Thursday, December 27, 2007

Year End Review

How successful is Aberdeener? That question may sound pre-mature considering the blog’s short life but asking forces us to define success. So, to quote Mayor Koch, how am I doing? To be generous, I’d say fair.

Aberdeener’s mission is to effect positive change through the promotion of ideas and information. Has there been any change? No.

The top three articles, Plato’s Disciples being number one, were all related to the Matawan-Aberdeen Regional School District. Yet, I’ve not seen any change. For example, our school administration, with the board’s consent, remains intent on using our most learning-challenged students as an opportunity to featherbed the teacher rolls. Despite widespread evidence that under-performing students often benefit from learning in a group environment, our school district won’t countenance any special program that doesn’t involve one-on-one instruction.

Surprisingly, the fourth leading article was Merge Aberdeen and Matawan. I believe most residents instinctively recognize the advantages of combining the two municipalities but the two councils are strongly opposed. There’s no chance of seeing a re-unification while the old guard is in charge.

At the opposite end of the spectrum, two of the least read articles were Affordable Housing in Aberdeen and Legislating Against Pay to Play. I don’t think people understand that for every five new residential units, the town is obligated to build an “affordable housing” unit as well. When you consider Aberdeen Forge, the proposed Transit Village, and the Anchor Glass area, that’s a lot of affordable housing we’ll need to build.

As for Pay to Play, I can only assume most people don’t care that Aberdeen’s township engineer, CME Associates, not only oversees about 25% of the budget, but is also the single largest political donor to the Aberdeen Democratic Party.

Why then do I rate my success as fair? Site traffic and the “water-cooler-multiplier”. To date, Aberdeener has attracted a little over 400 unique visitors and nearly 4000 pageviews. The number of unique visitors, though small, is certainly more than enough to impact any of the local elections. Plus, I happen to know that many of my posts have been discussed around the “water cooler”. Nearly 150 visitors arrived at the blog after specifically searching for “Aberdeener”.

In summary, no success yet but there’s reason to be hopeful.

As a footnote, I’d like to thank the other local blogs for their strong support – Matawan Advocate, Matawan Aberdeen Observer, and Truth In Matawan. Without their support, my blog would still be largely unknown.

I wish everyone a happy, healthy, successful, and blessed year.
>>> Read more!

Tuesday, December 18, 2007

Plato's Disciples

I’m not a fan of Plato. I believe he was, at heart, a fascist. He preferred “philosopher kings” to democratically elected leaders. He was anti-family and a proponent of social engineering. He was a misogynist even by his day’s standards. He was egomaniacal in his belief that philosophers could change human nature and build a utopian society. Hogwash. I adhere to William F. Buckley’s view that we’d be better governed by “the first 2,000 names in the Boston telephone directory than by the 2,000 members of the Harvard faculty.”

I mention Plato because it appears the Matawan-Aberdeen Regional School District shares his disdain for common sense. Like Plato, our school district prefers a “scientific approach” that is founded, not in science, but upon intellectual hubris.

At the past board meeting I asked about two programs whose combined cost is over $135,000 – Schools Attuned Training and Reading Recovery Teachers-In-Training. On the spot, without any notes or preparation, Kimberley Honnick, the Assistant Superintendent of Curriculum and Instruction, explained each program in detail including their histories, the organizations involved, the methodologies, and the school district’s need for them. Ms. Honnick is likely the foremost expert on education I have ever met. Yet, I profoundly disagree with her regarding the need for these and similar programs funded by the school district.

Schools Attuned Training is provided by All Kinds of Minds, a non-profit organization founded in 1995 by Dr. Mel Levine, a pediatrician and author of “The Myth of Laziness”, and Charles R. Schwab, the noted financier. The basic idea is that every child has strengths and weaknesses. When a child struggles in school, we need to pinpoint his strengths and weaknesses through a “neurodevelopmental profile” and then customize an educational method that plays to his strengths.

The program is touted as scientifically based and highly regarded among educators. But does it actually improve education? Since I can’t find a single study suggesting it does, I would have to say no.

In 2003, All Kinds of Minds hired Dr. Diana L. Montgomery to research the effectiveness of the program by reviewing participant surveys taken during the course. She did not do any follow up to measure the program’s effectiveness in the classroom. This is like measuring the effectiveness of a skydiving course by asking people whether they liked the course and then ignoring whether they survived the jump.

Surely, in the past twelve years, Charles Schwab could have funded a study to clinically prove the effectiveness of this program. But doing so would have risked showing the program is actually ineffective.

So, that’s $75,000 we’re spending on a program to design courses around “neurodevelopmental profiles” even though there’s no scientific basis to believe the program works.

Reading Recovery, created by Marie Clay in 1979, is an early intervention program designed to reduce literacy problems. It, too, focuses on classroom instruction customized to the child’s needs. For the $61,410 spent on the program, the school district could have purchased nearly 3,000 copies of “Reading Recovery: A Guidebook for Teachers in Training” from at a price of $21.50 per copy, shipping included. You would have to buy the book since neither the Matawan-Aberdeen Library nor any library associated with the Middlesex Automation Consortium carries a copy of this “bestseller”.

Does Reading Recovery work? In 1995, Reading Research Quarterly published a study by Dr. Timothy Shanahan and Dr. Rebecca Barr that states Reading Recovery “is less effective and more costly than has been claimed, and does not lead to systemic changes in classroom instruction, making it difficult to maintain learning gains.”

In a 2002 review of prior studies, Dr. Aleidine J. Moeller, the Director of the Teachers College Institute at the University of Nebraska-Lincoln, stated the following:

  • “Evaluations with a controlled group find that children who return to the classroom as successfully ‘recovered’ students immediately begin falling behind. Their learning rate is slower than that of other low achieving children.”
  • “Even with the best classroom instruction, there will still be some students who don’t make adequate progress and need additional, more intensive instruction. Reading Recovery has not met the needs of these lowest performing students.”
  • “[B]y virtue of the number of students who can be reached, Reading Recovery is at least 200% more expensive than other first grade interventions.”
  • “[S]tudents in Reading Recovery may experience problems with self-esteem when they do not perform well.”
  • “[In 23 years,] Reading Recovery has not changed as a result of new research on reading.”
In summary, Reading Recovery is an expensive program that is more likely to harm than help the child.

A key point to remember is that the $135,000 dollars spent on training do not include the hundreds of thousands of dollars spent on additional teachers to provide the one-on-one mentoring these programs require.

Why would the faculty so strongly support these programs? Because teachers love one-on-one programs. Individualized programs create the need to hire more teachers and give teachers the emotional reward of seemingly helping a child. Whether the students actually benefit appears largely irrelevant.

Why would the school board vote to support such programs? Because they don’t do their homework. The school board doesn't research the programs they fund with our tax dollars.

Plato asked an interesting question – Why are intellectuals so often ineffectual leaders? He answered by saying that intellectuals are accustomed to the light of day while most of the world operates in darkness, i.e. ignorance. Intellectuals, according to Plato, find it difficult to work in darkness.

I disagree. The problem isn’t that there’s not enough light. The problem is that too many intellectuals choose to close their eyes to reality. >>> Read more!

Monday, December 17, 2007

Legislating Against Pay to Play

New Jersey has become renowned for its system of “Pay to Play,” whereby contractors contribute to political campaigns in exchange for special consideration on government contracts. Pay to play is often legal so long as there’s no explicit arrangement connecting a contribution to a government contract. Naturally, many communities have banned this practice by forbidding any government contracts being awarded to a political contributor. The question is whether Matawan and Aberdeen should outlaw “Pay to Play” as well. I would oppose such legislation based upon free speech rights and the “Law of Unintended Consequences”.

I’m well aware how our area has been affected by graft. In 2005, Matt Scannapieco, the mayor of Marlboro, pled guilty to accepting $245,000 in bribes from developers. In 2006, Barry C. Bowers, the engineering inspector for Old Bridge, pled guilty to receiving over $25,000 in home renovations from contractors. That same year, Paul A. Coughlin, the mayor of Hazlet, pled guilty to accepting a $3,000 bribe from an FBI cooperating witness pretending to be a contractor. Months later, John Merla, the mayor of Keyport, pled guilty to the same charges.

At the same time, both Matawan and Aberdeen have both been tainted by, if not in fact, the appearance of pay to play. In 2004, Councilman Buccellato donated $3,900 to the Monmouth County Republican Committee. A few months later, the county awarded him a $25,000 contract for “call-in professional architectural services”. Last month, while considering whether to call, and pay for, a recount, the county awarded him another contract worth $125,000 even though Buccellato’s proposal was at least $30-40,000 higher than the others. Councilman Buccellato has also been a vocal supporter of awarding the Transit Village Project to the Columbia Group, a developer run by Jack Morris, a county Republican power broker.

Aberdeen’s Township Engineer, CME Associates, has donated nearly $60,000 to the Aberdeen Democrats since 1999. Coppola & Coppola, the consultant hired to develop the township master plan and review zoning variances, has donated at least $5,500 to the Aberdeen Democrats over that same time period.

Yet, I still oppose legislation that prevents political contributors from seeking government contracts. First, I believe that political contributions are a form of political speech and therefore ought to be protected under our Bill of Rights. Forbidding someone from receiving a government contract because of a political contribution is the same as penalizing him for political activity. No citizen should have to choose between political activity and feeding his family.

Additionally, I fear the Law of Unintended Consequences. In the 1990s, President Clinton sought to punish “excessive” executive salaries and made anything over $1 million non-deductible from corporate taxes. This led to an explosion in executive compensation via cashless stock options. Then McCain-Feingold tried to regulate campaign financing and funding moved from well know committees and PACs to shadowy 527s. Sarbanes-Oxley tried to outlaw Enron-style accounting shenanigans and international corporations began going public outside the United States.

Politicians will always find a way to raise money and interested parties will always find a way to give it to them. Better it should be in the open than in the shadows. Rather, I would allow any person or organization seeking business with the government to contribute to any campaign but with the following requirements:

  1. On the cover page of all proposals and bids, the vendor shall list all political contributions over $300 made by its executives and their agents over the prior five years at the local, county, state, and national levels where the town/borough council is located.
  2. Prior to voting upon any contracts, the town/borough council shall review, in a public forum, the vendor’s political contributions and include a listing of such contributions in the minutes.
  3. Should the vendor be found non-compliant, the town/borough shall nullify the contract or be awarded penalties up to 50% of the contracted amount.
People have a right to free speech and unencumbered political activity. But they don’t have the right to anonymity when the public good is at stake. When the government awards money to a political donor, we should all know about it. >>> Read more!

Thursday, December 13, 2007

When Failure is an Option

Imagine the following: Your neighbors have entrusted you with their children’s education. They have given you sixty million dollars and asked you to do the best you can with what you have. You recognize the responsibility your neighbors have bestowed upon you; so much of their children’s futures depend on what you do. In such a scenario, would you do any of the following?

  1. Give all teachers guaranteed employment for life if they manage three years without getting fired
  2. Dole out millions of dollars a year as an incentive for teachers to improve their own education but not one penny as an incentive to improve the education of their students
  3. When presented with two candidates to coach the chess club, a local grandmaster willing to work for free or the gym teacher who demands a thousand dollars, choose the gym teacher
  4. Adopt the legal minimum standards of education as your own standards
  5. Allow students to coast through school by taking only the easiest courses
  6. Dedicate more resources on psychiatrists and drug counselors than on the science department
  7. Draft a mission statement that doesn't include teaching
  8. Guarantee every teacher an automatic raise regardless of performance
Let's say you did all the above and failed miserably.
  1. Each year, your students score below the state average in all the assessment exams
  2. Most of your students graduate with an 8th grade math education compared to other industrialized nations
  3. Only a minority of your students successfully complete college
  4. Most of your students lack the skills to pursue careers in the most promising fields
Assuming all the above, would you then have the gall to demand more money from your neighbors because of promises you made to the teachers? Would you have the chutzpah to extort money from your neighbors by threatening to cut services?

Now, imagine the reverse. Imagine it’s your neighbor who’s taking your money. Imagine it’s your neighbor who’s failing to educate your child. And ask your neighbor this – “Since when did failure become an option in my child’s education?” >>> Read more!

Wednesday, December 12, 2007

Revaluations, Falling Home Prices, and the Equalization Factor

There’s some confusion regarding revaluations during a bearish housing market. People fear that their homes will be over-assessed because prior sales are not necessarily indicative of current values in a falling market. However, the focus should be on property taxes, not assessments. Will the current housing market affect individual property taxes? Yes but in ways that are impossible to measure, predict, or control.

Let’s assume that property taxes consist of local property taxes and county property taxes. Your property taxes are based upon your “fair share” and total appropriations at both the local and county levels. Your fair share is based on your property’s assessment compared to the total assessment for your municipality and your county.

In theory, a rising and falling market shouldn’t affect your fair share because all the properties are rising and falling at about the same rate. But in reality, that’s often not the case.

To illustrate this problem, let’s assume you own a “custom colonial” in the Strathmore section of Aberdeen. The appraisal company will assess your home using a comparable sales approach. Basically, they look at recent sales of similar homes in the same neighborhood. In a stable market, they would look at sales over the past year, maybe longer. In the current market, they’re more likely to use a 6-month horizon.

The problem for you is that there haven’t been sufficient sales of custom colonials in your area in the past six months to use in a sales comparison. So, instead, they will use the next best thing, country clubbers. But there haven’t been many recent sales of country clubbers either so they’ll use 4-bedroom Strathmore colonials.

The appraisal company will use the 4-bedroom Strathmore colonials as a base and then make adjustments to account for your basement, 2-car garage, square footage of living space, and the fact that you have a more modern home.

Here’s where the problem arises. The moment the appraisal company uses a different model house as the base, they’re assuming that your house is rising and falling at the same rate as the base model. That may or may not be true. If prices for custom colonials are falling at a faster rate, then you will be over-assessed.

Will the owner of a Strathmore colonial be affected? Only in that the total assessment roll may be off because some properties were assessed too much or too little.

The other issue is the equalization factor. Aside from revaluations, properties are generally not assessed at 100% of market value and the percentage varies for each municipality. To account for this, the county uses an equalization factor to “equalize” all assessments.

If you look at Monmouth County’s Equalization Table for 2005, you’ll see some interesting facts. Matawan has the pole position of highest taxes in the county. (Aberdeen is ranked 5th highest but moved to 3rd place in 2006.) Our school property tax rates are higher than the total tax rates of 16 municipalities in Monmouth County.

After the revaluations, the county will assume our assessments are at 100% of market value. Because the market is falling, our assessments at the county level may be too high.

Neither of these problems concerns me for a few reasons. 1) Markets are usually going up or down. 2) Assessments are an inexact science. 3) Appraisal companies try to account for market changes. 4) The errors are well within an acceptable range.

Another point to remember is that there is no remedy. Those who advise we wait for the market to stabilize are implicitly suggesting that we can predict when the market will stabilize since revaluations are always planned over a year in advance.

As my readers know, I have concerns regarding the revaluations and property assessments in general but the timing of this revaluation isn’t one of them.
>>> Read more!

Sunday, December 9, 2007

Affordable Housing in Aberdeen

Note: The numbers below have been provided by the Council on Affordable Housing and it's review of Aberdeen's Housing Element and Fair Share Plan.

Update: On December 17th, COAH voted to increase the affordable housing ratio to 20%, double the cost of RCAs, and reduce the age-restricted share to 25%.

Democratic leaders in the New Jersey State Assembly have begun pushing through the housing committee a bill that would end regional contribution agreements (RCAs). The practice allows municipalities to satisfy up to half of their affordable housing requirements by “purchasing” units in other communities. If the bill passes, the lost opportunity to use RCAs will be just one more mistake Aberdeen has made in managing affordable housing.

In 1971, the NAACP sued the town of Mount Laurel for discriminating against low- and moderate-income people through exclusionary zoning. The state supreme court decreed that all communities had a constitutional obligation to zone for their fair share of affordable housing. In 1975, the courts ruled that communities could not exclude low-income housing from certain neighborhoods. In 1983, following a second suit by the NAACP against Mount Laurel, the court established guidelines and procedures for communities to comply with the “Mount Laurel” decisions.

To force compliance, the courts instituted the “builder’s remedy” whereby a developer could sue the township for failing to fulfill its fair share obligation of affordable housing. If the developer won, the courts would allow him to construct a development of higher density than allowed by zoning so long as 20% of the units were dedicated to affordable housing.

In 1985, the state legislature passed the Fair Housing Act which established the Council on Affordable Housing (COAH). The purpose of the act was to provide specific affordable housing guidelines for each community. Although the guidelines are voluntary, any community whose plans are certified by COAH is shielded from developer lawsuits.

In 1990, Aberdeen lost two developer lawsuits involving Aberdeen Forge and Applewood (both in the Freneau section) and fell under court oversight. In 1993, the court required Aberdeen to submit its affordable housing plans to COAH to ensure compliance. In December, 2005, Aberdeen submitted revised plans to COAH for third round certification.

Under COAH guidelines, a community’s fair share is equal to an eighth of its projected growth in residential housing and a twenty-fifth of projected new jobs. In 2004, Aberdeen’s ten-year projections were 1,089 new residences and 457 new jobs for a total obligation of 154 COAH units. However, much of the new construction is discounted because it includes affordable housing, so the actual obligation is 87 units. Added to our prior obligation (for the years up to 2004, including credits) of 208 units, and we’re liable for the creation of 295 units.

Generally speaking, a town could allocate half of its COAH obligation to age-restricted units and discharge the other half through RCAs. Each RCA costs about $35,000 and the money typically goes to poorer communities that need the money to refurbish dilapidated apartments. Developers would gladly pay the fee as part of a PILOT program since the difference in value between market rate units and COAH units far exceeds $35,000.

However, in our instance, the math works differently because I’ve summed different rounds of COAH obligations and already discounted credits. But, using the numbers provided by the Council on Affordable Housing, Aberdeen made three big mistakes.

RCAs – Aberdeen had the opportunity to purchase 157 RCAs thereby reducing our COAH obligation by 157 units. The vast majority of the cost would have been picked up by developers who strongly prefer market rate units to COAH units. Instead, Aberdeen only plans to purchase 36 RCAs, just 23% of our legal allotment.

Freneau – The entire 68-unit Aberdeen Summit development on Wilson Avenue will be entirely COAH units. Though restricted to two bedrooms, none of them will be age-restricted. For those concerned that such a cluster of affordable housing units could create an undesirable area, the township has chosen to double-down.

COAH rents (including utilities) are limited to 30% of income (28% for buyers). The units are for those of moderate income, defined as earning up to 80% of the median income. In Monmouth County the limit is $65,637 for a family of four. However, if you restrict the COAH units to those of very low income, you get two credits for each COAH unit. Very low is 30% of the median or $24,614 for a family of four in Monmouth County.

Of the 68 COAH units on Wilson Avenue, 57 will be restricted to families of very low income.

Bookkeeping – Aberdeen is responsible for creating 295 affordable housing units. The math is simple – 36 RCAs + 92 COAH units at the senior center (South River Metals site) + 68 units on Wilson Ave. + 57 bonus points for very low income housing, + 44 units at Anchor Glass equals 297 units. That’s two more than we need.

If two units don’t sound like much, it’s the equivalent of $70,000 in RCAs. It’s a mistake to assume we could use those credits in the future since we’re building the COAH units at the senior center on Church St. in anticipation of development at Aberdeen Forge and Anchor Glass. If those developments don’t happen, we could be working off our surplus COAH units for years to come.

So, we’re welcoming the poorest of the working poor, using only 23% of our allotment of RCAs, and building more COAH units than required. Who says we’re not a charitable community?
>>> Read more!

Thursday, December 6, 2007

Reading the Aberdeen Municipal Budget

Click Here to Download a Copy of the Aberdeen Municipal Budget

The township has discussed making the Aberdeen Municipal Budget publicly available on its website in 2008. Rather than wait, I’ve decided to make the budget available for download on this blog. The budget posted here is only good for 2007. The 2008 budget should become available in February.

The printed version of the budget has all the numbers but none of the logic that generated those numbers. Everything is written to conform to government accounting as defined by state law. Absent any row-by-row explanation, much of the report is meaningless to the average citizen. Ideally, the township could publish an easy to understand budget overview. Until then, focus on the raw data and ignore the rest.

Part of the budget is restricted by budgetary “CAPS”. The “CAPS” portion is restricted by the state to a 4% growth rate and generally reflects discretionary spending. Most of the budget that’s excluded from “CAPS” is related to state mandates, such as pension funding. For example, in 2007, contributions to the Police and Fireman’s Retirement Fund jumped 58% (Sheet 20). Contributions to the Public Employees Retirement Fund rose 26% (Sheet 20). Maintenance of Free Public Library is up 15% as well (Sheet 20).

Still, this year’s municipal budget of $14,054,897 is only a 1.3% increase over last year’s budget (Sheet 11). Interestingly, only about half of the budget is raised through property taxes (Sheet 11). The rest is raised through a combination of fees, fines, investment income, and grants from county/state/federal governments.

Complaints regarding the township’s reliance on developers do appear to have some basis. The township receives nearly $1 million a year from its PILOT program (payment in lieu of taxes – Sheet 10). PILOTs are negotiated payments between the township and developers in lieu of property taxes.

$160,000 was budgeted for Townhall Improvements, whatever that means (Sheet 40b_i).

The surplus from January 1st, 2005 to December 31st, 2006 appears to have plunged 36% (Sheet 39). However, it’s possible that much of that money was simply shifted into reserves. I don’t know.

Another question mark is the $1.5 million of Property Acquired by Tax Title Lien Liquidation (Sheet 39). By comparison, Morris Township, a town with twice our budget and five times our surplus, lists only $36,475 for that same item. It could refer to the South River Metals site on Church St. That site is being used to construct a senior citizen community, most of whose units will be deeded as affordable housing. Once again, I don’t know.

If anyone could clarify the above items or add anything of interest, I welcome the input. But since the “average Joe” will never fully understand the budget, I urge the township to publish a simplified overview similar to the budget presentation provided by West Windsor. Their presentation gives a quick caption of where the money is coming from, where it’s going, and how the budget has changed over the years. Since West Windsor is also a township in New Jersey, I see no reason why Aberdeen couldn’t provide a similar presentation.

Having a budget available to the public is nice. Having an overview the public could understand would be even better.
>>> Read more!

Monday, December 3, 2007

The Matawan Revaluations

For those wondering what will happen in the Aberdeen revaluations, it’s instructive to look at Matawan. Although the final numbers aren’t in, they won’t change much from the preliminary numbers. Next year, Matawan will likely appropriate (collect in taxes) about $22 million. The preliminary assessments roll is $1.035 billion. That leaves a tax rate of $2.12 per hundred dollars of value. In other words, to approximate your future tax bill, simply multiply your current assessment by 2.12%.

Most people will see a slight decrease or increase in their taxes up to a possible 10%. This is the standard annual tax increase +/- 5%. However, some people will witness dramatic increases or reductions in their property taxes.

For example, 59 Wyckoff St. was purchased in October, 2006 for $420,000. I was unable to contact the new owners but, even assuming an assessment a tenth below the purchase price, they’re looking at their property taxes jumping from $5,935 this year to over $8,000 next year, a 35% tax increase.

Both Matawan and Aberdeen have made their policies crystal clear: no assistance will be given to property owners to enable them to transition to the higher tax rates. Their reasoning is two-fold. First, everyone should pay his fair share. Second, the taxpayers would be unwilling to subsidize someone else’s tax deduction.

I disagree on both points. Although everyone should pay his fair share, I see no harm in allowing those hardest hit by the revaluations to transition to the higher property taxes. The municipality could provide financial assistance, essentially limiting a single year’s tax increase to 10%.

Secondly, I believe the residents of Matawan and Aberdeen are charitable enough to allow a few of their neighbors to transition to the higher taxes. 60% of our federal income taxes go to transfer payments. Our school district spends millions a year to help children with special needs. Certainly, we’d be willing to cut or postpone spending on certain projects to allow some of our neighbors a little time to adjust.

Matawan will not be implementing any assistance programs prior to the 2008 budget but there’s still time to pressure Aberdeen’s town council. Don’t be fooled by the “Don’t worry. Be happy.” crowd. Some of our neighbors will need our help.
>>> Read more!