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Comments (Mostly) Delivered to Trenton City Council - August 2, 2018

NOTE: Below are remarks as written for last night’s Council meeting. I was cut off at the 10 Minute mark, which is noted below. I swear, when I ran through them they timed at 8 minutes. Oh, well.

The proposed Resolution failed in 2-5 vote. Sponsor Robin Vaughn and Santiago Rodriguez voted in favor.

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Madam President and Council Members – On your docket this evening is Resolution #18-519, intended “To Remove the Memorandum of Understanding (MOU) between the New Jersey Department of Community Affairs and the City of Trenton.”

The issue of the MOU – the document by which the State of New Jersey has memorialized and authorized Transitional Aid Awards to the City annually since 2010 – and the role of the DCA in oversight of the City’s internal financial affairs, have been in the forefront of Trenton discussions for the last few weeks. In his first days in office, the Mayor announced – wrongly, as it turned out – that the requirement for an MOU to accompany Transitional Aid had been waived for Trenton. Oops! Big Oops, actually, at the time, but one that should have quickly passed, in the aftermath of both a chaotic budget process that those in the Statehouse would rather forget, and a City Hall transition barely two weeks after bitter runoff elections.

However, since that brief incident at the beginning of July, the idea of canceling the MOU has been kept alive, and is present on tonight’s docket in the form of this quite meaningless Resolution. I respectfully request your vote against tonight’s measure.

This Resolution is poorly reasoned, needlessly contentious, and badly written. True, that’s the case with far too much writing in government and business; that can be excused. But its principal fault is that is simply meaningless, and meaningless in many ways.

First, by itself it will not authorize or trigger any action that can be taken by the City of Trenton on its own to change the terms of Transitional Aid, a state program instituted by Governor Christie when he unilaterally severed the previous financial ties between the City and State in the form of Capital City Aid.

This Resolution does not oblige the City in any way to any action, neither does it compel the State to do anything.  From the State’s perspective, Transitional Aid is a voluntary program for participating communities. Representing the interests of all of the state’s citizens and taxpayers, it has required annual MOU’s as the price of getting the grant since the program’s inception. Whether the amount is $27 Million, as it was in 2011, or this year’s $9 Million, if Trenton wants and needs State money under this program to balance its books , it has to play by State rules. A unilateral City Council Resolution doesn’t do a single thing to change that reality.

I want to be clear. Transitional Aid for Trenton is a flawed program. But put that thought aside for now.

Resolution #18-519 is meaningless for another, more important reason. The MOU mechanism has been described in the press by a sitting councilmember as “one of the crippling factors that has prevented the City of Trenton from thriving economically.” The language of the Resolution definitively states as an unquestionable reality that “Trenton will continue to be unable to generate the necessary investment capital, savings and revenue to improve and build out its service delivery platform and if action is delayed, to get the MOU removed, Trenton will likely continue to be severely fiscally distressed and challenged to effectively deliver services to its population of over 84,000 citizens.”

Whew! This is some claim. This is, of course, nonsense, easily dispoven by pointing to Trenton Pre-Transitional Aid. When the City was receiving over $40 Million in Capital City Aid, it was just as broke, just as “distressed and challenged,” just as dysfunctional. Can’t put the blame on DCA for this, although the State of New Jersey bears a lot of responsibility for several decades of history which have led to our current situation. Again, put that aside for now.

The truth is that Trenton has – as of yet – done nothing to show that it has earned the removal of state financial oversight that’s been the unavoidable cost of this particular program of state financial aid.

Confidence is earned.

Trust is earned.

Respect is earned.

Since your July 1 Inauguration, neither Council nor the Administration can yet point to any accomplishment, plan or policy that has begun to regain all the Confidence, Trust and Respect lost by the City of Trenton over the last several years by its continual failures of action and inaction.

There are efforts and plans under way of course, but none that have yet come to any kind of fruition. Working in opposition to whatever positive momentum that you on your new Council and the new Administration are working to get going is, frankly, a lot of baggage from the past that is doing nothing to earn back what’s been lost.

ITEM: The City website still contains the names of many Directors and Employees throughout City Hall who were on watch when $5 Million Dollars was stolen by a City vendor not so long ago. The Previous Administration failed to demonstrate or even explain that any action – in the form of personnel, policy and procedural change – was EVER taken to prevent another similar theft in the future. To begin to earn back Confidence in city government, the public still needs such demonstrations and explanations that we won’t be ripped off again.

This shouldn’t be a high bar to clear, after all, to show that you’re not leaving all the city’s windows and drawers open and ripe for the picking! But it’s a bar that Trenton stubbornly continues to refuse to clear.

ITEM: Although the Administration has devoted considerable energy and resources to cleaning up the mess at the Trenton Water Works, there still remain much of the same Public Works management – including an ineffective Director – and staffing that have overseen so many failures and violations, as well as a patchwork of contractors and consultants working to advance plans and goals of which we and customers throughout the County are still uninformed.

To help earn back Trust in Trenton’s Water Works, we need to see a positive Plan, as well as frequent and quantifiable, measureable progress in pursuit of compliance with such a plan.

The Administrative Consent Orders signed by the current and previous Administrations and the state Environmental Protection Department have also been the subject of strong criticism this past month, mostly unjustified. As of now, the ACO’s – and the monthly reports they require – are the only current means by which such compliance is being measured and explained, and the only current way by which Accountability up and down the chain of command can be in any way enforced. Until you, or the Administration, or the State, can come up with something better, the ACO’s are the best we’ve got. And the best not just for Trenton, but for all of the TWW customers in Mercer County on whose behalf Trenton is also supposed to act.

ITEM: The City’s record as a responsible and compliant recipient of Federal funding was damaged a few years ago when the US Housing and Urban Development Department canceled millions of dollars in Community Development Block Grants due to the City’s failures in program administration and management. Since 2015 the US Government has designated the City of Trenton as a “high-risk grantee of federal funds.” Has the City rectified that situation? I don’t know. Do you?

ITEM: For the better part of a dozen years, multiple Administrations and multiple Councils have been unable to adopt annual Fiscal Year budgets and financial plans until 9 or 10 months of the budget year have passed, with 9 to 10 months of city monies already come in, and gone out. That’s no way to run a city.

You will earn back Respect for City Council and the Administration by passing four annual, balanced city Budgets on a timely and responsible basis.

“But, but, but…” past Councils and Administrations have cried, “we don’t know what actual Transitional Aid Awards are until late in the Fiscal Year, and can’t complete a Budget until then!”

That’s never been a very satisfactory answer to me. Even if Transitional Aid actual amounts aren’t finalized until several months into a fiscal year, for goodness’ sake there’s absolutely no reason provisional temporary numbers – that we surely already have and DCA already has – can’t be used by the City and accepted by the State to prepare and formally adopt its budgets. If final Aid amounts change, amend the budget! In concept, it’s not that hard a deal!

Which brings me back to the Transitional Aid program. Yes, it’s flawed. Yes, it’s clunky. Yes, it infringes on the city’s autonomy.

[This is where Clerk Harris called me for time. The rest of these remarks were unspoken last night. Bummer.]

Yes, it lumps Trenton in with other Jersey communities and ignores the unique position of this town’s role as host of So Much State Government, a role recognized by the State prior to Chris Christie’s tenure as Governor. Yes to all that.

So, Councilmembers, come up with something better! There is a case to be made for Trenton’s unique position as the host of state government. There are arguments to support a source of regular, dependable and appropriate annual financial support in lieu of property taxes. But, let’s be clear, Transitional Aid is not that program. It never has been and never will be. It may in fact be phased out in the near future, as the very word “Transitional” has threatened since the program’s inception. But that’s not happening yet.

There is too much history and too much precedent with this program statewide to expect the state to waive the MOU requirement. It’s not going to happen. On top of that I simply do not believe that, as of tonight, the City of Trenton has earned that kind of consideration. To argue otherwise, and to adopt a resolution such as the one before you, is frankly not justified at the present time.

Don’t spend your precious months writing, debating and passing meaningless “Make it So” Resolutions such as #18-519. Don’t legislate in the press before you’ve done any meaningful legislating in this room.

Earn back Confidence, Trust, and Respect for this City by demonstrating Basic Competence, by this City.

In general, please, Do more. Talk less.

Prove that you are willing to and capable of doing the heavy lifting required to better the fortunes of the City of Trenton.

Please start by defeating Resolution #18-519.

Thank you.

Follow the Numbers... If You Can!

At my place of work, part of my job is to review, approve and sign every piece of business-related items. Estimates, contracts, purchase orders, expense reports, timecards, checks, etc., etc.

Most of the time it’s very straightforward. I see a bill for $1000. If we ordered the item and that’s the correct amount, great! All good. I put my totally illegible, but I’m sure highly distinctive, signature on the paper, and it moves along.

Sometimes, though, I will see a bill where  I am being asked to approve an amount that’s different from what’s on the bill. Why is that? Some goods and services – employee benefits are a good example – are handled centrally by a Corporate department. That department will send out copies of the bill to other corporate departments or shows like mine, with the specific amount each unit is to pay written in.

In those situations, an additional sheet or sheets are attached to the bill that show how that sub-amount was calculated, to the penny. So I know when I approve an amount that’s different from what the bill or contract says, I am confident I know that the different amount is the correct amount.

This isn’t rocket science. It’s standard business practice, anywhere and in any place that’s at all well and transparently run.

You know where I am going with this, right?

Let’s talk some more about Resolution #18-456, passed unanimously last week by Trenton’s City Council. This item approved the winning proposal, from Parkeon Inc, one of six vendors who submitted proposals in February of this year for new street Parking Meter and Kiosk services to be installed mostly in Downtown Trenton. This Resolution, as discussed at some length yesterday – sorry, sometimes these things do take a couple of thousand words to explain! – did not appear on the official Agenda and Docket for this Council’s final meeting on June 21, and was not accorded the usual prior public notice as called for by the NJ Open Public Meetings Act. You can look at yesterday’s post for more background and information. In short, from the information available as of yesterday and today, I consider the City’s process to evaluate all the submitted proposals and recommend a final selection to have been fatally flawed. The City’s selection of Parkeon may also, due to the fact that the proposed award of a contract to the winning bidder would be made way after the 60-day deadline required by NJ Purchasing Law, be invalid.

Today I want to focus on what the City Council members who voted unanimously – with the exception of the absent Phyllis Holly-Ward – were given to make their decision. Remember they saw this for the first time no earlier than the 5:30 PM time that last Thursday’s meeting started.

Here’s the link to the Resolution, along with the attached materials that was given to each Council member, according to City Clerk Dwayne Harris, who emailed this to me yesterday.

Here are the two pages, Pages 31 and 32 of the package, prepared by the City to summarize and compare all six proposals:

summary1summary2

There’s a lot of information on these Summary pages, so I highlighted the areas I want to draw your attention to.

You’ll notice that for most of the cost information that these Summary sheets are intended to, well, you know, Summarize, the reader is asked to go back to the Original Proposals from each company and look for that information.

“But,” I hear you asking, “this wasn’t announced as being on that Meeting’s approved and adequately-noticed Agenda! Council members wouldn’t have known to bring their copies of each proposal. Besides, why didn’t the City provide those numbers on the Summary Sheets?”

Good Question!!

I don’t have an answer to that. Right now. Keep reading!

As part of the Resolution package, the City did provide some cost information. Here are Pages 33-36 of the Resolution Package:

page 33page 34page 35page 36Did you follow all the way down here? Good!

Did you notice a few things? Such as:

1) These four sheets look to compare cost information for only two vendors: Parkeon and IPS. There are a few numbers for two other vendors, Ventek and Hectronic, on the summary sheet. But for “Total Price” for those two companies, or any cost numbers at all from POM, Inc. (the sixth, B & B Parking, was dropped from consideration because of a Fatal Flaw in their proposal), the Summary Sheets direct the Reader to “SEE ATTACHED BREAKDOWN OF PROPOSAL PAGE.”

2) The first page of the Resolution states it proposes that the City enter into a contract with Parkeon “in an amount not to exceed $1,200,000” for three years, with options to extend for a fourth and fifth year. However, I challenge you to find the figure of $1,200,000 printed anywhere in the sheets above, or in the actual Parkeon proposal (Pages 23-28) itself.

In the sheets above, you can see a figure of $602,901 for what’s labeled “Upfront Costs.” In addition to this, there’s a figure of $56,580 labeled “1 Year Operating,” and what looks like (the last digit is cut off) $169,740 labeled “3-Year Operat” (also cut off).

If you add the “Upfront Costs,” “3-Year Operat” and 2 of the “1 Year Operating” numbers to make a 5-year term, that all adds up to $885,801. That’s nowhere near $1,200,000.

Where’s the rest? Somewhere else in the proposal? Somewhere else in the Summary Sheets? In some other documents that didn’t get attached to the Resolution Package?

Finally, how do any of the numbers on the Winning Bid compare to the other Vendors who submitted proposals?

The answer is, We Don’t Know. And We Can’t Tell. The Summary sheets tell us to “See Attached Breakdown,” and there are none. You can’t figure out what numbers go with what option, and with what vendor.

In other words, this is all a Freaking Mess.

Just as at my job I will not approve any piece of business if the amount I am asked to approve isn’t the same one as printed on that piece of business, and there’s nothing attached to show how the requested amount has been calculated, I would have sent back this Resolution unsigned without a second thought, along with some stern words for the department that asked me to approve it.

There’s simply no way in hell, based on these sheets – or in the Parkeon Proposal – to see where the request figure of $1,200,000 on the Resolution came from.

But every member of City Council last Thursday approved this. Every member of Council thought this was dandy. Every member of Council felt they had all the information they needed to make an informed decision.

All I can say is, Thank Goodness that four of these guys will not be back on Council next year.

As to returning re-elected members Marge Caldwell-Wilson and George Muschal: WHAT THE HELL WERE YOU THINKING?!?!?!?!

I want to say here that I haven’t yet really looked closely at Parkeon’s proposal, nor those from the other vendors. They may likely be just fine and perfectly suited to solve Trenton’s downtown parking problem, after at least five years of no movement or progress at all. I have nothing to say at this point about any of them.

It’s just the way that the Administration and Council handled the matter that was bullshit.

Final point: I asked above, Why didn’t the City provide all the cost numbers on the Summary Sheets? And why did the City want to send the Council members to “SEE ATTACHED BREAK-DOWN OF PROPOSAL PAGE?”

I don’t know for sure. But, along with everything else we know today that’s associated with this Resolution:

  • It was a last-minute item added to the June 21 docket without adequate notice;
  • The Trenton Downtown Association didn’t know this action would be taken to award a contract;
  • There was absolutely no transparency in any of the financial numbers submitted by the six bidding vendors in the materials given to Council at the last minute, and no way to compare bids;

This still seems to me what it did yesterday: an effort by the outgoing Administration to pull a fast one before they leave office at the end of this week.

And, in this matter, each member of this Council utterly failed last week – one last time – in their obligation to protect the public’s interest, and ensure that financial decisions they make and approve are done with care, attention and full transparency.

We still don’t know why. Perhaps now we should try to find out?

Pulling a Fast One?

The current membership of Trenton’s City Council met for its final session last Thursday, June 21. The Agenda and Docket was pretty fat, chock full of last-minute items requiring action before new Council members and a new Mayor are sworn in this coming Sunday.

One item was not listed on the Agenda and Docket. It was walked into Thursday’s session without adequate public notice. It was Resolution #18-456, which proposed to grant a three-year contract, with options to be extended for a 4th and 5th year, for $1.2 Million Dollars to a Moorestown company called Parkeon Inc. for “parking meters and kiosks” and ancillary items and services to go along with the new parking hardware.

By itself, the last-minute inclusion of a Million Dollar-plus contract in the final Council session of this Council and this Administration should have sent up some red flags among the Council members. Since I didn’t attend the meeting, I don’t know if any of the members expressed any objections or asked any questions during the meeting. I emailed each member yesterday afternoon asking about this Resolution, and asked if there were any special emergency circumstances or other factors which required immediate action on this last-minute proposal. As of 4:00 this afternoon I have received no responses from any member.

Now, it should be said that, as far as I can tell, including a last-minute agenda item without adequate public notice isn’t illegal. Under the NJ Open Public Meetings Act (OPMA), N.J.S.A. 10:4-8 d., “Adequate Notice” is defined in part as “written advance notice of at least 48 hours, giving the time, date, location and, to the extent known, the agenda of any regular, special or rescheduled meeting, which notice shall accurately state whether formal action may or may not be taken” [Emphasis mine – KM]. That qualifier on the agenda – “to the extent known” – leaves a very large loophole for an Administration and Council to drive a truck through. Last-minute stuff happens. It just does. And not just in Trenton.

Even though I haven’t heard back from any Council members, it looks as if this last-minute Resolution for $1.2 Million didn’t seem to bother any of them at all. The Resolution was passed unanimously, 6-0, Member Phyllis Holly-Ward being absent. I asked City Clerk Dwayne Harris yesterday for a copy of the Resolution and the support materials provided to Council last week. The Clerk sent it to me, and it is available at the link provided above.

After looking at the Resolution, and other documents on the City website in connection with this proposal, I think Council should actually taken a closer look at this deal. In fact, I think they should have shot it down. Better yet, the Administration should not have submitted this to Council last week. At all.

If this Resolution and the contract with Parkeon have not been signed by outgoing Mayor Eric Jackson, they will be well advised to put this whole thing on hold, and let the new Council and Administration evaluate and deal with this matter. Properly.

A little background.

Anyone who’s looked to park in Trenton’s downtown knows that it’s pretty screwed up down there, and has been for years. Meters are frequently broken, and enforcement by the City is inconsistent, allowing state workers to park all day in curbside spots meant for short-term use only. Neighborhood merchants, as represented by the Trenton Downtown Association (TDA) have long been upset that potential customers are not giving them their business because they can’t find nearby parking.

This is not a new issue. At least as far back as 2013, the State Department of Community Affairs (DCA) made it a condition for receiving that year’s Transitional Aid Award of $25.4 Million “that the city work with the Trenton Parking Authority and a parking consultant to come up with a new plan, due July 1, to boost enforcement and collection of parking fees,” in the words of a Trenton Times (remember them?) article of the time. I also commented on the issue back then.

However, the City blew off that deadline. The State allowed the Transitional Aid money to go through.  And nothing has pretty much happened in the intervening five years.

Well, not exactly nothing. The “plan” we owed DCA back in 2013 was actually written, and published in 2015. However, nothing came of that plan. Spokesperson for the Jackson Administration Michael Walker told the Times in March 2015, “‘We haven’t had a chance to really look at it,’ Trenton spokesman Michael Walker said, declining to comment on the specific findings or recommendations.”

The City never apparently “had a chance to really look at it,” because yet ANOTHER study was done, resulting in ANOTHER plan published in January 2017.  This version actually led to a real result.

The City issued a Request for Proposals (RFP) that resulted in 6 bids, which were opened on June 1, 2017. For reasons that I haven’t been able to find out as of this morning, none of those bids were accepted. The City re-posted another RFP, and that led to another round of six bids opened on February 1 of this year. Three of these vendors had also bid last year. And it was one of those three, Parkeon Inc, that the City chose as its recommended vendor and presented to Council last week.

In this post today, I won’t get into the substance of each proposal. I won’t address the qualifications of the company, Parkeon, that the Administration recommended. There may be occasion to do that in the future.

I think the way the City conducted its evaluation is fatally flawed. That’s what I’m talking about in this piece.

The first thing that jumps out is the fact that these proposals were opened by the City on February 1. It wasn’t until June 21 that the City made its recommendation to Council? What happened here?

It’s not at all clear from the documentation that’s available. The text of the Resolution states that Council authorized bidding for Parking services back in 2017, and it mentions that six proposals were opened on February 1, 2018. The Resolution does not mention the first round of bids in 2017, and it is silent on why the first round was rejected.

The Resolution also cites the NJ Local Purchasing Law, N.J.S.A. 40A:11-4.4, as the authority under which the City can enter into this kind of proposal and contract.

However, the Resolution fails to mention a relevant section of the Purchasing Law, 40A:11-4.5 e., which states “Award of a contract shall be made by resolution of the governing body of the contracting unit within 60 days of the receipt of the proposals, except that the proposals of any vendors who consent thereto, may, at the request of the contracting unit, be held for consideration for such longer period as may be agreed” [Emphasis mine – KM].

According to this provision, the City had until April 1 to award the contract. In the text of the Resolution, there is no mention of any reason for the delay until June 21. Neither is there any indication that any or all of the six vendors who submitted proposals consented to any delay.

On the face of it, this should have been reason enough for Council to reject this Resolution. Instead, as mentioned above, Council approved this, unanimously.

I wrote above that the Trenton Downtown Association has for years been involved with the City on this issue, since their concerns about the lack of available parking for customers directly affects their businesses and personal livelihoods. They were taken by total surprise that the City moved on this issue last week, which was not what they had been told. In an email sent yesterday to TDA Board members, local realtor Anne LaBate wrote,

At our meeting last Tuesday [June 19] we discussed the on-going interest on the TDA in being involved as the City moves toward a decision on upgraded parking meters. The TDA Parking Committee had requested that we be included in seeing demonstrations of the technology being considered.  That has not happened thus far.

Folks who were in attendance will recall that we were told that this matter was not on the City Council Docket for Thursday’s meeting which would be the last meeting during this Council’s term and so this would be dealt with under the next administration.

In fact, a resolution was walked in to the Council meeting at the last minute and it was voted on with the council accepting the recommendation of the administration. It apparently calls for a $1.2 million expenditure.  The Council voted unanimously to approve the contract.

I think we might want to consider a communication from TDA to the mayor and council, asking them to hold off until the downtown business community have been able to participate in a qualitative way in this process.  Individuals and business owners can certainly, on our own, communicate with our elected officials. [Emphasis mine – KM]

TDA seems to have been under the specific impression that what the Administration and Council did on June 21, would not have been done. In a phone conversation this afternoon, the Chairman of the TDA Board, Willard Stanback confirmed to me that the June 21 vote to award the contract to Parkeon was entirely unexpected.

For several months, a committee of TDA members had been working with DPW Director Cherry and his department colleagues to discuss the ongoing process. The City had even shared the six proposals received with TDA Executive Director Tom Gilmore. Mr. Stanback told me he had no knowledge of why the first, 2017, round of proposals had been rejected. However, as late as May 30, in a meeting with Mr. Cherry, the City gave TDA no hint that the current contract process would move to conclusion by the end of June.

Mr. Stanback was taken by surprise on hearing of the June 21 vote. He said he called City Clerk Harris on Friday morning. According to Mr. Stanback, Clerk Harris initially didn’t even know a vote on the matter had been taken the night before. In fact, says Mr. Stanback, “No one I spoke to at City Hall knew what had happened until after the fact. ”

But wait, there’s more! The way the City conducted its evaluation of the six proposals looks also to be seriously flawed, at least based on the available documentation.

The Department of Public Works, which would supervise this contract and currently headed by Director Merkle Cherry, assigned three Evaluators to score each of the proposals:

  • Alexis Durlacher, Trenton PD
  • Anthony Santora, Principal Traffic Analyst, Dept of Public Works
  • Colin Cherry, Management Assistant, Admin Department, and son of DPW Director Cherry

There are problems with Colin Cherry’s score sheets.

First, there is the potential conflict of Interest with the Director’s Son scoring proposals for his father’s department. Regardless of anything else, if a losing bidder or bidders felt they should have scored better, they can always bring a nepotism charge in support of any complaint or litigation. I don’t know how far that would go, but it’s a situation that could easily have been avoided by using another person to evaluate the proposals.

More important is that Cherry’s scoring sheets are wacky. He clearly did not pay attention to the instructions. This is supposed to be a weighted score sheet, with four categories being assigned 25% of the overall weight. Each category was to be assigned scores from 1 to 10, with the maximum score possible in each category being 2.5. A perfect score for a vendor’s proposal would be 10.

Here’s an example of a correct scoring sheet, from Ms. Durlacher (Page 9 of the Resolution):

durlacher1

Pretty simple and straightforward stuff, right?

Well, look at Cherry’s scoresheets (Pages 22-27). His category scores range from a low of 10 up a high of 25. His total scores range from 13.75 up to 23.5. Here’s one of them:

cherry1

These scoresheets should have been thrown out. When you read “Score 0-10 (10 is High),” how can you give a 25??

I don’t know whether the scoring process would be considered tainted if only two evaluators – instead of three – submitted valid sheets. The Local Purchasing Law is silent on the specific evaluation process to be used. But again, if I were one of the losing bidders, I’d be pretty upset that these scoresheets would have been used to evaluate the proposals.

This is troubling on several counts:

  • As I mentioned above, the City would be vulnerable to litigation filed by any of the losing bidders.
  • That a Management Assistant of several years tenure could screw up the simple math of these sheets is troubling.
  • That no one else in Purchasing or Public Works noticed these flawed scoresheets before submitting them to Council is troubling.
  • That the BA didn’t notice these flawed score sheets before submitting them to Council is troubling.
  • That no Council member noticed the flawed sheets is troubling.
  • That Council agreed to take action on this on Thursday without adequate notice is troubling.
  • That all proposals were submitted back in February, and rushed through Council – without objection – is troubling.
  • That there is no attempt in the documentation to acknowledge that this Resolution was offered much later than the 60-day time limit authorized by State law, is troubling.
  • That these proposals were received in February and no one reached out to TDA about them, is troubling.
  • And, as mentioned above, that the screwed-up scoresheets were submitted by the Public Works Director’s son is troubling.

This is yet one more fuckup by this outgoing Administration and Council. Based on what is available in the public record, it sure looks to me like the City was just trying to pull a fast one in getting this fatally flawed proposal process completed and get a contract signed and on the books before the end of this week and the end of their term.

What we don’t know is why.

And we don’t know why this Council signed off on this Resolution without any opposition. Their last act in office was to rubber stamp this very sketchy proposal this Administration slid in under the wire. The only returning Council Members, George Muschal and Marge Caldwell-Wilson, ought to have known better.

But you know what? That’s really not that important right now.

What is important is that – despite the unanimous approval by the outgoing Council – this deal be stopped, at least for the time being, until the fatal flaws in the evaluation and execution of this proposal can be reviewed and fixed by the new Council and Mayor.

Eric Jackson should let this deal die along with his term in office.

Another Day Older, and Deeper in Debt. PLUS, TWW Update!

NOTE: This is the piece I had planned to run yesterday, before I got sidetracked by fascinating and very relevant financial information (yes, that’s not a contradiction in terms!) about the Trenton Water Works. There is further info on that, below. But first:

Thursday, Trenton’s City Council is scheduled – at what will be the final session for this Council and the Eric Jackson Administration – to deliberate the Second Reading of a number of Bond Ordinances which, if all are passed, will increase the long-term debt obligations of the Trenton Water Works by $18.7 Million Dollars, and that of the City of Trenton by $7.3 Million Dollars. These Ordinances were easily passed First Reading on June 5; there’s no reason to believe that this Council won’t give their final, lame-duck approvals on Thursday.

We don’t know any more about the capital projects being funded by these Ordinances; no one in the City or on Council has responded to my questions, or replied to my comments made at the June 5 meeting. But we do know a little more about the overall debt burden that the City and its associated utilities is carrying.

Since the City will be discussing the Trenton Water Works twice this week, tomorrow at an open public forum at City Hall and in a presentation at Thursday’s Council meeting, I thought this it would be timely to discuss these items today, in the hope that some of you readers might be able to ask a pointed question or two at these sessions.

Each year, every municipality in the State of New Jersey files a number of forms with the Office of Local Government Services of the Department of Community Affairs (DCA). These forms provide the State with snapshot pictures of the financial status (I was going to use the word “health,” here, but hey! it’s Trenton we’re talking about, the Sick Man of Mercer County. “Status” it is). These forms are all available for public examination and review, here. One of these forms is called the Annual Debt Statement and Debt Limit Calculation. It’s an Excel spreadsheet that summarizes the debt load of the municipality by each Fiscal Year ending on June 30. It also provides a great detail in separate tabs. The DCA website contains the Trenton forms for the recent Fiscal Years of 2013, 2014, and 2015 (The links will take you directly to copies downloaded from the State website). The two most recent filings, for 2016 and 2017, aren’t on the State website. The City of Trenton released those (those have been uploaded as well) to me in response to an Open Public Records Act (OPRA) request. These forms give us a pretty good look at the overall debt of the City.

First, here’s a look at the front page of the most recently prepared Debt Statement, the one dated July 31, 2017 for the budget year than ended June 30 of that year. What does it tell us?

debt1

Let’s start with the end. As the Bond Counsel for the City of Trenton, Everett Johnson, explained to City Council on June 5, in New Jersey the statutory maximum debt to be carried by a municipality is supposed to be 3.5% of the total Net Taxable Valuation of a municipality’s total taxable property. It is assumed by the State of NJ that carrying debt above that 3.5% threshold will jeopardize a town’s finances, as more tax revenue goes toward long-term debt service, leaving less available to pay for more current expenses, such as payroll.

We see above that Trenton’s Net Debt is 6.838%, almost double what the State allows and considers a “safe” amount of debt. Mr. Johnson said on June 5 that Trenton has for decades exceeded the statutory limit, because so much of Trenton’s real estate is property tax-exempt. That’s certainly been true for the five years of data we look at today.

In 2013, Trenton’s debt load was 5.902%. In 2014, 6.476%. 2015’s number was 6.855%. And in 2016, the number was 6.360%.

One other very important statistic to take from these forms: On the 2013 form, the three-year average of Trenton’s total taxable property was calculated to be $2,739,777, 815. That total had declined to $2,323,819,357 by 2017. That is a drop in Trenton’s property value over just four years of $415,958,458, or 18%.

To repeat: Trenton’s property value has declined $415 Million Dollars from 2013 to 2017. With a declining tax base, that means there is less revenue that the City can raise for its own operating budget. It also means that every additional long-term debt obligation that the City floats to borrow money will drive that debt-to-valuation ratio ever higher.

And, lest we forget, the City’s shrinking value of taxable property means that commercial property owners and homeowners who already took a beating in last year’s revaluation will feel increasing heat and pressure applied by city government anxious to squeeze as much revenue out of what still has value as they can.

On June 5, I reminded Council that,

At the time of the last issuance of $40.6 Million in General Obligation Bonds, in November of last year, Moody’s bond rating service noted the City of Trenton’s low underlying rating of Baa1, and stated “The rating further reflects the city’s very high fixed costs, and outsized debt burden while also incorporating improved finances.”

Council members, the City was criticized for its “outsized debt burden” in November. Tonight you seek to increase that burden by nearly $27 Million Dollars. What will this do to the City’s underlying ratings, and how will that ripple through to likely large increases to the City’s costs of borrowing?

The Bond Ordinances that Council will likely approve on Thursday will only increase our “outsized debt burden.” By itself, the $7.3 Million general City Bond Ordinance will boost the Net Debt percentage from 6.838 to 7.152%. And that’s even before figuring in any more reductions to Trenton’s property values over the last year.

Trenton’s finances are going in the wrong direction.

One other note on Trenton’s debt, before moving to the Water Works.

On the tab in the 2017 report labeled “muni bonds issued,” there is a list of the current bond issues which the city is currently servicing:

debt2

These different issues total out to $139,279,824. Right below that is a list titled, “Bonds Authorized but not Issued” [Emphasis mine – KM].

debt3This list totals $34,692,575. Seeing this list leads to a number of questions, which I hope someone will ask of Council and the Administration on Thursday (I won’t be able to attend). Such as,

  • If there is previously-authorized authority to issue another $35 Million in bonds, why is there a new request for $7.3 Million?
  • Some of these bond authorizations seem to be several years old, with numbers suggesting 2007 and 2010 for some of them. If these bonds have never been issued, should they be canceled? Will doing so improve the city’s bond ratings?
  • And finally, the same question I asked on June 5: Are all of these proposed projects and expenses, to be paid for with this new borrowing, really necessary right now? Why not hold off until the new Council and Administration can review them?
  • In other words, and to cut to the chase: What’s the rush???

— # —

Now, an update to the Water Works. Yesterday, I posted links to five years’ (Fiscal Years ending June 30 for 2013 through 2017) worth of Debt Statements prepared by the City and submitted to the NJ Department of Community Affairs. In each of these Statements, in the form of Excel Spreadsheets, there are tabs providing summary financial information about other City entities that incur debt obligations under their own authority, such as Trenton Public Schools, the Sewer Utility, and the Trenton Water Works (TWW). These statements indicate that, far from being nearly insolvent  – the impression given by the fact that the utility has for decades scrimped and starved the utility of needed manpower, maintenance, and capital investment – the water utility serving nearly a quarter million Mercer County residents in the City and outside has consistently earned substantial annual surpluses. By one simplistic measure, TWW outperforms some of America’s most profitable corporations, such as Apple, Google, and JP Morgan/Chase.

I thought that was amazing information, and posted it. Alert reader Iana Dikidjieva posted a comment on Facebook in which she said, “I always just read the audits.”

Well! Dang! In yet another of the nooks and crannies of the Trenton City website, a dozen years worth of financial reports and financial statements as reviewed and vetted by the city’s outside independent auditor Mercadien are posted for all the world to see. As I said yesterday, who knew? Not me, certainly! Thanks, Iana!

In this excerpt (page 99) of the 2017 Audited statements, you can see an Income Statement for the Water Utility, with much more detailed information than contained in the annual DCA Debt Statements I looked at yesterday. The format is different, and the date of the audit report – December 29, 2017 – is five months later than the Debt Statement’s July 31 date. It also reflects any post-Debt Statement adjustments made by the City or its auditors.

audit1

Yesterday, I stated that “The operating surplus – some might call it the “profit” for the Water Works – was $15,345,040. The operating margin (surplus as a percentage of total income) was 28.3%.”  On this audited statement, the “Excess in Revenue” for the fiscal year ended June 30, 2017 is stated as $11,758,613. That’s about $3.6 Million lower than included on the July 31 Debt Statement. However, as a percentage of the annual revenue TWW earned (which I use as the “Total Income” figure of $65,533,671, less the “Operating Surplus Anticipated” line at the top of $12,605,359; that’s not actual customer billing or other revenue), the net margin for the Water Works with these numbers is 17.9%. Looking at the numbers for the 2016 fiscal year, appearing right alongside, the net margin is 19.2%.

Those are not the stratospheric percentages I calculated yesterday. but still a mark of impressive financial performance by a utility that hasn’t provided nearly the same level of customer service and water safety! Even with a lower net margin, it is clear that the Trenton Water Works – from its own annual operating resources – can legitimately afford to spend more on hiring needed personnel, paying competitive salaries, and boost operating repairs and preventive maintenance.

This cache of Audited Financial Statements for a dozen years is bound to reveal other nuggets of useful information. I thank Iana Dikidjieva for pointing me to it.

I will finish by saying that it would have been nice these last couple of months, going back to the February 1 City Council meeting when I criticized Council and Public Works Director Merkle Cherry for not having TWW financial statements available at what was supposed to be a comprehensive presentation on the condition of the Water Works, had someone said, “You know, we have the last dozen years of that data, audited too, on the City’s Website!” That would have been very useful and relevant information to have.

But, no one did. Perhaps Director Cherry nor anyone on Council didn’t know those reports were there?

If so, that’s another good reason I won’t be sorry to see so many of them leave in ten days.

A Funny Thing Happened on the Way to the Debt Statement!

This week, Trenton’s City Council is scheduled – at what will be the final session of this Council and the Eric Jackson Administration – to deliberate the Second Reading of a number of Bond Ordinances which, if all are passed, will increase the long-term debt obligations of the Trenton Water Works by $18.7 Million Dollars, and that of the City of Trenton by $7.3 Million Dollars. These Ordinances were easily passed First Reading on June 5; there’s no reason to believe that this Council won’t give their final, lame-duck approvals on Thursday.

I was going to write a piece about the City’s debt burden, and how these proposed measures will only further stretch the City’s fragile finances even further. I will write that piece, but not right now.

Today I want to write about the Finances of the Trenton Water Works (TWW). Because today, we know a lot more about the financial operations of that utility than we knew yesterday. And that’s because what are essentially financial operating statements for TWW have been hiding in plain sight for years, located in a tabbed section of an Excel spreadsheet that’s filed by the City with the State at the end of every budget year. Since the City will be discussing the Trenton Water Works twice this week, tomorrow at an open public forum at City Hall and in a presentation at Thursday’s Council meeting, I thought this it would be timely to discuss these items today, in the hope that some of you readers might be able to ask a pointed question or two at these sessions.

Do I have your attention now? OK, then!

Each year, every municipality in the State of New Jersey files a number of forms with the Office of Local Government Services of the Department of Community Affairs (DCA). These forms provide the State with snapshot pictures of the financial status (I was going to use the word “health,” here, but hey! it’s Trenton we’re talking about, the Sick Man of Mercer County. “Status” it is) of each local community in the State. These forms are all available for public examination and review, here. One of these forms is called the Annual Debt Statement and Debt Limit Calculation. It’s an Excel spreadsheet that summarizes the debt load of the municipality by each Fiscal Year ending on June 30. It also provides a great detail in separate tabs. The DCA website contains the Trenton forms for the recent Fiscal Years of 2013, 2014, and 2015 (The links will take you directly to copies downloaded from the State website). The two most recent filings, for 2016 and 2017, aren’t on the State website. The City of Trenton released those (those have been uploaded as well) to me in response to an Open Public Records Act (OPRA) request.

These forms give us a pretty good look at the overall debt of the City, which was my original topic today. They also provide more information about the annual operations of the Trenton Water Works than the public has realized is publicly available for years.

The Debt Statement filed with DCA contains tabs where separate debt information for schools and municipal utilities, since those entities and authorities often issue and carry their own debt.

Here’s the 2017 page for the Trenton Water Works, found in the “utility I” tab.

debt5

See those numbers in the section called “Deductions Applicable to Bonds” etc. etc?

Item #1 – “Total Cash Receipts”?

Item #2 – “Operating and Maintenance Costs”?

Item #6 – “Total Debt Service”?

And… wait for it… Item #8 – “Excess in Revenues”

Ladies and Gentlemen, what you see before you is the closest thing to a separate Income Statement for the Trenton Water Works that we are likely to get for at least another long while. They are simplified, and don’t provide much detail. Put that aside for now. Here, stated very simply, are the numbers that TWW customers and Trenton resident have been looking for, for years! And here, they are, buried in an obscure spreadsheet on the NJ DCA website. Who knew?

Simply expressed, in the fiscal year ending June 2017, TWW brought in $54,068,735 of income, most if not all in customer billing. Operating expenses totaled $27,814,162, and debt payments $10,909,533.

The operating surplus – some might call it the “profit” for the Water Works – was $15,345,040. The operating margin (surplus as a percentage of total income) was 28.3%.

That, Ladies and Gentlemen, is amazing. Let me put that in a little perspective.

In 2016, the operating margin for Apple was 21%.

J.P. Morgan/Chase Bank’s margin was 23%.

Alphabet(that’s Google to you and me)’s margin? 22%.

Trenton Water Works beats those companies!!!

2017’s result was no fluke for the Water Works:

  • In 2013, TWW earned a surplus of $11,051,207 on revenues of $46,572,608, a margin of 23.7%.
  • In 2014, the surplus was $10,551,000 on revenues of 43,398,424. yielding a margin of 24.3%.
  • For 2015, TWW earned a surplus of $14,716,827 from revenues of $44,759,726. The margin that year was an incredible 32.9%.
  • Oddly, there are no numbers on the 2016 form. Given the other years looked at, I think it’s safe to say TWW probably had another good year.

Dear Readers, don’t let ANYONE tell you that Trenton’s Water Works isn’t profitable!

The numbers filed with the State for five years don’t lie. Or, I hope they don’t!

Seeing this kind of history proves without a doubt that the problem with the Trenton Water Works is not with its business model, but with its management.

The reason its operating margins have beaten Apple and Google for the last five years is mainly because the utility hasn’t spent what it should have to keep the place running well.

It didn’t hire the numbers of trained and experienced staff it needed to keep operations running smoothly and error-free.

It didn’t pay competitive salaries to those staff it did hire.

It didn’t spend the amount of money on repairs and capital equipment and pipe replacement that it should have.

THAT’s how you beat Apple’s margin! And also how you strangle a water system!

We know the City of Trenton has for years taken these amazing surpluses TWW has earned, and used them to cover the City’s horrid budget numbers. Some of that is fine and legitimate. The level at which Trenton skimped on spending money on the Water Works – at the considerable expense of its customers –  was entirely excessive and inappropriate.

The numbers are here, and the numbers are clear. Trenton Water Works makes plenty good money.

Now, it’s time to spend some of it!!!

Make sure the City hears this from their citizens and customers all over Mercer County. Tomorrow night, and Thursday night.

Outrage

Trenton’s people are strong, unfortunately because they are given so many occasions requiring strength in order to cope.

We’re in the national and international headlines this week, because of what happened at Art All Night early Sunday morning. One dead, a score injured. By gunfire, the 21st-Century’s equivalent of cholera, typhoid, smallpox, or plague in earlier eras: fearful scourges periodically visited upon the public at large that we only know how to contain – more or less – not cure.

Attention is already fading. The injured have been treated. Some have already been released from hospital, and the worst injured have had their conditions upgraded from critical to stable. As the circumstances and motives of the shooters begins to be seen more clearly, there’s been a collective sigh of relief that this was not a deliberate act of mass assault by a mentally-ill “lone wolf.” There’s even more relief that this was not, God forbid, “Terror.”

Tell that, by the way, to the hundreds of people who scrambled for their lives Sunday morning, or who were locked in place for hours while police secured the Roebling Works, making sure there was no further and imminent danger from other gunmen. They were pretty terrified.

The shock and outrage over what happened this weekend, that’s propelled this shooting to front-page news, is due primarily to the venue at which this crime took place. Art All Night is an event that showcases the best of Trenton: its wide range of artistic creativity across all kinds of expression, and a positive energy that propels this annual celebration for 24 hours once every year. It’s one of a very, very few high profile events which draws crowds of visitors into Trenton from all over the tristate region. For the previous 11 years, it’s been produced without serious incident, certainly without the kind of violence seen Sunday night. Something like this wasn’t supposed to happen at Art All Night. Certainly no one who was there expected anything like it.

It’s an Art Show, for goodness’ sake!! There are no gun battles at the Met, or the Whitney, or the Museum of Art in Philadelphia. That’s not supposed to happen! That explains all the headlines. That explains all the attention. The incongruity of bullet casings and police crime scene tape strewn about alongside murals, sculptures, and oil paintings is too vivid not to end up on the news. Until its place in the news cycle is replaced by some new outrage or horror, no doubt.

In Trenton, though, this particular incident will linger in our thoughts and – hopefully – our actions, because it’s both so singular and so typical.

Singular in that this was the first time that one of the marquee annual public celebrations in Trenton has been marred by this kind of violence. Over the last day we’ve heard and read that this incident will doom Art All Night, as the crowds who’ve visited the city attended in years past will stay away in droves. Other voices quietly say that we need to continue producing this event, showing that the City won’t be intimidated by a single incident.

Me, I think that as long as there is a need for Art All Night – and I think there is a great need for it – it will continue. The event began as a way for the arts community in this city to publicly share their work once a year, with each other and with the public, to re-energize their own individual creativity and celebrate their community in Trenton of fellow artists. If the event is smaller for the next couple of years because of lower attendance, that will probably be ok. Art All Night started out as a basically Trenton-only event, which built a reputation over the years that attracted visitors from all over. If it happened before, it can happen again. No one will soon forget what happened at the 2018 Art All Night, but I think people will move on. There will be Art All Night in the future. Perhaps smaller for a while, and surely safer, at least indoors. But I think the DNA of the event will be the same.

In a larger sense, what happened Sunday morning is all too typical of Trenton. If the accounts available this morning are correct, then the violence broke out between groups of people who knew one another, perhaps even falling under the all-encompassing but sometimes awfully vague label of “gang-related.” As such, Sunday’s incident is all too familiar. Over the last few years, Trenton’s citizens have seen all too many shootings that have been just as shocking, if not as attention-grabbing as the one at Art All Night.

Remember in 2014, there was a shooting at the church funeral of a man who himself was shot and killed in a street attack attack that left two others wounded. I can’t think of anything more outrageous than shooting up a funeral, at a church, no less. But the carnage there was far less severe than Sunday morning’s, thank goodness. Dense crowds at the Roebling Works provided a ready environment for multiple casualties, whereas the 2014 shooting at Galilee Church took place outside the service which was attended by around 100 persons, who all remained safe.

The folks who run the website Trenton Homicide Watch are kept plenty busy with the news of murders and their legal aftermath. And those stories only cover the occasions in Trenton in which people perish due to acts of desperate violence. Other occasions on which persons are “merely” wounded often don’t get many column inches to tell their tales. The only people who know about those are often the victims, perpetrators, and their families. These incidents often don’t make the Trenton Times, let alone the New York Times. But they are part of the daily background noise of life in Trenton. Seen in that light, what happened at Art All Night is less shocking and less unexpected to those who live here, remarkable in the degree of injury and violence rather than kind.

National attention will fade after the weekend, and we will once again be on our own to face the frequent and continuing outrage that fills our lives in Trenton. Sadly, there will be no shortage of funerals for those dying prematurely at the hands of others;  and a steady supply of mourners grieving their loss. Just as outrageous, if not more so, is our ongoing coping with this as the normal course of life in Trenton. At the very least, this past weekend shows us what the rest of the world sees when they infrequently turn their attention our way: shock and sadness.

Art All Night, I think will continue in future years. With increased attention to safety, the hope and expectation being that we can prevent future outbreaks of violence such as this weekend’s. At that event, at least.

The hard work will be to reduce the number and severity of all the other acts of violence, of large and small scale, which the people of Trenton daily endure, well outside of the national spotlight. This is where the future of this City and its people will rise or fall.

Trenton's Deal With Comcast is Up for Renegotiation. So Far, We Are Doing Nothing

Over the next several months, until September 2019, Trenton has a literal, once-in-a lifetime opportunity to renegotiate the underlying terms of its business relationship with the cable company that has been operating in the City for the last 25 years under a contract that was likely obsolete on the day it was signed.

So far, Trenton has done nothing to prepare for this imminent negotiation and so jeopardizes the available opportunity the City has to require the cable operator to provide – at its cost – public access channel space, equipment, and other consulting services that would allow the city of Trenton to provide its citizens with access to public information, city services, live or on-demand recordings of City public meetings, and other essential services already being provided to communities in Mercer County and elsewhere in the State. The new Gusciora Administration and City Council taking office in July has an early opportunity to make a deal for the City that has the possibility of transforming its information infrastructure.

Looking at the big picture of all of the issues facing Trenton during this transition period, providing it with a city-run cable channel or streaming site is not among the highest in priority.  But, any service that could help more people connect to its local government might in the long term boost civic engagement among its citizens, and perhaps aid in nudging up voter turnout from the pathetic 22% seen this week.

As I hope you will realize as you read on, this is a subject where a lot of resources are already available, with more that could be identified and made available to the city by upcoming negotiations – if the City decides to move quickly, that is.

Also known as Xfinity, or Kabletown, Comcast is along with Verizon FIOS one of two corporations providing Trentonians with an expanding menu of information services including Cable TV, Internet connectivity and Voice (traditional telephone).

These companies are actually more properly called “Franchisees.” Comcast – as all similar companies in the United States – operates under local municipal franchise agreements, renegotiated periodically, under the umbrella of Federal law and regulations. In New Jersey, Verizon FIOS operates under what is called a “system-wide franchise agreement,” which means that the State of New Jersey negotiates and manages the Agreement with Verizon that is in effect in communities statewide. The current system-wide franchise agreement took effect in 2014, and is in force until December 18, 2020.

This state-wide arrangement is due to the pre-existing historical status of Verizon (né NJ Bell) as the predominant (if not only) traditional Telephone company in the State. Verizon has long had a statewide footprint of equipment and services, and is subject to statewide regulation by the NJ Board of Public Utilities. More traditional, cable-only companies had, and continue to have, much smaller footprints in the state. Historically, firms such as Comcast, Cablevision and RCN to name three, expand their businesses and build their systems community by community, which is the rationale that Federal law uses to grant a good deal of regulatory authority to the level of local municipalities such as Trenton.

The franchise agreement with Comcast, however, is handled by the City of Trenton. The current deal was approved by City Council via Ordinance way back on September 16, 1994. It was a 15-year deal that was automatically renewed for another 10 years, in 2009. That means this current arrangement expires on or around September 15, 2019.

It is likely that there is not one single person working in City Hall today with knowledge of, let alone participation in, the 1994 process by which Comcast was granted its 25-year license. By itself, this puts Trenton at a very serious disadvantage when facing the imminent prospect of negotiating a new franchise agreement that may remain in force for perhaps another quarter-century.

We live in a telecommunications environment that has over the last 25 years utterly transformed our global culture and economy. One has only to reach into one’s pocket to find a tool granting instantaneous access to our global culture and economy to realize what’s happened over that 25 years. Companies such as Comcast create, manage, and profit from, these transformations, while communities such as Trenton seldom have ability to track these changes, let alone influence how they affect their citizens, for good or ill.

The City of Trenton has a narrow window of opportunity until September of next year to actually have a measurable influence on this process – at least as it involves Comcast’s franchise agreement. But that window is fast closing.

First, a little bit of background.

Under Federal Law, local communities are entitled to annual license fees payable by the franchisees authorized to do business in them, calculated as a percentage of the franchisees’ customer income on basic subscribed services as defined by federal law. In the City of Trenton’s Adopted FY 2018 Budget, the total amount of those license fees is itemized (on Page 22, Account #08-122) as $678,957.18. That figure is an actualized amount. The cable franchisees make a single annual payment to the City, in January, based on the income received from the previous calendar year from their customers.

The FY 2018 figure does not itemize payments by each company for that period. In FY 2017, the amount paid by Comcast to Trenton was $319,717.29, and from Verizon the amount was $355,559.89.

This is an income stream that is regular, guaranteed, and subject to likely nominal annual increases. Federal law (47 U.S.C. S542(i)) provides that the US government will neither regulate the amount of franchise fees paid by a cable company, nor the use of those funds by the local community, other than to place a ceiling on cable companies of 5% of gross billing to their customers for such purposes.

In New Jersey, the main regulatory structure is provided by N.J.S.A. 48:5A-2 et seq, within the broad umbrella of Public Utilities. In the preamble to this section of State code, Paragraph c, the explicitly-stated objects of such regulation include, in part, “(2) to encourage the optimum development of the educational and community-service potentials of the cable television medium.”

Clearly, although Federal law is deliberately silent on both the collection and use of local franchise fees as seen above, New Jersey statute has long intended the existence of local cable systems to serve the public interest. Therefore, it would fulfill the spirit of state regulation to use the entirety of the annual license fee to further the objectives as stated in Paragraph c.

However, in a financially distressed community such as Trenton, these funds have – not incorrectly – been considered as unrestricted revenue and applied against the city’s annual operating budgets. This has been consistently done with the knowledge and approval of the Local Government Services division of the state Department of Community Affairs, as indicated by the only correspondence on the matter (linked) released by the City in response to an Open Public Records request filed last year.

This background is likely more detailed than it needs to be at this point. However, the main takeaway to keep in mind is that, as far as building a capacity for the City of Trenton to provide an advanced platform for civic information and interaction, there does exist by federal law an annual income stream that has long been intended to be used – at least in part – to support and subsidize the annual operating costs of such a capacity.

To assist local communities in the preparation of a negotiating position for a community such as Trenton as it looks to renegotiate the master agreement with a cable franchisee such as Comcast, there are resources available. The State Board of Public Utilities publishes a “Guide to Franchise Renewal,” revised as of February 2012, to provide “municipalities and cable companies with the information needed to negotiate a successful franchise agreement.

The first half of this guide explains the first part of this process, begun in Trenton in September 2016 and now more than half over. As explained in this guide,

“Ascertainment is the term utilized to explain the fact-finding process described in the Federal Act. The purpose of ascertainment is to examine the past performance of the cable operator and identify the future cable-related needs of the community.

“The OCTV recommends that the municipality engage in the ascertainment phase of franchise renewal for the reasons outlined below. Although ascertainment is optional, it is necessary if the municipality wants to substantially modify the terms of the franchise or to deny the franchise renewal outright. The community’s needs may have changed since the initial franchise or the previous renewal. Moreover, the record that the municipality develops during ascertainment will help the municipality effectively complete negotiations with the cable operator. During negotiations, a municipality may require certain provisions in the municipal consent ordinance (“ordinance”) only if the requirements are based on a record developed during ascertainment. For example, a municipality may require public,educational and/or governmental (“PEG”) access channels and equipment, a system rebuild, expanded channel capacity, etc. (see “Franchise Proposal List”) only if such requests are based on the community’s cable-related needs established during the ascertainment phase and provided that costs are reasonable in light of these needs. There are additional items that the municipality can negotiate for during renewal. (See “Franchise Proposal List” for a full discussion of these items.)”– Emphasis added [ KM]

This is the key language to understanding this process. A municipality may legitimately require a franchisee, as part of its renewal negotiations, to provide at its cost dedicated cable channel space as well as production and distribution equipment to support what’s called the Public, Educational and/or Governmental (PEG) channel. But ONLY if requests are based on needs as determined during the ascertainment phase, going on now and already half-over without any city consideration or preparation for the upcoming negotiations.

The Guide does provide a great deal of information, checklists and bullet points to allow a community to construct and conduct this Ascertainment Phase. With Trenton behind the 8-ball by having allowed so much time to have passed without action, this is an invaluable guide.

Time is short. Data collected in the Ascertainment phase must be collated in an official “Municipal Report.” Per the Guide,

The municipal report must be issued no later than one year before the cable franchise is due to expire. If, for example, the municipality’s franchise expires on August 10, 2009, the report would be due on August 10, 2008. This permits the timely filing of the application for municipal consent.

It should be noted that one or both parties might request an extension of the due date in writing. Because state law mandates these time frames, the OCTV can neither grant nor deny extensions. However, if both parties have agreed to the extension and there is no harm to the public interest, the OCTV will permit the process to continue. The municipality should be aware that there has been no adjudication of the extent to which operating outside the franchise renewal time frames would affect the subsequent rights of the parties in administrative proceedings or in state or federal courts.

Trenton’s Municipal Report is technically due in September of this year, a highly unlikely deadline to meet. Therefore one of the first actions to be taken by a new Administration would be to request an extension to as late in 2019 as possible.

There are some additional resources that the City can draw upon during this process. The “Jersey Access Group” is a membership group of municipalities, school systems and higher education organizations describing itself as follows:

“ The Jersey Access Group (JAG) is a professional advisory organization that informs, educates, and recommends in the areas of technology, legislation, and regulation that shape and direct the use of multi-communication platforms for content creators and distributors on behalf of municipalities, educational institutions, and other public media facilities.”

Specifically, JAG provides assistance and leadership to PEG operators both current and potential in the following areas:

JAG actively analyzes and addresses emerging issues in areas such as:

Cable Franchising

  • Use and management of public rights-of-way
  • Franchise agreements and renewals
  • Regulation of rates and service standards
  • State franchising laws in lieu of local oversight

Operation of Public, Education and Government (PEG) Media Facilities

  • Maintain the integrity and professionalism
  • Program sharing platform
  • Funding and equipment donation sources
  • Station operating procedures, staffing, and volunteers
  • Educate, inform, and promote community involvement
  • Formation of new PEG stations
  • Problem solving strategies

Local Government Communications and Internet Policy

  • Social Media strategies
  • Consumer protection and net neutrality
  • National Broadband Plan, access, and funding
  • Public safety spectrum
  • Public rights-of-way management and policies
  • Service to anchor institutions like city halls, police and fire stations, schools, libraries, universities, hospitals, county services, courts, and community centers.
  • Emergency alert systems
  • Local government networks, wired, wireless, fiber and coaxial

New Technology Initiatives and Advancements

  • Developments in the telecommunication industry
  • Capital equipment purchases
  • Advocacy through local communications initiatives
  • Digital transition of PEG programming
  • Web 2.0 and beyond
  • Integration and best practices of communication platforms
  • Use of wireless networks
  • Converging technologies – impact on your laws

I reached out to JAG several months ago, to find out if Trenton had ever been part of this group or had otherwise been in communication. The answer was no on both counts. They are looking forward to assisting Trenton in any path forward.

One other area of resources. Federal, State, and City law mandate public participation in this process at every step. The City’s Ordinance covering the Cable Television Franchise, A317, provides for a Citizens Advisory Council (Section A317-11), to monitor the operation and service afforded by the company, and may make such recommendations as it deems appropriate to the company and the City Council.”

This Advisory Council has never been constituted by the City of Trenton, as confirmed to me by The City Clerk’s Office.

I hope this brief summary has provided an introduction to the opportunity before the City of Trenton. There is a very real prospect that – for the first time in a quarter-century – terms and conditions of a new contract with the city’s Franchisee Comcast – to establish a real municipal cablecast or streaming capability for the next several decades.

We have an opportunity to negotiate a deal requiring Comcast to provide channel space as well as production and distribution equipment to the City, at their cost, as well as training and installation assistance.

We have opportunity to designate at least some part of the dedicated annual license fees payable by Comcast, totaling almost $700,000 per year, to pay for operational costs.

But we can only do so within a formal license renewal process that began – with no action or even awareness in City Hall – 1½ years ago, and which is half over.

Given the timeframe available to us there are some alternative bargaining positions the City could take. Since traditional cable channel space is still very valuable, a fallback request to asking for the usual PEG channel as operated by many NJ communities might be instead to ask for equipment and services to allow Trenton to set up a digital streaming – live as well as on-demand – capability on the City Website, to allow streaming of public meetings and information in that medium. This could also be a good opportunity to overhaul the City’s website more generally, with the assistance of Comcast.

Three are several resources available to the City to assist it in conducting the franchise renewal process in a way that will help it to achieve at least some of these objectives by the time we are ready to renew a contract with Comcast in September 2019.

I hope the new Council and Administration will recognize the opportunity we have here, and take immediate steps to begin the process that should have begun over a year ago.

Twenty Five Minutes, Thirty Six Seconds

Based on one loose and entirely subjective measure, as applied to one extraordinary piece of video, Paul Perez is already acting as if he has been elected Mayor of the City of Trenton, and has entered his fifth month in office.

That subjective measure is the “Tony Mack Scale of Unfair Media,” as used to bash the local press. Specifically, the Trentonian newspaper. The trail that Mr. Mack blazed eight years ago looks to be the same path being followed by Mr. Perez. And the copycatting does not suit the man. If anything, it should increase a sense of alarm that this man is a close contender to be elected Mayor next Tuesday.

I speak about the comments, unscripted and passionate, pretty non-specific and rambling, made by the candidate in a very extraordinary 25-minute, 36 -second video posted on Tuesday.

The video, initially posted on Facebook Live and now streaming on YouTube, was apparently occasioned by receipt of a new mailer published by Perez’s opponent, Reed Gusciora, Mr. Perez held the flyer in front of him throughout the video, referring to it frequently. The candidate attacked the flyer throughout as an unfair personal attack on his character and his own personal history, but directed specific and heated criticism at the publishers of the piece for sourcing some of the material from The Trentonian newspaper. At 6:10 in the video, he said, “Many of you out there that read the Trentonian have your own scale of credibility, when it comes to the Trentonian… I won’t disrespect them. I will just say it’s not really reliable.” He then attempted to pivot away from discussion of the newspaper and the Gusciora flyer, saying (6:38) “all we want to do is make a difference.” But 20 seconds later, he sheds some tears and becomes very emotional. The Gusciora flyer stays on-camera the entire time.

Eight years ago, disgraced federal convict and former mayor Tony Mack had his problems with the Trentonian. At one of his first press conferences, remember, a plain-clothes Trenton police detective physically intimidated that paper’s editor Paul Mickle, as he aggressively questioned. Mr. Mack later imposed a short-lived “ban” on having copies of the newspaper physically present in City Hall. That was five months into that mayor’s term. Paul Perez is showing himself to be as prickly about this newspaper as Tony Mack. That’s saying something.

Look, we are in a transitional period for our local media. NJ Advance Media, owners of the Trenton Times, has seemingly made a deliberate decision to reduce – it feels like a total elimination – its local Trenton coverage. And that’s a shame. The local print media is now dominated by the Trentonian, as the only local daily featuring original reporting and commentary of interest to those who live and work in Trenton. This is not a brand-new development. It’s been happening here for years, as well as everywhere else in this country.

In November 2010, in the midst of Tony Mack’s Trentonian “ban,” I wrote in this space,

The Trentonian, for all of its many faults and wrinkles, has been doing some good journalism over the last several months. With an aggressiveness seldom seen during the Palmer Administration, the newspaper has been breaking news, posting frequent updates online, using video, and generally proving the continuing value of a strong local news presence.

In comparison, the Times has been lagging in its city coverage, reduced often to reports of press conferences and Council sessions, as well as ripping and re-writing press releases from outside sources.  This is no doubt the inevitable result of a long process of downsizing at that newspaper, and the hollowing out of local resources in favor of concentrating them at Star-Ledger headquarters up north.

I’m not saying the Trentonian doesn’t make mistakes. Too many stories are rushed onlne and into print without corroboration, relying only on single unnamed sources whose credibility on a given story can’t be evaluated by the average reader.

I don’t think those lines need much revision. I’ve been very critical of the Trentonian over the years, sometimes pretty bluntly. That much hasn’t changed. But a lot has changed in this country over the last few years that put Mr. Perez’s comments in a very different, and more troubling light.

Professional journalism is under attack, and the value of a free press challenged, from the very top level of our national government on down. Even though the main motivation for these attacks by the Current Occupant of the Oval Office has been revealed to be a cynical effort to “‘discredit’ journalists so that negative stories about him would not be believed,” the example set by the Current Occupant has been picked up by many others in the country and used to continually de-legitimize a professional and free press and those who work in the profession.

It is sad and disappointing to see and hear Paul Perez take up that cause and propagate it in the City of Trenton.

Mr. Perez is done with his specific discussion of the Trentonian at about the seven minute mark in the video, although it – like the ever-present Gusciora mailer – is an unnamed player of the subtext throughout.

The remaining 18 minutes are taken up with rambling, disjointed, defensive commentary, flitting from topic to topic without ever naming the names or dating the dates of what he’s talking about at any given time. As noted in the Trentonian’s own story about this video, Mr. Perez keeps talking about unnamed opponents in the third person plural, using a lot of “They’s”  and “Them’s.” “They” are apparently everyone else not backing the Perez campaign. Mr. Gusciora, certainly. Many of his former opponents who have endorsed Mr. Gusciora. The permanent floating Democratic “establishment” working against him. The Trentonian, obviously.

When watching the entire video, the whole thing kind of rushes over you in a stream-of-consciousness style in which one topic flows to another. Always concerning “them” and what “they” are doing in this election. I think it’s only by isolating specific statements and comments that one can realize what a remarkable video piece, and how damaging it is to Mr. Perez’s reputation in the closing days of this campaign.

8:30    “They’re trying to manipulate us all!”

11:38   “Now I was advised not to do this video, but I can’t help it.”

13:10   “It’s sickening and upsetting.”

15:40   “We’ve seen what they’ve done to people connected to me.”

18:20   “They darkened my face.”

18:33   “I apologize that I have to come out and talk about this.”

19:03   “We still have to fight these career politicians and the incredible machine they have.”

20:09   “They jump from one team to another, and then they try to justify why they’re doing things.”

20:18   “They try to act like they’re a state agency at times, and tell you what the rules are.”

20:25   “It’s amazing, amazing, amazing, to see these actions.”

20:33   “We’re not going to let them get us down.”

21:55   “We’ve had enough of these guys.”

And, finally,

22:00   “We want to put them on display and let you know who they are.”

Mr. Perez apparently believes that he’s done just that. But, other than the Gusciora mailer that never leaves his grip, he hasn’t mentioned a single person or fact or incident!

In the middle of all of this, curiously, Mr. Perez make a quick detour to talk about – again, with his same annoying vagueness – his own campaign. He responds to unspoken and undescribed criticism of his campaign, which he is quick to blame on an all together other set of unknown “Theys.”

13:18   “I don’t have any power over what they call Political Action Committees.”

13:39   “That material is is marked very clearly as to who it’s from”

13:47   “Sometimes they don’t even get that information right.”

13:57   “It goes to show you there’s no coordination between us and them.”

Whew. That was exhausting to watch.

What are we to make from all this?

To me, first and foremost, this demonstrates – along with his behavior and comments at last Sunday’s candidate forum, as well as a newly-published but three-week-old interview with the Trentonian posted last night – that there is a huge disconnect between what his campaign formally stands for, and what the candidate is showing us about himself.

Mr. Perez and his campaign has done a very respectable and comprehensive job of considering all of the important issues facing the City of Trenton, and presenting ideas and proposals for how many of these issues would be confronted by a Paul Perez Administration.

Since the first round of the election last month, though, he has put the issues aside and has allowed his ego and his personality to take center stage as the most important factor in the campaign, to him. Yes, he has a good story to tell, of a son of Trenton who served his nation for several decades, rising to a pretty senior position in uniformed and civilian service. He has a lot of which he can be proud.

However, we need more than a positive personal history in Trenton. We’ve recently had one mayor who served ten years too long. Another led away in handcuffs. A third sleep-walked through his term. Now this guy who is one of the two persons who will be elected the next mayor on Tuesday is setting the stage for four years of turbulence and personal drama. No, thank you.

We don’t need to elect a man whose ego, ambition and temper outstrip his talent.

Comments Made at Trenton City Council, June 5, 2018

NOTE: I delivered the comments below at Trenton’s City Council yesterday evening, after voting took place to approve, 4-1 (Phyllis Holly-Ward in opposition to all the measures, and George Muschal absent), 3 Bond Ordinances that would authorize borrowing almost $27 Million  – in the final month of this Council and Administration – on a long list of capital spending projects for the City in general (almost $7.7 Million) and the Trenton Water Works ($18.7 Million).

Copies of the draft Ordinances were available at the meeting. I scanned two of the three. Here’s a link to the text of the general City bill; here’s the one for the Water Works.

I know what you’re thinking. You’re saying to yourself, “Hey, are any or all of the items on the TWW ordinance required as part of the new Administrative Consent Order in force with the NJ Department of Community Affairs?” Good question! I read no reference to that in the Ordinance. And the subject didn’t come up during last night’s discussions. So that’s still a mystery.

Before Council’s vote, a lawyer from the city’s Bond Counsel since 2016, Everett Johnson of the firm  Wilentz, Goldman and Spitzer, made a brief oral presentation about the proposed bills, and provided some of the context I asked for in my remarks.

In this state, local communities are allowed to take on long-term debt obligations up to a maximum ceiling, defined as 3.5% of the Net Taxable Valuation of the town’s property. In Trenton’s case, as of 2017 the total value of Trenton’s property is $2,395,945,829. According to the State’s formula, 3.5% of that number would be $83,858,000.

Last night, Mr. Johnson estimated the total debt load for the City as currently in excess of $152 Million, almost double what State law says it should be. Mr. Johnson explained that Trenton has been well over the statutory maximum for over 20 years. This is primarily due, he explained, to the fact that – relative to its population – so much of Trenton’s property is exempt from taxes.

He did not provide, nor did anyone at Council’s meeting ask for, any information about how Trenton’s debt load has gone up or down over the last several years.

What we can say is that, if these three Bond Ordinances worth $27 Million Dollars are passed for final approval, the City’s debt burden would immediately jump 18%. That’s a mammoth increase to push through at any one time, let alone in the final weeks of a lame duck Council and Administration.

Pushing this through does, in fact, appear to be the plan. West Ward Council Member and current Council President explained that the measures were on the docket for first reading last night, unusually in a Council Conference session, so that they could be sent to the NJ Department of Community Affairs Local Finance Board – which must approve them – so they can come back to Council for further action.

And that further action, according to Mr. Chester, will be taken at the Council’s final working session on June 21. Public hearings for these three measures will be held at that time, as well as the final vote to approve.

These are big bills, worth a lot of money, for a long laundry list of items – both for the City and the Water Works – that as of this morning, we don’t know if we really need. In normal times, in this town, these wouldn’t get the attention and the clarity they deserve. In these final weeks, these measures look like the Administration is emptying the cupboard of all its wish list items, leaving the new Mayor and Council – and our poor taxpayers – a huge brand-new debt burden without any kind of thorough review or attempt to explain to the public what these items are and why they are all needed now.

I don’t like the way this is being done. If you live in Trenton and pay taxes, or if you live outside of Trenton and pay a Trenton Water bill, I think you shouldn’t like this either.

June 21, 5:30 at City Council looks to be the only chance left to say or do anything about this.

— # —

Mr. President and Members of Council –

Last week, at your West Ward Town Meeting, Mr. President, you were asked what was going on with the Trenton Water Works. What with several new contractors on board, a newly-inked Administrative Consent Order with NJ DEP, new RFP’s and large multi-year contracts listed on the City website, and with several transactions on Council docket, it has been obvious for several months that there is a lot going on. But there has been no attempt by this Administration and Council to put all of these changes in some kind of meaningful context. There has been no attempt to let Trenton’s citizens and other TWW customers know what all this means for the immediate and long-range future of the utility that provides drinking water to much of Mercer County.

At your meeting, you said that there would be a status report given about the Water Works at the last meeting of this body, as presently constituted, later this month. That was welcome news.

In the spirit of that openness, Mr. President and Council Members, tonight I ask for more information about and question the immediate need for the three Bond Ordinances on your Agenda tonight, #’s 18-27, 18-30 and 18-31. Collectively, if all Ordinances are passed tonight, these would collectively add almost $27 Million to this City’s long-term debt obligation. And we have no way in which to understand what that means to the City’s underlying financial health.

From the only information available for review prior to this evening’s meeting, it appears that each of these measures represents new obligations and initiatives, not the re-financing of existing debt.

As such, I think it is appropriate to ask for statements from the Administration asking for how these measures impact our finances.  Any consolidated statement or pro forma Balance Sheet, showing the City’s total long-term debt obligations and how these new ordinances would add to that load, would be essential to our understanding.

Any statements showing how an additional $18.7 Million adds to the debt burden of the Trenton Water Works, would be essential to our understanding.

From Mr. Johnson’s presentation this evening, we know that all of these Ordinances would, if approved, balloon Trenton’s total debt load by nearly 18% in one blow. That’s a huge increase on top of what Mr. Johnson tells us is already a total debt load in excess of the State-mandated maximum.

How does the City and the Utility intend to service these obligations? Are these intended as General Obligation instruments, or are there dedicated revenue streams attached?

What will these do to the City’s overall debt rating? At the time of the last issuance of $40.6 Million in General Obligation Bonds, in November of last year, Moody’s bond rating service noted the City of Trenton’s low underlying rating of Baa1, and stated “The rating further reflects the city’s very high fixed costs, and outsized debt burden while also incorporating improved finances.”

Council members, the City was criticized for its “outsized debt burden” in November. Tonight you seek to increase that burden by nearly $27 Million Dollars. What will this do to the City’s underlying ratings, and how will that ripple through to likely large increases to the City’s costs of borrowing?

I mention the TWW ordinance because it is the largest and the one that affects more people and rate-payers throughout the County. But I also want to find out about the $7 Million plus for “Capital Acquisitions and Improvements for the City in general. What’s up with that?

Are you absolutely certain all of this is necessary, at this present time? Are these actions by a lame-duck Administration and Council required now, tonight?

If so, it is the obligation of you on Council to explain to the public, and to require the Administration and its Bond Counsel to explain why that is the case.

I look forward to the release of more information and analysis before the final reading and adoption of these Ordinances.

It’s a lot of money, it’s late in the day, and very late in your term. We need to know more about this.

Thank you.

I Smell Smoke!

From the Sunday June 3 Trenton Mayoral Forum:

2:17:41 REED GUSCIORA:           “Paul, at the NAACP Forum, you called for ‘military-style’ policing. And I don’t know how you’re going to have a Sanctuary City with ‘military-style’ policing. And that’s documented. And don’t believe me. Don’t believe me. Read the transcripts, folks! But, this is the reason why we need to give drivers’ licenses, undocumented residents, and we need to tell Donald Trump – another inexperienced chief executive – we have to tell Donald Trump, ‘Hands off the Census.’ Count, we need to count everybody in to make sure we have federal aid, and to make sure our federal representation is kept up. So those undocumented residents are fully represented, not only in the State Legislature, but in the Congressional delegation.”

2:18:45 PAUL PEREZ: “So, here’s what I would say: Liar, Liar. Pants on fire.”

2:18:48 GUSCIORA: “Look it up. Look it up. Paul, look it up.”

2:18:55 PEREZ: “Because that’s not what  said. That is not what I said.”

— # —

From the NAACP Candidates Forum, March 12, 2018:

naacp

0:06 PAUL PEREZ: “Full disclosure: As a military officer, I spent fifteen years as a criminal investigator. I was also a Homicide Detective. And I actually worked on these things. So one of the things we always talk about is that, in the City of Trenton there’s a high level of gun violence. There’s a high level of drug distribution. There’s also a high level of human trafficking. But, guess what? We don’t make guns in Trenton. We don’t bring all the drugs, [unintelligible]. The drugs that come here, they come from somewhere else. And what we really need to focus on, is a military-style, kill-the-supply-line. We need to figure out where that stuff is coming from. We have [Highway Routes] 1, 29, 206, 33, 31, where these guys shoot up and down, unabated. Nobody stops them. They can shoot somebody in South Trenton, and then West Trenton, in two seconds. Nobody stops them. We need to bring back traffic police. We need to have a real, physical police deterrent that says to people ‘I need to take a second thought about what I’m about to do. Because I might get caught.’ And right now, we don’t have that in Trenton.”