ROSELLE, NJ — Roselle will be finally realizing a dream that is years in the making thanks to the Union County Improvement Authority funding $50 million in bonds for a school facility and community center. However, the authority faced some tough questions from the NJ Department of Community Affairs Local Finance Board prior to getting their stamp of approval.
The project, which includes $30 million in bonds for the Community Center and $19.5 million for an Early Learning Center, was easily the largest project the UCIA has approved for any municipality. Although there have been larger projects at the county level, nothing this large has been proposed to the authority by any municipality, especially one as small as Roselle, which has approximately 23,000 residents.
The two projects, called the Mind and Body Complex, will be built on vacant property on Chandler Avenue, which is located between 9th Avenue and Morris Place.
The community center, which includes a gym, recording studio, library and pool along with the early learning center has been a dream of former mayor and now assemblyman Jamel Holley. He said the borough has been in desperate need of both facilities.
The school board has been leasing space in two buildings in order to house kindergarten classes, which comes at a cost of $600,000 annually. That cost, officials said, could easily go toward debt payments on bonds for the new facility.
Although the cost of the proposed venture was not discussed in 2013, it now has been estimated the borough would have to spend $1.4 million a year to pay off the bonds. The impact on the average taxpayer with home assessed at $118,400 would be about $253 annually.
Also, while taxpayers would assume the debt, neither the borough or board of education would actually own the facility outright.
The borough would make a lease payment equal to the debt service incurred by the UCIA for the bonds under a “lease agreement.” The borough would then lease the facility from the UCIA once it is built. The Roselle Board of Education would also make a lease payment equal to the debt service on the early childhood learning center.
Although the NJ Local finance Board and NJ Department of Education approved the plans and expenditures, the finance board had questions for the UCIA prior to giving their final nod on the project.
On April 22 a contingent of borough officials along with Daniel Sullivan, UCIA executive director, met with the finance board to explain the proposed project and why it was needed. Although this is normal procedure when an authority approves bonding on larger projects, this time the board seemed perplexed over the financial end of the deal.
Officials explained to the board that the project was a “true shared service” contract between the borough, board of education and UCIA because the district had a significant need for a pre-k and kindergarten facility, and a recreational center was desperately needed.
Specifically they noted 200 children are currently spread out in two separate “substandard” facilities leased by the board of education and they are overcrowded.
The new pre-K and kindergarten would be a state of the art facility that would alleviate all the issues the school board has faced in recent years. They also stressed the importance of the school building, community center and library being located on the same parcel of land.
It also was explained to the local finance board that in May the borough, board of education and UCIA entered into the shared services agreement in which the UCIA agreed to handle everything, including contracts, contract management and construction of the project.
Roselle Mayor Christine Dansereau pointed out that Roselle was a community where the average household income was about $60,000, with both parents in the household working.
“The issue comes down to after school and what is a safe environment for them to go for recreation so they don’t align themselves with groups that we all know are pervasive in communities like ours,” the mayor said, adding that having a structured environment that youth can go to daily “will keep them off the streets.”
Dansereau explained borough parents could simply not afford to send their children outside the community for extracurricular activities, so their education of the world, in general, was not as comprehensive as it could be.
The local finance board clearly understood the need, but questioned why the UCIA was charging such a high fee for handling the project.
“I’m trying to wrap my head around the fee for the UCIA of $104,000,” said local finance board member Idida Rodriguez, adding “authorities come before us all the time and I’ve never seen a fee this high. Maybe you can explain it to me.”
UCIA financial consultant Dan Mariniello pointed out that the financial structure was standard for the UCIA, but in part the higher fee was due to the amount of the bonds, plus the fact the authority would be assuming all the construction management and contracts, which added to the these fees.
“So what you are saying is the authority is going to be the project manager for this project,” Rodriguez inquired and was told by a legal representative of the authority that this was, in fact, true.
Sullivan elaborated on that, explaining the authority would be overseeing the entire project, which encompassed a considerable amount of work. Alan Roth, legal counsel for the Roselle Board of Education, also interjected to explain why this project was crucial for the borough.
“We have almost 2,800 kids and a waiting list for pre-K of 100 children. We can only accommodate right now 200, so with this we are talking about being able to expand our program,” Roth said, explaining the schools were overcrowded and he did not want to see 6th, 7th and 8th grade students filtered into the growing high school population.
While the board said they fully appreciated the need for the project, they were far more interested in the fees the authority was charging.
“I’m not singling out Union County in any way, but as the improvement authority deals come before the board, it has often been a concern among board members over the fees of some complexes being too high,” said finance board director Timothy Cunningham.
Cunningham pointed out that he started his career off at an improvement authority so he was particularly sensitive to the fees charged by authorities.
While he agreed that in this case the UCIA was doing more than just financing the project, he issued a warning to all authorities that they may be clamping down on this charge.
“I just want all improvement authorities to know that the division staff are going to be undertaking an analysis to try to identify the spectrum of fees,” he said, noting that in the future, improvement authorities potentially could be questioned on this aspect when they come before the finance board.
Cunningham made one final comment about the close to $50 million shared services deal the borough and board of education made with the UCIA.
“Clearly it’s expensive, but nevertheless, it seems for the impact on the tax rate, the result that is being attributed or provided to the children and residents of the town is fairly extraordinary,” the director of the finance board said.