A special meeting of the East Amwell Township Committee came to order at 6:45 PM. Present were Mayor Larry Tatsch, Deputy Mayor Linda Lenox, and Committee members Peter Kneski and Timothy Martin. Committee member Patricia Cregar was absent. Township Administrator Timothy Matheny and Treasurer Jane Luhrs were also in attendance.
In compliance with the Open Public Meetings Act, a copy of notice of this meeting was filed in the Clerk's Office, posted on the bulletin board, and sent to the Hunterdon County Democrat, Times of Trenton, and Star Ledger on February 4, 2008. The purpose of this meeting is to meet with the Township Administrator and the Treasurer/CFO to discuss the 2008 budget and to meet with Bond Counsel to discuss bonding options. The public is invited to attend and comment. Action may or may not be taken.
Andrea Kahn, Bond Counsel from McMannimon and Scotland, was present during the discussion on bonding.
HIGGINS FARM: Ms. Kahn had previously received background information from Mrs. Luhrs on the project. She asked if the intent was ownership or a long term interest. Mr. Tatsch highlighted the following, stating that the question is whether the project was a bondable one: East Amwell has partnered with D & R Greenway Land Trust in the past with some parcels costing the municipality only about $250 an acre in the final tally; the Higgins Farm has about 400 acres in East Amwell, Hunterdon County, and about 250 (plus or minus) acres in Hillsborough, Somerset County; New Jersey Conservation Foundation (NJCF) is the lead agency; Hillsborough and Somerset have both committed $1,000,000 to the project, and East Amwell provided a consensus that we will commit $1,000,000; timing of the acquisition is not yet known - however, the owner would be willing to be paid over a 3 or 4 year period; there may be a short lead time for the Township to provide funding.
Ms. Kahn agreed that the Township could adopt an ordinance now and not appropriate the money until later. Interest rates are low (i.e., for 15-20 years, it is 4 - 4.5%); however, insurance costs are higher. Some discussion took place about unknown forecasts for future bonding, and Ms. Kahn explained that the Township could use Bond Anticipation Notes (BANS) as a temporary measure with the ability to roll over the BANS for up to 10 - 11.5 years. Interest rates for BANS are currently 2 - 2.5%, and Ms. Kahn provided specifics about rates for reinvestment and paying off the BANS.
Mr. Tatsch asked about a formula to disburse the $1,000,000 over the course of years. Ms. Kahn explained that the Department of Community Affairs allows for installment payments, and she recommended that an agreement be negotiated. The Township would not be retaining any ownership, but a right to access the public land. Ms. Kahn agreed that this was a bondable item, and all agreed that NJCF would take the lead in preparing the contractual agreement. Some discussion took place on allowing the non-profits to utilize their funds prior to the municipality's contribution being used and on the land acquisition under NJCF, whose last acquisition in East Amwell was the Baron property. Mr. Tatsch's concern was that the municipality would be asked to contribute in a short amount of time, and there may not be funding available in the budget. Ms. Kahn explained that this would be a complex and critical agreement with the number of agencies involved, and an escrow account for funds would be necessary. She further explained that a bond ordinance could be adopted in 45 days to two months, and this could coincide with specific closing dates outlined in a contract. Ms. Kahn recommended that the contract be negotiated as the first step with information on how much was being paid, who was paying for specific items, etc. The bonding would take place after the contract was settled.
Using the Open Space Trust Fund for the 5% down payment was discussed. Ms. Kahn also noted that there are some instances when grant funding is used for purchase, and the down payment is waived. Ms. Lenox indicated that Green Acres funding might also be used; Ms. Kahn said that there may be a question about the waiver of the down payment if the Green Acre funds are not East Amwell's share. Mr. Tatsch explained that NJCF and Somerset County officials would present the concept to Hunterdon County to garner their support.
Mrs. Luhrs indicated that the down payment could be paid out of the Open Space Tax Fund, and this would have no effect on the tax rate. Ms. Kahn recommended waiting until the contract develops to see what options the seller is seeking.
COAH (AFFORDABLE HOUSING): Mr. Tatsch outlined the plans to purchase a house in the Village of Ringoes, which is currently being used by Easter Seals. Highlights included the following: there is a month to month lease by Easter Seals; the owner has been contacted by the Township, and there is interest in selling; an appraisal is being sought; five COAH credits are attainable if there is a 30 year lease; the intent is to have the Township own the property and lease it to Easter Seals for a monthly rent payment; values for the house and monthly rent payments were discussed, with the purchase "being a wash" with a bonus of 5 credits; the intent is to bond for the purchase.
Ms. Kahn commented on renting to a 501C non-profit with a private 501C activity bond, which is similar to a government bond, but with specific public hearing requirements and with some restrictions. Ms. Kahn felt that the Township could meet the requirements, and she stated that the additional public hearing notice could be tied into the bond notice. She provided specifics about providing smaller issues, getting money up front for construction, spending the money within two years, and avoiding arbitrage. Mrs. Luhrs and Ms. Kahn exchanged comments on rolling short term BANS into a bond. Ms. Kahn agreed that it might be a good idea to stay with the BANS for a few years and then go long term bonding. Ms. Kahn agreed that the COAH developer's fees could be used for the 5% down payment for the house.
Mr. Tatsch spoke about federal funding being "pumped into" development disabilities homes and the fact the New Jersey is lacking in units. Ms. Kahn agreed that there is a huge need for this type of housing in Hunterdon, Sussex, and Warren Counties. Easter Seals has been present in Ringoes for a number of years without problems, and the 5 COAH credits is a plus. There are grants available for up to 80% of the financing, and perhaps East Amwell could get at least $100,000. Ms. Kahn said that the Township could either apply for the grant and reduce the up front cost or purchase and then apply for the grant.
Further discussion took place about the house, with the following highlights: Ms. Kahn said that if the grant is not a private 501C activity bond, the Township could go ahead with the usual bond procedure without restrictions; Ms. Kahn provided anecdotal information on working with the Developmental Disabilities Association (DDA) in acquiring Economic Development Authority funding for past projects; a copy of the CD from the NJ State League of Municipalities' Convention concerning funding opportunities will be purchased; funding from the United States Department of Agriculture - Rural Development (USDA-RD) was a possibility - Mr. Tatsch will get more information about this; Mr. Tatsch asked what could happen to the property once the house is paid off and the Easter Seals' contract expired; some discussion took place about the Omstead case, which was the basis for trying to get residents from institutional facilities into residential facilities. The conclusion of the discussion was that loans might be available, the Township will continue to negotiate with the property owner, and Ms. Kahn and Mrs. Luhrs will work out the details of the bond when necessary.
CLAWSON HOUSE: Mr. Tatsch provided background information on the purchase of the property, including an historic house, with Green Acre funding for the creation of a park. The house, which is listed on the Historic Register, is in poor condition and need of rehabilitation. The house has been stabilized and weather-proofed; the roof has been repaired. The architect has provided drawings, with the cost estimate for the repair being $485,000; however, this figure was provided last year and presumably may have increased. A congressional appropriation was sought last year, with no response as of this date. A second application for an appropriation was submitted this week. The Historic Preservation Committee is looking into grants, but some grants will not cover retroactively. Mr. Tatsch explained the Township's attempt to get an emergency grant last year for the stabilization; however, this type of grant was retroactive, and there was an urgent need to do a quick repair. The Committee noted that even with a grant, the Township might have to fund between $300,000 and $400,000.
Ms. Kahn spoke about the grant options, including matching grants, reimbursements, etc., but she felt that bonds or BANS would be appropriate. Ms. Kahn suggested applying for grant funding first to get a sense for the project, and then go out to bond. Discussion took place about the fact that the property is an historic one, which would increase the cost of rehabilitation; Ms. Kahn provided information on historic rehabilitations she was aware of, including work in Patterson and in Skillman. Mr. Matheny noted that the Clawson House was of "historic significance," a designation allowing the property to be rehabilitated rather than restored without a higher level of work and cost.
MESZAROS PROPERTY: Mr. Tatsch wanted to advise Ms. Kahn about the project although it is not a bond issue. He provided background information on a privately owned junkyard, which was in operation since 1947 with construction debris and other materials on site. There was a $283,000 grant to remove tires on the property, using funding provided by the NJ DEP. The Township has applied for and received $202,000 for remedial investigation on site, and once this is completed, they will apply for a grant for the remedial action with the goal of receiving a "No Further Action" letter from the State. There are three parcels, two of which are owned outright by the property owner, and the third is a 1.1 acre parcel, which was lost in foreclosure to an LLC. Title searches will be necessary. The Township Attorney is working with the attorney for the property owner and with D & R Greenway Land Trust to acquire the site. D & R Greenway Land Trust is also working with Green Acres on the acquisition. Ms. Kahn spoke about the up-coming trend to hold environmental insurance as well as title insurance on properties. Mr. Tatsch further explained that the property is in proximity to other state and open areas, which would be appropriate for a trail system. He stated that the project will involve D & R Greenway Land Trust and Green Acres, and East Amwell Township will have no major expenses, so bonding would not be necessary. Use of the Open Space Tax Fund for expenses would be appropriate. Ms. Kahn suggested that going for short term BANS for the contract might be an option. Mrs. Luhrs reminded the governing body that they approved a bond ordinance of $500,000 for the Omick property in a similar arrangement, and they did not use the money.
BOND COUNSEL MISCELLANEOUS: Mr. Tatsch asked Ms. Kahn about her opinion on the reasonableness of the Township's current debt. Mrs. Luhrs stated that the current debt is $8,000,000. Ms. Kahn explained that the Township could have debt up to 3.5% of the equalized value base, and she agreed with Mrs. Luhrs that the Township's debt is low. Mrs. Luhrs explained that the total debt of 88% is for farmland/open space. Some discussion took place, with the following highlights: the Township has no struggle with the 4% cap this year; Mrs. Luhrs explained that the Township increases the cap to 3.5% each year, but does not use it; tax collection rates are good; a recent article in the Star Ledger shows that East Amwell Township taxes are in good shape; the last time the Township went out for long term bonds was in 2003.
Mrs. Luhrs and Ms. Kahn exchanged comments about whether to tie in short term BANS, which will be due in May, into long term bonding. Options include the following: the original $714,000 BAN is now $690,150 in the fourth year, Reiter reimbursement of $519,000 can be used against this BAN; the Kanach reimbursement was put into capital surplus and can be used to pay off the remainder of this BAN; Ms. Kahn agreed that it would make sense to pay off the $714,000 BAN and roll over the $1,000,000 BAN in June. Committee members commented on not receiving the Scibilia reimbursement yet.
Ms. Kahn agreed that she would meet again with the governing body when needed. Mr. Tatsch noted that NJFC would be the lead in the Higgins' acquisition. Historic Preservation Committee will be asked about progress in getting grant funding for Clawson House. The Township will move ahead in negotiating the purchase of the group home. The Township Committee thanked Ms. Kahn for her services this evening, and she left the meeting at 8:35 p.m.
MUNICIPAL BUILDING RENOVATIONS: Mr. Matheny reviewed his February 20, 2008, memo on building renovation budget considerations. Highlights include the following: There is $62,250.57 left in the two ordinances totaling $90,000 for the project; the basement is almost complete except for carpeting; wiring and Cat-5 lines were installed in the basement, and the Office of Emergency Management (OEM) has been moved to the small room at the base of the stairs; an estimate to complete the office renovations is between $70,000-80,000; card access to the building would be approximately $9,000; staff will be moved to the basement during renovation of the office area, and the work could be completed in 6 - 8 weeks or less than that time, based on the progress of the contractor; cost reduction and less office disruption would result in operating from the basement during the construction period; a quote received last year for the carpet will still be honored, according to the vendor; cost for upstairs carpeting is approximately $14,000; Mr. Matheny's current office area is complete except for new carpet, and once this is installed, files can be moved to that area; a staff member will remain upstairs as a receptionist because the basement offices are not ADA compliant; cost for the staff relocation to the basement is approximately $2,000; Architect Terry Golda was paid $1,500 for the design, but he does not want to write the bid specs; Engineer Dennis O'Neal will write the specs based on the design at an approximate cost of $5,000; the DPW Superintendent received a quote of $8,500 to clean up the outside of the building, and minor expenses of some wall repair and replacement of a man door in the DPW garage would entail another $1,500. The additional appropriation necessary for the work above, minus the $10,000 for outside work, is $45,000.
Ms. Lenox asked whether the card access system for six doors was a necessity. Mr. Matheny explained that the stock price for equipment, whether two up to six doors, is the same; he also noted that it is better to install the equipment during construction rather than retrofitting. Some discussion took place on why Mr. Golda did not want to write the bid specs; Mr. O'Neal will work with Mr. Golda on getting the specifics for the bid documents. Some discussion took place about municipal architects, and Mr. Kneski provided insight from his experience in Princeton Township. Committee members also discussed the fact that the costs do not factor in the time and work load of the DPW in painting the building, and they discussed using the plans provided by Mr. Golda for the bid specs. Mr. Tatsch commented on seeing the full scope of the work over time, once the original plans were developed.
Mr. Kneski suggested the possibility of putting off the card system until next year. Mr. Tatsch provided the rationale for having a card system for better control over who has access to the building at any given time (i.e., reduction in number of keys given out, better control over the misuse of keys, elimination of access to building by people who may tamper with computers, files, etc). The system will also log in every user with name and date, and access can be denied, even remotely. Mr. Tatsch believed that the value justified the cost of the system.
Mr. Martin recommended that real costs be determined to prepare the budget. Mr. Matheny thought that the estimates were on the high side, and Engineer O'Neal would prepare the bid specs with breakdowns for items. Mr. Kneski explained that the architect usually has access to estimate books showing the applicable costs for items, and the bid specs are reviewed based on these estimates line by line. Mr. Kneski agreed to talk to Mr. O'Neal about this matter.
The governing body agreed that the outside work would wait until next year, and $45,000 for the municipal building renovations will be incorporated into the capital budget.
Mrs. Luhrs directed the Township Committee's attention to Capital Projects sheet dated 2/20/08. If all capital improvement requests are granted, the total would be $660,000, and using the $110,000 set aside for Spring Hill Road and the $100,000 left over from a capital ordinance last year, $450,000 in 2008 funding is necessary. Last year, the Township Committee used $317,000 from the Capital Improvement Fund, which was $133,000 less. If this figure is increased and no appropriations are cut, the tax rate would be around 2 cents more this year.
DPW Howell provided a revised budget request at the last meeting, which was not previously discussed. Mrs. Luhrs commented on the revenues and fees, which resulted in $14,000 coming in last year. Last year road projects, which accounts for the majority of the capital budget, was set at $390,000. The budget was discussed, with the following highlights: Mr. Howell revised his budget to include the full appropriation to do the work on Back Brook Road, i.e., up from $50,000 to $114,000, based on the fact that the original grant application required the Township to complete the full project, as agreed upon in the grant; Runyon Mill Road was removed from the project list; the truck was left on the list, based on Mr. Howell's previous explanation of need; Mr. Tatsch read from the revised project list regarding the extent of the repair on Lindbergh Road, which was estimated at $200,000 for a 6,000 foot repair; some discussion took place about limiting the scope of the Lindbergh Road repair to a partial overlay done by the DPW to stabilize as a base for a topcoat next year on the section from Ridge Road to Burd Lane; Mrs. Luhrs asked if this was a capital project or a road budget item, i.e., would the work involve a five year life expectancy; Mr. Tatsch stated that if the patch work was done, it would be used as a base material for a subsequent blacktop, and it would meet the five year description; Mr. Matheny will advise Mr. Howell that this line item will be cut from $200,000 to $67,000 or less, and Mr. Howell will decide on how to proceed, with the intent to finish the blacktop next year.
SIDEWALKS IN RINGOES: Mrs. Stahl received a call from Hunterdon County Engineer Ed Kopp earlier this month, asking if the Township planned to put sidewalks in Ringoes in the budget this year. Mr. Kopp provided an estimate of $190,000 for the full project, based on the designs he prepared several years ago. A congressional appropriation application was submitted to Congressman Holt's office today. Mrs. Stahl also noted that she was reviewing a grant application from the NJ Department of Transportation, but the competition may be stiff and we may not meet all the parameters. The Township Committee agreed that Mrs. Stahl should notify Mr. Kopp that sidewalks would not be in this year's budget.
COAH SPENDING PLAN: Mrs. Luhrs asked who would be working on the plan for this year, which must be approved by the governing body. She stated that she would work on it, but she had to know how the funds would be used. Mr. Tatsch stated that Municipal Housing Liaison Jim Robbins was working on it, and he could provide information. Using the fees for the five percent down payment on the group home will be part of the plan. Mr. Tatsch also noted that more fees are coming in for outstanding projects.
ADDITIONAL MEETING: The Township Committee will have one more budget meeting with the intent of introducing the budget at the second meeting in March. Mrs. Stahl will set up the meeting via e-mail. Some discussion took place about the percentage increase that the governing body would like to see this year, i.e., less than 2%.
ADJOURNMENT: There being no further comments and no members of the public present, a motion was made by Ms. Lenox, seconded by Mr. Martin, and carried unanimously to adjourn the meeting at 9:30 p.m.
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Teresa R. Stahl, RMC/CMC
Municipal Clerk