Column # 3- 3-18-08

 

COUNCILMAN BONACCI SAYS

 

$40 MILLION CROWN JEWEL - REALLY!

 

In Berkeley Heights, Council-member Bruno repeats a summary phrase.  When ex Council member Ronner referred to Stanford Park as a “Crown Jewel”, I merely laughed but did comment in writing that I thought Stanford Drive/Park would really become an “Albatross “ around the taxpayer’s neck.  Before I clarify and support my contention lets look back.

 

When Mr. Cohen ran for a single slot as a Committee person in 2004, I asked a simple question at a taxpayers’ meeting in the Library.  I asked Mr. Cohen, “What is the anticipated cost of taking Stanford Dr. off the private tax rolls and placing it on the public non-tax rolls?”  He said he did not know.  Then he blew some smoke.  At that meeting because of his non-responsive answer, I suggested it could be as much as $35 million and it would just take a few specific numbers and a rather simple calculation to confirm.

 

Well isn’t it a shame that people who think they got $8 million as a gift from the County and refer to “never looking a gift horse in the mouth” can be so enraptured?  Let me challenge some of our financially astute residents to check my method of determining the cost and perhaps others to provide the numerical facts.

 

First the NPV or net present value is a way to discount cash flows to the present day using some typical interest rate. So you can list several items whether as cash values today or in the future and also list a stream of past and future cash flows and convert all of these into a Present Value.  Then add up these present values and get the total NPV.  What are these related numerics for Stanford Dr.?

·        The Town’s portion of the purchase price- $5 million paid on Dec. 20, 2005

·        The interest on this $5 million borrowed money for the next 20 to 30 years

·        The annual loss in tax revenue for the next 40 years or more because the 17.1 acres will be owned by the non-taxpaying Township and the non-taxpaying Union County- (12 + acres by the County and 4+ acres by the Town)

·        The annual decrease in tax revenues from past years when taxes were lowered for the previous private owner as they phased out operations

·        The annual cost of maintaining the properties of both the Township and the County for the next 40 years (could be $400,000 or more per year)

·        The cost of $8.66 million dollars for the Recreation Center if and when it gets approved and funded

·        The annual interest on the borrowed $8.66 million for the next 30 years

 

Well, just pick an interest rate and discount these values to today.  Then add them up.  I believe you will come close to $40 million dollars if not more.

 

Of course we should put this in perspective.  Last year our local tax hit was $9.9 million and this year it will be a little over $10 million.  Therefore we are talking about 4 years worth of property taxes.  We wouldn’t need Governor Corzine’s tax cap if we had this money.

 

Then ask yourself again if Berkeley Heights will have a “Crown Jewel” or a costly bad-management deal.  Ask yourself if this helps Berkeley Heights enough (however enticing a nice recreation center becomes) considering appreciable infrastructure issues we should be addressing with higher priorities like a Library, a new Police Department building, a new or revamped Town Hall, a real Community Center, etc.  Meanwhile, the County continues with their plans for ball fields and their high annual budget and their approximately annual $10 million or so take from Berkeley Heights property taxes plus our annual maintenance costs for Stanford Park.

 

I look forward to hearing from residents on this subject over the next few months.

 

Dr. John Bonacci is a member of the Berkeley Heights Township Council and Vice-President of the Council for 2008.

 

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