UNION COUNTY BUDGET 2012 TAXES AND DEBT. Tax Levy (in millions) Union County Taxes and Debt2.

UNION COUNTY BUDGET2012

TAXES AND DEBT

Union County Taxes and Debt 2

Tax Levy (in millions)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

50

100

150

200

250

300

350

Tax Levy


Open Space Tax (in millions)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

2

4

6

8

10

12

14


NJSA 54:4-63.10Payments by municipality to county

2010: County ($769,989) + OS ($31,803)The municipality on February fifteenth of each year shall, in addition to the regular installment of county taxes to be paid on said date, pay to the county an amount determined by multiplying the total amount of assessments in the added assessment list for the previous year by the county and State rate for the preceding year, and such amount shall be for the use of the county.


Analysis of Tax Yield 2010


Big County Tax ComparisonCounty 3-Year Equalized

Value - 2010Population 2011 Tax Levy 2012 Tax Levy

Essex $94,299,472,829 770,675 $384,033,626 $391,714,300

Bergen $180,879,321,856 894,840 $351,980,788 $356,159,007

Middlesex $109,546,397,000 789,102 $320,093,000

Passaic $55,257,130,334 490,948 $298,991,500 $305,100,000

Union $74,763,453,344 523,249 $291,168,537 $303,543,083

Monmouth $124,626,088,385 642,448 $302,475,000 $302,475,000

Ocean $106,596,588,958 569,111 $293,278,750 $300,026,643

Hudson $64,623,619,328 595,419 $279,653,339 $292,680,093


Big County Debt ComparisonCounty 3-Year Equalized

Value - 2010Population Net Debt

12/31/102011 Debt

ServiceEssex $94,299,472,829 770,675 $326,914,353 $99,510,889

Bergen $180,879,321,856 894,840 $730,825,490 $62,038,250

Middlesex $109,546,397,000 789,102 $639,968,209 $61,460,702

Passaic $55,257,130,334 490,948 $373,881,844 $56,389,452

Ocean $106,596,588,958 569,111 $427,048,645 $51,478,696

Monmouth $124,626,088,385 642,448 $488,135,115 $50,853,005

Union $74,763,453,344 523,249 $547,656,394 $44,920,000

Hudson $64,623,619,328 595,419 $348,584,434 $19,726,438


How I got here

Pension Funding in NJ: • Bad Assumptions• Contribution Holidays• Unfunded Benefit PromisesAre we being governed by idiots?


First Contact

Shared Services Committee


Outrage: Councilman can’t recall why he was paid $4,500

“I didn’t make this clip to personally attack Jorn. It was an opportunity to shine a light on a state-wide problem, because this incident is common across the state,” Renna said.Other members of the former committee, along with their salaries, were: Hillside resident and former health inspector Angelo Bonanno ($4,500); Democratic committeewoman Patricia Plante ($4,500); former Garwood mayor Michael Crincoli ($3,750); former Kenilworth councilwoman Carmela Colosimo ($3,750); former Roselle Park councilman Gregory Kinlock ($4,500); and Springfield Democratic Committeewoman Jodi Bergen ($4,500).

http://www.thehillsider.com/?p=119


FRUSTRATION

Politician caught stealing and only explanations:• He deserves it because he saved the town

millions and got them out of a lot of messes.• What about Iraq?• Not getting paid enough to have to take this

questioning and abuse – but if job is hard and not willing to put in the work – why accept it?


Went to Corzine

Cranford Town Hall Meeting 1/30/08


Constituencies E-V-U-PThose who contribute to political campaigns. For example check campaign contribution records to the Union County Democratic and Republican Committees and you will find four broad categories of givers.


E – 2010 to UC Dem CommitteeDonor Donation Donor Donation

Albert, Norman $675 Graziano , Joseph $675

Badri, Sharda $45 Howard, Chris $375

Barry, Bob $300 Kobitz, Arhtur $600

Caroselli, Lawrence $675 Muftav, Moshood $425

Comas, Rosalba $375 Policay, Joseph $375

Delia, Sebastian $300 Rapuano, Ray $300

Dunn-Hale, Pamela $300 Wheeler, Joan $375

Duryee, Christopher $375 Yuska, Michael $375


E – 2010 to UC Rep Committee Donor Donation


Employees•$300 contributions•Campaign Workers• Friends and Family•Public Contact


V – 2010 to UC Dem CommitteeDonor Donation

Amaker & Porterfield $900

Richard Bauch $10,000

Bevan, Mosca, Guiditta $900

Birdsall Services Group $7,800 - $7,800

Harbor Consultants $5,000

Lacorte, Bundy $2,500

Love Hope Strength $100

Readlingers (Hale Insurance) $27,000


V – 2010 to UC Rep Committee

Donor Donation


VendorsNo-bid contracts go to campaign donors:Lawyers • DeCotiis, Fitzpatrick• Bauch, Zucker• Webber, DowdBuilders• Birdsall Services Group• Claremont Construction


Decotiis Lawyer Contributions


DeCotiis, Fitzpatrick & ColeUnion County Check Registries

2011 - $92,213.16

Date Amount Date Amount

2/23/11 $312.60 8/17/11 $5,890.455/4/11 $3,061.10 9/28/11 $4,598.006/8/11 $1,008.10 12/7/11 $50.006/8/11 $1,193.20 12/21/11 $3,485.206/29/11 $3,833.05 12/21/11 $4,413.408/10/11 $9,973.75 12/21/11 $2,781.368/10/11 $1,612.95 2/25/22 (HCR) $50,000.00


Decotiis, Fitzpatrick & ColeUnion County Utilities Authority

2011 - $457,858.24


Decotiis, Fitzpatrick & ColeUnion County Improvement Authority

2011 - $1,056,844.98Reason Amount Reason Amount

General File $159,345.61 Linden Movie Thtr $185.20

Brownfields $2,163.00 Linden So Wood Av $38,571.57

Child Advocacy Proj $110,464.43 Oakwood Plaza $6,441.61

County College $2,753.50 Park Madison $4,856.70

Elizabeth Ferry $2,110.40 Plainfield W. 2nd St $8,916.97

ISP/Dupont $19,907.33 Renewable Energy $337,325.72

Juvenile Det. Ctr. $13,621.24 Trembly Point $11,978.90

Linden Firehouse $31,096.86 Animal Shelter $92.50

Linden Library $26,312.62 Prosecutors Bldg $1,909.20

Linden Morningstar $73,466.84 Verge Prop Urb Ren $205,324.78


Decotiis, Fitzpatrick & ColeUnion County Billing - 2011

SOURCE AMOUNTCOUNTY $92,213UCUA $457,858UCIA $1,056,845TOTAL $1,606,916


U – 2010 to UC Dem CommitteeDonor DonationNorthern NJ Ironworkers $25,000NJ State Carpenters PAC $7,500NJ State Laborers $2,000Plumbers LOU 24 PAC $1,000


U – 2010 to UC Rep CommitteeDonor DonationLaborers UL 472 $800Teamsters Joint Council 73 $250


UnionsEven the Union County Republican Committee gets some money from them.Union dues as a retainer to keep politicians on their rolls.


P – 2010 to UC Dem CommitteeDonor DonationCranford Democratic Cmte $75Cryan, Joseph EFO $10,000Empower Newark PAC $5,500Fanwood Democratic Cmte $450Froehlich, R CTRE $12,000Hunterdon Cty Dem Cmte $300Lesniak, Ray EFO $12,500NJ State Democratic Cmte $270Pallone for Congress $16,000Payne for Congress $5,000Rahway Democratic Cmte $1,010Scutari for Senate $10,000Sires for Congress $5,000Stender for Assembly EFO $1,000Sweeney for Senate $10,000


P – 2010 to UC Rep CommitteeDonor Donation

Americans for Republican Leadership $5,000

Bramnick for Assembly $10,000

Dickson, Flanagan & Medved Cmte $2,325

Kean for Senate $25,400

Lance for Congress $5,000

Munoz fore Assembly $10,000


PoliticiansDealing and Wheeling

Dealing out:• Jobs• Contracts• Money• Perks


WheelingThe transfer of money between political organizations in order to skirt campaign funding laws. For example, the law firm of DeCotiis, Fitzpatrick and Cole received $1,606,916 from Union County taxpayers in 2011 ($92,213 through the county; $457,858 through the UCUA; and $1,056,845 through the UCIA). Check on http://www.elec.state.nj.us and you will find that DeCotiis and their employees made 1,825 separate political contributions over the years. One of them was made on June 6, 2008 to the campaign of state senator Raymond J. Lesniak in the amount of $3,000. Among the contributions to the UC Democratic Committee during 2010 was $10,000 made on 10/18/10 from the campaign fund of Ray Lesniak.

http://www.elec.state.nj.us/


Example of a Payback

Ordinance 716-2011: Providing Lifetime Health Benefits to 600-700 county employees (and raising golf fees)• No actuarial study• No freeholder questions• No idea of eventual cost ($50 million?)

It was up to taxpayers……………


Lifetime Health Benefits VideoFebruary 10, 2011 Freeholder Meeting

Ordinance questions


O’Sullivan Actuarial Study5/25/2011 OSU01 O'SULLIVAN ASSOCIATES ACTUARIAL SERVICES $9,000for Excel spreadsheet projecting 3% savings over 25 years.

Employees Impacted: 541 currently working

Average Annual Salary: $59,666

Savings in 2011 (Year 1): $59,666 x 541 x .03 = $968,375

Savings in 2012 (Year 2): $968,375 x 1.03 = $997,426

Savings in 2036 (Year 26): $968,375 x (1.03)^25 = $2,027,563


Defending the Freeholders

Lawrence Caroselli


Nobody else raised a peep

In Union County taxpayers have to watch out for themselves since nobody else is asking the questions you saw regarding what will amount to a $50 million giveaway in retiree health benefits. In that spirit, the BUDGET NUMBERS…………


Preface - No GAAP in NJ

Pension Symposium NJIT 9/11


Fitch on Union County

Fitch assigns AAA bond rating to Union County, outlook stable; rating is highest attainable. Suburban News 6/9/11


Fitch on Union County Video

Non-Transparent(I mean, different)


Budget Pays To:

• Run a Jail (Corrections)• Run a Nursing Home (Runnells)• Maintain Parks• Run two golf courses, a stable, and an ice rink• Fund the Prosecutors' office• Serve legal papers (Sheriff)• Maintain the courthouse• Provide social services• Keep track of land records (County Clerk)• Run Elections


Ancillary Departments

• Administrative services• Legal Counsel• Public Information• Finance • Freeholders


TAXESThe amount to be raised by taxation will go up 4.2% to $303 million in 2012 from $291 million in 2011. Additional money raised through state and federal grants and various revenue generators.


County Taxes by City


Taxes are not enough

2% cap though several exclusions limits amount taxes can go up.To get around the cap spending moves to debt.


Debt – 12/31/11 estimatePRINCIPAL 2012 DEBTBALANCE____ SERVICE____Bonds prior to 2011: $233,628,000 $26,875,692

Bonds 2011: $ 80,000,000 $ 8,917,480

Bond Anticipation Note: $130,000,000 $ 2,000,000

2003 ERI: $ 6,980,000 $ 1,200,733

Dam Loan: $ 2,912,714 $ 206,095

Bonds Authorized/Not Issued$102,871,286 $ 0

TOTAL: $556,392,000 $39,200,000


Not ‘Debt’ - 1

Payments to Authorities under lease or loan agreements.UCIA lease payment includes repayment of the project bonds plus as “additional rent, the County will pay the Authority an annual administrative fee and actual legal and accounting expenses incurred by the Authority.”


UCIA LeasesProject 2012 Balance (Est.) 2012 Payment

Correctional Facility $8,000,000 $930,548

Park Madison $26,000,000 $1,531,042

Linden Theater $2,200,000 $229,218

Juvenile Det Ctr 2004 $4,000,000 $1,094,387

Juvenile Det Ctr 2005 $27,000,000 $2,042,069

County Prosecutors Office $2,200,000 $284,010

Union County College Expansion $38,000,000 $4,410,222

Linden Theater 2006 $700,000 $230,025

10 Cherry Street Acquisition $800,000 $154,294

Child Advocacy Center $2,500,000 $222,275

Family Courthouse $45,000,000 $1,800,000

TOTAL $156,400,000 $12,928,090


UCIA Lease Debt - Estimated

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20120.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0


Not ‘Debt’ - 2

Debt service on bonds that will be paid solely from a county or municipal open space trust fund (established to hold proceeds of a dedicated open space tax or dedicated annual budget appropriation) need not be included in the calculation of the municipality’s or county’s total (gross) debt (N.J.S.A. 40A:2-44h).


TOTAL DEBT – OVER $2 BILLION?

1. Bonding ($556)2. UCIA Leases ( $156)3. Guaranteed Debt (Solar Panels $15; Oakwood

Plaza $18)3. Retiree Health Costs ($600)4. Pension Promises (??????)


Bonding for Long-Term Projects

General obligation notes and bonds of New Jersey local governments can be issued without any prior approval of the State or the voters as long as the debt complies with the applicable statute. In the case of municipalities or counties, bonds are authorized by a duly adopted bond ordinance. G.O. bonds issued by school districts are authorized by prior voter approval at referendum.


Adopting a Bond Ordinance

Generally, a municipality or county must:1. have the ordinance read at a public meeting

of the governing body;2. publish notice of the ordinance;3. hold a public hearing and have the ordinance

adopted by two-thirds of the governing body; and

4. publish notice of the adopted ordinance.


Issuance Procedures1. may not issue bonds to finance more than 95 percent of a project’s

cost;2. must sell bonds at competitive sale rather than negotiating a sale

with a designated underwriter;3. must amortize bonds over a period no longer than the useful life of

the projects financed (not exceeding 40 years for land);4. must begin repaying principal within one year of issuance;5. must structure principal repayments such that no annual payment is

more than 100 percent greater than any earlier payment; and6. may not authorize debt in an amount which exceeds 3-1/2% for

municipalities and 2% for counties of the average equalized valuations of the taxable real estate, together with improvements, over the preceding three years.


Tracking Bond Ordinances

Bibi Taylor explanation


480D Oak Ridge Golf Course

Ordinance Adopted 7/23/9812/31/00: $2,914,200 Balance2001 BAN: ($671,000)2003 BAN: ($702,000)2006 BAN: ($385,000)2009 BAN: (1,156,000)12/31/10: $200


Ordinances

Every bond expenditure needs to be tied back to an ordinance but who is keeping track?Was the $3 million allocated for “Oak Ridge Golf Course” back on July 23, 1998 in Ordinance 480-1998 really spent on Improvements to Oak Ridge Golf Course or was it being included in a bond sale to raise money to pay unrelated expenses?It’s not as if the county is noted for keeping accurate accounting records……


MusicfestHow much do they spend exactly? We’ll never know. Why? Because the county employees and officials running the event and the concessionaires keep shoddy records — if they keep any records at all.In Union County, they use the “trust me” accounting method.

• How many cars parked at $10 a pop? We’re not sure, because the parking lot counter isn’t accurate, but trust me, the money is all there.• How many beers were sold at the Beer Garden?We’re not sure. We took the bartenders’ word, but trust me, the money is all there. • How much was made on the kiddie rides?There’s no method for counting the tickets, but trust me, it’s all there.

To which we reply: This is New Jersey. We trust no one with cash, and for good reason. For years, trying to follow the MusicFest money has been dizzying. Who knows how much could have been skimmed? So this year, the Union County Prosecutor’s Office decided to investigate. It found the bookkeeping was so lousy last year — and probably every year — that nobody can tell whether money was stolen. Receipts? Records? What are those?The prosecutor’s office found no criminal wrongdoing (because, ironically, there were few records), but discovered that a vendor nearly ripped off the county for $24,281.68. A refund has been ordered. If Union County — which spends roughly $800,000 to stage the event — lost this much in 2010, was it cheated out of money the other 13 years? And why didn’t a county official spot this?

Star Ledger editorial 9/1/11

http://www.nj.com/news/index.ssf/2011/08/union_county_musicfest_organiz.html


Real Musicfest Costs

Kane In Your Corner


Audit Findings

Suplee, Clooney & Company have been the auditors at least since 2000.Monmouth changes every three years.Yet, they found some stuff:


Audit Findings – 2001/2002

We recommend that:• Every effort be made to obtain all Section 8 Housing

Assistance records from HUD.• Once the records are returned, the condition of the

records be assessed to determine their sufficiency, completeness and accuracy.

• A consultant be retained to file the final close out reports and resolve any questioned costs.

• Consideration be given to take legal action against the third party administrator to recover any misappropriated funds.


Audit Findings – 2003/4/5/6/7

That a physical inventory of General Fixed Assets be taken and reconciled with the property records on a periodic basis.


Audit Findings - 2006

OPEN SPACE TRUST FUNDSWe noted that Open Space Trust Funds were encumbered for authorized projects prior to the availability of dedicated revenues. The encumbrances were eventually reviewed and reallocated to other existing capital ordinances.RECOMMENDATIONThat the encumbering of Open Space Trust Funds be in accordance with the requirements of NJSA 40A:4-39


Audit Findings – 2007/8/9/10

Federal and State Programs:We recommend that the County of Union monitor and document the submission of all audit reports of subrecipients and the financial activities of the consultant of the Housing Choice Voucher Program


Audit Findings – 2007/8/9/10

Federal and State Programs:We recommend that all expenditure reports be accurately prepared and reconciled with the accounting records prior to their submission with grantor agencies.



PAYROLLThe monthly bank reconciliations for the payroll account were not prepared properly. There were numerous unidentified reconciling items and the outstanding check amount was not supported by a detailed listing.RECOMMENDATIONThat outstanding checks amounts included in the monthly payroll bank reconciliations be supported by a detailed listing



Department of Parks and Community RenewalWe noted that the office lacked formal internal control procedures that provided appropriate reviews, approvals and proofs of all financial transactions. As a result, the financial records as presented for audit were not accurate or completely maintained. Numerous checks received by the office were not recorded in the records or deposited in the bank account within 48 hours as required by State statutes. In addition, an employee responsible for maintaining the financial records was able to misappropriate County funds over a period of several years. This individual was dismissed from County employment and criminal charges were filed.


Audit Findings - 2008May 19, 2009; Star Ledger:UNION COUNTY -- Two employees of the Union County parks department were charged with theft today, in what authorities say were unrelated incidents.A clerk for the county parks department, Melissa Kolbeck, is accused of swiping between $15,000 and $20,000 in funds paid to the county for permits, authorities said. And park maintenance worker Brian Hughes is charged with stealing more than $35,000 from the parks workers' union, of which he is president, authorities said. He is also charged with forgery. Complaints were signed against both employees today, according to the Union County Prosecutor's office. Each has been suspended without pay pending the outcome of the charges. This comes a day after the county's announcement that an audit bureau (to be headed by Richard Childs) will be formed to conduct internal investigations and monitor internal controls for its 2,000-member work force.


Audit Findings – 2008/9/10

We recommend that the allocation of salary costs be documented and supported with employee time sheets.

Payroll from Employee Lists: $174 millionBudget: $158 (?) millionDifference: From grants and not being tracked



Union County Golf FacilitiesKSM provides the County a monthly financial report that details the financial activities of the golf facilities, however, we noted that these monthly reports were not being currently reconciled with the County’s golf revenue bank account.Section 6.4 of the contract between KSM and the County of Union requires the County to advance funds to KSM. These funds are then used to pay the operating expenses of the golf facilities. Advances under certain conditions are permitted by the Local Fiscal Affairs Law. This type of advance is not specifically listed as an exception.



Music Fest 2010During March of 2011, the Union County Prosecutor’s Office commenced as inquiry into the operations of the County’s 2010* Music Fest Program (and) issued a report 9that) concluded that no criminal conduct was evident by any County employee associated with this event, however, the report did identify deficiencies in the system of internal control. The management of the County of Union prepared a corrective action plan addressing the findings in the report.* After Richard Childs’ internal audit department was up.


Other Screw-Ups

OPEB calculations in audit Claiming a government insignia can be trademarkedRubber-room employees (Lapolla, Kolbeck,…)


Stockton Example

Sheet A-4 of 2011-12 budget tome (page 14 of 412) notes that a “new senior management team” looked at the books and found:

“an unfortunate practice of inter-fund borrowings, deficit spending, over leveraging and drawing down cash from internal service funds, all of which have quietly put the City’s General Fund at greater risk. From our examination, much of this has not been highlighted for City Council’s attention as a clear policy choice, but instead resulted from an accumulation of staff decisions at various levels of the City, and was buried in the myriad of financial details forwarded to the Council.”


Union County Questionable RevenuesRevenue Item 2011 2012

Debt Service Open Space $4,164,597 $5,288,400

Capital Fund Balance $3,000,000 $2,500,000

Trust Fund Balance $237,813 $0

Accumulated Absence Trust $0 $300,000

Fringe Benefits $3,550,384 $3,300,000

UCUA $0 $2,000,000

Open Space – Parks Maint. $2,350,000 $2,800,000

Weights/Measures Trust $0 $174,961

Prescription Drug Rebate $0 $1,000,000

TOTAL $13,302,794 $17,363,361


What it looks like

Union County is running a structural deficit that they are hiding with additional debt justified on dodgy grounds.They need to get grants, set up trust funds, build unnecessary projects so as to skim off a portion of the proceeds to pay operating expenses. That’s why they manufacture projects.


Projects

• Galloping Hill Clubhouse • Solar Panels• Bollwage Parking Garage• Family Courthouse• Oakwood Plaza• Ice Rinks in Oak Ridge Park• Replacing Culverts• Oakwood Park – New Providence


Believing the Lies

Summit Council President on County Debt


More Debt


Believing the Golf Lies

Summit Council President on HTTV


Wrap Up - 1

Not what it appears


Wrap Up - 2

Inspired Me

UNION COUNTY BUDGET 2012 TAXES AND DEBT. Tax Levy (in millions) Union County Taxes and Debt2.

Documents

Transcript of UNION COUNTY BUDGET 2012 TAXES AND DEBT. Tax Levy (in millions) Union County Taxes and Debt2.