Lower MUA Director Says Authority Not Sitting on $4 Million in Cash

VILLAS — Lower Township Municipal Utilities Authority (MUA) does not have $4 million of cash surplus as charged by Lower Township Deputy Mayor Kevin Lare, according to the MUA’s Executive Director and Board Chairman.
Last month, Lower Township Council voted 4-1 to ask MUA for $163,000 of its surplus funds to decrease an anticipated 1.7-cent tax increase by the township. Since then, council has reduced the tax increase to a penny without using MUA funds.
Lare said the money was parked in an “excess surplus account.” MUA Board of Commissioners voted 4-1 at a March 25 special meeting, not to give Lower Township $163,000 of its surplus funds.
At an April 6 MUA Board of Commissioner’s meeting, MUA Executive Director Matt Ecker read from an auditor’s report that said the authority had unrestricted net assets of $3.9 million which represented a portion of funds used to maintain continuing obligations to creditors and current liabilities.
“That money is assets, not cash on hand,” he said.
The actual cash on hand after all bond notes are satisfied is $915,741, said Ecker.
Ecker said the authority had to pay interest on a $6 million short-term loan to install water mains in the Town Bank area. MUA will not be reimbursed by USDA and move to low interest loans until the project is completed in three or fours years, he said, meaning those costs are funded by MUA’s budget.
MUA will pay $20,000 in interest for the initial $2 million loan, according to Board Secretary/Office Supervisor Emily Oberkofler. She projected interest on the $6 million loan could total $120,000 per year.
“We are going to be increasing our debt service payments and that’s money that we don’t have currently budgeted,” said Ecker. “The obvious place were going to take it out of is undesignated reserve.”
MUA Board Chairman Nels Johnson said the authority was not sitting on $4 million and collecting interest on that sum.
Ecker said the difference between assets and cash was similar to asking a person what their current worth was versus how much money they have in a bank. MUA’s assets include its buildings and equipment, he said.
Last winter and early spring, MUA spent close to $350,000 of unanticipated capital on emergency repairs to infrastructure, said Ecker.
MUA Commissioner Joseph Mentos called Lare’s statement on MUA sitting on $4 million, “politically motivated.”
Johnson said he was “dismayed” at the way the MUA was portrayed by Lare at an April 4 Township Council meeting.
“I think we can all agree in this township that we have done a very tough job, a very difficult job and all we are looking for is some gratitude on behalf of what the board has accomplished, what the previous executive director has done, and for us to walk out of here knowing we’ve done the best job possible for the township and ratepayers,” said Johnson.
During public comment, resident Ed Butler said attacks against the MUA were “politically based.”
“It is so obvious that it makes you sick,” he said.