Sunday, July 29, 2007

Housing for Somerset County Parks’ Employees

In yesterday’s posting, I discussed the notion of winning and losing in politics, and of how the results are rarely decisive. Some of the rationale was based on an essay entitled “How to Understand Politics,” by Harvey Mansfield. (See previous post.)

Despite the proposed evaluation of rental levels for commission-owned property – in one case, there is no rental charge – the anticipated adjustment of rental levels still may not meet normal criteria for establishing rents at fair market value. That is, not unless there is a paradigm change regarding such benefits in Somerset County Government, both at the Freeholder level, as well as at the Parks Commission.

As Mansfield explains, the reason for this is straightforward: “Politics is not an exchange between the bargaining positions of a buyer and a seller in which self-interest is clear and the result is either a sale or not, all without fuss.” If the proposed transaction between buyer and seller – in this case, between the Parks Commission as property owner and the employee as lessee of the property – is not on the open market, then politics get in the way of free-market workings and alter the outcome.

With regard to Parks Commission property, it’s arguable whether the commission should even own housing for rent to its employees, at any price. There is too much room for actual or perceived conflict of interest.

That the Parks Commission owns homes is simply an accident of its land acquisitions for open space and for recreation. The current situation is not the result of a direct intent to purchase housing for employee rental – at least we all should hope it isn’t.

Inadvertently ending up with a stock of publicly-owned homes situated on recreational and park property creates the problem of what to do with these assets. Such a situation makes it much too easy to find reasons for why a few Somerset County Parks’ employees have been offered these homes at below-market rents – properties which otherwise might be used in the public interest or disposed of.

And it becomes just as easy for the commission to make claims for why one or more of these rentals may have been part of negotiated packages when employees were hired. At least one tentative reason put forth in the press is that the salary (or salaries) of employees may have been discounted, as part of an arrangement which included housing. If this is the case, there should be written employment contracts on file which definitively state that, as well as what the higher imputed salary would be in the absence of such a rental.

Saturday, July 28, 2007

The Freeholders, the Parks Commission, and Politics

I like to get up early on weekends, before anyone else is up and about. It’s time for a shower and shave, brewed coffee, a light breakfast, and a table set for my wife. It’s also a time when the rest of the town is mostly still getting its Z’s – a good occasion to do some quiet reading and thinking.

In so doing, I came across an essay in the August/September issue of FIRST THINGS, entitled, How to Understand Politics. I suppose we could all use some of that knowledge; certainly, I could. The article was authored by Harvey Mansfield, a professor of government at Harvard – but I won’t hold that against him, since his thoughts seem to be particularly cogent, and he seems to express a genuine degree of humility in articulating them.

Mansfield claims that, “Politics … is a series of victories and defeats in which every victory for one side is a defeat for the other … many of them ephemeral, but some of them decisive. He goes on to say, the struggle, “… rarely ends in final victory. The left will never finally defeat the right, nor vice versa.”

The contest now taking place in public meetings, as well as in the back rooms of Somerset County political power brokers about what to do with the Parks Commission, fits that description. It is also prophetic. Institutions don’t go down easily, and that applies to the Parks Commission and its supporters.

By transferring purchasing, procurement, finance, and engineering responsibilities to the county itself, you might think that there is not enough left for the Parks Commission to remain intact, and that the Commission should be dissolved.

But you would be wrong, because the factors which go into the final decision won’t be the normal ones which you might expect. To completely eliminate the Parks Commission would, as Mansfield outlines above, involve a decisive defeat for the political forces in the community who don’t want to see that happen. They may or may not have good reasons for their choice – we don’t know, because, so far, the debate is not being conducted in the public square, and we are not participants.

What we should recognize is the probability that, when the dust settles, there will be a compromise which will leave the Parks Commission still intact, but outwardly crippled.

That’s not a good role for any public body. And, if this is the direction which the freeholders decide to pursue, then it is their responsibility to define exactly what they expect of this down-sized Parks Commission; because, remember, under the law it will still be a completely autonomous body acting in that capacity, and not in an advisory mode. So, then, will there be enough real work for 9 appointed commissioners to do?

Thursday, July 26, 2007

Park Commission Makes Early-Morning Decisions

Today’s 7:00 am meeting of the Somerset County Park Commission at its headquarters in North Branch Park, Bridgewater, was filled to capacity. Of about 80 attendees present, 50 filled all the chairs in the meeting room, while the remainder spilled out into the corridor and reception area. At least half of the audience wore either the distinctive green jerseys of Somerset County Park employees, while several sported the brown shirts of county park rangers.

The meeting opened with four commissioners offering their resignations. (See Martin Bricketto’s 9:30 am breaking news story at http://www.c-n.com/apps/pbcs.dll/frontpage).

Most of the meeting, however, was taken up with a review of recommendations made to the Somerset County Freeholders as contained in the Wolff & Sampson $150,000 report. Freeholder Rick Fontana went down the list, point-by-point, as the Somerset County Commission responded to each one, either agreeing or not.

The commission concurred with most of the recommendations, with some notable exceptions. One of those is that the rents to park employees on commission-owned homes should be reviewed for increases to fair-market value. However – and this could be a loophole – it was proposed that the rents charged to county employees should be set at what is “the custom and usage in the industry.”

Interpretation: Charge Somerset County park employees a rental in line with what other counties in New Jersey charge their park employees for renting publicly-owned homes, not what a New Jersey citizen would pay to rent similar properties on the open market.

Furthermore, some of the other park entities in New Jersey don’t even rent public property to their park employees. There is no open competition for Somerset County Commission-owned rental property (you have to be a park employee to get a home!). Therefore, fair market value needs to be assessed by an evaluation of rental values established in the real world, not by a contrived evaluation that does not represent the real market for housing.

Monday, July 23, 2007

Renting a $1,500,000 Home in Bridgewater

In the last posting of this blog on Saturday, July 21, we saw how a home in Bridgewater valued at $500,000 and renting for $2,000 monthly would provide a 4.8% yield to the owner. This was based on the criterion that the rent for a home needs to be kept in line with its worth. It was also pointed out that 4.8% is the gross yield, and does not include any estimated costs for grounds maintenance, upkeep, utilities, taxes and mortgage interest, if any.

Now, let’s turn to a $1,500,000 property and its potential rental value. After applying the same computations, I had to catch my breath; because, in order to achieve the same 4.8% yield as that for a home valued at $500,000, the rent needs to be $6,000 monthly. That’s right! It may sound like a great deal of cash – and it is – but prestigious properties don’t come on the cheap, and the economic concept of keeping the rent charged for a home in line with its value still applies.

Hypothetically, if the owner of a home valued at $1.5M wants to be generous, ignore business and economic realities, and decide to charge $2,000 monthly (the same rent as in the previous example for a $500,000 home) the gross yield drops to a mere 1.6%.

Raising the rent on a $1.5M property to one of the following amounts, $2,500, $3,000, $3,500, $4,000, or $5,000, would yield returns of 2.0%, 2.4%, 2.8%, 3.2%, and 4.0%, respectively.

The report issued by Wolff and Sampson implies that certain Somerset County Park employees are being charged below-market rents; it also questions “the circumstances surrounding various improvements, paid for by the Commission.” If so, this begs the question: What other, non-economic factors may be in play for why this is happening?

The photo above is that of a Bridgewater property owned by the Somerset County Park Commission. It is being rented to its director at $500 monthly. If, as has been reported in the press, this home has a value of $1.5M, the yield is only 0.4%.

Saturday, July 21, 2007

What’s a Fair Rent for Parks Employees?

On July 15, an area newspaper reported that the Somerset County Parks Commission Director, “…pays $500 a month for a $1.5 million historic colonial home on 25 acres in the Martinsville section of Bridgewater.” It also stated that there are 10 more homes rented to employees; another one is occupied rent free.

Should homes be rented to park employees? Let’s, for a moment, assume that the answer is yes – at least tentatively. The next question then becomes: What should the rental fee be? Is there an economic answer to the question? Yes. There are valid formulas for computing rate of return (or yield) on a real estate asset, based upon maintaining a proper relationship between the value of a home and its rent.

One of these formulas is simple and provides direct results. For example, let’s assume that a property in Bridgewater is worth $500,000 and is rented to someone at $2,000 per month: The yield to the owner is 4.8% per year.

Example #2: If the rent on this same $500,000 property is reduced to $500 per month, the rate of return to the owner plunges to 1.2%, an unacceptable return to the owner, under any reasonable business scenario.

Moreover, in order to keep these examples plain, none of the owner’s cost, such as grounds maintenance, upkeep, and taxes, if applicable, have been factored in.

In the next posting, you will see the results of a similar analysis for a home worth $1,500,000.


Note: Detailed explanations and spreadsheet formulas are not in this blog to keep it as brief and clear as possible.

Tuesday, July 17, 2007

Parks Management: The Story that Won’t go Away

Tonight, when I stepped out of the Somerset County Freeholders meeting on Grove Street, into the fresh evening air of Somerville, this is what the freeholders decided to do about the reported management abuses of the Somerset County Parks Commission:

-- A list of 14 demands read to his peers by freeholder, Rick Fontana, will be presented to the Somerset County Parks Commission at its next meeting, Thursday morning at 8:00 a.m.

-- These demands were taken directly from the Wolff and Sampson Report costing taxpayers over $150,000. One item, for example, calls for a review of below-market housing rentals – three of which are in Bridgewater – to certain park employees, as well as their free use of vehicles around the clock.

-- Another initiative, not originally contemplated by the freeholders, will be to direct Wolff and Sampson to perform a forensic audit of Park Commission employee expenditures and policy. It was not made clear at the meeting just how extensive this forensic audit will be, and it will come at additional cost.

-- If the Parks Commission rejects the freeholders’ recommendations, then Rick Fontana recommends that the county move immediately to dissolve the Parks Commission under a referendum put to the voters in the fall. All Freeholders agreed to this.

Of the 16 speakers who came to the mike (a large proportion were from Bridgewater Township) most were highly critical of the policy and practices of the Park Commission, some of its key employees, and of the freeholders themselves. Only a few were sympathetic, citing a “feeding frenzy by the press” as the cause of this problem. Baloney!

My Conclusion: There is no doubt that the average Joe or Jane working for the Parks Commission is a hard worker and keeps his/her nose clean – many probably knew what was going on and would not have approved, had it been their call to make.

The issue is that the Somerset County Parks Commission, established by referendum in 1956, is a quasi-public, non-transparent entity of appointed people, accountable to no one but themselves. So, over the years, abuses have crept in, one by one. Under law, the freeholders have no direct say in parks management, except to fund it to the tune of over $8 million yearly, as of last count.

Even if the Parks Commission accepts all of the recommendations of the freeholders on Thursday morning, it will not solve the problem. The freeholders want to make the engineering, procurement, and accounting functions of the Parks Commission subject to their direct oversight and control. This should be done immediately. But it will lead to other problems: overlap; redundant personnel, especially at the management level; poor morale; and a questionable role for the Parks Commission.

Freeholder Jack Ciattarelli, visibly distressed and seemingly sincere about wanting to fix this, referred to political feedback he was getting about, “…not throwing the baby out with the bath water.” There no longer are any babies left: It simply looks like dirty bath water. It’s time for the freeholders to recommend that a referendum be held calling for abolition of the Somerset County Parks Commission. Its duties should be folded directly under the accountability of elected Somerset County Freeholders

Sunday, July 15, 2007

Competing With the Blue Jays

Last year, there were only a few wild raspberries between my lot line and that of my next door neighbor. This spring, though, the entire row just sprung up and spread out, almost tripling in size. In the last few days, thorny branches have been bending over with the ripening fruit.

Late yesterday afternoon, as I checked out the condition of the wild berry patch, it became clear that it was time to harvest. Better get to it and start picking because, in the next forty-eight hours, the birds might have it all.

It took only about 20 minutes to fill up two empty, plastic pint containers with fresh red raspberries – I could hear the screeching of the nearby blue jays, while I was collecting this bounty.

Not to worry though. There’s plenty to go around. As soon as I had placed the fresh pints in the refrigerator and settled down in the back yard with a good book, I heard the cry of the blue jays again. They are formidable gatherers, swooping down from nearby trees, skimming across the lawn and, after zeroing in on their target, plucking berries off a cluster one at a time – just like that; no wasted effort.

Friday, July 13, 2007

A Veteran Educator Says, Adieu!

Next Friday, July 20, will be the last day for Christine Kane, who has served the Bridgewater-Raritan School District as Assistant Superintendent for Curriculum and Instruction over the past 8 years. In her new role, Ms. Kane will be assuming responsibilities as Project Director with the New Jersey Performance Assessment Alliance.

There she will be involved with the design of standards which are to be folded into New Jersey’s scholastic assessment programs. This effort is related to the federal No-Child-Left-Behind initiative. The Bridgewater-Raritan School District – together with at least 76 others in New Jersey – is a participant in NJPAA pilot programs (see http://www.njpaa.org/).

Christine Kane has racked up an impressive track record in the education field. She started her career at Holy Spirit, a parochial school in Sharon Hill, NJ. From there, she progressed to the Philadelphia, Pennsylvania schools, rising from teaching to administrative responsibilities over a 19-year stretch. Other career moves took her to Colts Neck, Red Bank, and Clinton. Her tenure in the Bridgewater-Raritan schools caps a proud 42 years of teaching, course development, and administration.

Bridgewater and Raritan will face a tough challenge in finding a person with the breadth of experience and knowledge which Christine Kane brought to the student population in our district.

Monday, July 9, 2007

The Park Commission’s Bridgewater Home

If you regularly read Courier-News editorials, you may conclude, as I did, that they are not all as blunt and direct as the one which appeared in Sunday’s edition, entitled, Time to Dig Deeper at Park Commission. When was the last time you saw the editorial team use the following words all in one opinion piece? Alarming. Disturbing. Scathing. Shocking. Sweetheart bargains. Gets your attention, doesn’t it?

That editorial followed an earlier account of an independent report which, as stated in the heading of a July 6 article by Martin C. Bricketto of the C-N …rips Somerset County Park Commission. Why, that’s enough to make you want to keep reading!

Among others things, the report revealed that 11 homes which are owned by the commission are rented to some of its employees. One of these homes is on Mitchell Lane, in the Martinsville section of Bridgewater, and is reportedly rented for $500/month. Not bad. I don’t know what type of property this is or what condition it’s in, but Martinsville isn’t exactly known for being on the wrong side of the tracks.

I wonder how many other dwellings are available for rent or lease in Bridgewater for $500/month.

Saturday, July 7, 2007

The Man at Our Front Door

It was 6:50 pm, Friday evening. My wife and I were about to enjoy the Netflix DVD, “Breach,” the story of FBI agent Robert Hanssen’s 22-year betrayal of America, when the two-tone sound of the bell alerted me to someone at the door. The knock which followed a little later, was a reminder that I might not be responding quickly enough to my unknown inquirer.

I flicked on the hall light, opened the front door, and there, through the mesh of the screen door, stood a meticulous young man, dressed in a well-tailored dark suit. Looking beyond his right shoulder, I spotted a sedan parked perpendicular to the bottom of the driveway – perhaps his driver.

“Hello,” I said, thinking that he must be a Jehovah’s Witness, given that a number of these equally well-dressed people have intermittently called at our house over the years. This man, though, proved the adage that one should never judge a person based upon a quick, first impression – it invariably turns out wrong.

No, this was Matthew Moench, newly-minted candidate for the Bridgewater Township Council. Mr. Moench volunteered that he is on a slate with Patrick Scaglione, incumbent for re-election to the Council; and with Patricia Flannery, Bridgewater’s mayor, also running for re-election next November.

There you have it: the local Bridgewater Township election campaign is underway. I must admit, although I have not yet taken a position on any of the candidates, that I am definitely impressed by this person who is willing to go out on a Friday’s summer night to conduct an informal, house-to-house, press-the-flesh, get-to-see-my-face campaign.

Tip O’Neill, the late Massachusetts congressman coined the phrase, “All politics is local.” To that I’ll add, “….and it’s also one-on-one personal.” Mr. Moench seems to have intuited the value of both.

Wednesday, July 4, 2007

Bridgewater’s YMCA Pool


This photo shows the Bridgewater YMCA Pool on a recent, lazy Sunday afternoon. It’s located on Garretson Road, across from the Bridgewater-Raritan high school. In the foreground is a partial view of the kiddy pool which spans the entire width of the lap pool. Originally built by Bridgewater as a municipal facility for Township citizens, the pool was eventually sold to the Somerset Valley YMCA which also serves Somerville and Hillsborough, each with its own building.

Although the pool was relatively quiet when this snapshot was taken, the photo belies how busy this place really is. It can get frantic at times! The larger, main pool boasts ten lanes designed for lap swimming. The building is a multi-use swimming facility: It hosts competitive, training and casual swimming for individuals of all ages, as well as for families and groups, all of which make maximum use of the pool.

In the mornings, during the warm season, it becomes much like a partial summer camp for kids. After Labor Day, when school begins, and throughout the rest of the year, weekdays see after-school training and practice for middle school and high school swim teams, for the Y’s own team, and for other groups. With 10 lanes and two diving boards, it’s a popular spot for competitive events. The high-diving board is one of not many in the entire state of New Jersey suitable for competition.

Sunday, July 1, 2007

A Bush Weekend at Kennebunkport




Saturday afternoon, my wife and I drove from Bridgewater to Raritan towards the home of one of our friends. There, we enjoyed a cozy welcome-home party for her daughter, Dina, who had just arrived from France, where, during the last school year, she taught English to grade-school kids in Nice.

As we drove through the grid of Raritan’s streets, the radio announced that the President, George Bush, would be spending the weekend at the summer compound of his parents, on Walker’s Point, Kennebunkport, Maine.

I learned to love the craggy Maine seacoast as a one-time native of New England, and as a four-year seminary student in Bucksport, Maine, where I enjoyed plenty of side trips to Frenchman’s Bay on the island of Bar Harbor.

There is an invigorating and pensive energy about the sea which tends to slow people down and to make them think about the basics – at least, that’s the impact that it has on me.

I hope that it has a similar impact on George Bush, because his responsibilities are geometrically greater than those of any one of us. His influence on the world, let alone America is still enormous, despite his now lame-duck condition – that’s an oxymoron, isn’t it?

We desperately need good leadership at all levels of government. Perhaps this weekend, it’s better to pray for that than to curse their hides. Can’t hurt.


Notes: 1. While vacationing up north last September, I snapped this blog’s picture of the Bush Family summer place on Walker’s Point.
2. If you’d like to sample Dina’s blog, which outlines her life and escapades in Nice, go to
http://dinaberk.blogspot.com/