TRENTON – The Local Finance Board decided Wednesday not to place financially burdened West Deptford under state supervision.
The need to consider such an action was triggered by the fact the town – which last year reached a tax appeal settlement regarding the old Sunoco refinery – will have annual debt payment this year that exceeds operating appropriations by 25 percent.
“If a town is in danger of not paying its bills, facing default, we intervene to make sure bills are paid,’’ Chairman Thomas Neff said last month. “No town in New Jersey has gone bankrupt in 80 years.”
Today Neff said that although they have decided not to opt for state supervision, it still would be appropriate to require regular reporting on the town’s financial situation, beginning on Nov. 1.
The Division of Local Government Services will be given a list of expenditures vs. appropriations, and there could be follow-up conference calls to make sure the budget is in order, Neff said.
State supervision is not a power used lightly, Neff said last month.
For example, Atlantic City is under such supervision due to the extreme financial burden it faces as a result of casinos’ tax appeals.
The board told West Deptford officials in August it saw no reason to believe the town was in danger of default or of not being able to pay bills.
West Deptford reached agreement last year on a $32 million tax refunding bond issue regarding a now-shuttered refinery that pushed its debt past the 25 percent ceiling.
The board was told by West Deptford Republican Mayor Ray Chintall and other officials last month that next year the debt should go back down to around 26-28 percent, depending on the tax levy.
Overall, the town will be amortizing $108 million worth of debt between now and 2032, they said.
Neff cautioned, however, that since they already know next year’s debt still will be above the 25 percent trigger, another such hearing will be necessitated.
However, township Democratic Committeewoman Denice DiCarlo urged the Board in August to mandate the town file monthly reports and have regular meetings with the Board staff.
She said best practices have not been followed, including lack of public work sessions on the budget, and increasing the use of one-time approaches such as dipping into fund surpluses to plug deficits.
“I have little confidence the town will not run out of cash before the end of the year,’’ she said at the time.
Regarding Atlantic City, the board also voted today to maintain state supervision there, but that was in a sense a procedural matter necessitated because the board had to vote one year from the date of the prior vote.
The city officials are scheduled to appear before the Finance Board in October regarding the status of the city and the effect on the city of the casinos’ tax appeals.