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RINGWOOD - Payment method worked out for Erskine Lakes dam
(by Teresa Edmond - Staff Writer - October 15, 2008)
RINGWOOD - As a step toward discovering a way to offset costs for the Upper Lake dam repair in the Erskine Lakes community, the borough assessed properties to find out how much each homeowner could pay yearly for the next two decades.
Borough Tax Assessor Rich Motyka assessed the properties of Erskine Lakes Property Owners Association (ELPOA) members and non-members alike. However, the actual amount each homeowner could pay won’t be determined until after the Upper Lake dam repair is complete.
According to a former ELPOA member, getting non-members to help out is “selfish on (the association’s) part” because non-members are expected to carry a financial burden for a lake they don’t have access to.
When Neil Schouten sat on the ELPOA Board of Directors, he noticed that the association could have funded the dam’s repair at a lower cost, but the association “kept procrastinating” because the board believed it could get a low-interest loan from the state.
“They’re still looking to keep their own dues down rather than accept responsibility for their property,” he said.
Motyka assessed the Erskine Lakes properties as a way to repay the loan the state provides for the dam repair, a project that has been the subject of discussion for more than 25 years. After the state gives the borough, as the co-borrower, a low-interest loan, the borough will put together a special assessment of the area that will benefit from the dam’s repair to pay off the loan.
Schouten said that according to ELPOA President Charlie DeDeyn’s letter to association members, ELPOA has the money to sustain the project, but would rather get non-members to take up as much of the financial brunt as the association.
Furthermore, Schouten said that non-members were not warned in advance of this fiscal bomb that’s being dropped on them.
“I’m wondering if this is legal to do,” he said. “If your foundation has a crack, do I have to pay for your house?”
Schouten claimed that the council would be partial to the ELPOA Board of Directors’ decision because some of the council members, including Mayor Walter Davison, are ELPOA members.
Mayor Davison said that members and non-members are “being treated fairly” when paying the lake dam repairs even though non-members don’t have access to it.
“If we didn’t comply with the state’s request (to reconstruct the dam), we’d have an empty lake and every property value (around the lake) would go down in my opinion,” he said.
ELPOA will pay 78 percent of the dam reconstruction, while non-members will pay only 22 percent, Davison added.
ELPOA has already gotten the lake dam reconstruction rolling, according to DeDeyn’s letter. Thanks to an ELPOA Board of Directors’ decision last July, the association went into an agreement with APS Contractors to fix the dam for $593,000. But including the budget for contingencies and additional expenses, the estimated final cost should be $750,000.
According to DeDeyn’s letter last month, the Upper Lake dam repair’s start date was Sept. 2, and the project’s target date of completion is next January. The contractor has lowered the lake’s water level to make the project go more smoothly, and the lake should return to its normal level by spring.
Three-tier assessment
Motyka assessed each Erskine Lakes property and came up with three tiers based on where the property owners live in relation to the lake. This three-tier system reflects how much the homeowners should pay annually for the next 20 years.
The tier system is based on ELPOA’s $750,000 estimate. Tier 1 property owners live directly on either Erskine or Upper Lake and therefore would have to shell out the highest amount of $125 annually. Those living across the street from the lakes would fall into Tier 2 and therefore pay $93. The remaining properties fall into Tier 3 and pay the lowest amount of $21.
According to DeDeyn, only ELPOA members who fall into the top two tiers would get reimbursed to help stabilize the association’s membership costs. The reimbursement is also a way to keep track of who would remain ELPOA members year after year because residents must stay with the association to get refunded. At the same time, the borough still wants the assessment’s costs to go toward the Upper Lake Dam repair, so non-members won’t get reimbursed.
DeDeyn explained that the ELPOA reimbursement is the same idea used in the state reimbursing residents on their property taxes; the state wants to keep track of who are still living in New Jersey.
Using ELPOA’s same $750,000 estimate, ELPOA would reimburse Tier 1 annually $60, dropping the annual net cost to $65. Tier 2 would get back $50 each year, cutting its annual net cost to $43. Tier 3 would not be reimbursed and remain at $21. Through this reimbursement plan, each tier’s annual net cost would equally be separated by $22 increments.
The situation if only ELPOA pays
According to DeDeyn’s letter, ELPOA has considered paying for the lake dam construction on its own since members would pay equally. But it was determined at an Aug. 12 board meeting this situation would cripple ELPOA financially and leave it in a fiscal drought impacting future projects.
Taking the dam repair on by itself would drain more than $200,000 from the association’s cash reserves and lead to an annual debt of $33,000. To pay off this debt, the association would be forced to raise membership fees.
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