BY ELAINE VAN DEVELDE
Staff Writer
At the height of campaign season in Tinton Falls, the shovel is poised to go into the ground for the long-awaited municipal complex, and mayoral competitors are buried in contentious debates on the cost.
The 37,000-square-foot main building will come in at $3 million more than the original estimated cost in 2001. Incumbent Mayor Ann McNamara is calling the added expense not so costly and worth the wait.
However, her challenger, Councilman Peter Maclearie, is still steaming over what he says is a $3 million mistake that’s the result of irresponsible fiscal management.
It’s a mistake, he said, that no one can afford to forget.
But McNamara is of the mind-set that it is time to move forward and stop dwelling on the idea that “hindsight is always 20/20.”
“It took a long time, but we’re getting the right building for today’s needs and the future,” McNamara said. “It was absolutely worth the wait. Council did a good job analyzing the situation and making sure we got exactly what we needed for the right cost. What can you do? Costs go up. The price of steel alone has risen about 30 percent.”
After many bidding snafus, a contract for $8,924,850 was awarded to G&P Parlamas Inc., Allenhurst, to build the main facility on the “great lawn” in front of the current town hall on Tinton Avenue.
When originally conceived in 2001 by architects Kaplan, Gaunt & DeSantis, Red Bank, this part of the project, or phase two, was slated to cost $6.8 million.
A prefabricated public works building, which has been up and running since the summer of 2003, ended up costing $2 million.
Officials bonded for the anticipated $8.8 million in October 2001, but the main complex’s construction was never bid on.
While the new $2 million public works facility has sat completed at the rear of the original municipal complex since 2003, construction costs rose, and no main building was built.
The result: three years after the original $8.8 million in bonds was approved, the cost escalated and council ended up approving a bond last summer for $3 million more to cover it.
While McNamara is touting interest earned on bond money that was invested by the borough and not yet spent, Maclearie is saying her perception is deceiving.
“There is a lot of misunderstanding about the money we have actually spent on this building,” the mayor said. “I want to straighten that out.”
McNamara had borough Chief Financial Officer Stephen Pfeffer compose a summary of bonds approved, ones that were actually issued, and what they earned in interest.
The originally approved bond that was sanctioned by council in October 2001 rose to nearly $9.3 million.
Part of that $9.3 million 30-year bond, or roughly $6.6 million, was actually issued to the borough on July 1, 2002, according to Pfeffer’s figures.
“The rest was approved, but not issued,” Maclearie said. “This is where the misunderstanding comes in.”
Pfeffer estimated that at a net interest cost of 4.65 percent, the borough has so far made principal payments of $437,408 and interest payments of $738,376, or close to $1.3 million. He also said in his memo that “the funds have been invested since their receipt.
“The majority of these funds have earned 2 percent or better [interest] for the last 2.5 years,” he continued. “Presently, these funds are earning 3.25 percent. The interest income that the borough receives on these funds is offsetting the bond’s interest expense in the budget.”
Maclearie, who is by profession a controller, however, said the numbers are confusing and misleading.
But McNamara says he’s just beating “a dead issue of unavoidable escalating costs and trying to make people look in the wrong direction away from what is ultimately a good thing all around — a new building that we need and interest income.”
“But they’re taking into account, with those calculations, estimated interest income on the money issued and invested at a rate of roughly 4 percent for all of 2005 when we haven’t even earned it yet,” Maclearie said.
Broken down, Pfeffer said that the interest income for 2004 was $127,014 and estimated interest income of $284,140 at 4.6 percent for all of 2005.
“It’s not a fair or accurate assessment of what’s going on and what taxpayers are paying,” Maclearie said. “What we have paid back came out of taxpayers’ wallets.”
He added that since the first payment on the $6.6 million of issued bonds was paid in January 2003 to now, $610,000 in principal payments have been made and $1 million in interest.
“Look at the $1.6 million spent so far as opposed to the $127,014 truly earned in interest in 2004,” Maclearie said. “It’s a far cry from the numbers they’re using that haven’t even been earned yet.”
The additional $3 million in bonds, while approved, hasn’t even been issued yet, he added. And council has estimated that there will be $700,000 more in incidental contingency construction costs along the way.
It’s a cost, though, that McNamara said the residents will benefit from in the end and really won’t strain their taxpaying wallets too much. “We’re going to have a lovely community room and facilities we never had before for the people to enjoy,” she said.
Last year, about 6 cents of a total tax hike of 8 cents was attributed to the municipal complex cost. This year there was no tax hike.
“That’s because the extra $3 million in approved bonds, and more, were not yet issued,” Maclearie said. “It’s going to cost, and a lot more. The analysis is simple: You don’t borrow millions of dollars to buy a house that you’re going to move into in three years. You borrow the money the day you move in.”