Audit Gives Glimpse into City’s Finances

WILDWOOD – During the 2019 election season, candidates and residents alike asked questions regarding city finances.
Taxpayers saw another tax-rate “hike” in 2019. The municipal purpose tax rate is $1.492 per $100 of assessed value, up from $1.443 per $100 of assessed value in 2018. The municipal budget stands at $29.9 million, down from $30.1 million in 2018.
During public meetings, residents asked how monies are spent, especially on large projects, such as the Public Works and Water Utility projects. Mayor Ernie Troiano defended the projects, saying updated facilities are needed to ensure services continue.
“Sometimes, you have overflow,” the mayor said Nov. 22, referring to unforeseen costs.
According to Troiano, when a project goes out to bid, costs are calculated, but circumstances often demanded additional funds. The present administration has disagreed over city spending practices, including the process of putting projects out to bid.
Commissioner Peter Byron claims that certain projects, i.e., the Back Bay Project, should have been put out to bid. Commissioner Anthony Leonetti and the mayor contend no harm was done to taxpayers.
“I would never do anything to put Wildwood down,” Troiano added.
A copy of the 2018 city audit was obtained, outlining the city’s finances and practices. The audit was conducted by Ford-Scott Associates LLC and Harvey Cocozza, Jr., registered municipal accountant. According to the report, the city undergoes a yearly audit. The 2018 audit spans from Dec. 31, 2017, to Dec. 31, 2018.
One point stands out in the report, directly dealing with projects and the bidding process.
On page 207, N.J.S.A 40A:11-4 reads: “No work, materials or supplies shall be undertaken, acquired or furnished for a sum exceeding in the aggregate $40,000 except by contract or agreement.” The statute stipulates that public funds can be used “only after public advertising for bids and bidding therefore,” unless otherwise provided by law.
Audit results found the city above the $40,000 mark.
When asked which projects fall under the excess, Troiano said he did not know, adding that “overflow” in projects is not uncommon. During the audit’s period, former Administrator Christopher Fox would have overseen the bidding process. Fox was terminated from his position in May.
“There was a misunderstanding of putting an ongoing project out to bid,” City Administrator Carl Groon said Nov. 25, during a phone interview.
Groon said he does not know which project pushed the city over the limit. Groon assures residents and officials that the problem would never happen again.
“The process needs refined,” Groon said. “We’ve (city) done that, and we’re moving on. There was a misunderstanding.”
Groon added that two purchasing officers “were out before I came.” Changes have occurred in the administrator’s office, and Groon is determined to set a clear financial course.
According to the report, the city had “improperly split” up purchase orders to avoid bid thresholds. Audit findings also state that total projects were more than the statutory bid threshold.
Ford-Scott Associates recommended that the city “ensure that all contracts are awarded per state purchasing law and that the purchases not be split to avoid bid limits.”
Projects requested by public advertising include sewer system repairs, water system repairs, water tower evaluation, bulkhead replacement, and road construction, according to the report.
The city has followed procedure regarding obtaining quotes above the $6,000 threshold.
“I’m not looking back,” Groon said. “My job is to move forward.”
Officials continue to face financial challenges, with a deteriorating Boardwalk (approximately $64.5 million), outdated infrastructure, flooding concerns, and lack of ratables and living costs; however, newly elected Krista Fitzsimons, Steve Mikulski, and incumbent Commissioner Peter Byron believe better times are ahead.
Another finding in the report also sheds light on financial constraints. The report states that the city entered an “intergovernmental agreement” Feb. 8, 2000, with the New Jersey Sports and Exposition Authority for the construction of the Wildwoods Convention Center.
Greater Wildwoods Tourism Improvement and Development Authority (GWTIDA) serves as the “operations and marketing arm” of the authority, per wildwoodsnj.com.
The agreement between Wildwood and the authority includes a $3.1 million mortgage payable to the city; however, according to the report, the state is “behind” in payments. The agreement also calls for a payment in lieu of taxes, totaling $30,000 per year. This amount has not been paid for 2017 and 2018.
Byron confirmed the audit’s findings Nov. 29, saying he has petitioned the state several times for the funds owed the city.
The state has a “tier” of municipalities receiving state monies; however, Wildwood is “at the bottom of the list,” said Byron.
“I don’t think we will ever see that money,” Byron said. He estimated that over $4 million could have been in the city’s coffers if the funds had been collected.
To contact Rachel Rogish, email rrogish@cmcherald.com.