Lower Township Nixes MUA Dissolution

VILLAS – Lower Township Mayor Michael Beck went to the Sept. 15 council meeting well prepared to present the township’s position on the dissolution of the MUA, which was scheduled for a final vote. By law, ordinances that authorize the dissolution of that agency and the assumption of MUA debt by the township require a super majority of four out of five voting council members to succeed.
The mayor presented a line-up of experts to review the merits, financial and legal arguments he had supported as leader of the movement to absorb the MUA into the township’s Department of Public Works. The move would purportedly save rate payers $1 million.
When the dust cleared, after lengthy presentations by those supporting experts, officials, council members and the public, the super majority was not to be found.
By a vote of three for the ordinance and two against, the dissolution was defeated. No votes came from Republicans Thomas Conrad and Erik Simonsen.
Township Administrator Michael Voll had begun the evening by emphasizing that no one at the MUA currently employed would lose their job. He added that he intended to visit the MUA once again Sept. 16 to reassure workers of that position and to begin forming a transition team. He also rejected the rumor that the savings from the dissolution would be used to finance the proposed move of the police department back to the municipal complex.
Bond attorney Jeff Winitsky explained that the legal requirements for the dissolution had been met and that the state Local Finance Board found that all was in order, and he remarked that the board also offered that the idea seemed to be a good one based on the figures submitted in the application by the township.
The independent auditor, Robert Schwartz, then reviewed his finding on savings. “It’s the million-dollar question … just how do we get to a million-dollar savings?” he began.
Schwartz answered his own question by reminding everyone that a significant part ($389,090) of the savings were found in administrative costs alone. He stated that these do not include a $15,000 savings for un-needed legal fees, and $17,000 in un-needed accounting services.
He also listed $71,673 in savings by canceling the outsourcing of the billing function, a function that the township computer system and clerks could absorb without additional costs.
Other cost savings were found on the operations side, without any jobs lost. He summarized his position by saying that he stands by his total estimate of $991,318 and still believes that this is a conservative estimate. He feels that additional savings would be realized by consolidating or eliminating needless insurance, equipment cost savings and reduced project finance costs that would not require local finance board approval.
Other officials were present to offer their support for the dissolution ordinance including Public Works Director Gary Douglas, Chief Finance Officer Lauren Reed, labor attorney William Blaney and Solicitor Ronald Gelzunas.
Despite the overwhelming amount of supportive presentations, council comments began with Councilman Thomas Conrad who remarked that he had submitted a list of questions to Voll and did receive answers, but that he was still not in favor of the dissolution.
He noted a number of people had a difficult time paying for water hook-ups in his ward and he was not sure that these residents would get a fair deal if the MUA were dissolved.
“This is not good for my residents,” Conrad said. “The taxpayers won’t see a tax reduction based on these so called savings.” Conrad then directed a comment to Beck, saying, “If you want to make this an issue in November, go ahead.”
“Why weren’t other municipalities spoken to for their advice?” Simonsen asked. He followed up by asking why the leadership of the MUA was not brought into the process and repeated his belief that if they entered a shared services agreement with the MUA, savings could be realized without having to dissolve the MUA.
He challenged Schwartz to reveal the results of his analysis of possible savings if the shared services agreement were implemented. “Weren’t you just paid to do that analysis?” Simonsen asked.
Schwartz had no answers for Simonsen, saying that he had not conducted that analysis as part of his work product. At that point, Deputy Mayor Norris Clark confronted Simonsen.
“Councilman Simonsen,” Clark began. “Please look into the camera (referring to the live streaming of the session) and tell us why you do not support saving $1-million.”
Clark repeatedly challenged Simonsen to explain his opposition. Simonsen cited the assumption of the MUA debt as a problem even though the auditor explained that this debt did not represent a new debt.
He explained that the township always guaranteed that department and that further, the “self liquidation” nature of the MUA debt renders it a non-issue when calculating township debt because there are incoming funds (utility revenue) that totally offsets the debt service on those bonds.
Clark again reminded his fellow council members that this issue will become an issue in November, and remarked that Simonsen has been mostly silent on the MUA issue all these months and again wondered why he would deny the people of Lower Township the opportunity to save the million dollars.
Beck clearly saw the handwriting on the wall that a super majority could not be achieved. He reviewed the fact that the state had approved the action, that there is a solid $1 million to be saved, and that as a leader he and the others on council had a responsibility and vested interest in better government.
Beck said that the township had conducted the process as professionals. He referred to all the expert opinions that supported the action and lamented that “we had an opportunity here today, to play in the Super Bowl, but we lost the game. … I feel badly for the people of Lower Township tonight.”
The triumphant MUA supporters who attended the meeting saw the defeat as their victory and applauded the final vote that killed, for now, the dissolution of the Lower Township MUA.
To contact Jim McCarty, email jmccarty@cmcherald.com.