Presentation Transcript

1. UNION COUNTY BUDGET2012TAXES AND DEBT

2. Tax Levy (in millions) Union County Taxes and Debt
3. Open Space Tax (in millions) Union County Taxes and Debt
4. 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. Union County Taxes and Debt
5. Analysis of Tax Yield 2010 Union County Taxes and Debt
6. Big County Tax Comparison Union County Taxes and Debt
7. Big County Debt Comparison Union County Taxes and Debt
8. How I got here Pension Funding in NJ: Bad Assumptions Contribution Holidays Unfunded Benefit Promises Are we being governed by idiots? Union County Taxes and Debt
9. First Contact Shared Services Committee Union County Taxes and Debt
10. 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). Union County Taxes and Debt
11. 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? Union County Taxes and Debt
12. Went to Corzine Cranford Town Hall Meeting 1/30/08 Union County Taxes and Debt
13. Constituencies E-V-U-P Those 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. Union County Taxes and Debt
14. E – 2010 to UC Dem Committee Union County Taxes and Debt
15. E – 2010 to UC Rep Committee Union County Taxes and Debt
16. Employees $300 contributions Campaign Workers Friends and Family Public Contact Union County Taxes and Debt
17. V– 2010 to UC Dem Committee Union County Taxes and Debt
18. V – 2010 to UC RepCommittee Union County Taxes and Debt
19. Vendors No-bid contracts go to campaign donors: Lawyers DeCotiis, Fitzpatrick Bauch, Zucker Webber, Dowd Builders Birdsall Services Group Claremont Construction Union County Taxes and Debt
20. Decotiis Lawyer Contributions Union County Taxes and Debt
21. DeCotiis, Fitzpatrick & ColeUnion County Check Registries2011 - $92,213.16 Union County Taxes and Debt
22. Decotiis, Fitzpatrick & ColeUnion County Utilities Authority2011 - $457,858.24 Union County Taxes and Debt
23. Decotiis, Fitzpatrick & ColeUnion County Improvement Authority2011 - $1,056,844.98 Union County Taxes and Debt
24. Decotiis, Fitzpatrick & ColeUnion County Billing - 2011 Union County Taxes and Debt
25. U– 2010 to UC Dem Committee Union County Taxes and Debt
26. U – 2010 to UC RepCommittee Union County Taxes and Debt
27. Unions Even the Union County Republican Committee gets some money from them. Union dues as a retainer to keep politicians on their rolls. Union County Taxes and Debt
28. P– 2010 to UC DemCommittee Union County Taxes and Debt
29. P– 2010 to UC Rep Committee Union County Taxes and Debt
30. Politicians Dealing and Wheeling Dealing out: Jobs Contracts Money Perks Union County Taxes and Debt
31. Wheeling The 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. Union County Taxes and Debt
32. 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…………… Union County Taxes and Debt
33. Lifetime Health Benefits VideoFebruary 10, 2011 Freeholder Meeting Ordinance questions Union County Taxes and Debt
34. O’Sullivan Actuarial Study 5/25/2011 OSU01 O'SULLIVAN ASSOCIATES ACTUARIAL SERVICES $9,000 for 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 Union County Taxes and Debt
35. Defending the Freeholders Lawrence Caroselli Union County Taxes and Debt
36. 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………… Union County Taxes and Debt
37. Preface - No GAAP in NJ Pension Symposium NJIT 9/11 Union County Taxes and Debt
38. Fitch on Union County Fitch assigns AAA bond rating to Union County, outlook stable; rating is highest attainable. Suburban News 6/9/11 Union County Taxes and Debt
39. Fitch on Union County Video Non-Transparent (I mean, different) Union County Taxes and Debt
40. 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 Union County Taxes and Debt
41. Ancillary Departments Administrative services Legal Counsel Public Information Finance Freeholders Union County Taxes and Debt
42. TAXES The 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. Union County Taxes and Debt
43. County Taxes by City Union County Taxes and Debt
44. Taxes are not enough 2% cap though several exclusions limits amount taxes can go up. To get around the cap spending moves to debt. Union County Taxes and Debt
45. Debt – 12/31/11 estimate PRINCIPAL2012 DEBT BALANCE____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 Union County Taxes and Debt
46. 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.” Union County Taxes and Debt
47. UCIA Leases Union County Taxes and Debt
48. UCIA Lease Debt - Estimated Union County Taxes and Debt
49. 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). Union County Taxes and Debt
50. TOTAL DEBT – OVER $2 BILLION? Bonding ($556) UCIA Leases ( $156) Guaranteed Debt (Solar Panels $15; Oakwood Plaza $18) 3. Retiree Health Costs ($600) 4. Pension Promises (??????) Union County Taxes and Debt
51. 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. Union County Taxes and Debt
52. Adopting a Bond Ordinance Generally, a municipality or county must: have the ordinance read at a public meeting of the governing body; publish notice of the ordinance; hold a public hearing and have the ordinance adopted by two-thirds of the governing body; and publish notice of the adopted ordinance. Union County Taxes and Debt
53. Issuance Procedures may not issue bonds to finance more than 95 percent of a project’s cost; must sell bonds at competitive sale rather than negotiating a sale with a designated underwriter; must amortize bonds over a period no longer than the useful life of the projects financed (not exceeding 40 years for land); must begin repaying principal within one year of issuance; must structure principal repayments such that no annual payment is more than 100 percent greater than any earlier payment; and 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. Union County Taxes and Debt
54. Tracking Bond Ordinances Bibi Taylor explanation Union County Taxes and Debt
55. 480D Oak Ridge Golf Course Ordinance Adopted 7/23/98 12/31/00: $2,914,200 Balance 2001 BAN: ($671,000) 2003 BAN: ($702,000) 2006 BAN: ($385,000) 2009 BAN: (1,156,000) 12/31/10: $200 Union County Taxes and Debt
56. 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…… Union County Taxes and Debt
57. Musicfest How 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 Union County Taxes and Debt
58. Real Musicfest Costs Kane In Your Corner Union County Taxes and Debt
59. Audit Findings Suplee, Clooney & Company have been the auditors at least since 2000. Monmouth changes every three years. Yet, they found some stuff: Union County Taxes and Debt
60. 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. Union County Taxes and Debt
61. 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. Union County Taxes and Debt
62. Audit Findings - 2006 OPEN SPACE TRUST FUNDS We 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. RECOMMENDATION That the encumbering of Open Space Trust Funds be in accordance with the requirements of NJSA 40A:4-39 Union County Taxes and Debt
63. 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 Union County Taxes and Debt
64. 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. Union County Taxes and Debt
65. Audit Findings - 2008 PAYROLL The 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. RECOMMENDATION That outstanding checks amounts included in the monthly payroll bank reconciliations be supported by a detailed listing Union County Taxes and Debt
66. Audit Findings - 2008 Department of Parks and Community Renewal We 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. Union County Taxes and Debt
67. Audit Findings - 2008 May 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. Union County Taxes and Debt
68. 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 million Budget: $158 (?) million Difference: From grants and not being tracked Union County Taxes and Debt
69. Audit Findings - 2010 Union County Golf Facilities KSM 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. Union County Taxes and Debt
70. Audit Findings - 2010 Music Fest 2010 During 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. Union County Taxes and Debt
71. Other Screw-Ups OPEB calculations in audit Claiming a government insignia can be trademarked Rubber-room employees (Lapolla, Kolbeck,…) Union County Taxes and Debt
72. 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 Taxes and Debt
73. Union County Questionable Revenues Union County Taxes and Debt
74. 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. Union County Taxes and Debt
75. 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 Union County Taxes and Debt
76. Believing the Lies Summit Council President on County Debt Union County Taxes and Debt
77. More Debt Union County Taxes and Debt
78. Believing the Golf Lies Summit Council President on HTTV Union County Taxes and Debt
79. Wrap Up - 1 Not what it appears Union County Taxes and Debt
80. Wrap Up - 2 Inspired Me Union County Taxes and Debt