Minutes: June 27, 2013

Call to Order

The regular meeting of the Vernon Township Municipal Utilities Authority (VTMUA) of the Township of Vernon was convened at 7:00 p.m. on Thursday, June 27, 2013 in the Vernon Municipal Center, 21 Church Street, Vernon, New Jersey.

Statement of Compliance

Adequate notice of this meeting had been provided to the public and the press on January 8, 2013 and was posted on the bulletin board in the municipal building in accordance with the Open Public Meetings Act, N.J.S.A. 10:4-6.

Roll Call

Thomas BuchneyP
Barbara ChorzepaP
Doug DobrzynskiA
Gloria GalloP
James KensekP
Stephen PiccirilloP
Vincent ZinnoP

Professional Staff Present

Attorney John Ursin, Engineer Ceren Aralp, Auditor Chuck Ferraioli, and Executive Director John Scerbo

1. Open Meeting for Public Comment

Motion to open the meeting to the public
Made by Barbara Chorzepa
Seconded by Thomas Buchney
All in favor

Chairman Vincent Zinno opened the meeting for public comment.

Don Conover from Great Gorge Village asked if the meeting could be open to the public at the beginning and at the end of the meeting so the public can discuss anything that has occurred during the meeting. John Ursin said it is up to the authority to decide when to open the meeting to the public. Chairman Vincent Zinno said they would take it into consideration.

Gary Martinsen of Vernon said he would like to see resolutions published on the MUA website along with the agenda so the public knows what resolutions the authority is considering during that agenda. He questioned the legality of the meeting if the resolutions were not published. Authority member Gloria Gallo asked for confirmation that the agenda was posted. Authority Executive Director John Scerbo said the agenda was posted outside on the bulletin board 48 hours in advance of the meeting. Martinsen said the public should not have to come to the municipal center to see the MUA’s upcoming agendas. Mr. Zinno asked Mr. Scerbo if there was an issue with getting the agenda and resolutions on the MUA website. Mr. Scerbo said he was not able to do it all. Ms. Gallo asked if the meeting was advertised in the newspaper. Mr. Scerbo said it was advertised appropriately and the agenda was posted outside appropriately. Mr. Zinno assured Gary Martinsen that the Authority would improve the website notification.

Gary Martinsen also asked if Mr. Zinno owned property in the sewered area. Mr. Zinno confirmed that he did. Gary Martinsen said Mr. Zinno should not have taken action on certain matters that impacted his property. Mr. Martinsen also questioned whether VTMUA Attorney John Ursin changed law firms or his firm’s name was changed, questioning whether his contract with the VTMUA was still valid if he changed firms.

Noreen Moran of Great Gorge Village asked a procedural question. She said in the past residents commenting during the public portion of the meeting only identified themselves and questioned if the authority’s new request that the public state their physical addresses on the record as well is appropriate. Vincent Zinno said they had to put their addresses on record. Mr. Ursin confirmed that it was required. Mr. Zinno said because they are public meetings, the public needs to give their physical addresses.

Alison Dyer, a former resident of Great Gorge Village, said she got a letter through her attorney, saying her condominium would be sold for tax sale because she had an outstanding bill. She said she had never received a bill the entire time she lived in the condominiums and the bill she had was actually sent to the new owner. She asked the VTMUA to waive her late fees and interest to date because she never received a bill. At the end of the public comment period, the VTMUA waived her late fees and interest.

Len Coloccia of Great Gorge Village discussed the township center planning and the installation of sewers and claimed all of the expenses for both are now being borne by the Great Gorge Village residents. He said the township could not rationalize moving that debt to the people who have been on the sewers for 20 years. He said the VTMUA is dividing the town in doing so. Mr. Coloccia asked whether the authority is going to exempt connection fees for the township municipal center or for the Board of Education buildings. He said according to the township’s sewer funding agreement with Mountain Creek, the municipal and school buildings, agencies, commissions, or political subdivisions are exempt from connection fees. Mr. Collocia asked if any entities do not pay connection fees would those fees be split among the users? Mr. Zinno said the public portion of the meeting is not a question-and-answer period but rather for public comment only. Mr. Collocia again stated he felt Vincent Zinno had a conflict of interest and should not be on the VTMUA. Mr. Zinno said if he had a conflict he is confident the VTMUA attorney would advise him so. Mr. Ursin said Mr. Collocia is reading the state statute regarding conflict of interest incorrectly and individuals who own property in the sewer service area can serve on the authority.

Kevin Schlossrick of Great Gorge Village asked if the authority had created a graph of projected rates as it said it would do so at the last meeting. Mr. Zinno directed the question to the auditor, Charles Ferraioli. Mr. Ferraioli explained that connection fees from the town center area would generate about $800,000 and the town will also generate user fees as people connect. The town also has access to a $2.3 million bond, which will allow the town to pay the SCMUA debt service. Mr. Ferraioli also said the township has an agreement with SCMUA that any connection fees from Vernon that are paid to SCMUA from the town center, the township will receive a 60% credit of those fees. That will generate $3+ million. There are also ongoing negotiations between the township and Mountain Creek for PILOTS (Payments in Lieu of Taxes). When that contract is settled, revenues will also come in from that. There is also a deficit agreement between the township and Mountain Creek that Mountain Creek will pay 63% of any deficit for the first five years. If there is any remaining deficit by the sixth year, Mountain Creek will pay 100% of that deficit. Mr. Ferraioli also said that by 2014, the township’s debt service to SCMUA will increase by $100,000, but the township’s operating budget should not have a significant increase. He also said as a result of the 60% credit, SCMUA will be crediting the township $90,000 in 2014. He said he did not believe there would be a rate increase to users in 2014. In 2015, the township’s debt service to SCMUA will increase by $150,000, but he said it is the authority’s goal to keep the rates stable. Mr. Ferraioli also said if the township does not increase its user base by 2022, it would have some serious issues.

Ken Acheson of Vernon thanked the VTMUA for passing the hardship resolution for businesses but said he is disappointed he is assessed 7.4 EDUs. Mr. Acheson also said he has to deal with the SCMUA first and then with the Vernon MUA second, but he does not have the $34,000 to pay SCMUA for its connection fee and asked if the town had progressed on discussing with SCMUA whether it would offer Vernon businesses a hardship payment plan. John Ursin said SCMUA is considering a hardship payment plan similar to Vernon’s. He said he would call SCMUA the next day and find out the status of the hardship plan to try to move it along.

Rich Roberts of Great Gorge Village asked Charles Ferraioli to reiterate what would happen in 2022. Mr. Ferraioli said the township’s debt service to SCMUA would be $1.5 million. Right now there are 1500 users, Mr. Ferraioli said.

Linda Gervald of Great Gorge Village asked where is the town center? What buildings are there? What is coming in, she asked?

Jean Murphy of Glenwood asked what were the residency requirements concerning membership of the VTMUA. She asked if someone from a neighboring town could be on the VTMUA. John Ursin said there was no residency requirement. She stated that anyone living anywhere but in Great Gorge Village could serve on the VTMUA. She asked if a New York State resident could be appointed to the VTMUA. She made the assertion that there is no residency requirement except for those living in Great Gorge Village.

Close Meeting to the Public

Motion to close
Made by James Kensek
Seconded by Gloria Gallo
All in favor

2. John Scerbo discussed the condition of mail delivery for the VTMUA. He said he got about 250 pieces of returned mail that were undeliverable. He said there were also a number of situations where residents said their VTMUA bills are not being delivered to them. Mr. Scerbo said this results in a loss of revenue for the VTMUA in the amount of about $65,000 to $135,000 per quarter. He said he does not think the VTMUA should take the responsibility for the mail not being delivered. He cautioned the authority on setting a precedent for waiving the late fees and interest for these situations because there may be many. In some cases they are landlord/tenant issues and in others they are former township residents who have since sold their condominiums. At question were the late fees/interest charges for former condominium owner Alison Dyer. She said she received all other mail/bills but did not receive the VTMUA bill, which she has since paid in full. She asked the authority to waive the late fee and interest charge totaling $65.03. The authority waived the fees.

Motion to waive the fees
Made by Thomas Buchney
Seconded by Barbara Chorzepa

Call for Discussion: No discussion

Roll Call Taken:
Ayes: Thomas Buchney, Barbara Chorzepa, Gloria Frato-Gallo, James Kensek, Vincent Zinno
Nays: None
Motion passed

3. Approval of Minutes

Approval of Minutes for Regular Meeting of June 6, 2013

Motion to approve the minutes
Made by James Kensek
Seconded by Thomas Buchney

Call for Discussion: No discussion

Roll Call Taken:
Ayes: Thomas Buchney, Barbara Chorzepa, Gloria Frato-Gallo, James Kensek, Vincent Zinno
Nays: None
Motion passed

4. Approval of Bills

Resolution 13-27 Payment of Bills through May 31, 2013

Gloria Gallo said she had asked John Scerbo to look into a bill from McAfee Hardware. The purchase order does not match the receipts. Mr. Scerbo said it looked as though the finance department had not attached all of the receipts, and he will look into it. Thomas Buchney asked for an Excel spreadsheet of expenditures every month.

Motion to approve the bills
Made by Barbara Chorzepa
Seconded by Gloria Gallo

Call for Discussion: No further discussion

Ayes: Thomas Buchney, Barbara Chorzepa, Gloria Frato-Gallo, James Kensek, Vincent Zinno
Nays: None
Motion passed

5. Correspondence

A. Bill Kittredge

Bill Kittredge wrote a letter that he has not been receiving sewer bills. His bills were going to an old post office box, which he changed 8-1/2 years ago. He received a tax sale notice for his condominium. The total bill was $571.68, which included late fees and interest totaling $67.68. He asked the authority to waive the late fees and interest. John Scerbo said the tax sale notice, which Mr. Kittredge received, was sent to the same address as the sewer bills. Mr. Scerbo will review the matter further.

B. FICA Associates

FICA Associates wrote a letter asking for a hardship payment plan for the connection fees. John Scerbo suggested that he contact them and tell them the procedure for the hardship payment plan.

C. Block 141, Lot 10.03, 3 Church Street

The property owner said her assessment of 7.5 EDUs total for her building, which houses a restaurant and a dance school, is causing a devastating hardship for her because she will have to pay a total of $96,715 in connection fees now that the 50% discount period has expired. She said based on her two years’ prior water bills, the building uses about 314 gallons daily, not the 1,875 gallons a day the VTMUA is assessing her for, which she said is more than six times the actual amount used. She said a mandated grease receptor would increase her costs. She has applied for a loan to pay the connection fees but doubts she will get it. She will be forced to sell the building, which was supposed to provide her security in her retirement, she said. She said the owner of the restaurant in the building, Gianna’s, is looking for another location because he cannot afford the increased rates. In addition, it will cost her $525 a month in sewer fees. She asked for her property to be grandfathered from connecting to the sewers until she has the means to pay or the VTMUA cuts her fees and EDU assessment in half since the restaurant is moving. Vincent Zinno said the letter had actually come in two months ago, and the restaurant tenant is moving out. Attorney John Ursin said a vacant restaurant is still a restaurant and the fees would remain the same.

James Kensek asked what action would be taken regarding the letter from Bill Kittredge. Vincent Zinno suggested asking the executive director to look into it further and bring it up at the next meeting. John Ursin suggested that such matters be handled in house and the executive director then make recommendations to the authority for action at its meetings. Mr. Ursin also suggested that if something comes in within 48 hours before a meeting, the executive director research the issue and place the matter with his recommendation for action on the agenda of the subsequent meeting, not the upcoming one. Barbara Chorzepa asked to create a standard procedure. Mr. Ursin said it was not necessary to formalize a procedure and left it to the discretion of the executive director unless it poses a problem in the future.

Motion to acknowledge receipt of correspondence
Made by Thomas Buchney
Seconded by Gloria Gallo

Call for Discussion: Thomas Buchney included in his motion that the executive director contact Bill Kittredge and get further information.

All in favor
Motion passed

6. Resolution No. 13-28: Resolution Establishing an Anti-Nepotism Policy to be Incorporated into the VTMUA Rules and Regulations

WHEREAS, the Local Finance Board required the VTMUA to enacting a nepotism policy;

WHEREAS, up to this point, the VTMUA has not had an employees;

WHEREAS, there is the possibility of the VTMUA having employees in the future and the Commissioners believe that it is an appropriate time to adopt a nepotism policy;

NOW THEREFORE IT BE RESOLVED that the Vernon Township Municipal Utilities Authority hereby adopts the following policy:

Nepotism Prohibited

Immediate relatives of any VTMUA Commissioner, Official or Employee shall not be hired, promoted, or transferred where one relative would have authority to appoint, remove, discipline, or evaluate the performance of the other; or where one relative would be responsible for auditing the work of the other; or where other circumstances exist that placed the relatives in a situation of actual or reasonably foreseeable conflict of interest. For the purposes of this policy, immediate relatives include spouse or significant other, child, parent, step-child, sibling, grandparents, daughter-in-law, son-in-law, grandchildren, niece, nephew, uncle, aunt, or any person related by blood or marriage residing in the same household.

NOW THEREFORE IT BE FURTHER RESOLVED that the recording secretary is directed to keep this Resolution on file until it is incorporated into the VTMUA Rules and Regulations.

Motion to approve
Made by Thomas Buchney
Seconded by Barbara Chorzepa

Call for Discussion: Barbara Chorzepa questioned the wording “residing in the same household” was appropriate. John Ursin said it referred to all persons living within the same household that are related by blood or marriage.

All in favor
Motion passed

7. Resolution 13-29 Creating a Fee for a Dishonored Check

WHEREAS, the VTMUA accepts payments of sewer user charges, connection fees and other charges by check;

WHEREAS, from time-to-time, a check is returned for insufficient funds or other reasons;

WHEREAS, the Township Finance Office has a long standing policy of charging $20 for any dishonored check;

WHEREAS, the Commissioners of the VTMUA agree with this policy;

NOW THEREFORE IT BE RESOLVED by the Commissioners of the Vernon Township Municipal Utilities Authority that any person who presents a check to the VTMUA which is subsequently dishonored by their financial institution shall pay a fee of $20 to the VTMUA.

Motion to approve
Made by James Kensek
Seconded by Thomas Buchney

Call for Discussion: Gloria Gallo asked if the bank charges the authority for dishonored checks. Executive Director John Scerbo sad he did not know what amount was charged. Gloria Gallo said the authority should be charging whatever the bank charges the authority.

Roll Call Taken:
Ayes: Thomas Buchney, Barbara Chorzepa, Gloria Frato-Gallo, James Kensek, Vincent Zinno
Nays: None
Motion passed

Gloria Gallo then moved to direct the executive director to find out what the bank charges for dishonored checks and report back to the authority at the next meeting to adjust the resolution accordingly if necessary.

Seconded by Barbara Chorzepa

Call for Discussion: Gloria Gallo asked if the bank charges the authority for dishonored checks. Executive Director John Scerbo sad he did not know what amount was charged. Gloria Gallo said the authority should be charging whatever the bank charges the authority.

All in favor
Motion passed

8. Resolution No. 13-30: Resolution Regarding Payment of the Executive Director’s Contract

WHEREAS the VTMUA has an independent contractors/consulting contract with the Executive Director;

WHEREAS the contract calls for periodic payments;

WHEREAS the amount of time between MUA meetings causes an issue with processing compensation checks;

WHEREAS the finance department has recommended a resolution creating a master purchase order;

WHEREAS the master purchase order will establish bi-weekly payments of the compensation of $37,000 based upon twenty (20) hours of work per week.

WHEREAS the creation of this master purchase order will authorize the finance department to make payments as described in the previous paragraph;

WHEREAS any hours worked above the 20 hours per week in a given pay period will be submitted to the MUA by a separate purchase order which will appear on the bills list at a VTMUA meeting for approval.

NOW THEREFORE IT BE RESOLVED that the master purchase order for the payment of the Executive Director’s compensation as described above is hereby approved and the finance offices authorize to process the payments accordingly.

Motion to approve
Made by James Kensek
Seconded by Gloria Gallo

Call for Discussion: None

All in favor
Motion passed

Gary Martinsen called a point of order and interrupted the meeting to show the VTMUA the agenda that had been posted outside the building that John Scerbo mentioned earlier. Mr. Martinsen objected to the agenda because it did not contain any information on what would take place at the meeting. He said no resolutions were listed, there were no numbers for the resolutions, and the agenda does not even mention any resolutions, applications, or actions that will be taken at the meeting. He questioned whether such an agenda met the legal requirement for notification.

9. Attorney’s Report

Mr. Ursin reported that there was no development in the lawsuit between the residents of Great Gorge Village and the VTMUA. There will be no further action until the Plaintiff amends the complaint, he said.

He also reported that the time period for the 50% reduction of connection fees expires within three days. Anyone connecting will now pay full rate and are in default for failure to take action. The VTMUA billing rate now begins, and the authority can now issue summonses in Vernon Municipal Court for violations of the rules and regulations. He suggested sending notices to violators or extending the date for compliance.

The authority discussed connection for Rumours Hair Studio. The application was postponed last month. Engineer Ceren Aralp said she is still waiting for the applicant to complete drawings. Vincent Zinno moved to extend to ten days before the next meeting the deadline for the applicant to submit all the proper paperwork for the hardship payment plan request, corrections to the drawings submitted to the engineer.

Motion to extend deadline for application for hardship payment plan for Rumours
Made by Vincent Zinno
Seconded by Barbara Chorzepa

Call for Discussion: No further discussion

Roll Call Taken:
Ayes: Thomas Buchney, Barbara Chorzepa, Gloria Frato-Gallo, James Kensek, Vincent Zinno
Nays: None
Motion passed

John Ursin stated that because SCMUA has not yet decided on a hardship payment plan for Vernon sewer users, Ken Acheson of the Mixing Bowl Restaurant cannot satisfy the requirement of the Vernon payment plan until SCMUA makes a decision. Mr. Acheson asks the authority to grant him an extension until the next meeting. Ceren Aralp said all of Mr. Acheson’s paperwork has been submitted correctly. Mr. Acheson also stated the only notice he ever received from the township was the requirement for mandatory hookup. He never received anything else and the only way he learned about the township offering a 50% reduction in connection fees if applicants apply by the June 30 deadline was by attending the VTMUA meetings. He thinks there are many people who do not even know about the 50% reduction and is surprised the VTMUA has not sent out any letters or other notification about it. He said those people are at a disadvantage. John Scerbo said in the past five days at least 15 people have come to his office with a second notice in their hands. Mr. Acheson said he never received a second notice.

John Ursin said the authority should authorize him to draft a letter that John Scerbo will send out. The letter will state that the deadline has expired for the 50% reduction in connection fees and they are now required to hook up at the full rate, the EDU billing will now begin, and further ignoring the regulations will result in a summons issued.

Motion to approve Mr. Ursin’s recommendation
Made by Barbara Chorzepa
Seconded by Vincent Zinno

Call for Discussion: Thomas Buchney questioned what would happen with those individuals whose applications are pending. John Ursin stated the rules and regulations require that EDU billing begin, regardless of whether someone has already connected to the sewers. In addition, those who have not yet complied with approvals for connections risk summonses and penalties for non-compliance. Vincent Zinno amended the motion to state that the billing for usage begins effective July 1. Barbara Chorzepa agreed with the amendment.

Roll Call Taken:
Ayes: Thomas Buchney, Barbara Chorzepa, Gloria Frato-Gallo, James Kensek, Vincent Zinno
Nays: None
Motion passed

10. Auditor’s Report

No report

11. Engineer’s Report

New Applications

A. 542 Route 515, 600 feet commercial space—.25 EDU Assessed

The engineer requested revised drawings

Motion to approve
Made by James Kensek
Seconded by Barbara Chorzepa
All in favor
Motion passed

B. 23 Omega Drive, Block 141.03, Lot 1

Commercial space on first floor and two residential units on second floor (one bdrm unit and 2 bdrm unit); assessed at 2.25 EDUs; the engineer does not recommend issuing a building permit until the drawings are revised.

Motion to approve
Made by Barbara Chorzepa
Seconded by Gloria Gallo
All in favor
Motion passed

Barbara Chorzepa asked for clarification of what constituted being “deep in the connection process.” She wondered if prospective users could essentially fit within that category within three days since the deadline for the 50% reduction was June 30. John Ursin said they would have to apply for the approval, present all of their required paperwork, and have approval from the authority by June 30. He also told the authority that at this point actual connection did not matter with regard to users beginning to pay. All prospective users must now begin to pay sewer fees, regardless of whether they have connected or not. The reduction in connection fee was merely an incentive to get them to connect. Those people now face summonses and penalties for not connecting but will still be responsible for the sewer fees they were assessed beginning July 1. Barbara Chorzepa suggested posting the application packets for connecting on the VTMUA website.

C. Block 142, Lot 8—Rite Aid and Hair Salon

The authority is waiting for final drawings. No action was taken.

12. Executive Director’s Report

John Scerbo reported that two weeks ago the VTMUA office mailed out notices reminding people of the June 30 deadline. He said a number of people have since come to the office inquiring about it. He also said the United Methodist Church voided its hardship payment plan agreement and paid its connection fees in full.

13. VTMUA Commissioner Comments

Barbara Chorzepa asked John Ursin again what constituted a quorum of the VTMUA. She said N.J. S.A. 40:14B-14 states a majority of the entire authorized membership of the municipal authority shall constitute a quorum at any meeting. She said the authority has five commissioners and two alternate and asked whether the authorized membership was all seven members. John Ursin said it was not. He stated the five regular members only constitute the “authorized members,” and therefore a quorum requires only three regular members in attendance.

Thomas Buchney asked if there is a general policy with regard to attendance of alternates. John Ursin said there was not, but he stated there is a state statute that requires meeting attendance but does not know the number of meetings a member can miss. He said he would confirm the number of meetings a member must attend. Mr. Buchney recommended contacting alternates who are not attending meetings. He said it is important for alternates to attend meetings as well.

13. Chairman Comments

Vincent Zinno said he would like to do research with the DPW on capital improvements. He would like to get some of them outlined with the DPW. He said the executive director took a tour of the sewer system and became acquainted with it and got an understanding of some of the capital improvements that need to be done.

Motion to Adjourn the Meeting

Made by James Kensek
Second by Gloria Gallo
All in favor
Meeting was adjourned at 9:35 p.m.

Transcribed and submitted by Jessica Paladini
Secretary, Vernon Township MUA