A34 percent electric rate increase may be in the works for Milltown residents.
The Borough Council will vote Monday on introducing an ordinance that allows for the increase. Since the following meeting will not occur until January, adoption of the ordinance will likely be up to the new council. While Democrats have had control of the council, Republicans will have the majority starting Jan. 1.
“The existing Democratic-controlled council created this mess, but what’s going to happen is the new, Republican council will have to clean up the mess,” Republican Councilman Randy Farkas said.
electric rate hike
“They want the Republican council to look like the bad guys. The ordinance will be reintroduced with a rate that reflects the fiscal situation of the municipal utilities department.”
The ordinance was to be introduced Nov. 19, but was tabled because Councilman Eric Steeber, who is in charge of finance, was not there. Councilman Bill Deinzer, chairman of the utilities department, made the motion to table the ordinance.
Neither Steeber nor Deinzer could be reached for this article. The two Democrats were defeated in the Nov. 6 election and their council terms expire Dec. 31.
Milltown is one of eight municipalities in the state that belong to the Public Power Association of New Jersey. The collective works together to buy energy in bulk and then allocates the energy among the various municipalities, which by state law are the sole providers of the electric utility service to their residents.
Energy from the bulk purchase through the new contract will be allocated in each of the eight towns starting Jan. 1, and run for the next 17 months.
Milltown Business Administrator Denise Biancamano could not be reached to obtain rate figures.
Farkas said that on the whole the increase amounts to a little more than $3 million.
When the Borough Council adopted its zero-tax-increase municipal budget for 2007 in September, achieved by using surplus funds from various departments, some were skeptical. The bulk of the surplus monies used in the budget came from the electrical branch of the utilities department.
“I’ve been on the council for 11 years, and every year we’ve been dipping into the surplus to control the taxes,” Democratic Councilman Mike Skarzynski said. “I’m voting on the minimum amount to be passed on to Milltown residents.”
Councilman Joseph Cruz, also a Democrat, agreed, saying residents can control their electric consumption, but they cannot control taxes, which is why the council opted to lessen the blow through the use of surplus. In addition, high-end users such as Target and Home Depot pay a higher rate than residents and small business, which helps to supplement the surplus, Cruz said.
While those in support of using surplus funds to defray taxes assured the public that there was still plenty of money in reserve in case of emergencies, others were doubtful.
“We’re not covered,” Farkas said. “We have about $120,000 in our electrical surplus, and we normally have $300,000 to $400,000.”
Brian Harto and Stacy Waters, the Republicans who will begin their council terms in January, spoke out against the use of surplus funds at the time the budget was introduced.
“We did bring it to light,” Harto said. “After January, I agree with Randy, it will probably have to be relooked at.”
Harto said he is concerned that even with a 34 percent increase, the surplus will not be able to get built back up to where it needs to be for emergency situations.
Waters could not be reached for comment.
South River, a part of the same power association as Milltown, introduced an ordinance last month that will bring a 67 percent increase in its electrical rates. Republican council members there shared similar concerns about Democrats voting to use surplus funds to balance their budget at election time.
“We’re even lower than South River,” Cruz said. “If we do go up 34 [percent] instead of 67 in South River, I think we’re doing pretty good. Milltown has been, historically, the lowest around.”
Farkas and fellow Republican Councilman John Collins, however, were doubtful that the borough would be able to maintain a 34 percent increase when a municipality with the same rates had to go up significantly higher. According to Farkas, the 34 percent increase would only cover new costs.
Skarzynski said his rationale for voting to table the ordinance last month was that the borough auditor and other professionals were not there to present all the facts and figures.
At previous meetings, residents with questions regarding the electrical rates were asked to wait until the numbers were worked out and the ordinance introduced. Collins questioned why, when the contract was signed in May, it has taken so long for information to be released to the public.
“It’s kind of a shame that they couldn’t tell people the truth,” Collins said. “It’s like filling up your [gas] tank without knowing the price. They withheld it for political purposes. That’s no way to treat people. You have to be honest with the public.”
Collins said Steeber told council members that there would be a finance meeting on the issue before the ordinance was introduced, but it never occurred. Farkas said he and Collins posed questions to Steeber that went unanswered.
Cruz criticized the Republicans, including Mayor Gloria Bradford for their current stance. He said Bradford lauded the council’s bipartisan efforts at the time the municipal budget was adopted.
“I praised the efforts by the council to come up with the best budget possible, and I know they worked hard on it; however, I don’t agree with how the surplus was handled,” Bradford said. “What we’re still hearing is political rhetoric, and that’s counterproductive to anything.”
According to Cruz, Collins thanked the council for using his ideas for dipping into the surplus to balance the budget when it was adopted and voted for the budget, but now is changing his standpoint.
Collins said using surplus funds was nothing new, but the Democrats went overboard.
“The problem was, they went on a spending spree,” Collins said. “They should have curtailed spending until June. To go barebones and say everything is going to be fine is just fiscally irresponsible.”
One example Collins cited in terms of imprudent spending was the purchase of a new sewer truck for over $150,000, when the truck will not arrive until June. He said he voted against individual items that he saw as unnecessary.
Although Farkas voted against adopting the budget, Cruz said he should have presented an alternate plan instead of simply saying he did not like what was proposed.
Farkas said he would vote against introducing the electric rate ordinance at the Dec. 10 meeting.
“The dance is over,” Farkas said. “Now it’s time to pay the band.”