NJ News & Views

[Editor's Note: At 5:55 p.m. on December 2 and at 2:45 p.m. on December 3, 2010, this story was edited for style, content and accuracy.]

New Jersey's fastest-growing township is following in the financial footsteps of its largest city.

On November 30, the same day Newark Mayor Cory Booker announced his city was laying off 167 police officers, the state Civil Service Commission (CSC) approved a layoff plan submitted by Lakewood Municipal Manager Michael Muscillo on November 19. The plan calls 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."

Last year, 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."

According to sources, a complaint was filed last year with state and Federal investigators that charged the township with applying a discriminatory policy of reimbursing some Lakewood property owners the amount of taxes they overpaid, while other Lakewood property owners instead received a reduced tax bill the following quarter.

In an August 13, 2009 blog posting, Lakewood activist Yehuda Shain reported that the township could no longer afford to reimburse property owners that agreed to settle challenges to their tax assessment.

"Lakewood Tax Refunds - NO MONEY Available! [I.O.U's]," Shain headlined his blog posting, then reported the news. "Are you aware that Lakewood is not refunding taxpayers reductions(?) They are telling them that the mortgage company needs to contact them etc…The taxpayer would never know unless they contact mortgage company who informs them that (they) never received the credit/refund."

For the past several years, Shain has provided counsel and representation to Lakewood property owners challenging their tax assessment at county tax board hearings.

"I have an attorney who signed (Stipulations of Settlement) for tax court 60 days ago," Shain reported on his blog. "Lakewood is telling him there is no money so we will be refunding the money with interest when we refund it to you."

At that time, a reporter for NJ News & Views e-mailed Shain and asked the name of the attorney and the amount of interest that was being promised to taxpayers that settled the challenge to their tax assessment with the township.

Shain did not respond to the request for comment.

Effective Tuesday, January 11, 2011, 13 men and women employed by Lakewood Township may pay the price for the municipality's failed fiscal policy by losing their jobs.

All New Jersey taxpayers are paying the price for years of failed state fiscal policy.

A new governor in Trenton is attempting to stem the cascading flood of red ink by promoting public policy that reduces the cost of labor in state and municipal government.

On September 14, Governor Chris Christie proposed a sweeping package of public employee pension and benefit reforms that would shift a greater share of their cost to workers.

The changes include payment of larger contributions into pensions and paying for health care based on premiums instead of a percent of salary.

Pensions are calculated using formulas that count how many years an employee has worked and the average salary over the final years of a career. Christie's changes would increase the number of years included in that average from three to five for state workers and teachers, and one to three years for police and firefighters, he said.

The plan would also eliminate automatic cost-of-living adjustments in pensions.

Christie proposed restructuring public employee contributions to health care by requiring them to pay 30 percent of the price of their health care premium, instead of an annual 1.5 percent of salary toward health care costs.

Co-pays and other costs would also increase.

Lakewood, Newark and other New Jersey municipalities have attempted to coerce labor unions into accepting the state's pension and healthcare reforms.

According to Lakewood Chief of Police Robert Lawson, many of his supervisory officers, whose contract expires at the end of the year, have responded by announcing their retirements.

On November 6, the day the Lakewood Development Corporation (LDC), was scheduled to meet and discuss the township's Urban Enterprise Zone (UEZ) that it oversees, Lawson and LDC Director Patricia Komsa were in Trenton. Lawson said he and Komsa testified before a state Legislative committee to ask for continued UEZ funding of the six police officers that patrol downtown Lakewood.

State officials asked Lawson why Lakewood could not assign less senior - and less costly - officers to patrol the downtown area that is part of the UEZ. Lawson explained that senior officers have first choice of assignment and that most chose to patrol the UEZ.

Lawson told NJ News & Views he is already operating the department on a shoestring.

"One of my primary objectives was to control costs within the department and put community resource officers on the street," Lawson told NJ News & Views in a November 22 interview. "Community resource officers explain the law and educate people."

At the November 18 meeting of the Lakewood Township Committee, committeemen explained public policy.

They did not act to reform it.

During the same meeting that the committee announced the appointment of C. Anne Doyle to succeed Lakewood Tax Collector Patricia Tomassini, who retired a week earlier, committeemen approved a resolution authorizing Doyle to process the cancellation of tax refunds or delinquencies of less than $5.00. However, many Lakewood property owners in arrears for small amounts on a single parcel may also owe larger aggregate sums to the township.

Some Lakewood property owners are also Lakewood developers.

In a legal notice published August 20, 2008 in the Asbury Park Press, the township announced that on July 25 it had filed a complaint in the Chancery division of state Superior Court to begin In Rem tax foreclosure on two land parcels owned by Kedma 1, Inc., a development company owned by Aaron Rottenberg.

The legal notice stated that as of May 21, 2008, Kedma owed a total of $143.40 in back taxes and interest on Block 202, Lot 5 and a total of $148.77 in back taxes and interest on Block 202, Lot 8.

At the August 28, 2008 committee meeting, Rottenberg paid a total of $55,000 for the six blocks and lots he won at public auction, but not one cent of the $291.17 owed in back taxes.

Resident Gerri Ballwanz asked committeemen during the public forum why Rottenberg was allowed to participate in the auction if he owed the township back taxes.

Township Attorney Steven Secare said one thing had nothing to do with another.

According to Tomassini, many other developers in town also have failed to pay their property taxes.

Instead of authorizing the new township tax collector to cancel tax refunds for nominal amounts, the township committee should prohibit any property owner in arrears from participating in auctions of public land, no matter how small the amount.

Two years ago, committeemen also discussed state Plan Endorsement, which benefits municipalities that submit an approved plan for future growth.

Earlier in 2008, the state Department of Environmental Protection stepped in to stop a sale of public land on the site of the Kettle Creek, a state-protected waterway. Deputy Mayor Meir Lichtenstein expressed frustration and anger with the state's action, which he said interfered with township plans to build more schools and affordable housing.

On July 24, 2008, Mayor Raymond Coles also expressed frustration with the state.

"We can't move forward without Plan Endorsement, but we can't get Plan Endorsement without (land) preservation," he said.

Committeemen may have found another way to accomplish that goal.

At their November 18, 2010 meeting, committeemen approved second reading of an ordinance, effective to June 30, 2011, that reduces the price of a taxi medallion from $1,000 to just $200 each - despite public comments by Diane Iannarone of Leisure Hack, a taxi service, and Evgeny (Eugene) Matvienko of Keser Day and Night Transportation, a limousine service.

Iannarone and Matvienko said that the township had failed to protect their businesses as required under township ordinance against increasing numbers of uninsured, unregulated and unsafe transportation companies stealing their fares.

Matvienko held a copy of a community telephone directory that he told committeemen included numerous advertisements for illegal transportation services that did not carry the amount of insurance he was required to have.

The Lakewood Directory, which is published annually to support the Cheder School, is sponsored by Abraham Ostreicher, a member of the Lakewood Board of Education.

Ostreicher did not return a call for comment.

Iannarone asked why the township committee was reducing the cost of a taxi medallion, which she said also reduced the value of her company.

Langert said the committee was reducing the cost of the medallions to encourage illegal transportation companies to buy them and become legal.

At past meetings of the LDC, township officials said the state told Lakewood it needed to bring more businesses to the municipality in order to qualify for Plan Endorsement - not just mixed-use developments that included retail shops.

Reducing the cost of a taxi medallion would not generate needed revenue to the township, but it might achieve that end.

The township is still losing $800 in revenue for each $200 medallion it may sell, even while spending increased tax dollars to hire advisory professionals to help it receive Plan Endorsement.

During the November 18 meeting, the committee approved a resolution for the hire of attorney Michael Gross of Giordano, Halloran & Ciesla as Special Township Counsel at a cost not to exceed $170 per hour - the same hourly rate charged by the township attorney.

According to the resolution, the township is seeking Gross's expertise in connection with Lakewood's Wastewater Management Plan and State Plan matters.

Gross is not the only professional the township has hired to help it receive Plan Endorsement.

Last year, the LDC approved the appointment of Langert's friend and neighbor, Yisroel (Steven) Reinman, as Executive Director of Economic Development. Reinman succeeded Russell Corby, who continued to work for the LDC as a contractor after he officially retired. As a contractor for the LDC, Corby earned twice his annual salary as a township employee before his contract expired earlier this year.

Reinman is costing the township even more.

As part of his duties, Reinman is Director of the Lakewood Industrial Commission, which generates revenue through the sale and lease of public land.

On September 23, 2009, shortly after Reinman assumed directorship of the industrial commission, the township reported a $114,492.59 total of all account balances.

The total was computed after subtracting the expense of a $40,000 grant awarded to the Lakewood Community Services Corporation (LCSC) for operation of its free English as a Second Language (ESL) classes.

Both legal and illegal immigrants that work for Lakewood developers have enrolled in the classes.

LDC Chairman Moshe Zev Weisberg, director of the LCSC, asked the industrial commission for grant funding of the free ESL classes in 2008 after the state Urban Enterprise Zone Authority (UEZA) declined to continue subsidizing the expense.

The LCSC receives funding through the LDC Job Links program. For years, Weisberg participated in LDC votes to approve funding to his non-profit organization that paid his salary.

In 2006, the township committee also appointed Weisberg's employee, Ada Gonzalez, to the LDC.

Weisberg is not only a businessman and public official, he is also a member of the Vaad, a political interest group and influential government lobbyist. Weisberg not only hires employees to work for his non-profit organization, he also screens candidates seeking elected office in Lakewood.

Successful candidates that received the Vaad's endorsement continued to reappoint Weisberg to the LDC, despite his conflict of interest.

In 2009, Weisberg defended the LDC hire of Reinman, whom Weisberg told a reporter he personally interviewed to succeed Corby.

Weisberg's confidence in his candidate for Corby's job may have been misplaced.

On January 27, 2010, the industrial commission reported an anticipated budget total in the new year of $97,686.84.

In a May 6 memo to Township Manager Frank Edwards, Reinman proposed that a parcel of public and private property known collectively as Hagaman's Property, located on Route 9 north near the Lakewood border with Toms River, be sold as soon as possible to replenish diminishing industrial commission revenue.

Two months earlier, Reinman discussed the urgency of selling the tract in a memo to Komsa.

"Its like 5 little properties & one normal sized one, but they are what they are, wooded and unimproved if at all," Reinman said in a March 10 memo. "We could use the LIC appraisals line if the LDC can't do it. BUT THEN we gotta sell it so we can replenish the line & have money for LIC existence."

The commission Reinman oversees could be operating in the red by the beginning of 2011.

During its July 28 meeting, the industrial commission reported a total of all account balances of $89,415.83.

Three months later, the industrial commission reported total income of half that amount.

On October 27, the industrial commission reported a total of all account balances of $47,717.26 - a decrease of $41,698.57 from July.

Instead of reassessing Reinman's appointment as head of the industrial commission, the township committee increased his responsibilities and gave him a raise.

At the June 10 meeting of the Lakewood Township Committee, members approved an ordinance on second reading establishing the annual minimum and maximum salary ranges for the offices and positions of persons employed by the governing body. The ordinance changed Reinman's title from executive director of economic development to director of economic development/LDC at an annual salary range of $55,000-$125,000.

Committeemen recently gave Reinman the potential to earn even more.

At their November 18 meeting, committeemen approved an ordinance on second reading to create the position of deputy municipal manager. Langert confirmed during the meeting that Reinman was a candidate for the position.

One month earlier, Reinman was already performing the duties of deputy municipal manager by attending a township committee meeting in place of municipal manager Michael Muscillo.

Langert denied that the committee has already decided to appoint Reinman to the newly-created position, but confirmed that someone already employed by the township would be promoted to it.

Despite the mayor's assertion that the person appointed deputy municipal manager would not be earning a second salary, the ordinance the township committee approved on November 18 states just the opposite:

"The compensation of the Deputy Manager shall be as provided in and by the salary ordinance of the Township, as amended from time to time, and shall be set at the pay scale adopted by resolution of the Township Committee."

Reinman's salary is reimbursed to the township through its UEZ fund, which is generated by a reduced sales tax collected by Lakewood UEZ members and by the interest earned on loans to qualified businesses.

Earlier this year, the LDC began making loans to qualified businesses for the first time in 16 years.

By early next year, Reinman could be working two jobs at New Jersey taxpayer expense.

By early next year, 13 township employees could be out of a job at New Jersey taxpayer expense.

They include Police Department Officers Kevin Martin, Patrick Kearns, Wendell Hunter, Nadine Clark and Chase Messer, represented by PBA Local No. 71; Public Works Mechanic Louis Fager, Laborers Gary Schiavone and Jaesson Toro, Recreation and Parks Security Guard James Esposito, Code Enforcement Officer Robert Treval, and Heavy Truck Drivers Nelson Ayala and Pedro Negron, represented by the International Brotherhood of Teamsters Local 97; and Department of Inspections Code Enforcement Officer Eugene Canfield, represented by AFSCME Local #3790.

"All (unions) were advised that layoffs would be a distinct possibility if they did not agree to the benefit changes," Muscillo told Connolly in his November 19 letter. "All (unions) were advised of the dire economic conditions the Township is currently facing."