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The Newtown Township Municipal Authority's Million Dollar Question

Previously, I asked for an explanation of where the Municipal Authority had spent $800,000 in recent years. Turns out, it was over a million dollars.

At Monday's Municipal Authority meeting, Larry Fischer, the Municipal Authority's treasurer, offered that there had been "rumors" that the authority could not account for $800,000 that had been spent by them.

I don't know about those rumors.

I do know that in a post on Patch on July 19, 2012, I wrote about the Newtown Township Municipal Authority's debt. I asked for an explanation of how $800,000, which had been in the Municipal Authority account, had been spent.

On Monday night, the Municipal Authority provided some answers in the form of explanation of the various Municipal Authority expenses paid and debts outstanding.  

Larry offered these explanations when discussing the Municipal Authority's 2011 audit. That audit, which the Municipal Authority has committed to posting on the township's website prior to next month's Municipal Authority meeting, stated the following:

  • The Municipal Authority collected revenue of $31,017 in 2011.  
  • The Municipal Authority expenses for 2011 were $180,080. This amount did not include expenses of the Crum Creek project. 
  • In 2011, there were $283,601 expenses attributed to the Crum Creek project.
  • $143,886 was owed to the township at the end of 2011. These are the bills that the Municipal Authority recently agreed that the township had paid for them($100,000), as well as payment on the existing loan debt of the authority which the township had guaranteed. This is a loan payable until 2017 that was guaranteed by the township in 2003 to finance costs of sewage facilities construction for homes in the Newtown Heights section of the township.  
  • The audit also reflected that there remained an outstanding debt for a loan payable to TD Bank of $467,976.
  • Larry reported that the township owes the Municipal Authority $28,757 for money lent to the township to install a water line in Florida Park many years ago.  
  • He offered that the cumulative expense since 2006 assigned to the Crum Creek Sewer project was $1,088,722.

It appears as though residents now have some explanation of how much taxpayer money has been spent. And, as Larry said at the meeting, they (residents) "may not be happy how it has been spent."   

I asked the Municipal Authority how they anticipated paying their bills going forward. I was told that they had approximately $35,000 in their checking accounts and that this would be sufficient along with any other revenue generated to pay the Authority's operating costs next year.  

I was also told that the township would be paying the cost of the TD Bank loan and that the $88,000 needed for these payments would be part of the township's budget.

After the Municipal Authority members verified that they are charged with sewage facilities construction, not planning, Paul Guest, a Newtown Township resident, asked about the Crum Creek expenses that have been included in the Municipal Authority audit as capital expenditures.  

He questioned how these expenses could be capital costs which would presumably be charged to those included in the project area. The Municipal Authority has not constructed anything in the Crum Creek area, yet they are indicating that they have incurred over a million dollars in capital costs.  

Paul asked, "If it wasn't planning, what was it?"  He went on to say, "I don't see how the Municipal Authority, now or in the past, could have spent over one million dollars on anything but planning."  

Since the Municipal Authority has spent over $1 million on the Crum Creek Project but hasn't built anything, there are new questions to be answered. Does the township owe the Municipal Authority over a million dollars that was spent on planning for the Crum Creek project since nothing has been built?  Will this be addressed during Newtown Township's budget process for next year?

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

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