Tell Me Lies, Tell Me Sweet, Little Lies

From The Express-Times:

Zikas' record expensive, embarrassing for Alpha
Thursday, January 28, 2010

It was baffling to read Alpha Councilman Harry Zikas Jr.'s letter (Jan.17) on the "in-lieu-of medical benefits" issue. With New Jersey's budget crisis, high taxes and loss of state aid, why is he so preoccupied with petty sarcasm and name-calling?

Maybe the explanation is two-fold: Zikas is up for re-election this year and wants to distance himself from his failed policies over the last 10 years. His general approach is both insulting and embarrassing.

This controversial medical benefits plan, adopted during Zikas' second term as mayor, has been a complete disaster for Alpha taxpayers. Since 2004, more than $108,000 has been paid to elected officials, with almost 70 percent going to just three council members (Robert Gara, $35,410; Louis Pettinelli , $22,243; and John Hajdu, $15,358) even though they all receive "Cadillac" medical benefits from various governmental bodies.

Also, in a Twitter post, Zikas called Pohatcong Township Mayor Stephen Babinsky "the Hugo Chavez of Warren County." During an Interstate 78 scenic byway presentation, he insulted and belittled Elaine Emiliani, Greenwich Township's mayor.

When Michael Savary objected to giving the borough attorney an exorbitant 7 percent increase, Zikas shot back, referring to a uniquely male part of Savary's anatomy.

If all this weren't enough, his tie-breaking vote approving the pool fiasco, his multiyear foot-dragging developing a borough Web site, the explosion in payroll costs under his watch, and Enron-style financial shell games with the water/sewer money should cause voters to ask, "Isn't it time for a change?"

Craig S. Dunwell
Alpha

I want to thank Dunwell for giving me so much to work with here - I don't even know where to begin! I would love to respond with a Letter to the Editor of my own, but The Express-Times only allows one letter per month and I reached that quota on January 17.

The first thing you need to know is that Dunwell is Councilman Michael Savary's 'Karl Rove', the "brain trust", if you will. He claims that he's not 'a surrogate' for anybody, but the writing is clearly on the wall. To be fair, Dunwell is currently a private citizen with his own opinions and he's clearly entitled to them, but when you attack my record and reputation, I'm going to respond and respond forcefully I will.

So, let's begin. Dunwell insinuates that I'm not concerned with "New Jersey's budget crisis, high taxes and loss of state aid". I would like to know where he would get an idea like that! Just like every citizen, business owner and elected official in this state, I'm extremely worried about our finances.  Dunwell mentions 'loss of state aid' and unfortunately, that is an issue every municipality will have to work through. I'm not sure if Dunwell remembers, but when I first took office as Mayor, one of the first things we did was apply for extraordinary aid to help repair Alpha's finances. Our application was successful and after a few more years of that additional aid, Alpha was on course to a stable financial future. Council held its first budget meeting of the year on Tuesday and if Dunwell were in attendance, he would have found out that our years of hard work are paying off. In fact, Moody's just upgraded our rating from Baa2 to Baa1. **See Below**

Ok, let's take his next shot at me - Dunwell states that I'm pre-occupied with "petty sarcasm and name-calling" because I'm up for re-election and I want to distance myself from my failed policies. While my seat on council is up this year, I haven't made a decision on running for re-election as of yet. I also don't consider my policies a failure and neither do the voters of Alpha who re-elected me as their Mayor in 2003 and allowed me the opportunity to continue serving Alpha as a Councilman by electing me to my current office in 2007. He opines that my general approach is "insulting and embarrassing". What about Councilman Savary's 'curb scandal'? Wasn't that "insulting and embarrassing" enough for him?

Dunwell brings up the story that won't die - the medical benefits plan! Yes, Alpha switched from a private health benefits package to the state health benefits package. Yes, we did it to save money. No, we were not aware that it had to be offered to elected officials. Was it a disaster? Far from it. While most of the savings were eaten up by having to offer the plan to elected officials, I still feel that the decision to switch was a smart move. It's interesting to note that Dunwell fails to mention Councilman Savary's decision to accept health benefits and what that will cost Alpha's taxpayers over the next three years of his term. Between the years of 2004 and up to and including 2006, Councilman Savary cost Alpha's taxpayers $15,688.68. Over the next three years, it is estimated that Councilman Savary's health benefits will cost $22,717.80 for a grand total of $38,406.48.

Next up, Dunwell references my infamous Twitter post about Mayor Babinsky.  I think I made it pretty clear in my blog post that I said what I said out of frustration due to Mayor Babinsky's unwillingness to cooperate with the Borough of Alpha on several cost-saving, shared services proposals. He continues on to say that I "insulted and belittled" Elaine Emiliani during a Route I-78 scenic byway presentation. If asking questions is insulting and belittling, then I'm guilty. Again, I posted a few entries on this blog regarding my feelings on the scenic byway proposal and how this state has bigger issues to confront and solve before we start designating highways as scenic byways.

Ok, Dunwell's next statement definitely needs some clarification. At Alpha's recent re-organization meeting on January 5, Councilman Savary decided to vote on our attorney's contract, which called for a 4.4% increase not 7%. I objected to him voting at all, whether for it or against it, because Councilman Savary is a defendant in a lawsuit filed by the Borough of Alpha that is being litigated by our attorney. When our municipal clerk went through the roll call and I heard Councilman Savary enter a vote, I finished voting and this is what transpired:

Me: "...My colleague, Michael Savary, just voted on this resolution and I don't mean, pardon my language, to bust your balls, but you are a current defendant in litigation that our attorney is [representing us on]."
Savary: "So, you want me to abstain?"
Me: "You should."
Savary: "Yeah, I was wondering about that...yeah, I'll abstain."

I tried to stop Councilman Savary from crossing the fine line of ethics, but I'm the bad guy because I said the word 'balls'. The horror!

Dunwell finally closes his letter with a bunch of rapid fire accusations. Let's take them one by one:

- my tie-breaking vote approving the pool fiasco
Yes, on May 23, 2006, I voted to break a tie to enter into a contract with the local YMCA to run the John Dolak Memorial Pool. I was willing to give the pool one last shot to break even, but unfortunately, it did not. We learned our lesson and decided to permanently close the pool after that season ended.

- multiyear foot-dragging developing a Borough website
While I did put the website on the back burner, the Borough's site is currently under development and will be live soon. Printed directories, newsletters and a mass e-mail list were developed to keep residents informed in the meantime.

- explosion of payroll costs under my watch
I don't think modest pay increases for our employees would qualify as an "explosion". Alpha had a history of constant turnover with our clerk and finance officer, but since 2000, the same two people have held those positions.

- Enron-style financial shell games with the water/sewer money
Coincidentally, Councilman Savary used the same attack line in his campaign flier that I issued a rebuttal to back in November 2009. This statement was made because our three public works employees are paid out of the water/sewer fund instead of the general fund. The Borough of Alpha's finances and records are audited yearly and our budget meetings are open to the public. The public has full access to the process and we have absolutely nothing to hide.

"Fiasco", "foot-dragging", "explosion", "Enron-style" - all words used to alarm people, because usually where there's smoke, there's fire, but in this case, where there's smoke, there's two desperate men rubbing sticks together trying to start a fire. There's a lot more to the Dunwell & Savary Saga, but I'll save it for the days and weeks to come.

**MOODY'S UPGRADES BOROUGH OF ALPHA'S (NJ) G.O. RATING TO Baa1 FROM Baa2**

Baa1 RATING APPLIES TO $350,000 IN OUTSTANDING PARITY DEBT

Alpha (Borough of) NJ
Municipality
New Jersey

NEW YORK, January 26, 2010 -- Moody's Investors Service has upgraded the Borough of Alpha's (NJ) rating to Baa1 from Baa2, affecting $350,000 in outstanding general obligation debt. The bonds are secured by the borough's general obligation unlimited tax pledge. The upgrade reflects significant growth of financial margins evident in the Current Fund balance increasing more than 600% since fiscal 2005 and the expectation that reserves will remain in-line with recent trends. Fiscal 2008 Current Fund balance was $1.06 million (44.1% of Current Fund revenues). The Baa1 rating incorporates the borough's improved financial position, limited $233 million tax base with the presence of several age restricted housing developments in Warren County (GO rated A2), wealth indices below state and national medians, and modest debt position. Pay out of debt is rapid with 100% paid within the next eight years and the borough has no future borrowing plans. All of the borough's debt is fixed rate and the borough is not party to any derivative agreements.

Moody's believes the borough's financial position will remain sound given a healthy Current Fund balance and management's conservative budgeting practices. Over a three-year period ending in fiscal 2008 (December 31), Current Fund balance increased to $1.06 million, or a healthy 44.1% of Current Fund revenues. Positive financial performance was primarily due to collecting property taxes in excess of budget and nonbudgeted revenue. Based on unaudited fiscal 2009 results, the borough expects to fully replenish its $243,000 in appropriated surplus and increase its Current Fund balance by $29,000 to $1.09 million (approximately 45% of Current Fund revenues). The majority of Current
Fund revenue (fiscal 2008) is comprised of properties taxes and state aid at 70.4% and 11.6%, respectively. Moody's believes the borough's financial position will face pressures in the near-term given the current operating environment of the state but expects reserve levels to be maintained well in excess of 2006 levels.

The borough defers payment of $1.03 million (a sizeable 37.2% 2008 Current Fund balance) of the local school tax levy. The deferred amount represents an off-balance sheet liability, which Moody's believes could create fiscal vulnerability in the event that school property taxes are reduced. However, the borough has kept the deferral amount constant thereby reducing the deferral as a percentage of the levy to 37.2% from 42.3% in 2005, and below the maximum permitted level of 50%.

STRENGTHS
* Low debt burden with no future debt plans and rapid amortization of debt
* Strong Current Fund balance at 44.1% of Current Fund revenues
* Management's conservative budgeting practices

CHALLENGES
* Limited tax base of $233 million
* Below average wealth levels in western New Jersey
* High debt service expenditures as a percentage of Current Fund expenses

KEY STATISTICS:
-2008 Population: 2,386 (-3.9% since 2000)
-2010 Full Valuation: $233 million
-2010 Full Value Per Capita: $97,458
-1999 Per Capita Income (as % of NJ and US): $20,104 (74.4% and 93.1%)
-1999 Median Family Income (as % of NJ and US): $45,435 (69.5% and 90.8%)
-Direct Debt Burden: 0.3%
-Payout of Principal (8 years): 100%
-2008 General Fund Balance: $1.1 million (44.1% of Current Fund revenue)
-Long-term G.O. Debt Outstanding: $350,000