress/performance reports for payment request; correspondence; and supporting documentation for contracts awarded, cancelled or never pursued.

On October 14, 2009, NJ News & Views also requested contract files for Lefkowitz from neighboring Jackson Township, which hired Lefkowitz from 2003-5 based on his work in Howell. Jackson Township Clerk Ann Marie Eden presented two of the contract files for inspection under OPRA, but said she could not find the third. She later said the governing body hired Lefkowitz without a signed contract in the final year of his employ with the township.

Earlier this month, Lefkowitz told NJ News & Views his commission was based on the size of state and Federal grants he brought to Howell for development of commercial ratables. Lefkowitz said he was paid commissions for his work during his employ with Howell, but did not provide the amounts or when they were paid.

In 2004, Lefkowitz said Republicans on the Howell Council hired a second retail consultant. Lefkowitz said the second hire was funded through payment of his commission in the final year of his contract.

According to a June 8, 2005 article by reporter Kathy Baratta of the Tri-Town News, Howell paid retail consultant MB Gluck-Shaw the same amount as Lefkowitz - $4,000 per month.

If Lefkowitz received a commission equal to the salary he earned per month during each of the six years of his employ until 2004, when a second retail consultant was hired, Howell officials misrepresented the actual cost of his services to taxpayers.

If Howell or Jackson officials paid Lefkowitz a commission off the books, they violated state law as well as the public's trust.

In Lakewood as well as its neighboring townships, municipal finances do not always add up.

"There was $16 million in surplus in 1996," Lakewood Deputy Mayor Steven Langert told the public on November 19. "This year, we had $7 million (in surplus). We used $5.5 million in surplus. We were left with a million and a half. Our best guess is we'll have $4 million in surplus."

Edwards said that would happen only if township officials followed his plan.

"That's if we use these procedures," he said, "Otherwise it could be as low as a million."

Langert expressed amazement.

"As low as a million!" he exclaimed. "(With that amount in surplus), we can't operate."

Langert commended Edwards for conceiving the idea to bond as a means of covering the 2009 municipal budget shortfall.

"Kudos to you for coming up with this idea," Langert told Edwards during their discussion of the resolution to seek emergency appropriations. "Had you not thought of this idea, we could be facing bankruptcy."

In 1965, Harvard mathematics graduate Tom Lehrer recorded "New Math," a satirical send-up of the American teaching practice intended to inspire a new generation of science students.

His introduction to the song addressed parental frustration at being unable to help their child do the simplest math functions according to New Math concepts.

"If you're under 35 or went to a private school you say seven from three is six, but if you're over 35 and went to a public school you say eight from four is six; carry the one so we have 169, but in the new approach, as you know, the important thing is to understand what you're doing rather than to get the right answer."