Camden Courier-Post – February 20, 1936
Forget Politics and Adopt an Honest Budget, City Rulers Told
COLLECT TAXES, REPORT Urges
Commissions Also Urged to County Affairs
By W. OLIVER KINCANNON
Disregard Chapter 60.
Refinance under Chapter 77.
Reinforce that with what security you can give by resolution or ordinance, but Disregard Chapter 60.
Use a business rather than a political basis.
Take an active Interest In the management of Camden County as well as Camden city, acting as a committee of inquiry on county management.
These are some of the points of advice given to the City Commission yesterday, at a special meeting of the Commission, by its Citizens’ Advisory Committee.
In trip-hammer style, James W. Burnison, chairman of the advisory group, read a report that followed with these recommendations:
Forget politics and work as a unit.
Cut expenses and stay within your budgets.
Prepare a complete and honest budget.
Let the taxpayers decide when an emergency exists that requires an addition to the budget. Fight shy of gamblers’ Interest rates.
Don’t default; it’s too costly.
Get on a cash basis and stay there.
Make every taxpayer in the city realize and live up to his tax responsibility.
Think about Camden city and county in a patriotic rather than a political sense.
Vote to Act Quickly
The commission voted to take quick action by passing a motion introduced by Commissioner Harold W. Bennett, director of revenue and finance.
This motion empowers Bennett to call, as quickly as possible, a meeting of the commission, representatives of its advisory committee, the finance committee of the board of freeholders, representatives of the city’s bonding attorneys, Hawkins, Delafield and Longfellow, representatives of Lehman Brothers and other bond houses to determine what arrangement can be effected to solve the city’s financial problems. Setting forth that it is not our intent or desire to criticize the performances of past or present city officers, ” the report nevertheless, contained frank condemnation of emergency deficiency appropriations for items that are and were left off budgets.
Hits Past Budgets
It contained also implied condemnation of all the city budgets since 1930 and pointed out: “That Camden City receipts have been running behind expenditures approximately $1,000,000 a year since 1930.”
“Our yearly budgets do not at present, and did not in the past, in the opinion of your committee, give a frank clear picture of anticipated income and expenditures.
“The job of contacting bondholders to procure interest reductions, your committee finds, has not been handled as frankly as it deserves. We can find no evidence of a sincere effort to layout a program and attack this problem logically. No more than 30 cents can be lopped off the tax rate if the contacting program were completely successful. The committee has failed to receive a requested report of efforts to contact bondholders.”
The committee was convinced that it is futile to expect any large-scale interest cuts from bondholders.
Hopeful of Rate Cut
It believes the majority of high interest-bearing bonds can be refunded at substantially lower interest rates if constructive action is taken immediately. The committee has been informed that the state has refused to accept “reasonable rates” on the city’s bonds held by the State.
Furthermore, “the present difference of opinion on this subject among members of our present city commission would in itself effectively block any real work along this line,” and “We feel that real results along this line require a united front on the part of our commission and the county freeholders. Our sinking fund, we are informed, is stuffed with our own frozen paper. Such financing, in our estimation, kills the purpose of such funds.”
“The present plan of singling out a few wards in our city and call for sporadic tax sales is neither fair to the delinquent taxpayers in these wards nor is it fair to the taxpayers throughout the city.”
Has Detail Report
After concluding his reading of the summarized report, Burnison informed the commissioners the committee has completed a detailed report of “40 to 42 pages of homework for you” and said that will be submitted today.
“That will contain detailed recommendations, including some errors in figures and in judgment, but we ask that you disregard the errors and use the good in it,” Burnison said.
He explained that when he mentioned 30 cents as the maximum figure to be lopped from the tax rate of the city were completely successful in obtaining interest reductions, he figured that would be the result if the city got 2% to 3 percent rates on all its bonds..
“There’s a large number of these bonds you can’t hope to refund at lower interest rates, as the rates already are low. You couldn’t get under 4 or 4% percent on your first refunding under Chapter 77 and almost all of the bonds not immediately refundable are around those figures, ” he said.
Commissioner Bennett immediately opened up argument concerning what the committee thinks will replace his favored refunding plan- Chapter 60 combined with Chapter 77.
Tells Objection to 60 Plan
“Sixty seems to give the other fellow more advantages than us; that’s our objection to it,” Burnison said.
“Apparently you have been assured from some source that we can avoid an increase in the tax rate without adopting Chapter 60,” Bennett said and continued:
“I see no way of keeping down this year’s budget without 60. Politics is out in my argument, but I honestly believe 60 and 77 combined make the only plan for us. Under the present plan the rate will go up this year. Won’t you tell us your source of assurance that it will not?”
Burnison did not answer the question immediately and Bennett said: “We would have to pass resolutions committing us to procedure similar to that under Chapter 60, wouldn’t we?”
“Yes,” Burnison answered, “but not binding you to as close supervision. You can’t continue to exceed receipts and improve conditions anyway.”
“Well,” Bennett said, “give us the advantage of your sources assurance.”
Tells Sources
“We have two such sources,” Burnison said. “Mr. Middleton is one.”
(Melbourne F. Middleton, Jr., former city director of revenue and finance and now a bond dealer interested in the city’s refunding issues.)
“Lehman Brothers (New York bankers who have handled many of the city’s bonds in the past and were interviewed last Friday by the advisory committee) also said if we showed a sincere frank idea of economizing and staying within our budget, the bondholders would accept our bonds without necessity of recourse to Chapter 60.
“They said 60 meant no more to the bondholder than resolutions and ordinances, if you get together and go on record to give security and then do it.
“I don’t think the city commission should have any compunction in binding itself not to exceed the budget. Then, if you find it is impossible for you to operate on what you are taking in under the present tax rate, call in a group of taxpayers say 200 of them — and explain the situation and raise the tax rate.
“Any reasonable man or group will see the necessity and logic of that. They will go along with you.
“But under Chapter 60 you put yourself under a rigorous unbending set of restrictions.”
Mrs. Kobus Urges Action
“Let’s quit arguing and do it,” Commissioner Mary W. Kobus suggested, and Mayor Frederick von Nieda asked: “If we take an average of the income for the past three years would you not consider that average for this year?”
“Yes,” said Burnison.
At that point Bennett made his motion for power to call a special meeting of the freeholders, commissioners, citizens’ group, bond attorneys and bond dealers, and it was passed unanimously after Commissioner George E. Brunner seconded it.
“I reserve the right own discretion about dealers will be asked,” Bennett remarked.
“It may be that Lehman Brothers are the only ones who will trust us,” Burnison said. “They know the lines we are working along. They work with other houses, and there may be other sources of credit we can tap.”
“Well, 42 of the largest cities in New Jersey with 62 percent of all at the ratables of the state are under Chapter 60 now,” Bennett said.
“Sixty-two percent could be wrong,” Burnison answered and laughed, adding: “In my opinion, those cities going under 60 haven’t looked very far ahead.”
“That’s what we have done,” Bennett replied. “My department has done that and that is why we are advocating 60.”
Burnison Disagrees
“Well there are members on our committee who know a good bit about that sort of thing and they say the city is justified in not going under 60,” Burnison said.
“The Legislature is going to pass a new budget law that will act just the same as Chapter 60, though it will not be passed in time to effect this year’s budget,” Bennett said.
“Well,” said Burnison, “I’d think the commission would prefer to adopt a safe course voluntarily than to be forced into it.”
“We have no assurance that those who will have charge of the city’s affairs for the next 15 or 18 years will follow the course we lay down for them,” Bennett said and added: “Past political experience shows that they won’t.”
This brought the argument to a close and Burnison, questioned by a reporter, said:
“We are not unalterably opposed to Chapter 60. We oppose it, yes. We believe under 77 a better job for us can be worked out.”
Members of the committee, in addition to Burnison, who attended the session are James V. Moran, Harry A. Kelleher, Carl R. Evered, Dr. Ulysses S. Wiggins, A. Lincoln Michener and Eugene E. Wales.
City Comptroller Sidney P. McCord, with an aide, attended, and a stenographer from Commissioner Bennett’s office took a complete report of the proceedings.
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