West Deptford Avoids State Financial Supervision

The debt in West Deptford is great and burdensome, but the overall financial picture in town isn’t grim enough for the state to institute financial supervision, officials indicated Wednesday.

West Deptford needs to get its own financial house in order, and New Jersey can only offer limited help, said Thomas Neff, director of the Division of Local Government Services (DLGS).

West Deptford was called before the DLGS Wednesday after the huge debt obligation in its 2013 municipal budget ($15.5 million in payments) triggered an automatic state review. 

The DLGS had to decide whether to exercise financial supervision over West Deptford, which would indicate a formal, public opinion that the township is unable to pay its bills.

Only Atlantic City is currently under state financial supervision.

“The debt service being paid by the municipality is high, but it is sustainable,” Neff said. “West Deptford has a record level of debt service, but they don’t have a record level of distress.”

The DLGS board didn’t call a formal vote on supervision for West Deptford at the request of an absent board member, who asked to hold off until its next meeting, which is Aug. 29.

A vote is expected at that date, but Neff added, “We can safely guess where this is headed.”

Divided on West Deptford finances

In a time when West Deptford’s Republican and Democratic township committee members are rarely on the same side of any town issue, Wednesday’s hearing was no exception. 

The only thing the three committee members present—Mayor Ray Chintall (R), Committeeman Sam Cianfarini (R) and Committeewoman Denice DiCarlo (D)—agreed on was that West Deptford shouldn’t be under state financial supervision.

Cianfarini called the hearing a justification of the concerns he’s repeatedly raised about past financial decisions in West Deptford. DiCarlo saw the hearing as a chance to address West Deptford’s recently approved, bare bones budget, which was formally introduced by Chintall and was co-planned by Cianfarini.

Both Cianfarini and DiCarlo came to the meeting with requests of the state. Both left empty-handed.

Could the state conduct a forensic audit of West Deptford to account for money Cianfarini says is missing? No. Could the state provide grant money for West Deptford to conduct an audit then? No.

Will the state compel monthly budget reports and quarterly meetings to ensure West Deptford’s budget remains on track, DiCarlo asked? No. Will DLGS send a dedicated staffer to assist West Deptford with financial matters? No.

DLGS doesn’t have the resources for such requests, Neff said, and can’t engage in “holding the hand” of municipalities except when required by law. 

He urged West Deptford officials to decide their own approach and to call on DLGS when necessary for assistance, but the state won’t institute any official action plan right now.

Part of the problem is that West Deptford residents and elected officials bitterly disagree on the town’s budget, which slashes the surplus and the financial cushion it provides in exchange for flat taxes this year. Cianfarini insists it’s the right move to help taxpayers.

“I have little confidence that the township will not run out of cash before the end of the year,” DiCarlo countered at the DLGS hearing. 

DiCarlo said she has yet to receive a financial report on where West Deptford’s spending stands so far this year.

DLGS staff reviewed the budget, Neff responded, and found the appropriation levels in line with past expenses. It does leave West Deptford with less surplus protection, he acknowledged.

‘Worst for West Deptford is probably behind them’

More than 25 percent of West Deptford operating expenses is dedicated to debt service, and so a DLGS hearing shouldn't have been entirely unexpected because that's an automatic trigger, Neff said. DLGS also was aware of West Deptford's debt situation. 

The $15.5 million debt repayment, for example, is largely from the DLGS-approved Sunoco tax appeal settlement.

West Deptford should expect another financial supervision hearing next year, the director added, because it’s unlikely the town’s debt payments will fall below the 25-percent threshold. 

But DLGS doesn’t believe West Deptford is regressing financially, Neff said. He cited the town’s audit problems falling from 34 last year to 22 this year, and a planned decrease of about $6 million in next year's debt repayment as examples.

“We think the worst for West Deptford is probably behind them,” he said.

Mayor Chintall agreed, citing West Deptford’s new general ledger (after decades without one) and an accounting software system he said provides better understanding of the town’s financial picture.

“If we all pool our resources together and not have this political divide, we can get through this,” Chintall said. 

“Here’s the thing: Whether it’s Democrat or Republican, what’s the common thing? The debt. I’m not pointing fingers on how we got here. We’re here today.”

Both Cianfarini and DiCarlo plan to pursue their requests: Cianfarini said he’d propose a forensic audit for West Deptford, while DiCarlo wants DLGS to closely monitor West Deptford finances.