Milltown officials are moving forward with an ordinance that would raise electric rates in town by about 70 percent.
Part of the increase comes as a result of higher rates charged in a new bulk energy contract with the Public Power Association of New Jersey, while the remainder is considered necessary by proponents in order to rebuild surplus funds that the Borough Council used to relieve the municipal tax burden last year.
“Had the prior council acted responsibly and not played politics with something as important as electrical rates, we wouldn’t be in this position right now,” said Republican Randy Farkas, who was elected to serve as council president this year. “This is a serious issue.”
The council introduced the ordinance increasing the rates on Jan. 14. A public hearing will take place Jan. 28, when the council is expected to vote on its adoption.
Milltown purchases energy in bulk with a collective of eight other municipalities. The borough is the sole provider of electricity for its residents. Under the new contract that began Jan. 1, the rate charged by the association is 34 percent higher than last year’s.
While the former council was still in place, then-council President Eric Steeber, a Democrat who was in charge of finance, was slated to introduce an ordinance that would bring a 34 percent increase in the rates. Themove was tabled in his absence, and in December was ultimately put off because of the new year approaching.
Republicans, in the minority last year, said at the time that the increase would not be enough to replenish the surplus funds that were used to keep the municipal tax rate stable last year.
“We’ve done it in the past, and that didn’t make [an electric rate increase] necessary,” Democratic Councilman Joseph Cruz said. “That money has always been used for tax relief, for the past 50 years. If there is a surplus, then they deserve their money back. The taxpayers need tax relief now. They’re hurting.”
According to Farkas, the Democrats up for re-election last year used the flat tax rate to garner votes, while not considering the consequences of using surplus funds, largely from the electrical department, to achieve it. Neither Steeber nor Democratic Councilman Bill Deinzer held on to their council seats, losing them to Republicans Brian Harto and Stacy Waters, both of whom criticized the budgetary practices.
“Obviously the public saw through that; however, now we’re paying the price,” Farkas said.
Cruz and Councilman Mike Skarzynski, the only two Democrats left on the sixmember council, voted against introducing the ordinance last week. Farkas said they did not offer any alternate plans.
Bothmen refuted Farkas’ claim, saying they spoke about the issue at the meeting in order to eke out other options.
“Let’s exhaust every avenue before we bring a 70 percent increase,” Cruz said. “With no plan, where’s the accountability?”
Officials took several years to build up sufficient surplus amounts in the past, Cruz said, and it does not make sense to attempt to recoup it all within the coming year.
Cruz and Skarzynski said that when they questioned Borough Business Administrator Denise Biancamano about why such an increase would be necessary, she said it is needed to bring the surplus to past levels and to offset the state-mandated 4 percent cap on municipal spending.
Cruz said the reason Farkas gave for the increase was to build up the surplus to meet the need for infrastructural repairs and upgrades. Long-range plans for such projects must first be laid out, then prioritized to be completed over time, Cruz said.
“That’s fine, but where is the plan?” Cruz said. “There is no plan. If you have a capital improvement … normally, you bond for it. It doesn’t make any sense at all for the people in this town to be paying as much as people in other towns, plus infrastructure. I put the people’s face next to this number, and it bothers me because the people suffer.”
Skarzynski agreed, outlining a suggestion he shared at the council meeting, which involved the borough researching the possibility of going with a large electrical supplier like PSE&G. Twelve years ago, the town did a feasibility study on such a move, and PSE&G was willing to pay $8 million to take over as Milltown’s electrical supplier, according to Skarzynski.
“It wouldn’t cost the township one penny to make some phone calls and explore the possibility,” he said.
Citing the aging infrastructure and the fact that an electrical substation must be moved because of the damage it suffered from flooding last year, Skarzynski said it could prove prudent to leave the public power association.
“If Ford Avenue ever gets developed, our engineers and our professionals came out and said our infrastructure cannot support the proposed project,” Skarzynski said. “If we needed a new substation, it wouldn’t be our responsibility, it would be PSE&G’s.”
Although the developer of Ford Avenue would be required to pay a fair share of infrastructural costs arising as a result of the construction, Skarzynski said that would only amount to about 5 percent of the amount to be shouldered by taxpayers.
Both Cruz and Skarzynski said another solution, which has been used in the past, is to pass the brunt of the increase on to high-end users, such as Home Depot and Target, so as not to allow such a large impact on residents and small businesses. Skarzynski predicted that small businesses would be forced to leave town because of the increase.
Cruz had his own prediction.
“People aren’t going to leave Milltown; they’re going to run away from Milltown,” Cruz said.
According to Skarzynski, he received seven calls from residents at his home following the meeting – a record number. The callers were supportive of his suggestion to research the possibility of pulling out of the association.
Farkas said he pays the rates like everyone else in town, and does not want to see the increase, but sees no other alternative at this point. He pointed out that both of the Democrats are up for re-election this year.
Skarzynski said neither he nor Cruz has decided if they will run for re-election.
“The election is over, everything is done, let’s stop playing politics,” Cruz said.