UNION COUNTY BONDING

1. UNION COUNTYBONDING

2. Real World Example Annual expenses: $60,000 Annual income: $50,000 But…….. You are allowed to borrow whatever amount you want to make up the deficit as long as you spend it on what are deemed long-term purchases.

3. Union County Example Annual expenses: $530 million Annual income: $500 million And…….. $30 million is added onto debt every year to make up the difference.

4. Local Bond LawN.J.S.A. 40A:2-1 et seq. 40A:2-3. Power to incur indebtedness, borrow money, issue bonds Any local unit, by bond ordinance, may incur indebtedness, borrow money, authorize and issue negotiable obligations for financing:

5. Local Bond LawN.J.S.A. 40A:2-1 et seq. a. any capital improvement or property which it may lawfully make or acquire; b. any purpose for which it is authorized or required by law to make an appropriation, except current expenses, as may be defined by rule and regulation of the Local Finance Board, and payment of obligations (other than those for temporary financing); or c. the amount of any contribution by a local unit that is a sending municipality under a regional contribution agreement pursuant to section 12 of P.L.1985, c.222 (C.52:27D-312).

6. Ordinances Every bond expenditure needs to be tied back to an ordinance delineating what the bonds will pay for. Since 2006 (the earliest available records) the following ordinances have passed:

7. Bond Ordinances2006

8. Bond Ordinances2007

9. Bond Ordinances2008

10. Bond Ordinances2009

11. Bond Ordinances2010

12. Bond Ordinances2011

13. 40A:2-22: Bonding Can Be For • Buildings and Structures • Marine Improvements • Additional Equipment and Machinery • Real Property • Streets or Thoroughfares • Utilities and Municipal Systems • Vehicles and Apparatus • Closure of a Sanitary Landfill Facility • Prefunding of a claims account for environmental liability

14. Buildings and Structures • Bridges, including retaining walls and approaches, or permanent structures of brick, stone, concrete or metal, or similar durable construction, 30 years. • Buildings, including the original furnishings and equipment therefor: Class A: A building, of which all walls, floors, partitions, stairs and roof are wholly of incombustible material, except the window frames, doors, top flooring and wooden handrails on the stairs, 40 ; Class B: A building, the outer walls of which are wholly of incombustible material, except the window frames and doors, 30; Class C: A building which does not meet the requirements of Class A or Class B, 20 years. 3. Buildings or structures acquired substantially reconstructed or additions thereto, one-half the period fixed in this subsection for such buildings or structures. 4. Additional furnishings, five years.

15. Marine Improvements • Harbor improvements, docks or marine terminals, 40 years. • Dikes, bulkheads, jetties or similar devices of stone, concrete or metal, 15 years; of wood or partly of wood, 10 years.

16. Additional Equipment and Machinery • Additional or replacement equipment and machinery, 15 years. • Voting machines, 15 years. • Information technology and telecommunications equipment, 7 years, except that for items with a unit cost of less than $5,000, 5 years.

17. Real Property • Acquisition for any public purpose of lands or riparian rights, or both, and the original dredging, grading, draining or planting thereof, 40 years. • Improvement of airport, cemetery, golf course, park, playground, 15 years. • Stadia of concrete or other incombustible materials, 20 years.

18. Streets or Thoroughfares • Elimination of grade crossings, 35 years. • Streets or roads, from 5 to 20 years. • Sidewalks, curbs and gutters of stone, concrete or brick, 10 years.

19. Utilities and Municipal Systems • Sewerage system, whether sanitary or storm water, water supply or distribution system, 40 years. • Electric light, power or gas systems, garbage, refuse or ashes incinerator or disposal plant, 25 years. • Communication and signal systems, 10 years. • House connections to publicly-owned gas, water or sewerage systems from the service main in the street to the curb or property lines where not part of original installation, five years.

20. Vehicles and Apparatus • Fire engines, apparatus and equipment, when purchased new, but not fire equipment purchased separately, 10 years. • Automotive vehicles, including original apparatus and equipment (other than passenger cars and station wagons), when purchased new, five years. • Major repairs, reconditioning or overhaul of fire engines and apparatus, ambulances, rescue vehicles, and similar public safety vehicles (other than passenger cars and station wagons) which may reasonably be expected to extend for at least five years the period of usefulness thereof, five years.

21. Closure of a Sanitary Landfill Facility The closure of a sanitary landfill facility utilized, owned or operated by a county or municipality, 15 years; provided that the closure has been approved by the Board of Public Utilities and the Department of Environmental Protection.

22. Prefunding of a claims account for environmental liability The prefunding of a claims account for environmental liability claims by an environmental impairment liability insurance pool pursuant to P.L.1993, c.269 (C.40A:10-38.1 et al.), 20 years.

23. Culverts underground duct: a covered channel that carries water or cabling under a road or railroad, or through an embankment. Of the $182,476,250 Bond Anticipation Note floated in 2010 $3,235,000 was specifically designated for fixing culverts based on ordinances passed in prior years.

24. Culvert Ordinances

25. How Was Culvert Money Spent Was $3,235,000 what was actually spent to fix culverts in Union County? Were accurate records kept of culvert expenses? Based on past experience with the county keeping track of records…………………

26. 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

27. Other Screw-Ups OPEB calculations in audit Claiming a government insignia can be trademarked Rubber-room employees (Lapolla, Kolbeck,…)

28. 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 can skim off a portion of the proceeds to pay operating expenses. That’s why they manufacture projects.

29. Projects • Galloping Hill Clubhouse • Solar Panels • Bollwage Parking Garage • Family Courthouse • Child Advocacy Center • Ice Rinks in Oak Ridge Park • Replacing Culverts • Oakwood Park – New Providence