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Town Mulls Options for Water and Sewer's $4M Cash

Lowering rates, sending rebates, paying off debt and a ratepayer 'holiday' are among the options officials have mentioned.

Members of the Montville Township Long Term Financial Planning Committee will be wrestling with a multi-million-dollar question that Township Committee members want addressed as soon as possible: What should the town do with about $4 million cash that the has on hand from operating at a surplus in recent years?

Lower rates? Send customers rebates? Keep the money to pay off debt? Or, should the town give ratepayers a "holiday" one pay period, an idea mentioned by Mayor Jim Sandham at the Township Committee meeting on Tuesday?

Robert Lowenfish, the town's interim director of finance and a longtime member of the Long Term Financial Planning Committee, said there are a wide range of options to be considered.

While Township Committee members said they have been questioning for more than a year whether the Water and Sewer Department was operating with too much of a surplus, the projected surplus for 2011—$651,937 for sewer and $175,000 for water—is larger than expected because the department's expenses were lower than anticipated, Lowenfish said at the meeting.

Committeeman Scott Gallopo said he is uncomfortable with the situation and disappointed it wasn't already addressed.

Officials said a preliminary look at the overall 2012 municipal budget numbers shows the town is expected to be in sound financial shape. Depending on revenue assumptions used, the budget could stay flat or increase by about 2 percent, though it's still early in the process.

"It's good indications," Sandham said.

Heidi Calcagno December 16, 2011 at 05:11 AM
Are we sure that the surplus isn't just because we have had enough rainfall to fully stock the aquifer so we have not had to buy water from other sources? Let's be sure to keep enough surplus in case this is a low-precip winter, especially since the water suppliers can name their own prices in drought years.
Larry D'Oench December 16, 2011 at 08:26 AM
Paying down debt is always a good idea. We can show the federal government how to do it.
Dan Grant December 16, 2011 at 11:46 AM
I would remind you that water and sewer rates were raised over the same time that this "Surplus" was generated. Money was also shifted over from rate payers to reduce taxes so as not to show the real tax rate. There is something very wrong going on here.
RUSS PISANO December 16, 2011 at 12:40 PM
It sounds like good management is the reason for the surplus
Maxim Sapozhnikov December 16, 2011 at 01:05 PM
Pay the debt, and decrease the future rate so to generate HALF of this year's surplus.
Dave F December 16, 2011 at 01:59 PM
Actually, just the opposite. If we have more rain during the Summer, people buy less water, so the fact that there is a surplus despite the excessive rainfall makes the situation even more disturbing.
Dave F December 16, 2011 at 02:00 PM
"Money was also shifted over from rate payers to reduce taxes" Never happened while you were in office, right Dan?
Dave F December 16, 2011 at 02:25 PM
There is still no rational explanation as to why it took almost 8 months for the Township Committee and the Long Term Financial committee to receive the surplus numbers from the Water and Sewer Department.
Liz Kril December 16, 2011 at 03:59 PM
GIVE a pay Holiday AND LOWER THE RATES!!! Montville water is way too HIGH!!!
Dan Grant December 16, 2011 at 04:06 PM
Dave you can live in the past because you can't stand to think about how wrong this is on so many levels. Yes we did it in the past because the old MUA owed the Township about $4 million in taxpayer funds that had to be paid back. That was seven years ago. We also lowered rates. They have raised rates because they said they needed them and now that turns out to be wrong. There are 2 CPAs and a "Financial Expert" on the committee and they are suprised about the accumulation of $4.8 Million??? This didn't happen in one year. They were in surplus from the very time Sandham was sighting an emergency back in 2009. This needs a blog because there isn't enough space here to cover all the wrong. I understand pretending you leaders have done the right thing but this is just silly. The two I will cut some slack for are Tim Braden and Deb Nielson. The others are the ones who touted their financial backrounds.
Jim Riter December 16, 2011 at 04:12 PM
Give a pay Holiday AND LOWER THE RATES!!!!!
Truscha Quatrone December 17, 2011 at 06:21 PM
The rates should be lowered. In September of this year there was a township Committee meeting packed with outraged residents complaining about their water bills. Is it possible that all five committee members have already forgotten this meeting? The increases passed since 2008 were never needed and were misrepresented by the director of Sewer and Water as needed to address infrastructure and increases from New Jersey water. The water and sewer charges are too high and should be lowered. Our senior citizens living alone in houses are being charged exorbitant sewer rates because they have wells. Senior’s living alone in homes with town water are over paying because of the sliding scale used for water rates. If you use the money to pay down the debt the sewer and water rates will still be too high and there will be another enormous surplus.
Dan Pagano December 18, 2011 at 04:16 AM
A $4+ million surplus in the water and sewer is wrong in every way and it is also immoral. It is wrong because the water and sewer department is designed to provide a service to residents and businesses. It is not suppose to generate income beyond what is necessary to pay the cost of providing the service along with maintenance and anticipated improvements. It is immoral because the money cannot be refunded in a fair and equitable manner. Some individuals who were overcharged may have moved and cannot be refunded at all. We are asked to believe the head of the water dept, the director of finance, the business administrator and the township committee suddenly discovered they underestimated the surplus by $3+ million. How is this possible? It's not but it has become typical. No one is ever held to account by this TC. They should be ashamed of themselves for allowing township employees to hide the fact that we were being overcharged. They need to stiffen their spines and start asking some tough questions, we deserve a thorough explanation. I wonder if any of them are principled enough to demand it.
Dan Grant December 19, 2011 at 08:35 PM
Dan, What makes you think it is the Township employees that are hiding anything? The group that is doing all the hiding is the Township Committee and they do it to make it look like your taxes are not going up and they are controlling the budget. Please take a moment to read my blog. Part of their job is to review all areas of revenue including the Water and Sewer Budget and the increases in surplus are pretty clear. I don't buy it that anyone hid anything from them. Two CPAs and one Financial Expert on the Committee and they didn't get it?
jf December 19, 2011 at 11:59 PM
As an accountant I find this hard to believe. How many times do I need to read about "found" money or surpluses we don't know about or unrealistic salary ranges that need dramatic adjusting to attract the right individuals in an economy where millions of people are looking for work! Who is accountable? Budgets are not rocket science in an established business or township so why we can't generate a budget and stick to it is beyond me. And what really is infuriating is that no one is responsible and everyone passes the buck. I'd have my head handed to me in any of these situations but then of course I work in the private sector where compensation is tied to performance and people get fired not tenured when they screw up. Where will I find the 2011 budget versus actuals when they are avaialble? Who actually generates the budget for the township - will it be this new CFO who is also a CPA? I'm getting very concerned about how our tax dollars are being handled!
Cynthia December 20, 2011 at 03:43 AM
I have a solution. Jf , DP, Dave F, should all run for town council!! I'm sure it's probably a lot harder than any of us can imagine. Then again, if you feel you can do better.........
Dan Pagano December 20, 2011 at 05:40 AM
Cynthia, Montville does not have a Town Council, that would be a Borough form of government where the Mayor is selected by the voters at the polls. Montville has a Township Committee where the Committee members are selected by the voters and a Mayor is selected by the Committee members. Tomorrow at 7 pm the TC will be discussing who will be the next Mayor. On Jan. 26, 2012, 7 pm at the Senior House the Tea Party will hear guest speakers Committeeman Tim Braden and past Committeeman Dan Grant discuss the advantages and disadvantages of both forms of government. All are welcome. Please consider attending because you have again clearly missed the point. My comments do not reflect my view that I can do better, I believe we deserve better and the TC can and must do better. A $4+ million surplus is indefensible because residents were overcharged and now no one knows how it happened.
Truscha Quatrone December 22, 2011 at 05:48 PM
In 2009 I wrote an open letter to the Township Committee regarding the proposed Sewer and Water rate increases. I have attached below an email from the Township Administrator CC to the Director of Sewer & Water and the Committee. Please note the last line of the email. G~ iI Truscha Quatrone <truscha@gmail.com> Sewer Rate Increase Meeting Frank Bastone <fbastone@montvillenj.org> Fri, Mar 6, 2009 at 4: 13 PM To: lruscha@gmai l.com Cc: Township Committee <TownshipCommittee@montvi llenj.org>, Tom Mazzaccaro <tmazzaccaro@montvillenj.org> Truscha, I need 10 address some of the misconceptions in your e-mail conceming. • The Township does not have a deficit. • The Sewer Utility is a separate budget from the Township budget. The sewer utility budget is supported by sewer fees. • The Water Utility is a separate budget from the Township budget. The water utility budget is supported by water fees. • The sewer rate increase does PREVENT the sewer utility budget from incurring a deficit, by generating the necessary revenues to meet the sewer budget over the next 4 years. • Water rates were not raised "a little" over a year ago. Water rates have not been raised since 2003. • We do not need to "increase taxes to close a deficif', we need to raise sewer rates to generate the necessary revenues to meet the sewer budget over the next 4 years. The sewer utility will have a deficit if we do not raise sewer fees. Frank Bastone, Montville Township Administrator
Charles Dyak January 04, 2012 at 04:39 PM
I don't beleive the township committee is there to micro manage the township employee's. They recieve reports from the different administrators and act if needed based on the report. If the surplus was reported to them a while back and it was swept under the carpet or hidden in tax relief then shame on them. If they were not aware of this surplus and learned about when it became public knowledge then shame on the Director of water and sewer. I would not assume all committee members had this knowledge at the same time.
Dan Grant January 05, 2012 at 02:01 PM
It isn't micro managing to allow a Department to accumulate $4.8 million in a surplus and take close to $1 million per year year from one group of people ( rate payers) to pretend you are lowering taxes while you raise rates for that group. In addition Property Taxes are deductable. Water and sewer bill are not. When they raise non-deductable rates to decrease fully deductable taxes it is kind of a double penalty on the rate payers. Every Departments expenses and revenues are reviewed every year (or should be ) as part of the Budget Process and it is a duty of every Committee Person and the Administrator to understand what each represents. You don't need to be a CPA to understand what happened here and who is responsible. This buck (or $4.8 million of them) stops with the Township Committee.
Irwin Guterman February 16, 2012 at 12:20 PM
STOP DISCUSSING FAULT AND ACT.................IRWIN G

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