DeCotiis

During these tough economic times, families are , combing through their budgets to better prioritize their spending. Small businesses are running leaner and more efficiently to deliver products and services at a more reasonable rate. It is the govern¬ment's responsibility to do the same. That is the reasoning used when Marlboro Township examined and ultimately dissolved The Marlboro Township Municipal Utilities Authority (MTMUA).

At the time of its creation, the MTMUA was tasked with establishing the necessary water infrastructure and delivering water to a rapidly-developing municipality. Some four decades later, the MTMUA was viewed by many as an unnecessary level of government and that water service could be delivered far more efficiently.

In 2009, at the direction of the Mayor's office, a team lead by the township's attorneys (Louis N. Rainone, Jonathan L. Williams and William R. Mayer from DeCotiis, FitzPatrick & Cole, LLP) and supported by our Chief Financial Officer Ulrich Steinberg reviewed the operations and finances of the MTMUA to determine if it would be feasible, legally, operationally and financially, to dissolve the MTMUA.

The subsequent report found that "as currently organized the Authority constitutes an unnecessary layer of government that,when dissolved, will permit the efficient delivery of services at a substantial cost saving to the ratepayer and the tax payer." The report also concluded that, Marlboro had the legal authority to pursue the MTMUA's dissolution.

Once the MTMUA was dissolved, an annual savings of over $700,000 was realized. The township also gained access to nearly $5 million in reserve funds which the MTMUA was required to maintain under its general bond resolution, but which could be returned to the taxpayers once the dissolution was achieved and the Authority's revenue bonds were replaced with the township's general obligation bonds.

The dissolution of the MTMUA was the right decision for Marlboro, but deliberate and careful analysis is necessary to determine if it is the right decision for other municipalities.

Our analysis found that the Authority had failed to enter into any new bulk water agreements, benefit and personnel rates had ballooned by an exorbitant rate of 13.1 percent and other costs saving recommendations had not been implemented. Most importantly, the report determined that the operation of the water system could be integrated into the township government. While non-union, the MTMUA employees were paid at rates that exceeded the township's work force. From a management perspective, it also appeared that the level of supervision was unnecessary for the 15 person work force.

When it was clear that Marlboro Township could deliver water more efficiently to its residents than the MTMUA, the decision was made to move forward on a plan to dissolve the MTMUA to benefit the ratepayers and taxpayers alike.

The Local Authorities Fiscal Control Law permits the dissolution of municipal authorities when it can be established that adequate provision is being made for the payment of all creditors of the authority and for the assumption of those services provided by the authority which are necessary for the health, safety and welfare of the recipients of those services.

There was no doubt we could satisfy these requirements. Our plan would transfer the administrative functions of the MTMUA to existing township personnel, with the Township Administrator, Chief Financial Officer, Clerk and billing and collections staff absorbing the MTMUA functions. As for the actual water treatment operations, we retained that staff and transferred them to the Department of Public Works, where their work was complemented by our existing staff. In one fell swoop we could eliminate hundreds of thousands of dollars in bureaucratic waste, but there were necessary legal steps to take first.

A dissolution ordinance, bond ordinance and ordinance creating a municipal water utility were prepared and introduced, and an application was filed with the Local Finance Board requesting that Board's approval of the dissolution of the Authority and the issuance of the Township's bonds to refund the Authority's outstanding bonds. The ordinances were adopted only after the Local Finance Board approved the dissolution of the authority.

The dissolution of the Authority was coordinated with the offering and sale of the township's bonds. Given that the township's general obligation bonds did not require the same reserve funds as required by the Authority's revenue bond resolution, the township was able to match the debt service schedule of the MTMUA and release the MTMUA's accumulated and required reserves from the requirements of the Authority's bond resolution.

Prior to dissolving an authority, a municipality needs to be aware of the authority's existing permit status and requirements, the licensure requirements for the facilities operations, the current and future capital requirements for the authority's facilities, the civil service and collective bargaining agreement requirements associated with assuming and/or eliminating existing authority staff and the impact of the dissolution on the local municipal budget.

Dissolving an existing authority takes a lot of a work, but the message from our constituents is to do more with less. New Jersey can no longer afford a bureaucracy rife with duplicative functions. If consolidation of governmental functions on a state or county level is to become a viable option the process should begin by each munici¬pality looking at its own and its authority's operations for the application of the same principles.

New Jersey families will no longer tolerate the waste of their tax dollars, and neither should their elected officials.