Santhana Gives Special Presentation

May 27, 2021 – Tuesday night’s Holmdel Township Committee meeting had a relatively light public agenda but two non-agenda items gained the most attention for the meeting.

The meeting began with a proclamation for the Visiting Nurses Association for their great work at Bell Works providing vaccination shots to many residents.

What is normally considered routine matters in the Consent Agenda also gained some attention. Among the items was a Resolution regarding Underage Drinking, in particular at the PNC Arts Center. There are documented issues with underage drinking at prior concerts at the PNC Arts Center. The resolution expressed concerns about the new state law that reduced underage drinking penalties and restricted law enforcement of underage drinking laws.

During the Business from the Committee session, Committeeman Prakash Santhana made a public announcement and a special budgetary presentation.

Committeeman Santhana first announced an effort by the Holmdel Asian communities for humanitarian COVID relief to India. While New Jersey and many parts of the United States are returning to somewhat normalcy, India is hard-hit with the world’s biggest COVID-19 surge that is resulting in an extreme public health crisis. As a result, the Holmdel Indian Association with support from the Alliance of Chinese Americans at Holmdel has launched a fundraiser for emergency medical supplies including medical-grade oxygen concentrators desperately needed in India.

Last year, the Holmdel Chinese community donated more than 500 pieces of PPE equipment as part of Holmdel’s PPE drive as well as donations of $1,000 each to the Holmdel Police and First Aid Squad to help the first responders in the middle of the COVID crisis.

During the COVID crisis in New York, New Jersey, and other parts of the country, there was an acute shortage of ventilators to help COVID patients to breathe. Portable oxygen concentrators that convert air to about 95% pure oxygen are needed for really serious COVID patients. This humanitarian relief effort started a GoFundMe with a goal of raising $200,000 to purchase these oxygen concentrators which can cost more than $1,000 each including shipping to India.

For more information, please see the link below:

https://www.gofundme.com/f/HIA-india-covid-help-initiative?member=11061357&utm_campaign=p_cp+share-sheet&utm_medium=copy_link_all&utm_source=customer

“Waterfall" Slide

Following the announcement of the relief effort, Committee Santhana then indicated that there were recent suggestions for additional expenditures by the Township such as artificial turf field and payment to the Board of Education for school security. Santhana then gave a short presentation on Holmdel’s 2020 actual revenue and expenses. The presentation included a “waterfall” slide that showed the revenues earned for the year and then the actual expenses and it showed that Holmdel actually may have a deficit for 2020 on a pro forma basis.

The first key point is that while there is a $4.5 million PILOT payment received, this was based on a projection from 2019 and is Not guaranteed. The Township expects an audited statement from Bell Works that will result in a “true-up” based on actual rental receipts. It is a possibility that a part of the $4.5 million may have to be returned to Bell Works because rent payments were restructured and the impact won’t flow through the books until this and the next year.

The second key point is that the Township, since about 2013, has accumulated $33 million of short-term debt that does not require principal repayment. Effectively, this is kicking the can down the road. However, the prudent thing to do is to convert this short-term debt to permanent debt, which will require repayment of both principal and interest, just like most of our regular mortgage payments. The Township has converted $20 million into permanent debt this year. There remains another $13 million that needs to be converted. Once this is converted, the repayment of principal and interest will increase the expected expenses by about $1 million – meaning had the Township done this earlier, the Township will need additional revenue to offset this expense.

The last point is that while the Township has a “reserve” of $3.5 million, the Township needs a healthy reserve for unexpected contingencies and to maintain its AAA debt rating. This is analogous to most households maintaining a “rainy day” fund for unexpected expenses – in the case of the Township, the possible repayment of the Bell Works PILOT payments.

Santhana noted that the suggestions for additional expenditures may have been made with good intentions but the point of the presentation was to make sure that the Township Committee and residents understood the Township finances before considering increasing additional expenditures.

Stay tuned. The next Township Committee meeting is June 8th, Primary Election Day.