The Town of Secaucus is trying to collect money it says it is owed by the developer of a gated townhouse community that was obligated to escrow nearly $200,000 to be used for open space funding. The Town Council reported Tuesday that this money was never collected.
The money, which had been earmarked for a marina and went uncollected for about six years, is the latest in a string of financial revelations the Town Council has made since January regarding unpaid debts, fees, and fines.
The lost revenue totals at least $8 million that could have been used to offset property tax increases over the last three years.
The governing body revealed Tuesday night that Secaucus never collected $194,000 that had been promised to the town by Baker Residential, the developer of Riverside Court.
As more details of uncollected dollars become public, a troubling picture of financial mismanagement emerges.
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Under an agreement with the town, Baker Residential, which built the development between 2004 and 2007, had promised to build a public marina on the site, replete with a river walkway and parking. When a marina at the Riverside site became unfeasible, the developer was supposed to instead build a marina at the site of the Old Mill.
“They were supposed to escrow $194,000 which was never escrowed,” said Mayor Michael Gonnelli at Tuesday’s Town Council meeting. “We’re in the process now of working with our attorney [Anthony D’Elia] and our administrator [David Drumeler] to get that money. We’re not going to build a marina. We’re going to put the entire amount of money into an additional phase of the park at Mill Creek Point to include a picnic area, picnic grove, park benches, and a playground. This is just another example of [people] not following up on certain items. This money should have been escrowed for five or six years now.”
Since the beginning of the year, the Gonnelli administration, which took office in January, has been examining the municipal budget for ways to cut costs and increase revenue while keeping property taxes down.
Thus far the administration claims that at least $8 million in fines, fees, grants, and special assessments went uncollected for years, with some debts dating back at least eight years. This total includes:
• $750,000 in uncollected false alarm fines owed to the town by several Secaucus-based businesses;
• $2.3 million in state and federal grants that were approved but never paid out because the town failed to submit the necessary paperwork to get the money;
• $4.8 million in special assessments owed for roadwork and other improvements made to streets that are primarily accessed by a handful of businesses. Although the roadwork – on Penhorn Ave., Castle Rd., and around Sack Creek – was completed, the town never issued reimbursement bills to the affected companies and thus was never repaid for the work done.
This $8 million figure doesn’t include another $3 million owed in uncollected taxes and foreclosed properties in town that are not generating tax revenue, nor does it include the $777,725 allegedly stolen from the Tax Collector’s Office over a number of years.
The town is now trying to collect on at least some of the outstanding debt.
Money to be recouped, but few changes made
The lost grant money can’t be recouped, but Councilman Robert Costantino, chair of the council’s Finance Committee, said Tuesday that $366,373 has been collected from companies that owed false alarm fines. This figure is about $50,000 more than the last time the Town Council updated the public on this debt.
And the town has started to collect on the unpaid special assessment fees, which will be repaid over a 10-year period, with interest. On Tuesday the mayor said, that $491,939 has been collected thus far for this year, with another $85,000 still outstanding. The town, Gonnelli added, hopes to collect on the $85,000 balance by the end of this year, and expects to recoup a total of $5.7 million by 2020.
Losses in the Tax Collector’s Office that resulted from the alleged theft have been covered by insurance.
However, as more details of uncollected dollars become public, a troubling picture of financial mismanagement in the town also emerges.
The mayor and others in the administration appear to have been open about the losses uncovered but have shied away from identifying specific reforms, safeguards, or personnel changes they will make to prevent similar problems in the future.
When asked about what changes have been made since the $8 million in missing funds were identified, the mayor said, “We have added line items in the budget for grants and special assessments. These line items never existed before. So now we have a way to track assessments and grants, and now we have separate accounts for these things…Every employee and department head knows they are being held accountable, and will be held accountable, to do their job.”
E-mail E. Assata Wright at awright@hudsonreporter.com.