Bloomingdale Picks 'Quality' Auditor, Not Cheapest

The majority voted to re-appoint Borough Auditor Dieter Lerch for another year after both he and Councilman Ray Yazdi respectively presented different figures on what they project the borough's budget shortfalls heading into the 2012 budget year to be.

Lerch's firm's (Lerch, Vinci and Higgins) proposal to the borough was $5,000 that submitted them, totaling $33,000 after he reduced the price from $35,000.

Lerch was present when the council discussed his appointment before voting on him and, after being accused of being pressured by the council majority when assisting with the budget process last year by Mayor Jon Dunleavy, Lerch adamently denied that he would be politically motivated in his professional career.

"I would never compromise my professional standards for anyone," he said.

Lerch also denied that he drafted the $9.6 million budget along with former Council President Linda Huntley and went on the record stating his firm does not draft budgets. But Yazdi repeated throughout the meeting that Lerch's comments to the council throughout last year assuring the governing body that the borough will not overexpend its budget helped lead to the shortfalls, which he projected to total $635,674. Democrats Yazdi and Councilman John D'Amato voted against Lerch's appointment.

"You put 100 percent trust in two people last year," Yazdi said to the council majority.

Yazdi's projection is based on the borough having to borrow $30,000 to pay social security; borrow $20,000 after flood damage; leftover bills for the prior borough attorney ($40,400) and other bills ($8,932) that were not paid last year; money owed for sick time or retirement of police officers and less revenue than anticipated, including $86,343 less than projected in court fees and $20,887 less in construction fees.

He also considered the $170,000 used from surplus, $63,000 used from capital funding and $93,727 repaid to the borough from the Federal Emergency Management Agency (FEMA) to be included in the shortfalls, as they are one-time revenue adjustments that he said cannot be counted on in 2012.

Lerch did agree that the borough expended $170,000 in surplus, but projected the shortfall to total $164,000. Lerch said the shortfall he projected was determined by the $86,343 less in court fees and he attributed the remainder of the shortfall to tax appeals. Lerch also placed blame on former Chief Financial Officer Donna Mollineaux and said that his calculations were based on information he received from the finance office, but Dunleavy defended Mollineaux and Yazdi presented several memos in which and presents ideas on ways to prevent it.

Lerch, who said the borough has a history of spending more money than it brings in in revenue, said there is more than $6,000 left from the 2011 budget, but Dunleavy argued that the borough is legally unable to fully expend the budget and that while that money may appear to be there, there are still unpaid bills and money that needs to be repaid from borrowing. 

Huntley, who spoke during public comment on the topic, also disagreed with Yazdi's figures.

"You're looking at things in a capsule and trying to make numbers fit what you want them to fit, but they don't," she said.

Council members could not agree on which shortfall figure was correct, although Councilman Glenn Schiffman was the only majority member that confirmed publicly that the borough has a financial problem after resident Carolyn Bross spoke about her concern that some council members were unwilling to agree that the borough has a shortfall issue.

"It's very scary to leave the town in the hands of people who don't face or recognize the problem," she said.

Councilwoman Jo-Ann Pituch made the motion to re-appoint Lerch and Schiffman seconded the motion. Councilwoman Linda Shortman, who was criticized for noting that her preference for Lerch was "personal" at a previous meeting, clarified her remark and said that she has personal experience with the other auditors that were being considered.

"Low bid doesn't always mean quality," she said, mentioning that while the borough went with a low-bidder through a shared services agreement with Wanaque , many residents are unhappy with the company that was awarded the project.

Even though Lerch disputed the amount of the shortfall, he did affirm that the borough will have challenges with the 2012 budget.

"Do I think it's a difficult budget year? I think the answer is yes," he said.

While the conversation at times seemed bleak, Dunleavy and Yazdi said there are solutions that can help with the shortfalls if the council is willing to work together. Dunleavy mentioned construction fees associated with the Avalon Bay development and said he is hoping the borough can generate between $400,000 and $500,000 in revenue this year from that project.

Another idea, which was tabled upon suggestion of Borough Administrator Ted Ehrenburg, was to hire another to assist in the traffic bureau and bring in revenue through additional court fees. But since the preliminary budget is still being drafted, Ehrenburg recommended the council motion to allow the police chief to begin the interview process but hold off on hiring until it is determined if the budget would allow for a new officer.