Raiding the Open Space Trust Fund

As noted before, Union County does it by declaring they can use Open Space trust fund money to pay the salaries of parks employees maintaining lands NOT purchased through the Open Space trust fund. They are wrong but it allows them to misappropriate that money for current expenses so they make believe they can do it.  Revenue items of $2,350,000 and $2,800,000 were included in the 2011 and 2012 budgets respectively.

However, after a review of ten years of audits, it looks like they’re stealing even more.

The UCWA obtained this list of all acquisitions through the Open Space trust fund through March, 2011 which, when totaled, adds up to $68,466,428. Of that $67,833,477 represented purchases through 12/31/2010 which is the time period of this review.

Summary audit information shows $78,835,839 in Commitments (payouts from the trust fund) up through 2010. Of that amount, the UCWA spreadsheet shows $10,165,403 in grants to municipalities through 2011.

The trust through 2010 reported receiving income of $97,880,928 broken down between:

  • Regular tax levy: $88,431,126
  • Added Taxes: $377,155
  • Contributions: $474,700
  • Interest Income: $898,094
  • State Green Acres Grants: $6,161,573
  • Cancellations: 1,161,790
  • Refunds: $376,550

The assets in the trust as of 12/31/10 were 19,045,089.

Summing Up And Rounding we are left with:

$97 million comes in for $68 million in acquisitions and $10 million in grants leaving $19 million in the fund.  It makes sense until you consider………

$39 million in acquisitions were supposedly bonded for.  The same spreadsheet showing the cost of acquired property also shows $39,110,207 of the cost as being bonded on which $19,242,206 was paid in debt service through 2010 (see spreadsheet of Open Space revenue items as reported in the budgets).  Where’s that unaccounted-for $20 million?

I asked:

.

.

I still don’t know….but I have a good idea.

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4 responses to this post.

  1. Posted by Javagold on April 29, 2012 at 4:41 pm

    THIS IS THEFT !!!!!!

    Reply

  2. Posted by G. Albritton on April 29, 2012 at 8:12 pm

    The UCWA is absolutely right in its analysis that Union County has been stealing from the Open Space Trust Fund, in what has been a continuing series of clear misappropriations, both obvious and not so obvious. Here is one way they have done it that is not so obvious, but the County has thereby committed theft from a TRUST FUND nonetheless. Let’s step back a year or so….

    The County of Union has in recent years borrowed quite a lot of money, and it has for some time financed much of this borrowing through the issuance and subsequent renewals of Bond Anticipation Notes (BANs) under NJSA Section 40A:2-8.1. At the end of June 2010, the County had over $182 million principal amount of BANs outstanding (now $130 million). These BANs were all renewed on or about July 1, 2010 in two issues, at interest rates of 1.25% and 2%, well in excess of the market yield which was at the time approximately 46.3 to 49.1 basis points for one year paper.

    Because of its agreement to pay these higher than market rates at the end of June 2011, Union County collected a premium of approximately $2.4 million over the Notes’ aggregate principal amounts in July 2010, as reported by the County’s then Finance Director at Freeholder Board meetings on June 24 and July 29, 2010. I understand that these significant additional proceeds were then applied by the County Finance Director to increase the Union County Capital Fund balance.

    Certain of the BANS that were renewed in 2010 were originally issued by the County to finance purchases under its Open Space program. The down payments for these purchases were drawn from the Trust Fund and debt service on the BANs has been reimbursed to the County from the Trust Fund. The outstanding Open Space-related BANs are interest-only, and the Union County Budget for 2011 anticipated payment by the Trust Fund to the County of interest in the aggregate amount of approximately $273,000 on such notes.

    The problem here is that these interest payments of $273,000 charged to the Open Space Trust Fund did not represent market rate interest, but rather reflected the much higher rates agreed to be paid by Union County to induce the investors in the BANs to pay the $2.4 million collected in premium by the County. However, no part of that premium was shared with or allocated to the Open Space Trust Fund according to the County’s budget documents, for 2011 or in any prior years, resulting in substantial disadvantage to and an increased reduction of the Trust Fund to the County’s sole benefit otherwise. I would estimate that in 2011 alone approximately $190,000 to 200,000 was overcharged to the Trust Fund in this way, and that such sum has been, however indirectly, effectively misappropriated from such Fund by the County.

    It is unfortunate that the Union County Trust Fund has in place no proper supervision to prevent this sort of abuse by the County, in spite of the facts that the County has for years appointed a full-time Open Space Administrator for the Fund, that the Union County Counsel’s office has a highly paid “Green Acres” special counsel on staff, and that these and several other administrative persons employed by Union County are actually paid their salaries from the Trust Fund. These functionaries have proven less than worthless, providing the illusion of supervision while actually allowing the Trust Fund to be looted.

    Reply

  3. Posted by Bob Bolmer on April 30, 2012 at 7:02 am

    Well, Union County Freeloaders and their dishonest cronies in the county are sticking it to the tax payers again. What else is new. Maybe we need to put some of the County’s top officials in jail for a few years and fine them heavly, then they might act ethically.

    Reply

  4. […] The most pathetic aspect of this sick ritual is that, not only is it county officials giving municipalities back their own tax money, but that money being given back is only a fraction of what the county collects through the Open Space Trust Fund tax with the majority of the money going for the county’s budget these days, as we noted back in 2012. […]

    Reply

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