(UPDATED) Montclair Council: Reduced Debt by $8.2 Million, Approves Four-Way Stop Sign

BY  |  Wednesday, Feb 06, 2013 8:05am  |  COMMENTS (29)

The Montclair Township Council in conference

The Montclair Township Council in conference

(UPDATE) The Township of Montclair Annual Debt Statement for budget year ending 12-31-2012 is now posted on the township website.

Montclair Township Manager Marc Dashield took the opportunity at the Montclair Township Council conference meeting of February 5 to announce that the town’s debt reduction diet is working. The township reduced its gross debt — combined municipal, school, and utility debt — by $8.2 million (down from about $220 million) in the first six months of the council’s term. The township was able to authorize the cancellation of $1.072 million in debt while making principal payments totaling $3.2 million on top of the council’s approval of $4.2 million grants for outstanding debt.

Bob Benecke, of Benecke Economics of Moonachie, took the council through a plethora of numbers to explain where the township stands on its debt and where it’s going.  He said that the overall debt was comprised of long-term bonds, short-term notes, and authorized but not issued (ABNI) components.

Benecke, as an advisor to the Montclair municipal government, laid out a plan anticipated in resolutions up for a vote during the meeting, one spelling out the form of bonds totaling $32.5 million bonds to be sold and the other two providing for the combination of said bonds into two single issues, one for $10.5 million in general improvement bonds over 11 years and the other for $22 million in school bonds over 15 years.

“The lowest payment for each side . . . cannot be less than 50 percent of the highest payment, or vice versa, so that you will not have swings in your tax payments and tax rates because of the debt,” Benecke said.  He added that the bonds are being issued for as many years as they are to accommodate the useful life of a bond and the projects it finances.   Short-term notes are expected to be paid out at an interest rate of 4.25 percent, which would allow for the reduction of debt by the value of the long-term bonds.  The ultimate goal is to get the debt to below $120 million by the end of 2022.

“We just can’t in a vacuum reduce debt,” Benecke said.  “As we go through the next ten years, there’s going to be needs for roads, needs for facility improvements . . . so these are net numbers.”

The council’s policy is not to fund projects at more than 50 percent of the total principal payments for any one year.  This means that for every dollar in revenue, most notable in a grant from the state, 50 cents will be used to pay down the debt.  The plan calls for a reduction of overall debt by approximately $68 million by 2022.  Benecke added that Montclair’s AA bond rating, along with its diverse population and high tax base, makes it very favorable in terms of reducing debt.

Mayor Robert Jackson was pleased with the presentation, noting that the disciplined principal payment schedule reduced the debt by 4 percent in six months.

“I’m ecstatic about it,” he said.  “I think it really points to the fact that with some discipline, and being creative, and scrubbing the books and really looking for cash in every corner, and not using that to spend but using it to reduce debt is exactly what we’ve been looking to do.”

Township Attorney Gets Pay Raise

The council took the time to pass an ordinance on first reading in addition to resolutions those relating to bonds.  Township Attorney Ira Karasick is seeking a pay raise for his office in light of the increased workload due to the Law Department taking on tax appeals, redevelopment negotiations and contracts, and various other forms of litigation once outsourced but since brought back in-house, along with his new role as counsel to the Historic Preservation Commission.

“It’s made the job basically a full-time job,” he said.

Fourth Ward Councilor Renée Baskerville cited the latter point, asking if outside counsel was considered for the Historic Preservation Commission.  Karasick responded that it would cost more for the township to outsource counsel for the commission.  He also said the lack of compensation for general redevelopment planning, as opposed to specific redevelopment planning, and he noted the unpredictability of the workload of tax appeals, which can vary annually.  Mayor Jackson made it clear that an increase in Karasick’s salary would still cost less money than bringing in outside counsel.

Dr. Baskerville saw it differently.  “We don’t know if there are other people out there that might give us a more competitive price for the same services,” she said, “because we just have never gone out to request proposal to see what other people might be able to do for us.”

The ordinance passed on first reading by a vote of 6-1, with Dr. Baskerville the only dissenter.

Karasick also brought to the council’s attention an affordable housing unit at the Bay Street Commons that was vacant for two-and-a-half-years before being sold.  It was over-assessed, and the developer is seeking a refund on taxes paid in the last two years.  The council is expected to look further into the matter.

Montclair Cooperative School students get 4-way stop sign, celebrate with cookies.

Montclair Cooperative School students get 4-way stop sign, celebrate with cookies.

Forest & Chestnut Streets to Get 4-Way Stop Sign

In addition to passage of a resolution expressing interest to representatives and senators in Congress over acquiring the former Social Security building on Bloomfield Avenue form the federals government, the council finally passed on second reading an ordinance creating a four-way stop zone at Forest and Chestnut Street, with new stop signs to be installed by the end of the week.   Students from the Montclair Cooperative School then gave Mayor Jackson and each council member a bag of four stop sign cookies as an act of gratitude.

“Before the vote, it would have been considered a bribe,” Karasick joked about the gift.

29 Comments

  1. POSTED BY idratherbeat63  |  February 06, 2013 @ 9:15 am

    Good to see the Town Council tackling the issue of the town’s debt. Do we now understand correctly that Montclair residents owe 220 million dollars in debt and this costs the residents approximately 15 million dollars a year just to service the debt? Will the Town Council be publishing the exact figures.

    Shame about the stop sign. The intersection of Forest and Chestnut has been made more dangerous. Children should not be encouraged to cross streets for pizza during school hours. Worse is how the Town Council takes decisions on road safety.

  2. POSTED BY jonbonesteel  |  February 06, 2013 @ 11:32 am

    In what strange land does a 4-way stop make things less safe? Very odd.

    Anyhow, the sign(s) are now up and you need to stop at that intersection.

    Thank goodness!

    Jon

  3. POSTED BY Right of Center  |  February 06, 2013 @ 12:17 pm

    “The township was able to authorize the cancellation of $1.072 million in debt while making principal payments totaling $3.2 million on top of the council’s approval of $4.2 million grants for outstanding debt.”

    Cancelled debt? As in something we decided not to borrow? That gets counted as a reduction in debt? Or are we counting future interest on retired debt as a “debt reduction?” My wife will be happy to note we just saved $5000 on a vacation we decided not to buy!

    What the devil does “on top of the council’s approval of $4.2 million grants for outstanding debt.” mean?

    “making principal payments totaling $3.2 million” sounds like the only real reduction in debt. Anyone want to bet if that principal payment was from funds re-allocated from debt restructuring?

    $3.2 million of $220 million is 1.4%

    Congratulations! Cigars are in order.

  4. POSTED BY kay  |  February 06, 2013 @ 12:35 pm

    Jon, that would be The Land Where No One Knows How to Navigate a Four-Way Stop!!

    As a refresher….
    (1) Take Turns. Who gets there first, goes first. Doesn’t matter whether the other guy is turning left and you are going straight, if they got there first they go first.
    (2) Tie goes to the person on the right, all the way around the circle if necessary. If in the unlikely event everyone gets there at the *exact* same time then everyone smile and wave and eventually someone can proceed safely.
    (3) You must actually *stop* your car, at the limit line. Do not just slow down and roll through. And you cannot *go* just because the guy ahead of you goes. I call this Drafting, and the police call it “failure to stop”, N.J.S.A 39:4–144, 2 points!

    I hope they put up those flashing stop signs. It will be a while before people fully realize the change so be careful. Also, maybe it will stop some folks from using Forest and Chestnut as a mini-highway cut through! And as for making it more dangerous, I truly don’t understand how that’s possible, unless you’re from Boston and are utilizing Conan’s described 2nd-car/no-stopping-required rule.

    Now if people would just abide the no parking rules there at that corner. Remember, whether or not there’s a sign prohibiting it, when you park too close to the corner, it becomes much more difficult for other drivers (and especially school buses!) to make the turn, and you run the risk of damage to your car. Just sayin’.

  5. POSTED BY Selma Avdicevic  |  February 06, 2013 @ 7:23 pm

    ROC, you actually have it right, for once ;)

    As for the 4-way stop sign, while in principle it’s a great idea, considering the number of schools and children in the vicinity of the intersection, the problem remains, as Kay so eloquently surmised, that people actually don’t know the rules. And if they do, they choose to ignore them. MPD will tell you that I call them at least once a day about the intersection on Berkeley and North Mountain, as well as the one on Bellevue and North Mountain. Both 4-way stops, both EXTREMELY dangerous. I have never actually been to any of these and witnessed all the drivers obeying the rules. This is no joke, even though cops laugh when I tell them I am not calling because I feel endangered in any way. Since I drive one of those SUV behemoths, I am actually afraid what might happen to drivers that hit me.

    Now, for the 4-way stop on Chestnut and Forest, specifically, I hope, I pray, they have some enforcement for the first few weeks, because the visibility is limited, considering it’s a hill.

  6. POSTED BY jcunningham  |  February 06, 2013 @ 7:35 pm

    “Children should not be encouraged to cross streets for pizza during school hours.”

    —that is NOT why the 4 way is there.

    i continue to be amazed by the ability of folks to believe what they want in spite of the facts. please continue to believe whatever the hell you want, but don’t feel compelled to share your ignorance with the rest of us…

  7. POSTED BY Frank Rubacky  |  February 06, 2013 @ 7:44 pm

    We should not waste any MPD resources on enforcing the 4-way @ Berkley & North Mountain.
    What we should do is remove the 4-way. It was a really stupid decision by the past Council to appease somebody…I am not sure they even know.
    There was absolutely no factual basis for this 4-way. Ask Dr Baskerville, ask the Township Engineer, OPRA the traffic study, ask the MPD, ask the MFD, ask Cary Africk. If you want to talk about monuments to stupidity, this is one.
    To add insult to injury, this intersection is now far more dangerous than it has ever been.

  8. POSTED BY silverleaf  |  February 06, 2013 @ 8:04 pm

    Will someone please tell me how having a 4-way stop sign at the intersection of N. Mountain and Berkley is more dangerous than having no 4-way stop sign at all.

  9. POSTED BY Frank Rubacky  |  February 06, 2013 @ 8:16 pm

    Silverleaf,
    If you haven’t done your basic homework on 4-way stop intersections, I’m not going to take the time to educate you…especially since you do are predisposed to your wrongheaded point of view. Does that explain it?

  10. POSTED BY silverleaf  |  February 06, 2013 @ 8:32 pm

    No, that does not explain it and furthermore, I have no predisposed opinion on this topic whatsoever. I simply as asked a question in response to your assertion that seemed counter intuitive to me.

    What it does explain however, is your disingenuousness, which is typically the case when one has no sensible response at all.

  11. POSTED BY Frank Rubacky  |  February 06, 2013 @ 8:34 pm

    Dat! I’ve been Silverleafed!

  12. POSTED BY silverleaf  |  February 06, 2013 @ 8:39 pm

    Well then, at least we agree on one thing!

  13. POSTED BY Frank Rubacky  |  February 06, 2013 @ 9:17 pm

    Let’s hope you are right.

  14. POSTED BY PAZ  |  February 07, 2013 @ 12:07 am

    What’s the better solution to a 4 way stop? I have no idea! Put barricades up so no one can use the intersection?

  15. POSTED BY allaboutthenumbers  |  February 07, 2013 @ 12:30 am

    At 12/31/11 the total Gross Debt authorized was $223,202,003. Compare that with the balance at 12/31/12 of $212,023,986. This is definitely in the right direction.

    This council canceled debt that was authorized but not issued, yes, just like telling your wife you’ve said $5,000 on a vacation you are not going to take. But prior councils failed to do this. This was a one time big reduction in gross debt outstanding that was prudent to do. It will help enforce discipline for spending within the township’s means to some extent. It is up to this council to determine how much discipline it will use. Unfortunately, I hear this refinancing passed Tuesday night will add another $1+M to the annual debt service cost.

    Roc, “What the devil does “on top of the council’s approval of $4.2 million grants for outstanding debt.” mean? ” This makes no sense to me either. Was he saying they will simply use grant proceeds to pay down debt? I though grants were issued with strict spending purposes. For example, the town received a grant from the state for drunk driving. Could they have used the grant money issued for this campaign to pay down debt instead of having check points or police pulling people over for random checks? There was a lot of press in November/December about this drunk driving campaign happening. I didn’t see one police car or any check points pulling people over. Did anyone?

  16. POSTED BY sohobound  |  February 07, 2013 @ 9:51 am

    Wow, the state govt giving grants for Montclair to pay down debt. Who knew? Maybe the manager wasn’t supposed to let that slip?

  17. POSTED BY idratherbeat63  |  February 07, 2013 @ 10:17 am

    PAZ: A red light would work better than barricades for your purposes. The absurd does not help your argument.

    To respond to your question, we could teach our grammar school children how to cross streets correctly and insist that they take their social responsibility as well.

    We could oppose facilitating grammar school children leaving school premises for pizza during school hours or hanging out at corner shops after school.

    For the Town Council to rely on grammar school children to make traffic decisions and then to call Councilor Robin Schlager’s standing on a corner for an hour “a new traffic study,” shows how unprofessionally and irresponsibly this Town Council makes safety decisions.

    It is not only the fact that this was a bad traffic decision, it is even more a concern as to how this Town Council functions.

    The cookies seem to say it all.

  18. POSTED BY Right of Center  |  February 07, 2013 @ 10:20 am

    I appreciate your post allaboutthenumbers. But I have a quibble.

    “This was a one time big reduction in gross debt outstanding that was prudent to do.”

    Not borrowing as much as you are allowed is not a reduction in gross debt. Prudent? Well, ok. But the same kind of financial prudence as a bankrupt family deciding not to charge another dinner at a fancy restaurant on their credit card. Correct decision? Yes. Something to cheer? No, not really.

    We can go over the cliff in 4th gear or 3rd gear but I’m not going to be impressed until we come to a complete stop and hopefully go in reverse.

  19. POSTED BY Right of Center  |  February 07, 2013 @ 10:23 am

    “To respond to your question, we could teach our grammar school children how to cross streets correctly and insist that they take their social responsibility as well.”

    We might start with the High School. These young adults apparently can’t get across a street with a crosswalk and a signal (!) unaided.

    One hopes, I guess, colleges also have crossing guards to avoid the inevitable blood-bath.

  20. POSTED BY idratherbeat63  |  February 07, 2013 @ 10:29 am

    So Montclair has a total debt of 220 million dollars and the town pays 15 million (oops, now 16 million since Tuesday) per year in servicing the debt – as far as the Town Council is letting us know.

    By not taking more debt, we are now told we are “saving money.” Makes sense, I suppose.

    The Town Council promises to reduce the total debt by 68 million dollars by 2022 using grants (from the state, our state, another huge debt the Montclair residents also carry). Somehow (?) this should get the town to 120 million dollars in debt by 2022. Though at the same rate as now the town will be paying approximately another 160 million dollars in servicing the debt over the next ten years.

    And now the Mayor is ecstatic over this plan.

    All very convincing “being creative.”

  21. POSTED BY getaclue  |  February 07, 2013 @ 11:30 am

    idratherbeat63 , just a correction, if the council is indeed paying down principle of $68MM by 2022, the annual interest costs will be reduced as well, so technically not $160MM in servicing costs you quote, but rather will be much lower. Math is math. While I am skepitcal of this councils ability to achieve this, any reduction in principle over the next 10 years is nothing but a positive imo. Even if this is a gimmick in accounting, the net result is that debt outstanding is going down….

  22. POSTED BY Right of Center  |  February 07, 2013 @ 11:54 am

    all this discussion and we’re still in the dark about what exactly is being said and done. The council seems uninterested in being perfectly clear and the Baristanet reporter seems uninterested in stating it in a clear way. Opacity. One can’t help but think that this is by design. The best we can hope for is to note the vague wording and realize (from past experience) that clarity is not on anyone’s agenda.

    We have no proof of witchcraft but we glimpsed the cauldron, heard the cackling, and saw the black cats arching their backs.

    ’tis the work of the Devil, says I.

  23. POSTED BY idratherbeat63  |  February 07, 2013 @ 1:17 pm

    getaclue, so far this town has only seen debt increasing. There is no indication that the overall debt in Montclair has increased. All the Town Council said on Tuesday night is that they are going to borrow less, but still borrow.

    Montclair should not be in debt. There is no reason why this town ever needed to live above its means. We need to get serious about the money we spend. Why would anyone seriously want to buy property in Montclair just to be saddled paying off debt they had no part in creating?

    We need to see the real figures on the town debt from the Town Council, and not just smoke and mirrors based on creative accounting that suggests we should use state grant money to pay Montclair’s debt.

    Let’s see the town’s full balance sheet along with a realistic 10 year plan to get out of debt completely. The carefree spending spree should be ended.

  24. POSTED BY kay  |  February 07, 2013 @ 4:27 pm

    Yesterday late afternoon, hubby watched as at least three people blew right through the new stop signs, in spite of the extra one that was sitting right in the middle of the road.

    Yes, I know some people do not know how to cross the street. I see a lot of teenagers crossing at strange non-perpendicular angles on the way to school in the morning, some of whom cross just far enough away from a corner that if some impatient driver really guns it after turning, they will get mowed down. Cross at the flaming corners, people! (and if there’s a light, with a walk/don’t walk sign, for heaven’s sake don’t walk if you see the Red Hand!!)

    However, in this case I don’t think that is necessarily the problem. The issue here are the poor sight lines and the fact that people seem to instinctively accelerate up the hill. So if you’re on Forest trying to turn left onto Chestnut toward the H.S. it can be a neat trick to get out safely. Add to that the lines of parked cars, the fact that Forest is IMO too narrow for parking on both sides, and that people routinely FLY down Forest, maybe to get to the train station, or because they are frustrated with the North Fullerton intersection, or maybe it’s to grab their free-allday-parking-on-the-side-street space before someone else does, and it makes things quite difficult both mornings and evenings. (You’ve also heard me say before that the parking laws are being routinely flouted on Forest near Walnut starting at happy hour. And on Saturdays there is someone who I believe attends a yoga class who actually parks for hours in the middle of a traffic lane. Yeah you, with the Subaru, one of these weekends I’m gonna to have to call it in!)

    As for the 4-way at Berkeley & North Mtn. – I always thought was implemented mainly for traffic calming. BUT like I also said before, IF we had more enforcement, people would stop driving like jerky idiots. If they had parked an officer there for a couple of weeks, at varying times, to catch the people hitting Mach 1, I’ll bet the problem would have been solved. And with more enforcement, all they’d need is to get ONE ticket for failure to stop, and have one of Montclair’s finest very nicely explaining it to them, and suddenly they will know how to navigate the 4-way.

  25. POSTED BY Conan  |  February 07, 2013 @ 4:33 pm

    None of you would last a week as pedestrians in Boston.

  26. POSTED BY walleroo  |  February 07, 2013 @ 4:52 pm

    A red light would work better than barricades for your purposes.

    Actually, no. It’s much easier to run a red light.

  27. POSTED BY walleroo  |  February 07, 2013 @ 4:54 pm

    We should not waste any MPD resources on enforcing the 4-way @ Berkley & North Mountain. What we should do is remove the 4-way. It was a really stupid decision by the past Council to appease somebody…I am not sure they even know. There was absolutely no factual basis for this 4-way. Ask Dr Baskerville, ask the Township Engineer, OPRA the traffic study, ask the MPD, ask the MFD, ask Cary Africk. If you want to talk about monuments to stupidity, this is one. To add insult to injury, this intersection is now far more dangerous than it has ever been.

    My FAVORITE post of ALL TIME.

  28. POSTED BY sohobound  |  February 07, 2013 @ 5:51 pm

    The article shows the drop since they were elected. If memory serves, Fried & Co authorized about $6 million of debt in in their last month. How much of the $8 million being cancelled/paid back is just from these last minute debt approvals? It has always been smoke & mirrors. Just get the debt down, keep the schools strong with all the recent surpluses & don’t crush us with tax increases anymore. When is the developing starting at the Centro Verde? When are we going to see the forensic audit promised during the campaign? what’s the hold up on these?

  29. POSTED BY walleroo  |  February 07, 2013 @ 7:08 pm

    An old friend from way out in the boondocks said to me recently, “who the hell cares about a few 4 way stop signs? We handle them all the time! They’re all over the place, you pompous jerk!”

    To which I replied: yeah, but this is Jersey.

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