Monday, November 25, 2019

Hey Mr. Hoover......How about just a little fact checking before you publish an article?


In today's Trenton Times, there was an article on page 10 with the title: "Towns must stop dishing out tickets just to raise cash" by Richard M. Hoover (a guest columnist from (ironically) The Institute for Justice).  It inferred rather clearly that our town practices "taxation by citation" as a means to balance a municipal budget.  We do not.  I sent him the following email this morning, and I wanted to share it with you all because....frankly....I'm tired of the unjustified attacks....and being quiet and hoping these attacks just go away or are forgotten....well, it just ain't me.  

Mr. Hoover:

I read your article today with great disappointment.  Had you bothered to contact me to make a simple inquiry regarding whether or not there is any validity to the civil action filed by the 6 Lawrence Township police officers, I would have told you some facts that may have caused you to not disparage Lawrence Township as you did.


First, as a former Municipal Court judge in our Town, I completely understood the impact that the New Jersey Supreme Court’s position (and policy changes)  would have regarding revenue generated by municipal courts (from motor vehicle stops), and that our Town should not be relying upon levels of revenue generated in the past in future budgets forecasts.  It is clear that that source of revenue (one of many in a municipality) would be down.  In our particular circumstance, the reduced revenue from our court (and our impound yard) was offset by increases in revenue from other departments (i.e., construction office and permits, etc.).  This allowed us multiple budget years to get an accurate estimate of revenue that will be generated by our court (and impound yard) so we can do accurate budget forecasting.   This is what responsible municipal governments do. 
  
In addition, if you had asked, I would have told you that the problem that we were experiencing from our Police Department was that we had officers that in my opinion simply refused to work because they were either upset about some union dispute (our police department uniquely has 2 unions...which has proven to be a disaster for many reasons) and/or our former police chief because of how he treated his police officers in general.  

In our Town of 34,000 residents, 22 square miles, with more than 125 miles of roadway (that includes Route 1, I 95, Route 206 etc), our police officers had consistently made approximately 8000  motor vehicle stops annually (a number well within national averages).  In 2018, that number dropped to approximately 5100.  Our revenue from our storage facility went from $145,451 in 2016 to $77,328 in 2018.  This represented a ridiculous drop in traffic enforcement.  Speeders were able to speed without risk of being stopped….drunk drivers drove without risk of being stopped……uninsured and unregistered vehicles were sent on their way if they even had been stopped in the first place.  Basic traffic safety in our Township was being compromised.  I can’t tell you how many calls I received from residents complaining about speeding on their streets and never seeing a police car around. 


In response, there were concerted efforts (including seeking guidance from the NJ Attorney General’s Office) to get the police officers back to working…..to being productive….to earning their salaries that tax payers were paying….and to honor the oath that they took when they became a law enforcement officer.  It had NOTHING to do with revenue generating.  As difficult as you may find this, I don’t come from a finance background.  My decisions don’t start and end with the mighty dollar.  I actually worry and put emphasis on what is the right thing to do in all respects to municipal government operations (to respect and value our residents and our employees and make decisions that reflect that)….including police department operations.  Lawrence Township does NOT rely upon “taxation by citation” to balance its budget. 

So I take offense to you disparaging our police and administrative officials in your article without bothering to determine whether it had any basis in fact.  This is apparently the world we live in now, but I thought you should know at least one person cares about the reputation of our community, our police chief and the officials who run the municipal operations.   The next time you do an opinion article, may I suggest you make some attempt to verify your position.

Below is a link to a blog post regarding the police civil action that you may find interesting:


https://lawrencetownshipnjmanagerkpn.blogspot.com/2019/10/the-police-officers-lawsuit.html

Kevin
Kevin P. Nerwinski, Esq.
Municipal Manager/QPA – Township of Lawrence
2207 Lawrence Road
PO Box 6006
Lawrenceville, NJ 08648
Direct – 609.844.7005
Fax – 609.895.1668
www.lawrencetwp.com

Thursday, November 21, 2019

Moody's Upgrades Lawrence Township Credit Rating to Aa1 from Aa2.

The community of Lawrence Township has been the beneficiary of years and years of strong and responsible fiscal management.  This is not me taking any credit for this fact at all.  I am simply following an established playbook and executing it under the watchful eyes and guidance from our elected officials.  Our past longtime municipal managers (Bill Guhl and Richard Krawczun) and our current CFO Peter Kiriakatis have positioned the finances of this community very well.  This, in turn, directly effects our ability as a community to undertake significant capital projects under the best of terms from institutional lenders as a borrower.  To speak plainly, we as a community have saved hundreds of thousands of dollars in interest payments over the years because of our strong finances.

On November 18, 2019, Moody's (an American credit ratings agency lender's rely upon when issuing bonds to municipalities) issued a press release upgrading the Township's rating to Aa1 from Aa2.  This rating means we are an "excellent" security at the highest level of this rating category.   If you want to explore what this means further, go to https://www.moodys.com/.

What follows are some of the more interesting comments from Moody's press release:

Credit strengths:  
- Large tax base with strong resident wealth and income.
- Strong finances.
- Low debt burden.

Financial Operations and Reserves: Growing and healthy financial position

The township's financial position has been on a positive trend over the past four years and will remain strong in the near to medium term. In 2018, the township’s Current Fund balance amounted to $15.6 million or 32.5% of revenues. Moody’s makes certain adjustments to New Jersey local governments’ fund balance to include receivables and reserves that would be eligible to be included in fund balance under GAAP accounting but are excluded as a result of state statutory accounting regulations. The Moody’s adjusted Current Fund Balance amounts to $24.2 million or a healthy 50.5% of operating revenues. Both figures are materially up; over the past five years, reported fund balance has increased 207.7% while adjusted fund balance is up 125%. Management attributes the strong results to a number of factors including controlling expenditures mainly by reducing staffing levels through attrition, as well as regular increases in the property tax levy. The strong financial performance is particularly notable as the township is actively engaged in efforts to replace debt with pay-as-you-go capital spending. Favorably, the bulk of the township's revenue (61.5%) is derived from property taxes. State aid contributes only 8.3% of revenues. An additional 11.8% comes from sewer charges and the remainder comes from various miscellaneous sources including construction code fees, ambulance fees, etc. Fixed costs are moderate at just under $8 million or 16.7%. Although 2019 is not yet over, management reports that revenues and expenditures are generally tracking well to budget. The township expects to at least replenish the fund balance appropriated in the budget and may even run a modest surplus.


LIQUIDITY

The township's cash levels ended fiscal 2018 at $24.8 million or a healthy 51.8% of operating revenues.

Management and Governance

Management is proactive in the township's financial management by producing monthly budget reports to track revenue collection and programmatic spending throughout the year. New Jersey cities have an institutional framework score of “Aa,” or strong. Revenues are moderately predictable and mostly consist of property taxes; however, cities are required to make county and school district tax levies whole in the event of tax appeals. Revenue raising ability is moderate as cities are constrained by a 2% cap on the property tax levy. Cities can raise the levy above the cap for debt service, pensions and certain qualified expenses. Expenditures, which primarily consist of personnel and public safety, are highly predictable. Cities have a moderate ability to adjust costs given the presence of collective bargaining and high fixed costs.

As we cycle past the election season, it is my hope that the residents of Lawrence Township have confidence that those of us charged with the responsibility to operate the government that serves you are doing what you require, expect and deserve. 

Friday, November 15, 2019

When Confidentiality Must Supersede Transparency in Municipal Government

     We have all heard the word "transparency" over the past several years when it relates to government operations.  It means that what is said and done in government should be made available to the public to review and scrutinize.  This concept absolutely makes sense when you understand and accept that "government" is the mechanism for the people to run the "business" of the community.  To bring this home further, the Lawrence Township municipal government serves the community, and is mandated to always act in the community's best interests.  Always.  Making its actions open to public scrutiny ensures that the public can make informed decisions on whether or not their government is, in fact, working in its best interests.

     Recently at one of our council meetings, a person in the audience remained in the council meeting  room after the regular agenda was completed and as the municipal attorney, council members, the municipal clerk and I prepared to begin an executive (closed) session.  After the public left the room, the man remained in his seat very much unaware about what was to take place.  He wanted to hear what we planned to talk about.  After a few moments of awkwardness, he was politely told that he must leave the room during "closed" session.  He seemed genuinely surprised that he could not remain, but eventually left the room.

     There are times when the "business" of the community requires its elected officials to be able to communicate with one another in confidence and outside the scope of public scrutiny.  The primary way that our municipal government does this is during "executive" session (or sometimes called, "closed session") that at times may occur during our public council meetings.  New Jersey allows for government officials to meet privately to discuss public business under N.J.S.A. 10:4-6.  This states, in part:

Public bodies may meet in closed session when the matters under discussion (1) are considered  confidential by federal law, state statute or court rule, (2) would jeopardize receipt of federal funds, (3) constitute an unwarranted invasion of individual privacy, (4) concern collect bargaining, (5) involve purchase, lease or investment using public funds, or concern the setting of banking rates, (6) concern investigations of violations or possible violations of the law, or techniques of protecting the safety and property of the public, where disclosure of such techniques could impair such protection, (7) are covered by the attorney-client privilege, (8) concern personnel, or (9) involve certain proceedings which could result in a civil penalty, suspension, or loss of license.

     The most frequent uses of executive session that we see in our municipality is to discuss land acquisitions, litigation, and collective bargaining (union) negotiations.  To better understand this concept, let's discuss the Town's recent acquisition of the Sheft property (the closing is pending).  The strategy for the negotiation of the acquisition of the property was discussed by myself, the municipal attorney and the elected officials in closed sessions.  Among other things, we talked about how much we would be willing to pay for the property and under what terms and conditions.  Now imagine that these discussions had to take place during a public meeting in the presence of the public.  This would mean that the Shefts could have sat in the meeting room listening to how we planned to negotiate with them!  Obviously, this would not be in the best interests of our community.

     Another example would be discussions involving the strategy the governing body wishes to pursue in collective bargaining negotiation with the various unions that represent the Township's employees.  How much would we be willing to offer for cost of living increases?  What terms and conditions in the prior contract need to be revised or omitted altogether because they work against the proper functioning of the department?  If these discussions were required to be done during a public meeting where union members may situate themselves, the best interests of the community would most certainly be jeopardized.

     As important as it is for your elected officials to be able to discuss certain issues in private among one another in a manner that protects the public interest, it is as important that those same officials keep the discussion completely confidential and not repeat anything that was said in closed session.  If an official violated that confidentiality and revealed to anyone what was said, it would be an ethical and legal violation of the law.  If the officials in a closed session fear that one among them will not keep the confidence of the subject matter and reveal it to others, open discussions cannot be conducted and government "work" cannot be completed.  It undermines the ability to act effectively on behalf of the community.

     In conclusion, there are very valid and real reasons to have government officials be able to communicate in private on issues that affect the community, and also for those same officials to know and understand the reasons why confidentiality must be protected.  In the end, when the acquisitions are completed, the union negotiations are concluded or litigation is settled, the minutes of the closed sessions are made available to the public to consider and scrutinize.  This system is necessary and it works.  




My Deepest Apologies to Rich and Frankie and their families.

On the front page of the Trentonian newspaper today there was an extremely odd and poorly written article that was intended solely to dispar...