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Sunday, April 3, 2016

Is Englewood Bankrupt?

Dear Residents:

After months of budget Council meetings, 2nd Ward Councilman Michael Cohen and 3rd Ward Councilman Eugene Skurnick pushed through their joint motion to approve the introduction of this year's budget without any discussion of reducing the unprecedented $2.2 million spending increase they have proposed. More troubling is that they are hiding what is, in essence, a property tax increase, by plugging the hole with one-time cash proceeds from the impending April sale of one of the largest city-owned assets - the Lincoln School.

When this revenue is gone next year, how will they cover this exorbitant spending increase?

My concerns about the budget this year were reflected in an article in THE BERGEN RECORD, SATURDAY 3/12/16: (ENGLEWOOD)- "The City Council is moving ahead with a spending plan that ignores the mayor's strong opposition to increased spending and financial 'one-shots,'...The City Council this week unanimously approved a $62 million budget, up $2.25 million from the previous year." Click HERE to read the full Record article.

Last year, I said the City would soon realize increased revenues with the advent of the Lincoln School redevelopment project, assisted living facilities for our elderly, another new residential projects and the first office building to be built in Bergen County in a decade.

However, I stressed at the time that, "The City Council must not make the same mistakes of prior city administrations and spend every penny of new city revenues and more, but to create an economic engine to strengthen our city finances, to invest in our community, its services and continue to hold the line on property taxes. The Council should never return to the prior decade of spending more than it makes. Balancing a budget with one time fiscal fixes will inevitably result in the return of uncontrollable rising taxes."

I am confident that the balance of council members will come to the table during upcoming meetings to work together and balance a budget without relying solely on a onetime fiscal gimmick. After discussions with Council President Wayne Hamer, there will be a Council meeting devoted to addressing these issues.

I urge you to stay involved, participate and let your voice be heard. Please do not hesitate to contact me at frankhuttle@englewoodmayor.com and reach out to your Council member and tell them we can do better.


Best regards,

Mayor Frank Huttle III

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Councilman Michael Cohen responded to the Mayor's comments in an open letter to the Community


Date: Friday, March 25, 2016
Subject: Important Budget Update from Council Member Michael Cohen

The Facts about the True Status of the Englewood City Budget from Councilman Michael Cohen

Dear Neighbor:

I am writing firstly to sincerely thank those in our community who have both publicly responded and who have privately offered words of support in the aftermath of the Mayor’s unfortunate and factually misleading attack on both the city budget process, its actual impact, and my role in arduously working to protect our community both in the services we receive and our ability to control our property taxes.

As you have seen, since I first ran for city council six years ago on the primary platform of controlling our property taxes I have played a major role in making sure that our city has had the absolute lowest municipal increases of any city in the county with the tax increases being 2011 – 0%, 2012 – 0%, 2013 – 0%, 2014 – 0.8% and 2015 0%. This is a record that I am very proud of and believe that I have done my best to serve our city well in this regard.

Two of the key outstanding questions that I have been receiving since the mayor’s email are
1) Why is the mayor saying that I am leading a “budget motion for an unprecedented $2.2 million spending increase, and 

2) To explain the mayors claim that I am personally hiding this increase with a one-time cash infusion from the sale of the Lincoln School which will only lead to a large budget hole next year.

I would like to answer each of these questions for the community with the factual statistical data as opposed to what have as yet been only attempts at personal and malicious political rhetoric which I believe is beneath the dignity of any official elected to represent their community and neighbors.

1. Budget Increase over last year
•       The actual increase is not the $2.2 million claimed but rather $2.080. The Mayor used the administration’s earlier budget proposal for his figures as opposed to the latest version of the budget negotiations.

•       There are certain annual contractual increases which no council or mayor has the legal authority or ability to alter. In this year’s budget they include
•       $889,000 increase for contractual union salary increases for our Fire Department, Police Department, Department of Public Works,  Health Department, Recreation Department and unclassified employees. This increase represents a 1.8% increase; prior contracts before my election were over 4% annually.

•       $305,000 increase for city debt repayment obligations on bonds that have come due.
•       $211,000 (4%) increase for State mandated pension contribution increase for the Police and Fire Department. Those pensions for other Englewood employees that are under the council’s control are once again flat.

•       $158,000 (3%) increase for the Bergen County mandated increase rate for solid waste disposal and sewer disposal.

•       $124,000 (5%) increase in non-negotiable utilities such as water, gas and electric.
•       $266,000 increases in departmental supply contracts and necessary supplies. The bulk of this number includes $187,000 for additional park supplies to support recreation programs such as the field repair and maintenance for our little leagues and soccer leagues.
The mandated non-negotiable annual budget increase = $1.955 million.

The remainder of the increases is attributable to the following expenditures;
•       $150,000 for setting up our annual and necessary reserve for anticipated property tax appeals

•       $150,000 for our 5% necessary down payment on the $9.5 million  in capital improvements determined necessary by our city engineer such as $1.4 million for road reconstruction, $1.4 million for milling and paving deteriorating roads that can still be repaired, $2.0 million for sewer and drainage repairs, $973,000 for final expenses on the construction of the new firehouse and immediate repairs needed in our public buildings, $800,000 in new traffic signals, and $2.0 million for necessary Department of Public Works equipment such as $600,000 for the next installment of the new one armed garbage trucks and $400,000 for the associated garbage pails to be distributed to our ward, $180,000 for the needed salt grinding system for snow plowing preparation, and $160,000 for preemptive street light transponders to avoid emergency vehicle street accidents.

It is important to understand that the initial budget proposal offered by the administration asked for a budget of $63,224,000, as a result of the councils budget hearings the current status of budget negotiations has produced over $800,000 in cuts that I have fought for resulting in a current budget of $62.448,000. Since the budget negotiations are still in progress there will likely be additional cuts prior to budget’s final passage.

2. Regarding the Mayor’s claims as to myself and the Council hiding a budget deficit with a one-shot cash infusion from the sale of the Lincoln School:

•       Based on wise strategic long term budget choices made by the Council, and with extensive consultation with the city’s auditors it was recognized that there are a number of major ratables that will begin to fill the city’s coffers on a consistent basis beginning the 2017 budget. However, since many of those income sources will not come on line until next year’s budget the city’s auditors, the council, the City’s Chief Financial Officer and the City Manager have utilized the Lincoln school sale as a one year bridge using proceeds of the $7.9 million sale in the following manner:

•       $3.2 million in debt reduction
•       $2.8 million to replenish our surplus to lift our bond rating
•       $2.0 million in the current budget to protect needed services and ensure that there would be no serious property tax increase this year.
The new revenue sources that will come to fruition beginning in next year’s budget are as follows:
•       $500,000 Route 4 ERA Development
•       $1,000,000 (approximate) from new requirements for Englewood Hospital to pay property taxes on it’s for profit enterprises.
•       $500,000 - $1,000,000 for Lincoln School Residential Development
•       $500,000 minimum for future budgets not however in 2017 for sale and development of the Liberty School site.
•       $1,000,000 annually in future (non 2017 budget) revenue from attrition of DPW Sanitation workforce due to the implantation of the one man garbage trucks.

As the information above demonstrates, the usage of a portion of the sale proceeds from the Lincoln School sale was strategic and part of a long term fiscally sensible plan constructed by the city council, in consultation with the city’s auditors, city manager and city’s chief financial officer – not a one shot hidden conspiracy as insinuated by the mayor in his misleading letter.

The mayor however has articulated to the Council that he will veto any budget in which his idea of a community center on the 40 Bennett Road property is not fully funded. This property has been deemed unsuitable for such usage by even those who aspire to a community center not to mention the significant cost to the city to both purchase the property and operate it as proposed.

If the mayor is to veto the city budget and the council fails to override his veto then our budget process will be permanently be taken over by the state and will no longer consider our desired budget cuts. If the state takes over our budget they will increase property taxes annually by the maximum allowable under the legal cap to 2% each year for the foreseeable future.

The council however has collectively spurned the mayors threats and largely committed to jointly overriding any veto and protecting the city from such legislative irresponsibility and political prioritization.

I fully understand that my outspoken opposition and leadership in opposing the mayor’s plan for the 40 Bennett Road property has incurred his wrath and resulted in a multitude of personal attacks from him, however, I was elected by our ward to stand our ground and protect our community from policy’s which simply do not make sense for us, and I will continue to do so regardless of the consequences that I have been threatened with.

I also understand that the Mayor’s misleading comments regarding the budget might very well be attributable to his inability to attend the majority of the council’s budget hearings and a lack of familiarity with the current status of budget negotiations. The Mayor has offered the council absolutely no suggestions as to how he envisions a budget with further fiscal austerity than currently exists, and I am confident that the reason is that based on the statistics provided above he understands that there are very few further cuts to be made that will not have a severely negative impact on our city services such as eliminating twice a week garbage pick-up.

I hope that the above has clarified the status of the budget and I invite the Mayor to join the council in better understanding the current budget and to be part of helping maintain a high quality of life for all of Englewood’s residents.

As always, please do not hesitate to contact me with any questions at either MichaelDCohen@Hotmail.com or at (917) 817-9753. Thank you.

Sincerely,

Michael D. Cohen
Councilman, 2nd ward.
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