An open letter to Governor Murphy on Cumberland’s County’s ongoing struggles

July 18. 2018

Governor Phil Murphy

PO Box 001

Trenton, NJ 08625

Dear Governor Murphy:

According to the most recent census data for the year 2016, the median household income in Cumberland County, NJ declined to $49,537. That compares to over $76,000 average in New Jersey where the average household income is growing at a healthy 5.5% rate overall. Our local property values continue to fall year after year, and are now less than half of the state average.  Yes, we are hurting and the economic gap continues to widen.

Many of us have not yet recovered from the “disaster after the disaster” of Superstorm Sandy where not only did state government exclude our county from essential recovery assistance, but then came in with increased regulation, enforcement and prosecutions of citizens that made our existing struggles much worse.  The combination of incompetence and corruption that we saw join forces in post-Sandy governance devastated many of my neighbors. Many of my neighbors have given up and moved away.

Yet we continue to build toward a better future. This week I met with the president of a local federal savings bank on behalf of a small business client. I mentioned that our local government is concerned that there is no bank in our township and this is hurting our chances at economic recovery. His response was clear: there isn’t be a bank here because “there isn’t any money”.  It’s true. We don’t have much money. Yet our people are extraordinarily resourceful. We’ve been described as a “pull ourselves up by the bootstraps crowd” that can overcome any challenge except the ongoing oppressive force of government corruption and shortsightedness.

Yesterday I struggled to find the money for a small business state permit application fee. The permit application fee is greater than the annual gross revenue of the project requiringthe permit! While the fee would be manageable in other parts of the state, it is an economic deal killer here in rural Cumberland County. During my 20+ years of working here I have come to conclude that our largest problems are excessive taxes and over-regulation. Our property tax rates – measured as a percentage of property value – are perhaps the highest in the country. The percentage of gross revenue our small businesses pay to government is astronomically high. Despite this, we struggle without basic government-supervised services like telephone lines, internet, trash disposal, or public water and sewer. We pay the same but get far less in return. On a daily basis, we suffer the effects of bad public policy and ongoing unreasonable government harassment.

As long as the state government continues to use a “one size fits all” approach and continues to treat us in Cumberland County the same as the rest of the state, we will be locked in this downward spiral. Continuing to use the same failed government tactics will not work! Our county is packed with innovative hard-working citizens who only need the chance to be allowed to crawl from beneath the weight of onerous state government burdens. We can and will rebuild our Cumberland County communities. We simply need to get state government to stop  holding us down.

I urge you to immediately empower your administration to fast-track an alternate resolution procedures to allow our citizens to address our struggles with state government in a fair way that considers both the goals of your administration and the reality that is Cumberland County today.

Sincerely,

Tony Novak, CPA, MBA, MT

Controller

Baysave Association

Money Island, New Jersey

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Update: State of NJ vs Novak, et. al.

Today is the scheduled hearing in New Jersey Superior Court for the state’s motion to show cause in State of New Jersey vs. Novak, et. al. Following is a summary of my defense:

STATE OF NEW JERSERY VS. NOVAK, ET. AL.

SUMMARY OF ARGUMENT AGAINST MOTION FOR ORDER TO SHOW CAUSE

by Tony Novak, Controller, Baysave Association

 

1)      This is a case of government behaving badly. The state is asking for a court order after having unilaterally broken two agreements with Novak over the past six years after Novak performed in good faith. Then they denied three separate requests for problem resolution in the past year where all of the parties could have sat down and worked on a solution. The state is not entitled to behave this badly and then come into Superior Court to enlist legal muscle in its actions.

2)      This is an unreasonable request. There is a coalition of government agencies, private businesses, nonprofit agencies and industry leaders – more than 20 in all – working on the sustainable and fully compliant redevelopment and compliance of Money Island Marina. Collectively, we have more than 70 active community redevelopment projects under development with more than 30 of them including land use permitting. It is unreasonable to think that any one person or entity can bring the transformation to a sustainable environmental future for this community, let alone develop those plans within a 30-day time frame requested by the state. Novak does not have the legal authority or capability to act unilaterally to take the actions requested.

3)      The facts are in dispute. The state’s filed complaint and supporting certifications are so riddled with errors that it is impossible for us to know what the prosecution intends. We need a process – whether ongoing community-based planning, alternate dispute resolution process or discovery in this ongoing legal action – to determine the facts in this matter.

4)      The admitted responsible parties are not involved yet. In this same Superior Court, before the same Judge, during questioning under oath, another person testified about her willingness to accept the legal and financial responsibility for the NJDEP violations to these properties. We expect that the responsible parties and local government will step forward but the legal process is expected to take another one to two years. It will likely take even longer for government to act on its already approved resolutions that will address compliance issues.

5)      Other parties were not notified. It appears that all pre-hearing notices were sent to Novak’s home address in Money Island New Jersey despite notification that the other parties are not here. Novak is the only resident of the western half of Money Island and there is no indication that any other parties are aware of the State’s legal action. The state is required to make reasonable efforts notify parties before it takes legal action against them.

6)      No environmental damages. The prosecution has presented ZERO evidence of any environmental damage or immediate threat to the environment. We have a stellar reputation and track record for best operating practices and environmental test results. What they are saying is that their paperwork trail wasn’t documented for decades, and internal management process has been flawed for many years before any of us were on the scene. A failure on their part does not equate to a crisis on my part. We all agree on the goal of working toward full land use compliance under new regulations that the NJDEP admits are not even promulgated yet. But this ‘crisis action’ and legal threats are not the way to do it.

7)     A new master compliance plan of action is already underway. The NJDEP Acting Director of Coastal Land Use Planning has already announced the department’s intention to “work closely with this Money Island project to promulgate new regulations that are effective for the bayshore region of Cumberland County”, per our mayors in the past month. Last week the news was released that our new NJDEP Commissioner’s Office had fast-tracked and approved funding for the #1 environmental entanglement: public sewer systems for the nearby towns. We know that we will be included in the next phase and that all parties are working as quickly as possible. There is no need for this current legal action and, in fact, the legal action is slowing down the progress toward full compliance by causing some key stakeholders to remain uninvolved until after the legal action is resolved.

Superstorm Sandy Update at 5 1/2 Years

The government-created “disaster after the disaster” continues to dominate our lives. Virtually all government cooperation is still lacking at this point five and a half years after Sandy.

We have recently crossed the five and a half year mark since superstorm Sandy devastated our community and much of the damage has not yet been repaired. Fraud, mismanagement and red tape within the government systems that administer post-Sandy rebuilding programs are mostly to blame. We have plans and funding ready now but lack government approval to proceed. Many of the local people who initiated the “No retreat – Save the bayshore communities” campaign have sold their properties and moved out over the past year. Those who remain are deeply entrenched in a battle with government to negotiate a plan for recovery and sustainability.

Some of the issues that specifically hamper Money Island, New Jersey recovery are:

  1. New Jersey Department of Banking and Insurance declined to investigate sales practices of insurance companies that sold inappropriate and inadequate coverage.
  2. The National Flood Insurance Program admitted fraud and mismanagement in handling flood insurance claims but continued to deny payment on those claims anyway. Policyholders have been forced to settle for lesser amounts or give up die to high legal costs of pursuing their claim in court.
  3. Most recovery programs were denied to homeowners and businesses on the New Jersey bay shore region. We read that 98% of all post-Sandy Small Business Administration loan applications were denied.
  4. Almost all of the applications, pre-application meetings and project proposal applications for post-Sandy recovery work at Money Island have been denied.
  5. The Trump administration announced the removal of funds promised and approved by Congress for post-Sandy mitigation programs. Citizen activists like me believe that the Trump action is retaliatory against east coast states like New York and New Jersey that are suing Trump and his government in multiple actions. Both of our New Jersey Senators, Bob Menendez and Cory Booker, as well as our Congressman Frank LoBiondo and other states’ Senators, opposed the move and sent a letter to Federal Emergency Management Agency (FEMA) asking for a one year extension for projects that are underway but not yet complete. The letter is part of a bipartisan effort of Congress to keep the projects funded because we have simply not had enough time to meet all the rebuilding requirements.
  6. On June 8, 2018 the Trump administration reversed course and announced that it will not pull back previously approved funds.
  7. On Monday June 11, 2018 when NJ activist Doug Quinn addressed FEMA administrator Brock Long about specific policy provisions at the National Flood Conference in Washington, DC on Monday to address the Congressman’s’ letter this week, NFIP administrator Brok Long said “I’m not going to answer that”, then shut down the meeting to questioning and walked off the stage. Quinn later wrote that the event “was a learning experience. We have no friends there”.
  8. On the same day, June 11, 2018, at the public meeting of Downe Township Committee mayor Bob Campbell said that FEMA officials admit that post-Sandy projects they intend to see completed are still incomplete here in our township. There was no discussion of a timetable for the federally funded projects.
  9. Last month the New Jersey Attorney General filed a lawsuit against Tony Novak and others for failure to make progress on post-Sandy recovery despite the track record of more than ten applications and pre-application proposals to do so.

Given the history of what we call “the disaster after the disaster” I am not optimistic about any immediate change in government’s role in our future recovery. We will continue to push for our recovery and long term sustainability at a grass roots level for years to come. We are able to rebuild under the various regional and local recovery plans but we need government permission and cooperation to do so. We also need funding for those aspects of the recovery projects that benefit the public interest rather than just private businesses and homeowners. Virtually all government cooperation is still lacking at this point five and a half years after Sandy.

I anticipate at least two more years will be required to settle existing litigation and appeals and then return to the process of rebuilding. The legal battles are a waste of time and money that only enrich the lawyers on both sides but we don’t think that it is likely that government will act responsibly or come to our aid anytime soon.

State of New Jersey vs. Tony Novak, et. al.

Baysave was named as a defendant along with its controller Tony Novak in a lawsuit filed May 4, 2018 by New Jersey Attorney General Gurbir Grewal. The lawsuit does not allege that Baysave or Novak or anyone associated with us did anything wrong, but rather that we are in possession of distressed properties where the stabilization, recovery,  transfer, sustainability planning and compliance phases are taking much longer and are proving more complex than anyone had hoped.

The underlying issue is that the entire Money Island marina, in fact most of the small rural port community of Money Island, was built almost a century ago without building permits, land surveys, tideland leases, etc. We assumed these properties would be acquired by the state like other local working waterfronts and that would transfer the issue to the state to deal with (as with other marinas like neighboring Fortescue). But in the years since Sandy, little has actually been accomplished. Apparently the state switched from being a cooperative partner in our restoration efforts to being an adversary. We don’t know why but we suspect the action is not in good faith.

The lawsuit comes down to this: the government has declined at least 15 permit or license applications or pre-application inquiries since Sandy (when Novak legally took over management) and is now suing us because those same permits are not issued.  It is, in our opinion, unconscionable for the state to be both the denier of permits and simultaneously bring charges for failure to have permits that should have been addressed decades ago.

Most significant in this matter is the observation that the NJDEP abandoned its normal problem-solving mechanisms (pre-permit planning meetings, application review and comment and alternate dispute resolution) to opt for decline of applications and direct to lawsuit with no attempt at resolution. One NJDEP program director told me that this was the first time in her career that she saw this pattern of action by her department and so she did not know what to advise me.

Here is:

One step forward, one step back

In our long-term effort to restore Money Island and repurpose the resources for a future of sustainable aquaculture, it often feels like we are taking one step forward and one step back. Today the two extremes hit particularly hard.

“Fall seven times. Get up eight.” – Japanese Proverb

On December 30 Senator Booker sent an online message to Tony saying that he was interested in receiving more information about Baysave’s project at Money Island. That sparked a flurry of follow-up activity, calls and referrals that kept us busy all week. It is clear from multiple sources that the federal government wants to see us succeed. Early this morning I had a scheduled phone call with one of New Jersey’s best business financing experts. She works in North Jersey but was referred by Stockton SBA and has been helping us for several months. She said that she had brought our redevelopment plan to a lender who wants to fund the project and match the USDA’s program to expand aquaculture here. Great news! I worked on some spreadsheets to support the idea and we scheduled another call for Friday.

Then only a few hours later a representative from the New Jersey Department of Environmental Resources called to say that the state declines to discuss a resolution of the old land use and permitting issues that existed before the Baysave project began. She seemed surprised to support the result. We discussed that this is unusual for the state to refuse to participate in alternate dispute resolution. This is copy of the confirmation letter denying alternative dispute resolution: BaySave ltr from NJDEP.

I can imagine no respectable reason why the state would refuse to enter into discussions on resolution of environmental issues under any circumstances. Most personnel in the department support our efforts. I have occasionally been critical of the agency and once even turned in an employee for attempted bribery years ago. This most recent action, unfortunately, represents the agenda of a small minority of NJDEP officials.

In reality, the state’s action today probably has little to do with us and has more to do with swampy politics. Nevertheless, we will continue to work our restoration and redevelopment plan one step at time, relying on the strong support expressed by the many other forces of government and the community.

14 Money Island projects threatened by federal budget cuts

Most of the infrastructure projects at the Money Island Marina community are developed and managed locally but funded through a combination of private and public funds. The most common funding formula is that we fund 100% of a project in advance and then the state uses federal funding to reimburse 75% of the approved costs. Since not all costs are refundable, it usually works out to something like a 50/50 split. We work with governments and other partners whenever possible to reach a level of cooperation that allows important projects to move forward.

While nothing is certain yet, this blog post is simply meant to build a list of the possible consequences of the Republican’s new budget slashing of environmental programs funded directly or indirectly through the EPA that would change Money Island New Jersey operating plan for 2017 and beyond:

  1. shoreline stabilization projects
  2. oyster reef recovery research
  3. dune building research
  4. channel dredging*
  5. roadway stabilization*
  6. waste water handling system
  7. boat pump out station
  8. boat ramp extension
  9. transient vessel dockage
  10. aquaculture education program
  11. waterfront development permits for aquaculture
  12. underground storage tank removal
  13. oyster safety monitoring program*
  14. overharvesting enforcement*

* These are 100% government controlled and funded, partially through EPA funds paid to the state.

We will continue to communicate with our partners as well as federal and state agencies to try to keep these projects on track. However, if the funding offer from federal government is withdrawn, we will likely be stalled here for an uncertain time.