Seaside Park’s Conundrum: What’s The Cost of Annexing South Seaside Park?

Route 35 South in South Seaside Park. (Credit: Monmouth-Ocean MLS)

Seaside Park has already hosted one of its two listening sessions on the requested annexation of the South Seaside Park neighborhood of Berkeley Township. While the “kitchen table” issues connected to the annexation process – zoning ordinances, water towers, public works collections – will all be addressed in advance of a vote on the matter, one variable will remain: the transfer of capital debt from Berkeley Township to Seaside Park.

There are numerous perspectives from which the issue can be framed. Seaside Park may take on debt, but will gain valuable ratables that can support it. The town’s tax base will grow, debt service for existing projects will eventually fall off the books, and an expanded community will emerge as one. On the other hand, Berkeley Township – which fought unsuccessfully to keep those same valuable ratables – may seek to have Seaside Park take on more debt than some borough residents might believe is fair, leaving the entire matter in the hands of the court.

The unknowns of the situation are at least partially linked to the fact that annexations in New Jersey are exceedingly rare. While they are routine in Florida and other states with unincorporated areas, New Jersey is divided between 564 municipalities that battle for scarce state funding and the ability to keep valuable property on the tax rolls. By nature of the very statute that governs annexations, the final dollar figure of debt service Seaside Park would be expected to take on is impossible to calculate until after a vote by the borough council to accept the annexation petition. That issue alone represented the primary point of concern at the first listening session the borough hosted on the matter last week.

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Jean Cipriani, an attorney hired by Seaside Park as special counsel to manage the annexation issue, laid out the basics: accepting or denying the petition to annex South Seaside Park from Berkeley Township is in the hands of the borough council. An ordinance approving the annexation must garner a two-thirds vote both on first reading and second reading in order to pass. While council members will have a solid base of knowledge on the debt issue, the process of determining a final number can come only after a vote to accept the annexation is cast pursuant to the state statutes that set forth the process.

The process of determining the transfer of debt between the two municipalities is both complex and micro-managed at the same time.

Should the annexation vote pass: “On the Monday following the effective date of the ordinance at 10 a.m. at the Seaside Park municipal building there will be a gathering,” Cipriani explained, reiterating that even the time of the meeting is dictated by the state statute. Three people from Seaside Park, appointed by the council, and three people appointed by Berkeley Township’s council will attend the meeting.

“The subject there is, ‘Does Seaside Park owe Berkeley Township money?’” Cipriani said. “They would say, ‘this portion of our debt is attributable to South Seaside Park, and Seaside Park has to take that on.’”

The catch is that Seaside Park officials won’t know Berkeley Township’s request until that very meeting. Of the six people appointed to decide the issue, four must agree.

“If four people do not agree, then after 60 days, Seaside Park must apply to Superior Court and say, ‘we can’t come to an agreement,'” Cipriani said. “The assignment judge for Ocean County would then appoint three people and they would have 30 days to come to a decision. That decision is final.”

Towns take on debt for numerous reasons, from replacing utilities, to paving streets, to upgrading parks, to buying police cars. Seaside Park council members will not cast their vote “in a vacuum,” said Cherron Rountree of Government Stategy Group, a consulting firm hired by Seaside Park that is tasked with the rare task of producing an annexation impact report for the borough. The report will include an analysis of Berkeley Township’s debt, and how much of it is attributable specifically to projects in South Seaside Park. The analysis, however, is not binding. Berkeley Township officials could conceivably propose a larger figure, though representatives from the firm said the numbers in their report will be promulgated by experts in the field of municipal financing and taxation.

Cipriani said residents of Seaside Park should not expect council members to become proponents of, nor objectors to, annexation. Doing so could expose the borough to legal action regardless of whether the vote is to accept or deny the annexation petition. Parties on either side of the issue can sue to overturn the decision, with the standard for vacating such a decision based on the question as to whether the council acted arbitrarily or capriciously in their decision-making process.

“Making decisions without information is almost the definition of being capricious,” said Cipriani. “It is critically important that the governing body not pre-judge this issue. Pre-judging it is another way the court can find – whatever decision they make – that the decision was arbitrary and capricious.”

The council’s goal is to have the annexation impact report in hand by the end of the year, however it could take longer to produce depending on the complexities the analysts experience while writing it. The report will detail expected tax impacts, the potential expansion of public services, and the ramifications – positive or negative – of expanding the borough. An ordinance to approve the annexation will also have to come with zoning ordinances that will be introduced simultaneously.

“As soon as it is effective, South Seaside Park is part of Seaside Park. That means they’re immediately subject to the same taxes and the same ordinances,” said Cipriani.

“The second it becomes effective, all of Berkeley’s zoning ordinances disappear,” she said. “So what you will see, if the governing body decides to put this on, is the ordinance for annexation itself – ‘do we take South Seaside Park or not?’ – and then zoning ordinances. There won’t be any time when there is no zoning. South Seaside Park has different types of housing – there are things that are present there that are not present in Seaside Park, so we have to have ordinances in place that are appropriate for those housing types.”

The listening sessions, organized by the consulting group, are designed to solicit concerns that residents are seeking to be included in the impact report. The next session is scheduled for Monday, Nov. 24 at 6:30 p.m. at the Tri-Boro First Aid building at 61 J Street.