Township Committee Meeting (3-22-17) – Budgets Adopted

The TC adopted the 2017 Budget in a special meeting on March 22. This was delayed because the regular meeting on March 20 was consumed by the discussion about Glen Alpin. All TC members were in attendance.

The operating budget as adopted was the same as was presented in preliminary form over the last couple months and described in prior Thumbnails. Appropriations (aka spending) total $8.706 million, up 1% from 2016. Employee compensation (56%) of expenses is budgeted to rise 5% in 2017 driven by a 2% cost of living increase for non-union employees (non-police), a 1% increase rate increase in health insurance, a new hire in DPW and a part-time clerical employee in town hall. As well, pension costs rose almost 12%.

To raise the revenue to pay for this spending, tax will increase 1.8%. As an example, for a property assessed at $1 million, taxes would increase $50, from $2680 to $2730. But the total property tax bill for this theoretical $1MM property is over $11K. Recall that the $2730 is only for the Harding portion of your property tax bill (about 25%) – pays for HT Police, DPW and town hall functions. Your property bill also includes 4 other taxes: county (25%), county open space (1%), school (46%) and Harding Open Space (4%). Using 2012 as the base, the county and county open space taxes have actually decreased. School, Township and HOST have all increased with School increasing the most.

The TC also approved the capital budget of $700K. This includes various items – Kirby Hall ($165.5K), DPW building improvements ($175K), AV and computer equipment ($70.5K), roads and basins ($165K), COAH housing ($54K), DPW Equipment ($96K), Salt Storage Dome ($60K), Vehicle for building dept ($30K).

Citizens who want more detail can find the presentation slides on the township’s website – www.hardingnj.org.

The TC also ratified the Memorandum of Agreement with the PBA, the union representing the police. The prior contract expired 12/31/16. New contract is for 4 years and calls for a 1.5% per year increase in the compensation for the most senior officers. The prior contract had a 1.9% increase in the top step. There was no change in the health care.

The TC passed a resolution setting the rate that Harding police officers are paid for off duty work such as for traffic control for utilities and Wightman’s Farm. The new rate, which the vendor pays is $95/hour; $10 of which goes to Harding and $85 goes to the officer. This rate was said to me “in-line with neighboring towns”.

Big Decision for Glen Alpin Could Be Imminent

At its next meeting (April 17, 2017), the Harding Township Committee is expected to make a decision on “Diversion” scheme to resolve the future of the Glen Alpin property. Interested citizens should attend that meeting to voice their opinion on this issue. This report attempts to summarize the situation.

Glen Alpin is the historic property on the northwest corner of Tempe Wick Road and Route 202. The 9.6 acre site includes a Gothic Revival house and a detached multi-car garage. Harding purchased the property years ago with financing from Harding Open Space funds, State Green Acres and Morris County. The original plan was for restoration of the building and use as an event center. After the purchase, the Township realized that the cost to restore the house was too great and after replacing the roof (cost – over $800K) and other work, the project was put on hold. Maintenance costs will be about $25K this year. So GA has sat for years, frustrating attempts to find a resolution.

GA was the proverbial Gordian Knot. Because many parties (NJ and Morris County entities) funded the purchase, HT is not in complete control even though we are the stewards. It can’t easily be sold. It can’t legally be demolished. And the deteriorated condition and historical restrictions combined with the requirement that work done pay “prevailing wages” (read union scale) to all contractors make the cost to restore the building prohibitive – likely well over $1mm and perhaps multiple millions. From time to time, hopes were raised that a potential lessee was interested, but those always came to naught.

But over the last several months, township committee persons Dev Modi and Tim Jones have discovered a process by which a municipality can dispose of a property that was acquired with NJ State money. This process, called a diversion, requires an application to the State, demands the purchase of other property (2-4x as much acreage) to compensate for the disposed (diverted) property and can require repayment of grants taken for acquisition and repairs. On the plus side, the diversion (if granted) allows for the removal of encumbrances and modification of historical restrictions. Diversion requires the property be disposed of by auction after which the property might be in the hands of an owner who could do work less expensively because that new owner need not use union labor.

HT hired the consulting firm of Spinelli & Pinto (S&P) to help analyze the options. S&P made a public presentation of their findings at the regular TC meeting on March 20. Most of this report comes from information from S&P’s presentation.

There are two types of diversion – public and private. In the somewhat unhelpful definition given, a public diversion is “constructed by or sponsored by a public entity” whereas a private diversion is not “constructed or sponsored by a public entity”.

The public/private distinction is critical because if the diversion is deemed private (by NJ Department of Environmental Protection), then HT must acquire TWICE as much land to compensate for the diversion of the Glen Alpin property versus if this was deemed a public diversion.

S&P’s analysis also showed that Harding could divert just 3.2 acres (the parcel around the house) of the 9.6 acre property. This is advantageous because the compensating acreage needed to be purchased is one third the amount in a full diversion.

The consultants presented five options and their costs:

Partial Diversion, (private scenario) – $4.81 million

Full Diversion (private scenario) – $11.82 million

Partial Diversion (public scenario) – $2.98 million

Full Diversion (public scenario) – $6.33 million

No Action – $4.74 million

If the consultants’ numbers are accurate, the cheapest option is a partial diversion, public scenario.

All the diversion options assume that grants totaling almost $1.2 million received from Morris County would have to be repaid in full. But there is some indication that HT would not have to be repay the grants in full.

Auction proceeds from the GA sale were estimated at $694,000 and $1,000,000 for the partial and full property respectively.

The consultants assumed that compensating acreage to be purchased to replace GA would be purchased for $286,198 per acre. In a public scenario, HT would have to purchase 6.4 acres (2 x 3.2 acres) or 19.2 acres (2 x 9.6 acres). In the private scenario, HT would have to buy twice as much property. The property would have to be purchased only with Harding funds – no NJ Green Acres or County money for the compensating acres.

The cost of the No Action scenario was considered surprisingly high to some observers. This analysis totaled the costs for 29 years from 2017 to 2045. In this scenario, repair and restoration costs rose from $50K in 2022, to $170K in 2045 and total almost $2.5 million – this for a “No Action” option. The consultants said this annual figure was determined by looking at the costs for the last few years, a period which included the enormous cost to replace the terra cotta roof. A growth rate of 6% was used for the repair/restoration costs.

The TC believes that the cost of the diversion can be accommodated within the existing annual Open Space budget. In the words of committee person Dev Modi, a “diversion allows Harding Township to leverage its commitment to Open Space”. So if HT is going to buy open space property as it does frequently, combining a diversion with those purchases allows HT to get out from under GA at the same time and put it in good hands.

The public was assured (1) that there are potential buyers for GA; (2) that there have been preliminarily talks, and (3) that some don’t care if there will be some historical restrictions because those would help them get financing