Point Beach to Borrow to Pay Back Jenkinson's $711,000 in Taxes

The Point Pleasant Beach Council is taking the first steps toward borrowing $711,000 owed to Jenkinson's, according to the terms of a tax appeal settlement reached late last year.

A split council voted narrowly on Tuesday night to take steps to pay back the tax payments, which are owed according to the terms of a settlement the council approved in December.

The settlement was recently approved by a court, prompting the town to begin taking steps toward paying the refund.

Jenkinson's had originally appealed taxes paid in 2007 through 2010, based on a $16 million property assessment the company contested was inflated.

However, during negotiations, Jenkinson's agreed to pursue an appeal only for the years 2009 and 2010.

Ultimately, the terms of the settlement called for a refund of $585,000 for those two years, which is part of the total of $711,000 owed.

The settlement also calls for a refund of $146,000 for 2011 because the new, lowered tax assessment, reduced by about 24 percent, goes into effect this year.

On Tuesday night, the council voted  3 to 2 for preliminary approval for a bond ordinance to pay back $585,000 of the total amount and passed a resolution asking the state Local Finance Board for permission to bond for the bulk of the tax refund payments.

"It will be interesting to see what happens at the next meeting when they have to vote to adopt the bond ordinance because a bond ordinance needs four yes votes to pass," said Mayor Vincent Barrella in an interview on Friday.

Councilman Frank Rizzo was absent at Tuesday's meeting.

Councilmen Sean Hennessy and Michael Corbally were the only no votes.

Interestingly, last year Hennessy voted for the settlement which requires Point Beach to pay back the money. But on Tuesday night he voted against the mechanism the borough needs to use to pay it back.

Hennessy did not return a number of messages left at his work, home and cell phone.

The council had voted unanimously in December for the settlement. Corbally was not on council last year when the settlement was reached.

Corbally said in an interview on Monday morning that he voted against the bond ordinance because he disagrees with the settlement.

"I don't think the town should have settled at all," Corbally said. "I think the original assessment was fair. They said they are not worth more now than they were in 2006, but I think they are. They bring in more people now than they did five or six years ago."

Corbally acknowledged it's hard for tax assessors to find a property comparable to Jenkinson's to use to determine a valid tax assessment.

The council is not able to bond for the entire $711,000 owed because the state is not allowing municipalities to bond for refunds of taxes owed for this year, Barrella said on Friday.

Of the total of $711,000, the town is able to bond only for $585,000 because that is the amount the town has to pay back Jenkinson's for taxes the company paid in 2009 and 2010.

The total of $711,000 minus $585,000 is $126,000, which is the bulk of the amount of the refund Jenkinson's is owed for this year based on the new, lowered assessment.

However, there is an additional $20,000 in "soft costs" or costs such as legal and court fees, that also has to be paid back, Barrella said.

So the mayor and council have to figure out how to pay back an additional $146,000, which will affect next year's budget.

Barrella said on Friday, "We need to make an emergency appropriation to borrow the money through notes because the state won't let us bond for taxes owed for this year. It's really kind of ridiculous."

He said that hopefully the town can keep the expenditure of $146,000 "outside the tax levy cap for next year's budget. The $146,000 is six-tenths of a penny on the tax rate. And the $146,000 is just the 2011 component. We also have to pay back the bond and there is now a lower assessment."

If the expenditure is inside the cap, it more directly threatens to increase the municipal tax rate.

In December, Jenkinson's representatives had said the seaside attraction has been paying around $4 million an acre for its beach property since a townwide reassessment in 2007, calling it "grossly unfair."

Councilman Jeff Dyer repeatedly said on Tuesday night that he wanted the public and the media to understand that the amount of the tax refund would have been much greater if Jenkinson's had not "given back 2007 and 2008."

Dyer was referencing Jenkinson's agreeing to not pursue tax appeals for 2007 and 2008, but only for 2009 and 2010.

"They forgave 2007 and 2008," said Dyer. "They gave that back to the town. Our own tax attorney said we would have had to pay back those two years if they had not forgiven those years."

"They didn't forgive anything," Barrella replied. "They decided they wouldn't contest 2007 and 2008. It was settled. We could have won everything, we could have lost everything. But it was settled."

It was only one of many times during the long, contentious meeting that there were disagreements about Jenkinson's, as there have been during the past few months.

For example, Barrella mentioned that an attorney for Jenkinson's had written a letter to him, criticizing him for opinions he voices about Jenkinson's, which the lawyer reads in transcripts created by a stenographer hired by Jenkinson's.

Barrella said Jenkinson's and Martell's pay a stenographer, using a laptop computer and audio recording equipment, to create transcripts of all council meetings.

The stenographer sits at a table in front of the council dais to record the meeting.

"This is using our electricity," Barrella said. "And I never get to see the transcripts."

Hennessy admonished him for directing his comments to the stenographer.

"Tell them, not her," Hennessy said.

On Friday, Barrella said, "I didn't mean to attack her. She's just doing her job."

And a number of residents chided the council members who have cast pro-Jenkinson's votes on either reducing or eliminating various fees, such as recently reducing fees for amusement games and, most notably, eliminating special event applications fees that are paid by the local Chamber of Commerce and other organizations.

The pro-Jenkinson's votes have been cast by Hennessy, Dyer, Rizzo and Councilman Tim Lurie.

Barrella does not vote unless there is a tie, but has repeatedly spoken against those votes by the four councilmen.

So have a few of the meeting regulars.

"You should be ashamed of yourselves," said Ben DeSpoto, one of the meeting regulars, chiding the councilmen for eliminating all special event application fees, which would have required Jenkinson's to pay $2,000 per each "special event," such as fireworks and concerts.

"You gave away almost $300,000 three weeks ago," he told them on Tuesday night.

Dave Cavagnaro gave out Jenkinsons' leaflets listing "special events." He noted that it was interesting given that Jenkinson's had said at a council meeting that their events are not "special events," but simply what they do as an entertainment company.

Cavagnaro noted that the Parent-Teacher Association of St. Peter's School in Point Beach had to pay a $50 special event fee for a car and raffle ticket sale on the Boardwalk.

"So a school has to pay, but a multi-million dollar company gets away with paying nothing?" Cavagnaro said.

Hennessy said he would have made a motion to waive the fee for the PTA, but realized it was too late because they had already paid.

"Well, now is not the time for us to be giving back money, it's the time for us to be looking for revenue," said Councilwoman Kristine Tooker, who has not voted with the four councilmen regarding Jenkinson's fees.

She was absent from the April 19 meeting when special event fees were eliminated, but did not vote with the four at other meetings regarding Jenkinson's fees.

The special event fees had been on the books for years, but never paid by Jenkinson's.

At the March 29 meeting, when the council reduced amusement games fees and took the first step toward eliminating special event fees, resident Max Gagnon said, "What are you, chicken? Are you afraid of them?"

No one answered.