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Manager: $19M in Capital Projects Possible with No Tax Increase

Moorestown township manager Scott Carew says the township has enough revenue and savings coming its way to offset the many projects on its plate.

A rough sketch of Moorestown’s fiscal future shows it has enough money to complete most of its major capital projects—without having to raise taxes.

After Councilman Mike Testa to the , claiming he needed to know what the tax impact would be, financial officer Tom Merchel prepared a budgetary outline laying out every financially significant project currently on the township’s plate.

The sum total of the projects on the list—including , $690,000 for the rec center, and $1.4 million for —came to $19 million. Township manager Scott Carew said, based on Merchel’s projections, that $19 million would result in a $1.4 million annual debt service payment (principal+interest) for a 20-year bond, which would lead to a $163 tax increase on the average assessed home ($529,800).

Factoring in the amount of offsetting revenue and savings expected to come the township’s way in the coming months and years, Carew said the cost of doing all those projects is “essentially tax-neutral for the next decade,” and possibly beyond.

Carew readily acknowledged this fiscal blueprint is not totally comprehensive, distinguishing it from Merchel’s detailed budget projections.

“I am admitting up-front, I am not considering every single variable,” said Carew. “It’s a broad argument; it’s not a specific argument … The gist of the argument is that we can afford to do (these projects) because we’re in good financial shape.”

Carew’s and Merchel’s projections span the next 10-20 years, so there’s no way for them to predict unforeseen capital expenses that will almost surely crop up during that time, Carew said.

On the other hand, there are also savings and revenue offsets not accounted for in the projections, such as savings due to higher health insurance contributions from the unions—which kick in next year—tax revenue from new ratables (), and .

“The township is positioned very well for the future,” said Mayor John Button, explaining that fiscal responsibility has been the township’s “modus operandi” for the past several years. “(Carew’s projections) did not surprise me at all.”

Here’s a list of the projects, and their costs, included in Merchel’s and Carew’s projections (all numbers are approximate):

  • Purchase of new police vehicles ($404,000)
  • Various road improvements ($625,000)
  • Resurfacing of New Albany Road ($415,000)
  • Municipal complex ($13.3 million)
  • Reconstruction of West Spruce Avenue and Magnolia Court ($360,000)
  • Improvements to ($423,000)
  • Improvements to the Church Street Recreation Center ($690,000)
  • Installation of new lighting at and parks ($195,000)
  • Improvements to Wesley Bishop North ($1.4 million)
  • Repairs to dam ($275,000)
  • Miscellaneous other expenses ($800,000)

Carew factored in the following as offsetting revenue/savings (again, all numbers are approximate):

  • A $600,000 reduction in the township’s current annual debt service in 2014
  • Another $1 million reduction in annual debt service in 2019
  • A nearly $900,000 reduction in annual debt service in 2022
  • Anticipated annual savings of $500,000 in the reserve for uncollected taxes (beginning in 2014)
  • Annual use of liquor license revenue
  • $80,000/year savings once the municipal complex is built due to no longer paying rent on
  • 15 years of to offset the fields projects (which the township has received in writing, according to Carew)
  • once the municipal complex is built

Though Carew and Merchel have advocated the use of liquor license revenue in the budget over a number of years——Carew acknowledged council has not decided on the continued use of that money.

(The projections only include . Depending on the township’s response to , the township could potentially score another $1-$2 million more from the sale of the two additional licenses.)

Carew also pointed out that the use of the Open Space, Recreation, Farmland and Historic Preservation Trust Fund toward the Wesley Bishop North project——was not factored into these projections.

Rick Rohrbach August 25, 2012 at 12:07 PM
$13.3M to move the library across the parking lot from the existing library (and then call it "Town Hall"). Is this really a good use of our money? Basically, we are getting some one time cash from the liquor licenses (we hope) and some new ratables. Instead of using any of this new money for tax relief, we've decided to use it all on these new projects. Certainly some of them are needed and worthwhile but I wonder whether anyone in this town really thinks we should spend $13.3M to replace the library (which didn't burn) and build offices for a handful of township employees. This won't provide any new services and does little to offset the more than $200k in rent we pay annual to house the various services that were displaced by the fire. (Police, Courts, Administration). I guess when people drive by Second and Church, the new building will make people feel good / proud of their town. But is that worth $13.3M?
Jen Fischer August 25, 2012 at 12:41 PM
This is why we need to vote for a new Council we can trust to do the right thing going forward. Look at the money they have to be trusted with! Their votes will be the difference between taxes going up or taxes staying flat or going down. After seeing how Democrats have run this country, I am definitely voting for the Republicans.
Pete August 25, 2012 at 03:51 PM
“$80,000/year savings once the municipal complex is built due to no longer paying rent on 2 Executive Drive offices” Hmmmm, if we now pay $80k/yr on the office lease, and if that lease cost increases an average of 4% per year for the next 40 years, we will have paid a total of about $8,000,000. To bond $13,300,000 for 30 years at 3% interest will cost the township about $20,000,000. Really, is there any logical reason that we will spend $20M vs. $8M ?????? Am I missing something here?
John K August 25, 2012 at 04:14 PM
It's not about Republicans vs. Democrats, especially here at the local level...it's about electing town council persons who are committed to making decisions in a transparent manner, welcoming input from the community, and governing in the interests of all residents, not just the "don't-increase-my-taxes-one-penny-no-matter-what" crowd. Personally, I'd like to see a town council made up of both Reps and Dems who take a bipartisan/nonpartisan approach to local government..
Gary Villari August 25, 2012 at 04:34 PM
God help us if the Democrats get their hands on town council. Sorry John K, I want a government in my town that is willing to put taxes as the top issue. Democrats being trusted with tax dollars is like trusting a child with a batch of cookies. Just can't help themselves.
Ryan M. August 25, 2012 at 06:46 PM
Laughing at John K!!!! Leave it to a Democrat Committee member to say 'party doesn't matter'!!!! In other words, I know the Republicans have the advantage so lets run from our party title? Hard to hide from that big D next to their names when your candidates are on the same column as Obama and Menendez and Adler!!!!
Townie August 25, 2012 at 06:47 PM
I didn't do the math....but your theory is correct. You also have a parcel of land in the center of town left over to do something with. I'm shocked they would actually come out and say all of this is tax neutral. The natural progression of costs will increase. The union may contribute more....but that isn't going to save anything....it'll help offset future cost increases. Salaries, utilities, and other operating costs will keep rising. If you want to avoid raising taxes, you have to lower future payments.
Rick Rohrbach August 25, 2012 at 07:38 PM
It's not $80k per year savings. $80k is what we are paying for the admin space at Executive Drive. Of this amount, $50k is for rent and the balance is for operations and maintenance. Presumably, we'll still have some of this cost (gas, electric, etc.) when the new building goes on line. Not $30k but not zero. So, really, the savings are probably closer to $65k per year.
Dave Daily August 25, 2012 at 07:40 PM
I'm not sure if this is really a Democrat or Republican thing. I believe all three groups running for council as well as the current council are on board for an entire new municipal complex. If I'm wrong, let me know.
Rick Rohrbach August 25, 2012 at 07:44 PM
By the way... I think we can only do a 20 year bond. And that's what Scott Carew suggests in the numbers reported by the Patch. Now run the analysis with $13.3M on a 20 year note at 3% and only $65k savings. If you assume 5% inflation for the annual rent payment - over 20 years, the comparison is $17.8M to build and $2.15M to rent. It will take 55 years to break even.
Pete August 26, 2012 at 02:51 AM
Rick, your numbers or mine, it’s still a bargain to lease vs. building the complex. I brought this up at a Council meeting last year, and was brushed off. To make matters worse, the township record of maintenance of property is abysmal. Witness the fields, library and rec center. There is no reason to suspect any improvement for the new complex and thus in 25-40 years it will require millions of renovations or torn down.
Tax Playa August 27, 2012 at 02:23 AM
Hear! hear! Rick! You nailed it. I'd rather have the tax savings in my pocket than build this "Town Majal ". What a complete waste of money!
HomeBrew August 27, 2012 at 01:29 PM
Why the discrepancy in cost of lighting Jeff Young/Maple Dawson? Project listed here as $195,000, but just a few weeks ago Council was considering appropriating $455,000 for the project. http://www.moorestown.nj.us/filestorage/207/154/2143/488/3250/2012_07_23_agenda.pdf
Tom August 27, 2012 at 02:41 PM
If what you have provided is accurate, this is very troubling. Pete what do you mean you were brushed off?
Pete August 27, 2012 at 03:57 PM
There was a very long presentation made by the Task Force on Monday, April 11, 2011 on costs of the proposed Muni Complex. That presentation http://www.moorestown.nj.us/pubs/140/4174.pdf was on line at that time, but now the link is broken. On page 28 there was an Excel spreadsheet (lease vs. build) which I don’t currently have, but my conclusions, from the data on that page were: • Annual savings of lease over build = $502,347.13. • Over a 45 year life of building, it is cheaper by $22.5 Million if we lease. Their argument is that after 45 years, we still have the buildings – yeah, sure, 45 year old buildings…………… what are they worth? o What is the worth of our present 1973 Municipal Complex buildings??? It’s only 38 years old….. It was not at that meeting, but somewhat later, when I asked about the data, I was told that “we did the analysis, and it’s better to build”. I broached this subject several times with various people and the response was the same – that the issue has been studied and we are better off building……. Seem that we are the victims of the Abilene paradox
Ed Nice August 27, 2012 at 06:12 PM
Probably the grant for $250,000 was taken out of the number when the comment was made. The cost is $455000 minus $250,000 leaves us with ............ $205,000! Sounds like a reasonable assumption right HB. Everything said or reported isn't a conspiracy!! But we do know how you like to stir the pot!
Ed Nice August 27, 2012 at 06:16 PM
Might also have to do with the Pryor Park lighting was also worked into the bid because it saved the town, if I remember correctly, like $10,000. Once again the innuendo that something is a miss is not really needed HB. Keep to stirring your brew and not the emotions of the town!
HomeBrew August 27, 2012 at 06:35 PM
Just asked the question. Thanks for answer.
Ed Nice August 27, 2012 at 06:43 PM
HB you know you know the answer already..... you post to stir the pot and stir the pot only! Stick to your Brew buddy!
Most Interesting Man in MTown August 27, 2012 at 07:39 PM
I have a new contest....not the stupid one like Homepoo did. How about..."I don't normally drink, but when I do (you add the final line)." So you could say; "I don't normally drink, but when I do, I prefer to do it in Moorestown" or "I don't normally drink, but when I do, it is usually before town meetings"
HomeBrew August 27, 2012 at 08:16 PM
Slogan Contest Update: "Welcome to Moorestown: Home of the 'Broad Argument' (Because Specifics are for Chumps)" Enter your own slogan and check out other entries: http://homebrewsjavajive.blogspot.com/2012/08/moorestown-slogan-contest-updated.html
Most Interesting Man in MTown August 27, 2012 at 08:23 PM
Stay thirsty my friend.............
HomeBrew August 28, 2012 at 12:12 PM
Moorestown Slogan Contest: "Welcome to Moorestown: Drink 'n Thrive!" Read more and enter your slogan here: http://homebrewsjavajive.blogspot.com/2012/08/moorestown-slogan-contest-updated.html

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