Mayor Brown spoke with me via phone the other day about his position on the Township of Evesham taking over the Evesham Municipal Utilities Authority (EMUA). Mayor Brown noted that he has been talking about this for months at Council meetings and that talk of the Township taking over the EMUA precedes even his administration. The Mayor told me that Gus Tamburro and Bonnie Ault talked about dissolving the EMUA. While I was unable to confirm discussions of this nature by reading Township Council meeting minutes, I did find that there have been discussions about taking money from the MUA surplus as far back as 2006.
Mayor Brown says that there is currently an $11 million dollar surplus at the Evesham Township MUA. After reading the EMUA audit he asked the auditor about this and the auditor said "Mayor you're right, if you close the doors today there is $11 million dollars there." There is an explanation for much of this surplus. Since the EMUA is not a municipality or backed by a municipality they have different rules regarding how much escrow they must keep on hand for their bonds and there are some other escrow accounts that they are required to keep on hand. Also, readers of this web site will remember, that last month the Acting Director of the MUA explained in an interview with me that much of the $5 million dollar surplus in operating funds is actually earmarked for projects. Mayor Brown said he believes that attributing this surplus to use on pay-as-you-go projects only happened since he brought the surplus to the attention of Council.
Mayor Brown went on to say that "...there are need projects and wish projects." He said he would love to build a senior center in Evesham Township or have a program to redo the sidewalks and street trees in some of the older developments in the Township. These are some of his "wish projects". His "need projects" are continuing to upgrade Township trucks so the trash can be picked up. Likewise, the Mayor does not believe that every project the EMUA has is a "need" project. Mayor Brown contends that some of the projects the surplus is earmarked for are "wish" projects.
Mayor Brown said that the result of the discussion at the last Township Council meeting was that Kurt Croft and John McKenna were donating their salaries to help finance a study on the dissolution of the EMUA. The study will cost about $30,000. It will be done by an outside third party and will look at various scenarios regarding dissolution of the EMUA. This study should answer the question, does it make sense to dissolve the EMUA? It will not only evaluate the possibility of the Township taking over the EMUA as a department under the Township Manager, it will also look at other possibilities like consolidating the EMUA into a more regional MUA with other municipalities. The Mayor is guessing it will take about sixty (60) days to get the report. Mayor Brown believes this report will give Council the tools it needs to make a decision on whether it will be cost-effective to dissolve the EMUA.
I asked Mayor Brown what his opinion was on government agencies or authorities, like the EMUA and the Evesham Township School Board, amassing a large, multi-million dollar surplus? The Mayor said that there is a need for municipalities and other government agencies to have a surplus, but the ability of a municipality, authority or board to secure a bond reduces the need for those very large surpluses. He said that when he came to office the Township only had a surplus of about $130,000. Council has kept the surplus down at that level because if there is an emergency the Township can borrow the money. Mayor Brown said that Evesham Township, the EMUA or the Evesham Township School Board all have the ability to borrow large sums of money at reasonable rates if need be.
I asked Mayor Brown if a large cash surplus just gave government agencies and authorities the ability to spend large sums of money on projects without having to shine the light of voter approval on the project? The Mayor agreed, saying that if the EMUA came under the Township then large projects would have to be bonded. Bonding a project requires a Township ordinance which means public meetings and comments on the reason for incurring the debt.
Mayor Brown believes that dissolving the EMUA will not have a negative impact on future water rates. He believes that taking advantage of shared services savings will allow the EMUA to keep water rates stable or even bring them down. However, the Mayor also believes that he wants to wait until the report that has been ordered comes back. He wants to hear what the experts say about what direction Council should take and what the costs and future savings will be.
I asked our Mayor what effect taking over the EMUA would have on the Township Manager's office? There is a potential for savings but I also wanted to know what the short-term costs of dissolving the EMUA would be and what will happen at the Township Manager's office when the Township Manager is also responsible for some of the day-to-day activities of the EMUA? Mayor Brown said he thought the Township would still retain the Executive Director position at the EMUA. That position would in essence become a department head instead of the Executive Director and be responsible for the day-to-day operation of the EMUA. The initial cash savings is the surplus and bond escrow. The costs are one of the things we still need to find out. What will it cost to go to the local finance board and have them approve this dissolution? What would it cost to move the EMUA bonds over to Evesham Township? Should we pay some off? Should the Township refinance a bundle of these bonds? The Mayor says these are some of the questions the report should be able to clarify.
The next question Mayor Brown was asked was, "Do you foresee, if the Township does take over the EMUA, the need for regulations that would keep any Township Council from raiding the surplus?" Mayor Brown said "That's a great point. I think we have to. We learned our lesson ... in what happened with the golf course." Mayor Brown credited John McKenna with bringing this same question up at Council. The Mayor said we have to learn from the past and put filters and safe guards in to make sure future Councils don't do to the MUA what was done to the golf course.
"What do you think of the Deputy Mayor's idea of taking a percentage of the EMUA's revenue instead of dissolving the authority?" The Mayor replied that if the report Council ordered says that is the most efficient and effective way to proceed then we need to talk about it. The Mayor cautioned that the question then becomes when or where do you stop? "We have to have a plan."
There are two questions or dangers faced by Township Council in starting to take a percentage of the EMUA's revenues. Currently, the Township can only take a percentage of the EMUA's revenue if the EMUA agrees to this, how long will the EMUA acquiesce on this issue? The second danger, or at least question, is if the Township begins taking part of the EMUA revenue will this cash inflow become a necessary part of the municipal budget, like the school deferrals, that have to be accessed each year to make ends meet?
I also asked the Mayor if he thought we had to take over the EMUA to keep from increasing property taxes this year. Mayor Brown said NO, we should be pretty close to a zero increase in the municipal services tax rate this year, much like we had last year. Mayor Brown went on to say that if we did take over the EMUA the Township would not even see that as a tax advantage until the next budget year. "This is a long term solution."
Just to confirm this point then I asked "So, this is not a money grab so we don't have to raise taxes in an election year, this is really based on what you think the right thing to do is?" Mayor Brown said this is not a money grab, this is a question of what is best for Evesham Township in the long term. "This is based on somebody that has lived here for forty years."
The next question to Mayor Brown was "Are you going to run this year?" He said he would make up his mind in the next week or two.
Before I let him go I wanted to hear what Mayor Brown had to say about the recent vote to take the benefits package away from future members of Evesham Township Council. Mayor Brown said that the benefits package varies depending on the recipient's circumstances. If you are a single person the benefits package amounts to about $8,000. In Mayor Brown's situation, he is married with three children, the benefits package from Evesham Township amounts to about $14,000.
The Mayor pointed out that both he and John McKenna donated their salaries back to the Township in previous years. The Mayor believes that if the Township wants good people it will have to do something to attract them.
Should the Evesham Township MUA become a department of the Township Manager's office? What do you think about government entities retaining and building large banks of surplus funds with your money? Are there any other questions you think Township Council needs the answer to before they have enough information to make this decision? Should Evesham Township Council members have access to the Township benefits package? Should Township Council members donate their salary back to the Township in times of financial crisis?
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Bill Kennealy posted the following comment at Friday, February 05, 2010 - 7:35 AM
I was at the Township Council meeting that discussed the takeover of the MUA and it was very clear to me that the Deputy Mayor wanted to "raid" the MUA fundas soon as possible for use by the Township. Maybe "good cop/bad cop" acting by the Mayor and deputy mayor at the meeting.
The MUA is clearly operating ina fiscally responsible way under laws and financial documents dictates and restraints. I DO NOT want the politicians getting their greedy hands on the MUA. Government and politicians ruinand lay waste everthing that they get their hands on, Consider the wrecking of Social Security, Highway trust fund, medicare etc that the politicians have run into bankrupcy or almost bankruptcy. Furthermore, I do not want to spend money on studies on this matter; I want those funds spent on Township necessitites like SNOW Removal.
I am a Senior and I see no need for a senior center in the township.
Anonymous posted the following comment at Thursday, February 04, 2010 - 4:50 PM
What will happen to the people employed by the MUA?