With the nation facing the most the most volatile economic conditions since the Great Depression, the Oakland town council chose door number three with respect to plans on the table to refurbish the tennis courts. The more expensive and comprehensive of the three plans, it will include the additional improvements of repositioning the tennis courts and installation of a new lighting system.
The council as a whole had committed themselves to accepting a plan that would return the courts to an acceptable playing condition. The approximately 160,000$ difference did create a schism in the all Republican council as members Di Pentima and Pignatelli voted nay for the higher priced option. Council member Di Pentima, who chairs the finance committee, disagreed with the argument proffered by Recreation Commissioner Steve Wagoner that the project would not impact the town budget until the year 2013.
Council member Di Pentima offered that the project has already impacted the budget with 10,000$ in interest fees being accumulated for the approximately 400,000$ assumed in short term notes. Council member Pignatelli offered a more abstract argument with respect to citizens’ concerns with government spending in general, and that there should be a differentiation between needs and wants when it comes to expenditures.
Many in the state of New Jersey would like to relieve politicians in general of their need to debate such issues. Assemblyman Michael Doherty , R-Warren/Hunterdon, introduced Assembly Bill 1880 on Jan. 28, requiring counties and municipalities to get voter approval for referendums before borrowing for major expenditures. But many elected officials fear a knee-jerk reaction from voters at the polls will prohibit investment in local infrastructure.
The difference of 160,000$ between the limited and the comprehensive alterations to the tennis courts is marginally significant, but Council member Di Pentima felt the council should not discount the economic crisis that is hitting individual families in Oakland. While the increase in taxes spread across the board might be insignificant to many Oakland residents, there are others where it will be felt.
The project brings local attention on the situation facing the municipal bond market. Like most of the economy, the market for municipal bonds has been dreary. Municipal bonds historically have been a solid investment as even the Great Depression saw no state defaulting on its general-obligation bonds. The market has not been conducive for bonding the project at this point, and the short term loans discussed during the meeting are expensive. This is one area where the recently passed stimulus package may may prove beneficial. The federal dollars invested in infrastructure should lead to less municipal bonds being offered, making the supply smaller and a better market for municipalities seeking to sell.
Also, higher taxes for some might make muni-bonds an extremely attractive investment. President Barack Obama’s intention as a candidate to raise taxes on those making more than $250,000 a year might lead to a renewed interest for muni-bonds. Analysts believe a 6% muni yield is often equivalent to a 10% taxable yield for residents in high income-tax states like California, New Jersey and New York.
The federal stimulus package may end up providing new tennis courts for other municipalities around the nation. Although it was common for such projects to be undertaken in the 1930’s as part of Roosevelt’s public works programs, there is no guarantee that similar projects will be earmarked with the current spending program. This is not stopping towns around the country from putting such projects on their wish list for federal funding. Other municipalities in New Jersey are tapping into their Open Space funds which can be used for recreational maintenance and historic preservation, in addition to acquiring open space. But for now, local residents who can should consider looking into the municipal bond market.
This is just an incredible waste of money the town doesn’t have. To hand out this kind of money to satisfy the WANTS of the few at the EXPENSE of the many is insulting. I thought Republicans were fiscally conservative and the Democrats were “tax and spenders”? What happened to that? Seems that only Councilmen Di Pentima and Pignatelli remembered that when the vote came up.
Yes, the courts need work but is now the time to spend all this money so the players don’t have the sun in their eyes? As pointed out during the meeting, the 2009 budget isn’t even completed and we have to fund projects that SERVE ALL THE RESIDENTS but to the tennis mafia, this is needed. Where are the priorities here?
Who wants to bet that when the budget is done and it includes yet another tax increase, the fingers will all be pointing to a lack of aid from Trenton?
I would like to make it perfectly clear that I got all of my finance numbers from the Borough of Oakland’s CFO. With the money the Recreation Commission would contribute, along with user fees, the municipal budget would not see any impact until 2013.
Steve Wagoner
Chairman, Oakland Recreation Commission
Unfortunately, Mr. Wagoner’s accretion that there is no impact on Oakland’s budget until 2013 is 100% incorrect, and the information he received from our CFO points that out.
In our 2009 budget, I will be budgeting to cover the interest costs we have paid on the short-term loan the Borough used to fund certain Capital projects, which include the initial $410,000 that was approved with the 2008 Capital Budget.
Any resident that would like the correct information can come to a council meeting and speak with me or you can email me at DiPentima@Oakland-NJ.org.
Frank Di Pentima
Councilman
Oakland New Jersey