$268 TAX HIKE COMING

DCA Rejects $800,000 Anticipated Revenue

(Reprinted from Amboy Beacon, Oct. 20, 2010)

SOUTH AMBOY — Apparently with much reluctance, the City Council voted at a

Special Meeting held last week to adopt an Amendment to the Calendar Year

2010 Budget and the Budget itself without including $800,000 as anticipated

revenue, thereby leading to a massive tax-increase this year.

The Resolution was moved by Councilman Joseph Connors, seconded by

Councilman Mark Noble and adopted 4-0. Councilman Donald Applegate abstained from

voting.

The Amendment to the CY 2010 Budget will increase local taxes by another

$722,576, on top of the $39 hike previously-announced by the Administration

and the Council on a home assessed at $266,000, the average in South Amboy,

from the unamended spending plan. Using the numbers provided with the CY 2010

Budget as introduced, the amended Budget will increase the municipal portion

of taxes on the average home by $268.

Council President Fred Henry, who is running for Mayor in the Nov. 2

election, called a letter the city received from the state Department of Community

Affairs (DCA) “flawed” because its officials “would not allow us to put

that money in our Budget for this year as anticipated revenue,” so “our hands

are tied with this” because “DCA says we have to adopt a Budget.

“We’re in a bind here,” Henry declared. “This is something the people of

South Amboy are going to have to deal-with.”

Despite a state requirement that the final CY 2010 Budget be approved by

the Mayor and Council no later than Friday, Sept. 24, no action was taken by

the Council at its regular meeting the previous week.

At another Special Meeting held on Sept. 27, the three Council members

in-attendance — the barest number for a quorum — refused to take any action on

the spending plan.

After adjourning into a closed-door executive session because “the Council

has to be brought up-to-speed about some problems with negotiations,” as

explained by Henry, Councilmen Mark Noble and William Schwarick refused to take

any action on the spending plan following their return.

Councilmen Donald Applegate and Joseph Connors — both of whom are running

in November — were absent from that meeting.

“I feel personally that I cannot vote to adopt this Budget because it’s

not fair to the taxpayers of South Amboy,” Noble declared at that time.

“I concur,” Schwarick added. “There’s a decision on additional revenue

coming from the state. We had a deal with a developer who agreed to purchase

Amboy Aggregates for $800,000, but at 4 p.m., the rug was pulled-out from

under us.”

O’Leary interjected to correct Schwarick’s statement.

“O’Neill Properties, the contract-purchaser for Amboy Aggregates, also had

signed a contract to purchase one acre next to it known as ‘the restaurant

site,’” he said.

“At 1 p.m., we had an agreement from DCA (state Department of Community

Affairs) Commissioner Thomas Neff, but at 4 p.m., this anticipated revenue

source was not accepted,” the Mayor stated.

“Obviously, we have no vote for the Budget tonight,” Henry said. “”We

had a deal already-made, everything was set, and then apparently an anonymous

call was made that this was not a real LLC (Limited Liability Company).

“We’re fighting a tax-increase, and for whatever reason, it’s not

coming-about,” he said. “We’re talking only about one acre of land where the (South

Amboy) Boat Club was. A deal was made, but at 4 p.m., we received a call

that the deal was off.”

O’Leary castigated DCA officials for allegedly bowing to pressures from

“an anonymous caller” who challenged the deal’s legitimacy.

The Council’s inaction subjected the three members in-attendance to the

possible assessment of individual $25-a-day fines against them by DCA.

Henry announced at the last regular Council meeting that a Special Meeting

would be held last week in an effort to adopt an amendment to the CY 2010

Budget that would be acceptable to DCA, as well as the Budget itself.

The day after the Council’s regular meeting last week, the Redevelopment

Agency held its regular monthly meeting, at which representatives of The

O’Neill Properties Group appeared for a slideshow presentation introducing

themselves to the community.

O’Neill is a highly-capitalized Pennsylvania-based firm that specializes

in redeveloping contaminated properties known as “brownfields,” such as the

400-plus-acre former NL Industries site in neighboring Sayreville, where an

elaborate multi-million-dollar Redevelopment Plan is being implemented.

After the presentation, the Agency voted 4-0 to adopt a Resolution

rescinding its previously-declared emergency and a Resolution adopted at its Sept.

23 Special Emergency Meeting authorizing a Redevelopment Agreement with a

newly-formed Limited Partnership, and to instead authorize a new Agreement

designating “O’Neill Properties” as redeveloper.

The first Resolution was moved by Henry and the second Resolution was moved

by Business Administrator Camille Tooker, both Agency members, and both

were seconded by Agency Chairman Kevin Meszaros. Members Benjamin Block and

Melvin Rosado were absent. Mayor John O’Leary, an Agency member, recused

himself from voting but was in the audience and participated in discussions during

O’Neill’s presentation.

The Agency’s vote to change the contract apparently was intended to

convince state officials to allow South Amboy to include the $800,000 in the

Agreement as anticipated revenue in the CY 2010 Budget, thereby heading-off a

large tax-hike this year.

The Beacon has obtained a copy of a two-page Agreement signed by

Redevelopment Agency Executive Director Eric Chubenko and Richard Heany, President of

Amboy Waterfront Acquisition Associates LP, providing for the payment of

$800,000 to the City of South Amboy by Dec. 15 for the one-acre parcel as part

of a $3.8 million property purchase.

However, an “escape-clause” in the contract allows the entity to withdraw

from the Agreement “at it’s (sic) discretion,” and to “compel” the Agency

to sell the property and return “the deposit.”

According to a Business Entity Status Report provided by the N.J. State

Business Gateway Service, Amboy Waterfront Acquisition Associates LP is a

“foreign (Delaware) Limited Partnership” (not an LLC), which filed on Sept. 27,

the date of the second Special Meeting.

At the Redevelopment Agency meeting, O’Neill attorney Edward Campbell

acknowledged that Amboy Waterfront Acquisition Associates LP is an O’Neill

“affiliate,” but noted that he did not draw-up the Agreement.

At last week’s Special Council Meeting, the entire Council adjourning into

another closed-door executive session “to discuss the Budget,” Henry

informed the audience.

Realizing that this is not one of the enumerated exceptions provided in the

state Open Public Meetings Act, commonly known as the “Sunshine Law,” he

quickly stated, “Excuse me; it is for contract negotiations.”

City Law Director John Lanza and Chief Financial Officer (CFO) Terance

O’Neill, who did not attend two previous Council Special Meetings dealing with

the CY 2010 Budget, also were absent last week.

At 6:26 p.m., the Council members emerged with O’Leary and Tooker and took

their seats. Schwarick moved and Noble seconded to reconvene the public

meeting.

“This is a sad day for the citizens of South Amboy when politics hits our

good citizens’ pockets,” Connors declared.

“The Business Administrator and the Mayor have been trying for three

months,” Applegate said. “It hurts. It hurts real-bad.”

“We’re trying our hardest to do what’s best,” Noble said. “We can’t

fight the state anymore. If we continued, it could be detrimental to the

citizens of South Amboy. With reluctance, we had to adopt this Budget tonight.”

“I find it offensive in this society that anonymous bullying can affect the

city,” Schwarick declared. “It’s a shame that we must allow this

anonymous, scurrilous activity to continue, but to fight this in court would only add

to our legal bills.”

O’Leary cited changes in state funding going-back to former Gov. Christine

Whitman’s Administration.

The amendments adopted by the Council increase the total amount of the CY

2010 Budget by $1,553,543, from $13,993,033 to $15,546,576, and the amount to

be raised by local taxes by $722,576, from $7,129,425 to $7,852,001.

A source familiar with municipal budgeting had indicated to the Amboy

Beacon that DCA will allow municipalities to anticipate revenue from developers

“only if there’s signed contracts.”

In anticipating revenues, a municipal government runs the risk of not

collecting that revenue — part of the reason for neighboring Perth Amboy’s

fiscal problems.