NJ News & Views

[Editor's Note: At 8:00 p.m. on February 8 and at 5:56 a.m. on February 11, 2011, this story was edited for style, content and accuracy.]

Two years after the Lakewood Board of Education attempted to "go green," the Lakewood Township Committee is hoping to succeed where the board failed.

Both governing bodies face insurmountable costs to achieving that goal.

At the February 3 meeting of the Lakewood Township Committee, members held first reading of an ordinance to rezone the Corporate Campus/Stadium Support Zone in the B-6 zone to permit facilities for the collection, recycling and processing of organic waste into energy.

The area includes the Lakewood Industrial Park.

For more than a decade, an increasing number of for-profit businesses have moved out of the industrial park, while non-public schools and non-profit organizations have taken their place.

During the township committee meeting, representatives of Organic Diversion, LLC of Marlton made a presentation for construction of a proposed $30 million facility to recycle commercial food operation waste into low-cost energy. According to the representative, a $250,000 self-contained organics compactor would make up to 25 trips per day on designated truck routes, servicing area customers.

In Lakewood, however, not all commercial food operations are located on designated truck routes.

In 2009, a Lakewood businessman known as the Candy Man stored his wares in the rented garage of a residential home at 58 Seminole Drive. The home was rented out to a family and the home's garage was rented out to the Candy Man.

Since 2006, neighbors said a procession of three large trailer trucks would arrive twice a week in the residential neighborhood to deliver palettes with large boxes that were warehoused in the rented garage.

During one delivery, neighbors said one of the boxes broke apart, enabling them to see its contents. The box contained imported food, cookies and candy sold at local supermarkets around town.

Neighbors also said that before the Candy Man began using his home on Genesee Place and the residential property he leased at 58 Seminole Drive to store his food products, the Seminole home garage was open for business as an automotive paint shop.

Lakewood Township ordinance permits mixed-use development in all zones, including commercial food operations that Organic Diversion would service.

In May 2, 2006 meeting minutes of the Lakewood Development Corporation (LDC), a township agency that oversees the Lakewood Urban Enterprise Zone (UEZ), Executive Director of Economic Development Russell Corby discussed repairs to the Lakewood Industrial Park interior roads.

According to Corby at the time, "We are looking at substantial costs…that…will be in the millions."

The more successful Organic Diversion becomes, the greater the cost to New Jersey taxpayers that subsidize the repair of local, county and state roadways its waste compactor would travel - including the industrial park's interior roads.

During the February 3 presentation, a resident asked for the location of the proposed organic recycling facility. An official said it would be located on New Hampshire Avenue. The resident asked where on New Hampshire Avenue. The official disclosed that the proposed location would be on the Department of Public Works property - which is tax-exempt.

After the Thursday night presentation, a reporter for NJ News & Views e-mailed an OPRA request to inspect Reinman's department files on Organic Diversion, which Township Clerk Mary Ann Del Mastro denied the following morning.

Later that same day, Fairways resident William Hobday reported in his weekly newsletter an e-mail he received from current Lakewood Executive Director of Economic Development Yisroel (Steven) Reinman, who discussed the proposed recycling facility with Hobday.

"In the case of Lakewood, this company coming here will represent a land sale of above $2.5 M, a consistent ratable of approximately 200 K+, 35-50 jobs in a highly sophisticated and automated high tech operation," Reinman told Hobday.

Reinman said that Organic Diversion would provide "a shining PR opportunity which should help us attract more innovative companies to Lakewood’s Industrial Parks." 

Reinman also indicated in his e-mail to Hobday that Organic Diversion would be working in partnership with Lakewood's Department of Public Works.

"The company’s sale of energy at a discount to the DPW will mean savings to the taxpayers as an additional benefit," Reinman wrote. "The location is also right along existing truck routes, and the volume of truck traffic to this facility so minimal (~25 a day) as to be negligible in terms of impact to local residents."

During the Organic Diversion presentation, a representative of the company said the proposed $30 million facility would be the first of its kind in North America.

According to the company's Web site, Organic Diversion LLC "has long term experience in both the food service industry and in organics collections and hauling. We are focused on establishing strong relationships, superior training, operational efficiency and maximum diversion rates resulting in lower disposal costs. We offer chain wide, multi-state organic recycling solutions for food waste generators."

Reinman supported the partnership with Organic Diversion in his e-mail to Hobday.

"This is exactly the kind of progress we need in Lakewood and will represent a great net benefit to the town and the taxpayers," Reinman wrote Hobday. "Additional companies representing next generation technology, in place and proven in other places throughout the world, are in discussions to establish USA headquarters in Lakewood.  I believe we can create a hub of this activity in our Industrial Parks, attract more companies, increase our commercial ratable base, and help to offset the incremental increases in costs that the township faces in coming years."

The Lakewood Board of Education also saw the value in generating low-cost energy it could sell as a source of revenue.

Since 2005, when the Toms River School District successfully "went green," an increasing number of New Jersey school districts have installed solar panels on public school roofs to generate funding as well as low cost energy.

The Lakewood Board of Education also considered going green in order to finance the repair of all six public school roofs. That option wasn't possible, according to a 2009 e-mail provided by district business administrator/board secretary Robert Finger under the Open Public Records Act (OPRA).

"We have reviewed electric bills and done extensive site visits with early indication that virtually all roofs are in need of significant repair," James Bryan of RAI Services said in an October 26, 2009 e-mail. "We have determined that there is no way we can roll roof repairs into a PPA solar project cost and reach any reasonable investor returns."

Bryan said the district would need "a top notch balance sheet and great credit" to qualify for the project, which he acknowledged it did not have.

He proposed an alternative to installing solar panels on all public school roofs that would have financed their repair.

"If the BOE would like to address a single school that might have workable roofs, we can do that, but that too is a long shot because project is small," Bryan wrote in the e-mail. "My best advice, get the roofs repaired (we can certainly do that work), then approach the solar issue."

Two years later, the board is still unable to finance the repair of all six public school roofs.

Following a December 26, 2010 blizzard, the repairs have reportedly become critical to the safety of students, teachers and visitors to the schools.

On January 19, 2011, the board approved the award of an emergency snow removal contract to Diamond Construction of Brick for $36,250. Lakewood Superintendent of Schools Lydia Silva told a reporter for NJ News & Views that the contract included removal of heavy snows from public school roofs.

The snow removal services may have been too little, too late.

The February 3 board agenda included the award of a contract with Professional Exteriors, Inc. of Brick for $13,000, the lowest of three bids received by the district for removal of the existing canopy over the two front entrances at Lakewood Middle School.

During the 2006-7 school year, the board discussed repair of the middle school roof, as well as replacement of the high school roof. Unable to finance both repairs, board members instead approved only the $4.3 million replacement of the high school roof, which will be paid off at the end of the 2010-11 school year.

At the end of the 2006-7 school year, the board not only approved a lease-purchase agreement to finance the replacement of the high school roof, members also reported a shortfall of more than $1 million.

Four years later, municipal finances are also operating in the red, making it unlikely that local government can afford to "go green" either.

On November 30, the state Civil Service Commission (CSC) approved a layoff plan submitted by Lakewood Municipal Manager Michael Muscillo on November 19. The plan called for the termination of five Lakewood police officers hired in 2008 and 2009; seven public works employees hired in 2006, 2007 and 2010; and one township inspector that returned to work with the township in 2009.

According to Muscillo, the township asked for elimination of the 13 permanent positions because the three unions representing the workers would not agree to township demands for contract concessions.

"For reasons of economy and efficiency, the township proposes the layoff of thirteen (13) permanent employees," Muscillo wrote Kenneth Connolly, Director of State and Local Operation of the CSC.

Muscillo told Connolly the township had no other choice.

"There has been an increase in the Township pension contributions in excess of $850,000," he said in his letter to Connolly. "Extreme measures must be taken to address the Township's budget shortfall, declining revenues and contractual obligations that will dramatically impact the Township's 2011 budget."

In 2009, Lakewood committeemen received state approval to defer payment of more than $10 million in July school taxes to the Lakewood School District to close a municipal budget shortfall.

By the end of the year, committeemen also approved a resolution 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.

At that time, NJ News and Views asked Lakewood Manager Frank Edwards how much the township currently had in surplus.

"No one keeps track of surplus until the end of the year," Edwards said on November 5, 2009.

On November 19, 2009, Edwards told the public the township had virtually no surplus.

On November 30, 2010, NJ News & Views contacted Muscillo to ask the same question.

He did not return a call for comment.

Muscillo discussed township finances in his November 19, 2010 letter to the CSC.

"The layoff is part of the Township's plan to reduce its annual operating budget, while maintaining efficient township services," Muscillo told Connolly. "The affected positions can be eliminated without detriment to the services provided by the Police Department. Additionally, over 4 consecutive years the Township has been hit with thousands of tax appeals with refunds in excess of $2.8 million."

On February 3, 2011, a reporter for NJ News & Views publicly asked committeemen how much the township had in surplus at the end of 2010 and the percentage of property taxes collected by the township in 2010.

Mayor Menashe Miller said he didn't know, even though the township is required by state law to conduct a year-end audit of its finances.

During the same meeting, committeemen approved two ordinances granting tax abatements.

Property owners that receive a tax abatement pay no taxes on new construction the first year of the abatement. Every year after that, property owners pay an additional 20 percent of assessed taxes on the construction for the duration of the abatement.

In township documents, tax abatements are also referred to as a tax exemption since no property taxes are collected on new construction the first year of the abatement.

During the public forum preceding the committee's vote on one of the two tax abatements, Reinman repeatedly maintained that taxpayers are not losing money on new construction that receive the exemptions.

His assertion is incorrect.

For more than a decade, the investors in Block 128, Lot 7, at 410 Monmouth Avenue, received millions of dollars in UEZ grants for redevelopment of the site. According to county tax records, the property owner no longer pays taxes on improvements to the land since razing the former structure built on it with public dollars.

In 2005, the property owner paid $27,500 in taxes on land, $33,300 in taxes on improvements to the land, for a total of $60,800 in property taxes.

Following a township revaluation, property taxes increased dramatically at the address.

In 2006, the property owner's land was assessed at $660,000 and at $116,400 on improvements to the land, for a total assessment of $776,000.

In 2009, the property owner was assessed $0 on improvements to the land.

After a 2010 township reassessment of some Lakewood properties, but not others, the property owner's land assessment was reduced to $540,000.

For years, the Lakewood UEZ fund was generated primarily by collection of a reduced sales tax the township received, not the state.

State taxpayers are unlikely to see a return on their multi-million dollar investment in 410 Monmouth Avenue anytime soon; in 2010, the property owner was assessed $0 on improvements to the property and in 2011, following the committee's February 3 approval of a tax abatement, the property owner will continue to be assessed $0 on the completed 5-story building.

For each of the next four years, the property owner will be assessed a 20 percent increase for the duration of the 5-year tax abatement.

Taxpayers are also continuing to lose money on their investment in Block 345, Lot 9, on James Street, which committeemen also gave a tax abatement. County tax records report that the property was vacant prior to new construction on it, but the owner is identified in county tax records as a limited liability corporation funded through a percentage distribution of a family tax shelter.

Money the state is not receiving is money its taxpayers are not receiving either.

Reinman asserted that unless property owners received a tax abatement, businesses would not locate in Lakewood.

That isn't true either.

For years, owners of Lakewood taxi and limousine companies that pay township fees have invested in its future. In return, the owners have asked the township that regulates their business to also protect it from unregulated transportation services undercutting them.

For years, committee members and township officials have turned a deaf ear to their pleas.

Last year, committeemen approved an ordinance to temporarily reduce the cost of a taxi medallion in Lakewood from $1,000 each to just $200 each. Mayor Steven Langert maintained that the 6-month reduction was intended to induce illegal taxi services to become legal.

Last week, a reporter made an OPRA request for the number of taxi medallions the township sold at the reduced rate. Township Clerk Mary Ann Del Mastro told NJ News & Views that only one medallion was sold. The buyer was the owner of Latino Express, a taxi company already regulated by the township.

According to Diane Iannarone of Leisure Hack, the reduction in the price of medallions not only failed to create more legal Lakewood taxi services, but reduced the value of her business, which she was seeking to sell.

As more illegal taxi services do business in Lakewood, Iannarone and other legal taxi owners are finding it harder to make a living there.

Lakewood Limousine owners also face an increase in the cost of operating their business; at the February 3 committee meeting, four committeemen approved first reading of an ordinance to charge limousine owners an annual $75 fee and a motor vehicle card fee of $50.

LDC committee liaison Raymond Coles voted no.

At the February 1 meeting of the LDC, Lakewood UEZ Coordinator Patricia Komsa announced the award of advertising matching grants to qualified business owners. During the meeting's public forum, a reporter asked whether the LDC had asked business owners receiving the matching grants if the publications in which they advertised were also advertising illegal taxi and limousine services.

Komsa and Coles said that wasn't the responsibility of the LDC.

It should be.

Local business owners will likely use their matching grants to pay for advertising space online in The Lakewood Scoop. The Lakewood Scoop, an online news service, also provides a Ridesharing service that matches registered passengers seeking a ride with registered transportation services offering to provide one.

The Scoop acknowledged the dangers of such a business relationship, but not the site's responsibility for its consequences.

"With gas pricing as high as they are today, Ridesharing can be a useful way to save money (and meet new friends)," the Scoop told visitors to its site. "Whether you are ridesharing via our service or elsewhere, you should always exercise caution and common sense to protect yourself from unsafe situations. Rideshare will make every effort to remove accounts based on negative feedback or complaints. However, determining a travel-partner’s honesty, driving credentials, and/or background is ultimately your responsibility."

For several months, the township has submitted its meeting agendas and press releases to the Scoop for publication, making it an advertiser in a publication that in turn advertises transportation services the township does not regulate.

One of those unregulated services could soon include the township.

After the February 3 meeting, a reporter also made an OPRA request to inspect insurance documentation and proof of compliance with all state laws and township ordinance regulating Transit Connect, a municipal fleet of nine buses the committee purchased with Federal grants.

Transit Connect is the new name approved by the township committee last year for the Job Link bus service.

According to state statute, because a commuter bus cruises for passengers that hail it at designated stops, the buses are licensed as taxis.

Del Mastro did not provide the documents NJ News & Views requested under OPRA.

Under OPRA, a records custodian has up to seven business days to respond to a request in writing.

On February 9, the state Urban Enterprise Zone Authority (UEZA) will hear a request by the LDC for $105,000 in funding to operate the township's fleet of buses, as well as a request for UEZ boundary modification.

New bus routes would primarily service adult students commuting to college classes in downtown Lakewood, instead of workers commuting to jobs in the industrial park.

The township is also asking the state to approve a UEZ boundary change to include the college adult students attend, as well as a neighboring university.

If approved, New Jersey shoppers and property owners will be picking up the tab.

The township can't afford it.

In a January 25 press release, township public relations agent Fran Kirschner reported a settlement with all six unions representing the majority of municipal employees.

"At issue was the change in health insurance plans," Kirschner reported to the media.

NJ News & Views did not receive a copy of the press release from Kirschner, whose services are funded through the collection of a reduced sales tax, the proceeds from the sale of public land, and property taxes paid to the township.

"The Township currently provides six different health care plans through its carrier Central Jersey Health Insurance Fund," Kirschner reported. "Changing to only one, uniform health care benefit package will result in a significant savings of an estimated $700,000 to $800,000 for the Township and ultimately the taxpayers."

Kirschner reported that the savings would be realized through both the consolidation of the health care plan and the change in benefits.

Less than two weeks before Kirschner issued the press release announcing the settlement, the township continued to pay a price it couldn't afford.

So did one of its union employees.

On Friday, January 14, Lakewood Police Officer Christopher Anthony Matlosz responded to a call for service in a residential neighborhood off Joe Parker Road, without critical data that comes at a political as well as financial cost to the township.

For Matlosz, the price was higher; he paid with his life.

"Going green" may reduce the cost of delivering government services in the long run, but officials must carefully examine its cost in the short-run and find alternatives they and taxpayers can afford.

The Lakewood Board of Education is already doing that.

According to the January 28, 2011 meeting agenda, the board was scheduled to take action on the hire of Energy Analysis Group, LLC to prepare and submit the district's 2010 Pay for Performance Application to the New Jersey Clean Energy Program. If approved by the state, the plan would result in a reduction in utility usage at Lakewood High School, Lakewood Middle School and the Clifton Avenue Grade School, at an energy savings to the district and taxpayers.

Its Web site states that the New Jersey Clean Energy Program offers financial incentives, programs and services for state residents, business owners and local governments to help them save energy, money and the environment.

The board's January 28 meeting agenda also disclosed a hidden cost to "going green" that the township committee's February 3 meeting agenda did not: if the board opts out of its contract with Energy Analysis Group, taxpayers will be obligated to pay expenses incurred by the contractor. The board meeting agenda stated that the amount was not to exceed $44,300.00 (10 cents per square foot).

Municipal government, not just district government, needs to make the same disclosure to taxpayers in the event its plan to "go green" is not realized.

The stakes are high for local and state government, according to Committeeman Marc (Meir) Lichtenstein, quoted in Kirschner's January 25 press release.
 
"Taxpayers are carrying a huge financial burden," Lichtenstein said.