Gloucester Township Faces Questions About Debt, Double-Borrowing

GLOUCESTER TOWNSHIP, NJ — As Gloucester Township Council gave final consideration to a proposed $7,796,262 capital improvement plan Monday night, the township’s governing body faced questions about $3 million that was moved from the capital fund to help balance the budget in December.

“Was that a bad decision?” resident Pete Heinbaugh asked during the public hearing on the proposed bond ordinance.

“That money was earmarked for specific projects. We were able to do those projects, move forward and cancel that,” Gloucester Township Council President Orlando Mercado said.

The state recommended canceling the rest of that bond money due to concerns over state aid amid the coronavirus pandemic, according to Gloucester Township Business Administrator Tom Cardis.

The money was moved into the budget to help offset the cost of debt, Cardis and Gloucester Township Chief Financial Officer Christie Ehret. Had they not canceled it, the township would have had to pay interest on it, they said.

The plan calls for the borrowing of $7,425,011 in bonds or notes for several projects throughout the township, and it includes a down payment of $371,251.

Gloucester Township Mayoral Candidate Sam Sweet said that if they had saved that money, the township would have had to borrow less for this bond ordinance. He also accused the township of over-borrowing.

He said they borrowed a total of $117,000 for a road project in 2019 and roughly the same amount for the same project in 2021.

“It appears that we’re borrowing twice for the same project,” Sweet said. He also referred to a project for a Department of Public Works generator that was in Phase 2 in 2019, and listed as in Phase 1 for 2021.

“With $3 million that was canceled, you’re going to find items in the 2019 budget that were canceled,” Cardis said.

“I understand you canceled it, but you still borrowed it, and you’re going to borrow it again,” Sweet said. “We paid interest in 2019 and 2020 of 3 percent on the bond. And now you canceled it, and you’re re-borrowing it.”

He also said he could find between $150,000 and $200,000 worth of items in the plan that he doesn’t believe need to be part of the capital improvement plan.

He believes they should be part of the township’s regular budget, but Councilman Dan Hutchison said they are included in the capital improvement plan at the suggestion of the township’s bond counsel.

“We have to follow the advice of our bond counsel,” Hutchison said.

“We don’t need to borrow for low-ticket items that we’re going to pay double for down the road,” said Sweet, who said he believes the township overborrowed on about one-third of the projects in the capital plan.

The breakdown of projects covered by the ordinance can be found below:

• $1,881,953 for the repaving of various streets. The obligation would be $1,791,993, with a down payment of $89,600;
• $1,691,165 for improvements to township buildings. The obligation would be $1,610,633, and the down payment would be $80,532;
• $1,181,600 for the purchase of various dump trucks and other equipment for the Department of Public Works. The obligation would be $1,125,333, and the down payment would be $56,267;
• $1,614,187 for the purchase of various equipment for the police department. The obligation would be $1,537,321, with a down payment of $76,866;
• $406,056 for the repaving of various sidewalks and curbs, including the Jarvis Road sidewalk. The obligation would be $386,720, with a down payment of $19,336;
• $394,675 for the purchase of various equipment for the Department of Public Works. The obligation would be $375,881, and the down payment would be $18,794;
• $205,514 for the purchase of equipment for the Parks and Recreation Department, including fencing, and the resurfacing of various recreational areas. The obligation would be $195,728, with a down payment of $9,786;
• $126,600 for various drainage improvement projects. The obligation would be $120,571, and the down payment would be $6,029;
• $105,500 for the completion of various projects for the Parks and Recreation Department, including fencing, and the resurfacing of various recreational areas. The obligation would be $100,476, with a down payment of $5,024;
• $94,950 for the purchase and installation of streetlights and traffic signals. The obligation would be $90,429, and the down payment would be $4,521;
• $79,125 for the purchase of office and computer equipment. The obligation would be $75,357, with a down payment of $3,768; and
• $15,297 for the purchase of equipment for the township's recreation department, including bar code scanners, laptops, tablets, AV equipment and blinds for the Recreation Center. The obligation would be $14,569, and the down payment would be $728.

Gloucester Township Council unanimously approved the proposed bond ordinance following Monday’s public hearing.

Sweet has been critical of the township’s spending for several years. Each of the last two years, he has been part of a committee that put together a “Citizen’s Budget.”

After previously running in the Democratic primary locally, he filed a petition to run for mayor on the Restore GT ticket. He will run against incumbent Democrat David Mayer and Republican challenger Joseph F. Damico III in the Nov. 2 general elections.