Montclair Township Council Meeting: Town Reduces $40 Million of Debt Since 2011

Montclair Chief Financial Officer Padmaja Rao delivers news on the reduced debt at the November 24 Montclair Township Council meeting while resident Sandy Sorkin (left) takes notes.
Montclair Chief Financial Officer Padmaja Rao delivers news on the reduced debt at the November 24 Montclair Township Council meeting while resident Sandy Sorkin (left) takes notes.

The Montclair Township Council held a brief conference meeting on November 24 at which it hosted the township’s chief financial officer, Padmaja Rao, who presented favorable news about Montclair’s finances.


Rao began by saying that, since the end of 2011, the township had reduced its debt from $223 million then to $183 million in November 2015, which caused Mayor Robert Jackson and the councilors to break out in applause.  Rao also reported that the township was able pay down $11.5 million through the budget  in the process.  Mayor Jackson said that the 22 percent reduction in the debt was significant because it allowed Montclair to dedicate less money to the debt while paying it down, providing some financial momentum.  Rao also said that 59 percent of general obligations bonds would come due in five years, the remainder coming due in ten years, which she said was favorable toward debt reduction.

In public comment, resident Sandy Sorkin agreed that Rao’s news was wonderful, but he had an issue with the fact that her report had not been posted on the township’s website.  Rao had given hard copies of a slide presentation to the council, and Sorkin said that the public ought to be privy to the information that the council had only just received.  Sorkin added that this was an example of “secret reports” with details that the public couldn’t see.

“I think that you should have the same complaint that I have, that this should have been available before the meeting, so you wouldn’t have to sit here and read it to ask your questions,” Sorkin told the council.  He commended the $40 million debt  reduction but asked how much of it was canceling unissued bonds that were authorized.  Mayor Jackson said that the amount of issued debt went down by about $204 million to $164 million, so it’s the same spread as the drop in debt that was issued.

“I’ve heard this in the past,” the mayor said, “where people have said, ‘You’re not really reducing outstanding debt,  you’re just canceling other debt,’ and that is absolutely not the case.”

Senior Activities & Resources

Resident Adriana O’Toole also spoke in public comment, lamenting the lack of a senior citizens’ center and the diffuse nature of senior activities, which are scattered about town.  O’Toole said it was shameful that so many other municipalities have senior citizens’ centers, all fully staffed, while Montclair does not, and she said the senior-bus service was inadequate, providing a scattered schedule and insufficient information about where in town it goes.  Mayor Jackson said he resented the idea that Montclair was not senior-friendly, insisting that his council had strived to get a new senior bus and provided senior activities at the library and adding that council members regularly attended meetings of the Senior Citizens Advisory Committee to establish a rapport with seniors.

Deputy Mayor Robert Russo, as a senior citizen himself, stressed that the council was trying to get a seniors’ center established, and O’Toole responded that she was not blaming the council in particular, but she noted that the town has a history of giving older residents short shrift. Fourth Ward Councilor Renée Baskerville said she was “excited” about the increased efforts to remedy that situation.

Montclair Fire Department

Montclair Fire Chief John Herrmann at the November 24 Montclair Township Council meeting
Montclair Fire Chief John Herrmann at the November 24 Montclair Township Council meeting

Fire Chief John Herrmann addressed one of the six resolutions up for a vote that evening (no ordinances were voted on) authorizing the purchase of a new Pierce-Arrow ladder truck for the fire department.  Chief Herrmann said that the existing ladder truck was twenty years old and the fire department had pretty much all possible use out of it.  Third Ward Councilor Sean Spiller noted the “significant savings” the chief had achieved in proposing to buy the truck through the Houston-Galveston Area Council Cooperative Lease Purchase Program, and Chief Herrmann pointed to a $79,000 savings through a lower interest rate than the available bond rate along with a discounted pre-payment of the chassis.  Chief Herrmann added that he was aiming to replace fire apparatuses at a fifteen-year cycle, with an apparatus replaced every three years with some of them going into reserve status.

Second Ward Councilor Robin Schlager asked when the new ladder truck would be delivered and also asked about the fate of the old truck. Chief Herrmann explained that it would likely be auctioned through used-apparatus vendors, and that the new truck would take about a year to build; he also responded to Dr. Baskerville’s  question about the ladder’s reach, saying that, at 105 feet, it should reach eight stories.  Deputy Mayor Russo expressed concerned about the truck possibly having problems, and he wanted to know what the warranty was for a Pierce-Arrow truck. The chief said that different components were covered by different warranties and that he has never had problems with Pierce-Arrow vehicles.  He told the deputy mayor that he could get him particulars on the warranties involved.

“Just remember,” Deputy Mayor Russo said,” if it doesn’t work, you can go to the lemon law,” noting that the law protecting consumers from purchases of failed vehicles also extends to purchases of municipal vehicles.   The resolution passed, 7-0, as did a resolution awarding a contract for the purchase of new fire hydrants through HD Supply Waterworks in Edison.

Construction of the MC Hotel

Also, the council addressed the question of a possible closing of Orange Road between Bloomfield and Hillside Avenues to accommodate construction of the MC Hotel.  Township Attorney Ira Karasick said that the street would close “only on infrequent occasions” in a 12-18-month period, with a single lane open in one direction most of the time.  The start of the construction period hasn’t been determined, but Karasick said it depends on the council approving a series of agreements he was planning to discuss with the mayor and councilors.  Councilor Spiller praised Karasick for working with the hotel developers to ensure that the entire portion of Orange Road isn’t closed, and Karasick was also addressing the parking issues for the residents along that stretch of Orange Road.



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  1. Not so fast Robert. If actual outstanding debt was reduced, why are those not the only numbers that are ever used? There is no chance there was a $40mm reduction in outstanding debt. Canceling authorized but unissued debt is a good thing to do but in no way bona fide “debt reduction”. Of course, relevant distinctions like fixed versus floating debt aren’t noted. Any significant amount of long term floating debt is likely to hurt residents. More generally, liabilities continue to grow silently and significantly. Inadequate spending on Montclair’s 100+ year old water and sewer infrastructure maintenance are creating looming liabilities for residents — particularly with the stress added to the infrastructure with the latest large scale real estate development projects. Most importantly, the true cost of the post employment pension and healthcare benefits for public employees is massively under-estimated — and of course –under-funded. Sure, go ahead point to the town’s credit rating. Long live muppets and Ponzi schemes.

  2. alex, you failed to notice that the Montclair 2016 campaign has already begun & this is just the latest installment…via the very new Township CFO. Ah, it’s nice to be an incumbent.

  3. I recently determined a cure for cancer. Though I’ve only shared the details of my cure with those who have died from the disease. Sorry.

  4. From what I calculate, we have $135MM in long term bonded debt, $30MM in short term notes/other issues and $18MM in authorized, but not issued (ABNI). The ABNI number seems to have held relatively constant since 2011. So, our short term debt must be up. Since it seems the low short term rates are favorable over bonds right now, we are benefiting for the moment.

    I get touting the progress made for campaign purposes and this council deserves all the credit. Yet, as I understand it, our plan is to reduce total debt to $120MM by 2022. Therefore, can you educate me on how debt service costs will not steadily increase in both absolute and relative measures, especially as the annual long term bond payments due are growing, not declining?

  5. And not for nothing, the Montclair Public Schools don’t seem to be on board with our debt plan as they just said they need another $5-9MM within the next 5 yrs, over their current capital plan, and they obviously are unable to adequately replenish their capital reserve account to cover this.

  6. one way to manage incease in debt service would be to make do with current ladder truck. 20 years does not seem to end “usable life” of fire trucks:

    “According to the U.S. Fire Administration’s Fire Service Needs Assessment, researched by the National Fire Protection Association (NFPA) and published in December 2002, 16 percent of all fire engines (pumpers) are 15–19 years old; 21 percent are 20–29 years old; 13 percent (more than 10,000) are more than 30 years old. The report concludes that more than half of all fire engines are more than 15 years old.”

    Those are pumper numbers but perhaps adder truck numbers are comparable? The mayor and council seem constitutionally unable to say no to fire or police department, however ludicrous the request (“policy interceptors”, mobile command unit). I guess they are afraid to look like they are putting fiscal probity above public safety. Or maybe they are afraid of those unions.

  7. I appreciate your point, but I also see the Chief’s point about sending employees up a 10 story ladder that is 20 years old, on top of facing the toxic potpourri by-product of modern building materials burning.

Comments are closed.