The West Windsor Township Council has voted 4-1 to introduce a $36.5 million budget that includes a 1.7-cent tax rate increase, despite Council President Charles Morgan’s efforts to urge council to examine his controversial proposal to use more surplus to reduce taxes.
Public debate over his proposal, which he says would have lowered taxes by 12.1 percent, took center stage during the campaign season and carried over into the May 18 council meeting, where tensions rose yet again between Morgan and members of administration.
Throughout the budget discussions, Morgan has taken issue with the township’s AAA bond rating, which he claims has ended up costing the township more money than it saves. Morgan has been adamantly proposing to reduce the township’s surplus by $2.45 million, which he claims will lower the tax rate in this year’s budget by 4 cents. Under Morgan’s proposal, he advocated cutting back the $7.6 million in reserves by $6.65 million all together, leaving about $982,832 in the fund balance.
Despite his urging, the rest of council voted to introduce the budget as originally proposed, and took the chance to defend township Chief Financial Officer Joanne Louth and Business Administrator Chris Marion. Morgan has publicly accused Marion and Louth, particularly, for using “inaccurate numbers” in their response to his proposal — a response he says was commissioned by the mayor specifically to discredit his proposal in light of the campaign. He even wrote to the state Attorney General and Mercer County Prosecutor’s Office requesting a criminal investigation, and has threatened to bring the matter before the state Local Finance Board.
Before introduction of the budget at the May 18 meeting, Morgan again pointed to Standard & Poor’s “analytical characterization of ratios,” which he says suggests that carrying 7 to 11 percent of surplus in the budget is more than sufficient for a municipality. Right now, the surplus lies between 22 and 26 percent, he said.
And referring to suggestions by councilwomen Linda Geevers and Diane Ciccone that the budget remain flat, with a zero percent increase this year, Morgan said “I’m wondering why we wouldn’t at least put on the table a budget with a zero percent increase.”
“We really haven’t taken a look at these numbers publicly,” Morgan said, referring to his proposal and the analysis Louth performed on it, which he says was ridden with inaccuracies.
However, other council members said they had had enough. “This is the third meeting that this has been brought up,” Councilwoman Heidi Kleinman said. “I understood you had a lengthy discussion with Chris.”
She also said that all council members had questions, and that both Marion and Louth made themselves available to discuss any of those questions and run numbers before the introduction.
However, Morgan said he had been requesting a meeting with them since 12 days before the meeting. “I have had no opportunity go through the errors, and there are flagrant errors in the memo,” he said. “The memo is strictly one-sided” and advocated the CFO’s opinion to hold the money in surplus, Morgan added, saying it was the “natural inclination of a CFO.”
In Louth’s analysis of Morgan’s proposal, she said it would only result in a 7.3 reduction in taxes, not a 12.1 percent reduction. Further, the tax rate would be lowered to 29.1 cents, and not as low as 27.1 cents, as Morgan had proposed, which would be a 2.3-cent decrease in the tax rate, not a 4-cent decrease.
Following through with Morgan’s proposal could result in “total depletion” of the fund balance, Louth stated. Louth estimated that there will only be $3.6 million in fund balance available to support the 2010 municipal operating budget. That is a reduction of 44.8 percent from the proposed $6.65 million to support the 2009 budget.
To try to end the discussion, Kleinman said she understood that the Triple A bond rating was not just based on surplus, but said that deciding to dip more into the surplus to offset taxes was more of a policy decision.
She suggested that if Morgan wanted to make a motion regarding that policy about the surplus, he should and that council would go from there. “I personally do not support the idea of jeapordizing our Triple A,” she said. “None of us want to continue to discuss this.”
Ciccone said that as the newest member of council, she “did her due diligence” and sat down with Marion and Louth for a second time to go over a budget that included a zero percent increase, as they said they would do for her.
Now, after reviewing what that budget would entail, “I’m not comfortable with a zero percent increase in the budget,” she said, adding that her understanding was that if the township reduces the budget this year down to a lower level than it has been, it would be much harder for the township to be able to maintain its services the following year, when it is only able to raise the tax levy by 4 percent, which is mandated by a statewide 4 percent cap on municipalities’ tax levies — especially when the township would hypothetically use more surplus to lower that budget that may not be recovered.
“We may see a benefit this year, but we may not be able to recoup that,” she said. “I don’t want to cut more into the surplus if I don’t know where the bottom is.”
“I really think the budget as proposed, through I’d like it to be a zero percent increase because we all pay property taxes,” was the tightest it can get, she added. “I’m comfortable with the budget as proposed.”
The rest of council seemed to be on the same page. “These are tough times — there is a loss in revenue, a loss in state aid,” said Geevers. However, in her conversations with community members, “I wasn’t finding any support of going to a lower AAA bond rating.”
Said Councilman George Borek: “There’s a lot of uncertainty, and there’s no light at the end of the tunnel.”
To Morgan, Borek added, “If it was any other time, I’d agree with you, and say let’s cut the surplus.”
Morgan said aside from his belief that the township was holding “way too much surplus,” he also took issue with the fact that there was nothing in the budget for a salary of an executive director for a 501c3 community foundation. Another of his controversial ideas throughout budget and campaign season, this proposal includes hiring an employee to solicit donations to the community foundation to help offset costs put into the municipal budget.
When the issue came up during a prior council meeting, Ciccone had requested an opinion from Township Attorney Michael Herbert over whether having such a community foundation was legal. Morgan said he still had not heard anything from Herbert.
He later made a motion to have $50,000 added to the budget to pay for an executive director of a 501c3 organization, who would be responsible for first recovering his or her $50,000 salary and then be charged with raising more money for the foundation.
During the meeting, Herbert said “the whole purpose of a 501c3 is for people to make a tax exempt donation to a charitable organization,” and that a township could not have its own 501c3. “It is not formed to lessen the revenue burden of a government.”
Morgan vehemently disagreed, referring to a case in New York City in which he says there was a legal ruling that allowed the city to open up a 501c3 nonprofit foundation to collect money to help pay for a private bus service that was failing. The IRS ruled that was a legitimate charity that was lessening the burdens of government, and the city avoided going to the taxpayers and asking them to subsidize the bus service, Morgan says.
Ciccone said that there has to be a full discussion and more research done on the matter, and that perhaps the council could look at Morgan’s idea for next year’s budget.
Council members did not second Morgan’s motion. He also made a motion to include an extra $100,000 in the budget for more bicycle and pedestrian improvements, as had been requested throughout the budget process by members of the West Windsor Bicycle and Pedestrian Alliance.
However, Louth suggested instead adding the money to the capital budget, which can be amended at a later time. Making changes to the budget during that meeting would mean township professionals would have to re-format the budget and would not be able to have the budget adopted by Monday, June 22, as planned in order to meet a state deadline.
The council decided to hold off, and no one gave a second to Morgan’s motion. He was the lone vote against introduction. A public hearing on the budget is set for Monday, June 22.
The tax rate in the 2009 municipal budget, as introduced, has increased by 1.7 cents to 33.09 cents per $100 of assessed valuation, and the amount to be raised by taxation is $20.6 million. Under the proposal, the owner of the average assessed township home at $549,345 would pay $1,818.33 in municipal taxes this year, and increase of $93.39 over last year’s average $1,724.94.
Council Defends Louth, Marion. Later in the meeting, council members defended Louth and Marion during their time for council comments, with one council member even asking Morgan to withdraw his request for a criminal investigation.
Borek began the comments, saying, “If there was something done that was inappropriate, there’s procedures to deal with that.” Still, he added, “I don’t think they would do something on their own to compromise the best interest of the town.”
He said that “to suggest corruption,” as Morgan had in his comments and press conference before the election, “I don’t think it’s appropriate.”
Ciccone said that in her limited experience with Marion and Louth, she found them to be very professional.
Geevers aked Morgan “to drop these criminal charges you filed so we can all move forward. We have a lot of township business that needs to get done, and this gets in the way.”
However, Morgan said he felt that it was “document produced by a CFO that is full of errors, clear errors,” which was purposefully released and was “highly favorable to the person it supports. I will be pursuing that complaint,” he added.
In response, Geevers then threatened to file a complaint against him for allegedly trying to have Louth’s memo with the analysis of Morgan’s proposal destroyed, which Geevers said is a violation of the Open Public Records Act because it was a governmental memo.
Included in Morgan’s filings with the attorney general and prosecutor’s office, he includes a chain of E-mails sent back and forth between council members, Marion, and the mayor, in which he asked for a new draft of the files containing Louth’s analysis before they could be released to the public.
Further, Morgan said that he felt the document was clearly a political one. “The document is not a ‘governmental record,’ therefore, and it should be withdrawn, and any copies that have been disseminated must be collected, and all copies must be destroyed immediately,” Morgan wrote. “The consequences will be serious if these materials have been disseminated to any members of the public or have become public in any other way.”
Mayor Shing-Fu Hsueh said that the council had asked for a review of Morgan’s proposal by the township staff, just as they would review any council member’s ideas and proposals.
Geevers echoed the sentiment. “Then, we’ll pursue that you wanted those documents destroyed.”
Marion, trying to quell the situation, said he tried to keep tempers out of the discussion on the budget. “I’m concerned about the staff,” he said. “There’s differences of opinions. There’s been allegations made that we will address in the appropriate channels.”
