By vincent todaro
Staff Writer
EAST BRUNSWICK — Whether $500,000 in annual revenue should continue to benefit the township’s parking utility is only one of many questions regarding the utility’s future.
Councilman David Stahl and Councilwoman Catherine Diem, both Democrats, met with township Finance Director L. Mason Neely and Mayor William Neary last week to learn more about concerns involving the utility and its history. Diem and Stahl, both new to the council this year, said they want to learn more about the issues, especially in light of the fact that the Neilson Plaza parking deck, Route 18, will soon undergo more than $1 million in maintenance work.
Some township officials have questioned whether $491,000 in rent revenue that goes to the township-operated utility should instead benefit the township as a whole — meaning commuters who use the Neilson deck and the Transportation and Commerce Center park and ride lot, also Route 18, could have to make up the difference themselves.
Stahl said he is also concerned with the utility’s fund reserve, which has declined in recent years, as well as the years-long waiting list of people seeking monthly parking permits at the two facilities.
The normal costs of operation, combined with debt incurred for the Neilson work, and the loss of the subsidy, would likely mean an increase in commuter parking fees. However, Howard Neuman, a member of the township’s Commuter Parking Advisory Committee, has told township officials it would be wrong to take the rent money away from the utility.
The money comes in the form of rent paid by Sam’s Club, the Route 18 Flea Market and Jason’s Furniture, which are located on township-owned property. The township uses a private firm to manage the property, and that firm keeps a portion of the rent above the $491,000.
An agreement dating to 1978 calls for the rent money to benefit the utility budget rather than the municipal budget.
Stahl has questioned whether it is fair to allow that subsidy to continue, as it raises the question of whether all East Brunswick taxpayers should pay for facilities used by only a small minority of residents. Officials also noted that the parking fees charged to commuters, also a source of income for the utility budget, are the lowest in the area, at $15 to $20 per month for township residents, or $2 per day.
During a recent council meeting, Neuman argued that the yearly rent payments are part of a "quid pro quo" dating to the 1970s and the construction of the Tower Center.
"What is really important, though, is the fact that before the Neilson Deck was built, the township was on the verge of losing the entire Tower Center project over a minor cost differential," he said.
The utility went into debt to make up for that difference, he said. The township paid $14 million in construction costs related to the Tower Center and the Neilson deck, with $9 million paying for Neilson and $5 million helping the developer with infrastructure improvements, Neuman said, noting that township officials wanted to help the Tower Center project because it would become the township’s greatest tax ratable.
"Why was the parking utility allowed to be saddled with $5 million of debt that had nothing to do with parking or commuter needs?" he asked. "Because there was a quid pro quo for the additional debt."
The $5 million was paid off by the utility with the rent money from the businesses.
Stahl said Neuman’s argument is unsatisfactory because the rent money given to the utility budget has been far more than $5 million. In fact, when the agreement ends in 2008, about $15 million of rent money will have gone to subsidize the utility. He also noted the rent money was going to the utility long before the construction of the Neilson deck.
Neuman said that early rent money went to the repayment of debt that had resulted from the township’s acquisition of the Transportation and Commerce Center property in the late 1970s.
As a result of the construction of Neilson Plaza and the acquisition of the transportation center property, he said, the utility still has $8.2 million in debt still to be paid off.
Stahl said he does not think the subsidy is fair to all residents, but wants to know how much its removal would affect the utility’s finances.
"If I remove the subsidy, does it mean the finances of the utility are compromised?" he asked.
He said the issues regarding the utility are very complicated, and there may be valid reasons for continuing the subsidy.
"So we’re still examining it," he said, adding that the process is "plodding along."
Diem said that ending the subsidy "may or may not be the right thing to do," but added that parking rates have not gone up for a while.
Neuman argued that if the township takes away the rent money, parking fees would have to be raised by more than 60 percent.
"It would represent an attempt to make 10 percent of East Brunswick residents subsidize the other 90 percent, and it would be reneging on a 15-year-old pledge," he said.
The subsidy is only one question, though.
Stahl said the utility has burned through its fund reserve over the past few years, dropping from about $1.5 million a few years ago to roughly $250,000.
"If you burn through cash that quickly, you need to replace that," he said.
In addition to the shrinking reserve is the need for the $1 million in work at Neilson, he said. The township also needs to find a way to shrink the huge waiting list for monthly parking permits, he said. To accomplish that, some daily spots could be turned into permit spots.

