Q: Are the costs of issuance of these four UCIA bonds really $1,054,898.75?

A: Maybe not.  In reviewing more of the submissions it turns out that the ‘Underwriters Discount’ for the Park Madison and Juvenile Detention Center bond issues (totaling $278,190) was not included in the Proposed Issuance Costs.  The total cost would then come to $1,333,088.75 but, then again, those two refundings might not be approved.

Q: How much is the county expecting to get from these bond sales to use for current budget expenses?

A: From the submission item (9) (c) of both the JVD and Park Madison applications: “The deal is expected to bring over $2 million to the County to reduce the overall tax rate.”

Q: Where will the county get that money from?

A: Apparently the Local Finance Board wants to know too.  In the Executive Summary of the JVD application next to the line “In exchange for the commitment to issue the Refunding Bonds, the authority, based on current interest rates will receive an initial payment equal to 7.5% of the principal of the refunding bonds.” it is written in long-hand (not by me) in the margin: “from?”.

Q: Will the savings materialize?

A: Probably not.  According to the executive summaries of all four applications the savings will come from lower coupon rates yet the rates assumed (.46% – 2.66% for the County College bonds and .53% – 2.41% for the Correctional Facility bonds) are extremely optimistic for an entity with an Aa1 rating and a negative outlook based on recent borrowing.

It’s classified as ‘Proposed Issuance Costs’ on the applications to the Local Finance Board, all sent on March 21, 2012, for the four bond refinancings the UCIA wanted to do and they totaled $1,054,898.75 based on excerpts from the filings.

However, neither the freeholders nor the bond counsel knew that number (or weren’t willing to divulge it):
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All four filings were on the April 11, 2012 Agenda (11:25 AM) while the Park Madison and Juvenile Detention filings were also on a Supplemental Agenda for the May 9, 2012 meeting.  Here’s what became of them according to an email exchange with the LFB:

From: Ryan, Lisa
Subject: RE: Information request on Local Finance Board Agenda items
To: “‘John Bury’”
Date: Monday, May 7, 2012, 5:50 PM
Hi John,
The Union County Improvement Authority County College Project/Refunding and Revenue Refunding Bonds Correctional Facility Project applications were approved at the April Local Finance Board meeting. The City of Plainfield/Park Madison Redevelopment Project and the Juvenile Detention Center Facility Project were deferred to the May 9 Local Finance Board meeting agenda.
To obtain copies of these applications, please submit an OPRA request. To submit the request, go to the DCA homepage at http://www.nj.gov/dca/index.shtml and click on the OPRA/Open Public Records Act icon at the bottom of the page. Next, click on State Request Form at the top of the webpage that opens. Select Community Affairs from the drop down menu. Then select Division of Local Government Services. Completely fill out the records request form and click submit (make sure you indicate how you would like to receive the copies, i.e. fax, email, etc.).

Hope this helps.
Lisa
Lisa Ryan
Public Information Officer
NJ Department of Community Affairs
lisa.ryan@dca.state.nj.us
609-292-6055
101 South Broad Street
Trenton, NJ 08625-0800

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Thanks, Lisa.

I did OPRA the applications and saw on the website that the UCIA Park Madison and Juvenile Detention Center applications were on a supplemental agenda for May 9.  Do you know if they were approved?

John

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Hi John,

Both were deferred to a future meeting.

Lisa

Repeatedly the freeholder board was asked for an estimate of what professional fees would be for the four Union County Improvement Authority bond refinancings.
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As it turns out, each of the four filings to the Local Finance Board disclosed the ‘Proposed Issuance Costs’ which we will also disclose here with excerpts from those filings.  But first, what do you think those costs were for the refinancing of 4 bond issues totaling $83,168,200.  Hint: the costs were broken down between Authority Fee, Bond Counsel; Disclosure Counsel, Underwriter, Underwriter’s Counsel, County Bond Counsel, County Auditor, Trustee & Counsel, Ratings, Printing, and Miscellaneous.

Union County wants to privatize Watchung Stables so they will pay $16,000 to Mareth Advisors, LLC of Arlington, Va to tell them to do so.

When they wanted to build a Wedding Banquet Hall/Clubhouse at Galloping Hill Golf Course they got this guy to study it and he said nothing about what an idiotic idea it was:
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For CYA purposes, county officials always get outside opinions, generally from campaign donors for a fee, so why no study on the privatization of Runnells? Who’s running this operation which is now delaying layoffs until September 1 to buy more time to get dietary, housekeepng and laundry services lined up?

If the freeholders are really on their own in this then, come September, Runnells patients could be getting roombas and beating their whites against rocks as they wait for the Weeenie Mobile to come around.

They’re going to bond for $73,335,000 through three Ordinances, 732 ($27,000,000), 733 ($21,645,000), and 734 ($24,690,000) but the financial details seem to be entirely up to the Local Finance Board’s discretion:

On the Agenda of the April 11, 2012 meeting of the Local Finance Board there were four items totaling $81,335,000:

11:25 AM Union County Improvement Authority (County College Project/Refunding) Union – NJSA 40A:5A-6
$30,000,000 Proposed Project Financing
11:30 AM Union County Improvement Authority (City of Plainfield/Park Madison Redevelopment Project) Union – NJSA 40A:5A-6
$21,645,000 Proposed Project Financing
11:35 AM Union County Improvement Authority (Juvenile Detention Center Facility Project) Union – NJSA 40A:5A-6
$24,690,000 Proposed Project Financing
11:40 AM Union County Improvement Authority (Revenue Refunding Bonds Correctional Facility Project) Union – NJSA 40A:5A-6
$5,000,000 Proposed Project Financing

An email requesting information on these submissions was sent to lisa.ryan@dca.stae.nj.us at the Local Finance Board and this response came earlier this afternoon:

Hi John,

The Union County Improvement Authority County College Project/Refunding and Revenue Refunding Bonds Correctional Facility Project applications were approved at the April Local Finance Board meeting. The City of Plainfield/Park Madison Redevelopment Project and the Juvenile Detention Center Facility Project were deferred to the May 9 Local Finance Board meeting agenda.

To obtain copies of these applications, please submit an OPRA request. To submit the request, go to the DCA homepage at http://www.nj.gov/dca/index.shtml and click on the OPRA/Open Public Records Act icon at the bottom of the page. Next, click on State Request Form at the top of the webpage that opens. Select Community Affairs from the drop down menu. Then select Division of Local Government Services. Completely fill out the records request form and click submit (make sure you indicate how you would like to receive the copies, i.e. fax, email, etc.).

Hope this helps.

Lisa
Public Information Officer
NJ Department of Community Affairs
lisa.ryan@dca.state.nj.us
609-292-6055
101 South Broad Street
Trenton, NJ  08625-0800

$9,975 to buy fireplace tiles
$1.6 million on DeCotiis, Fitzpatrick
$1 million for other personnel and outside counsel
$800,000 a month building a golf clubhouse
$235,000 for UC Directions
$92,700 to fix an organ
$300 a pop to cater your meetings

This is a top-of-the-head list.  I’m sure you people can add to it.  Please feel free in the comments section and we will total up the possible savings.  If you need reminders check registries going back to 2004 are here.

Freeholder Sullivan:

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Tina Renna:

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Bruce Paterson:

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Jim Buettner:

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John Bury:

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Union Leaders:

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Freeholder Chair Mirabella:

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Explaining the two-week pay issue:

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Workers:

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Other Freeholders:

The Evidence:

There have been $68,466,428 in Open Space Trust Fund (OSTF) purchases with the $8,020,044 spent for the St. Agnes Church Property in Clark on December, 2007 being the last major purchase.

Revenue from taxes and grants was more than sufficient to make those purchases however the county bonded for $39,110,207 purportedly to make those purchases.  But the audited revenue figures of the OTSF do NOT show that bond money coming into the OTSF though county budget figures do  show $28,695,202 through 2012 going out from the OSTF to repay those bonds.

The question:
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The response:

Silence from the county but people are noticing.  At the May 1, 2012 Summit Council Meeting it was reported that there was an hour-long discussion on withholding the Open Space tax during which Thomas Garvey, president of the Summit Taxpayers Associations (STA), made these remarks:

The purpose of my remarks tonight is to make a specific call for action regarding the Union County tax levy as follows:

Where as;

Union County spending is completely out of control as evidenced by their ignoring the governors 2% nominal spending cap, increasing Summit residents tax levy by 10.94%, voting life time health benefits to employees which will cost taxpayers over $50MM (estimate). These same benefits are not available to most taxpayers or to our own city workers. For some perspective, the average NJ resident pays $1,802 in state income tax and the average Summit resident pays more than twice this amount or $3,999 in Union County tax alone.

Union County borrowing is completely out of control as evidenced by growing County debt which now totals over $556 MM and is up $154.7MM and 38% over the past 5 years. This debt does not include an additional $150 MM in lease obligations which require payments of $12.9MM per year.

Union County accountability is completely out of control as evidenced by their ignoring 3 months of personal appearances and petitions from members of Summit City Council and providing no audit-able documentation or receipts of any kind to support tax levy demands totaling almost $32 MM per year.

Therefore, the Summit Taxpayers Association requests that Summit City Council pass a resolution calling for the withholding and escrow of 1/2 of the Union County Open Space Tax (approx $521 M) levied for 2012. The argument for this request is outlined above but is also grounded in the belief the Open Space fund and tax levy are currently being used for purposes other than originally intended when approved. We also recommend Summit Council approve money to be used for a legal defense of this action.

Mr. Garvey continues in an email to the members of the STA:

After my remarks Summit City Council voted 5-1 to continue to pay the County Open Space tax.  Several council members spoke openly that their vote was based on “preliminary” legal advice but further legal review is warranted.  I believe we have not heard the last of the legal debate to withhold and escrow the Union County Open Space tax.

The STA anticipates future litigation of the Open Space tax and ensuing discovery of facts will broaden resulting in disclosure of even larger acts of fiscal irresponsibility by Union County.  Taxpayers can regain control of our County Government but to do so we must be willing to …….. follow the money!

2012-430 Freeholder Bette Jan Kowalski: Authorizing the County Manager to enter into a contract with Millenium Strategies, Caldwell, New Jersey for the purpose of providing grant procurement services for the period of January 1, 2012 through December 31, 2012 in an amount not to exceed $36,000.
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Millenium Strategies was paid about $3,000 per month from May, 2011 to January, 2012 for ‘Grant Writing and Procurement’ according to the county check registry.

Resolution 2012-434 Freeholder Daniel P. sullivan: Authorizing the County Manager to enter into an agreement with the Elizabeth Development Corporation for the purpose of providing assistance to underserved people with training and gaining access to summer employment in the amount of $25,000.
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