Point Beach Takes Final Vote to Pay Jenkinson's Tax Refund

Point Beach Council cast just enough votes for an ordinance to borrow $585,000 to pay most of the back taxes owed to Jenkinson's and for related costs.

Councilman Sean Hennessy cast the lone no vote against the adoption of an ordinance to bond for $585,000, saying that he had believed that Point Beach owes Jenkinson's only $505,000.

"And that's what I'm going to agree to," Hennessy said. "That's what we agreed to in the back room in December."

Councilmen Jeff Dyer and Tim Lurie also said they remember, from a December council meeting, an agreement to pay $505,000 back to Jenkinson's.

Mayor Vincent Barrella insisted they were wrong and objected to what he characterized as the councilmen unfairly accusing Borough Administrator Christine Riehl for providing incorrect or incomplete information to them in closed session in December.

"That's not true and it's not fair to criticize her because you weren't paying attention in the back room," Barrella said to the three councilmen.

Riehl, who is also the borough chief financial officer and tax collector, said in an email on Thursday: "The bond ordinance for $585,000 took into account $564,009.27 in 2009/2010 refunds, and $20,900 is professional fees related to the appeal and bonding process."

Had one additional council member voted no, the ordinance would not have been adopted because an ordinance to bond needs four affirmative votes, Barrella said.

And Point Beach would have been vulnerable to a lawsuit filed by Jenkinson's for failure to pay as mandated in a tax appeal settlement agreed to by the town, Jenkinson's and a tax court judge.

"If I had to vote, I would vote yes because when you settle, you need to pay for what you agree to," said Barrella.

In the borough council form of government, the mayor only votes when there is a tie.

Council members Kristine Tooker, Michael Corbally, Dyer and Lurie voted yes.

Councilman Frank Rizzo was absent for the third consecutive meeting due to an ongoing health problem.

Riehl said in the email on Thursday that Point Beach owes Jenkinson's a total of $711,478, including the $585,000 borrowed through the bond authorized on Tuesday night.

Barrella has said the town cannot bond for the entire amount of $711,478 because part of that amount, about $147,000, is for overpayments for this year and the state is not allowing towns to bond for tax refunds for this year.

Hennessy, at Tuesday night's meeting, said the total bond amount of $585,000 includes an appeal filed by a separate property owner and should not be "rolled into" the Jenkinson's bond.

And, similarly, Lurie and Dyer had asked Riehl at the meeting if a tax appeal refund owed to the Harbor Head condominiums near Jenkinson's was included in the bond ordinance.

She had said no, the condo development itself was not included, only the beach in front of it, which is owned by Jenkinson's.

Riehl also said, in an email on Thursday, that all of the properties included in the tax refund bond of $585,000, and in the total of $711,478, are all related to Jenkinson's.

"Because all the properties are not assessed in the name 'Jenkinson's,' one could argue that they are not Jenkinson's appeals," she wrote in the email. "However, they are all related to Jenkinson's in some manner."

Riehl said the $711,478 owed to Jenkinson's breaks down as follows: 

•  2009 Appeal Refunds,  $269,071.92.
•  2010 Appeal Refunds, $294,937.35
•  2011 first and second quarter overpayments, $147,468.73

"The professionals are our bond counsel, Decotiis, Fitzpatrick & Cole, LLP; Borough Auditor, Suplee Clooney & Co. and the law firm of Kelly, Bauer and Kenneally," Riehl wrote.  "The funds were estimated, and could potentially come in under what was appropriated, and the balances cancelled."

William Mayer, Point Beach's bond counsel, told the council that the state local finance board had approved the town to borrow $585,000 to cover the bulk of the taxes owed, professional expenses already incurred and additional professional fees for the cost of bonding.

He warned council that if it does not bond for the entire amount of $585,00, it will not have a way to pay for the balance.

"My recommendation is to leave the ordinance intact," said Mayer, who is a Republican council candidate.

Hennessy, also a Republican, had decided a few months ago not to run for re-election.

Mayer has said he will resign as municipal bond counsel if he wins election.

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 $711,478 owed.

The settlement also calls for a refund of $146,000 for 2011 because the new, lowered tax assessment, reduced by about 23 percent, goes into effect this year.

At the May 10 meeting, 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.

Hennessy and Corbally had voted no.

Corbally said in an interview afterwards that he had voted no because he had not agreed with the settlement council reached with Jenkinson's last year, before he was on the council.