By Matthew Sockol
Correspondent
SAYREVILLE – The Sayreville Board of Education’s request to receive developer payments from a payment-in-lieu-of-taxes (PILOT) agreement has been denied by the Borough Council.
Board President Michael Macagnone appeared before the council on Jan. 11 to request 56 percent of the PILOT agreement granted to the developer, Highview Homes in August 2014.
“That’s the amount of tax dollars the board gets on things that are traditionally taxed,” he said.
Highview Homes is constructing a residential rental community in the place of the demolished Club Bene on Route 35 and Old Spye Road in the Morgan section of Sayreville. The community will consist of 148 rental units, a 2,820-square-foot clubhouse and a pool. The rental units will have 22 age-restricted units, 67 one-bedroom units and 59 two-bedroom units.
In a PILOT agreement, 95 percent of a developer’s annual payment goes toward the municipality and 5 percent goes toward the county. No money is given to the school district.
Under New Jersey state law, only the surplus of the developer’s annual payments under a PILOT can be given to other entities, such as a board of education.
“You’re doing something for the taxpayers,” Macagnone said to the council while arguing for the board’s request. “You’re going to have some residents who don’t pay taxes on the value of their home.
“This is money that’s due to the board at that percentage and that’s what we’re looking for so we can continue to pay our bills.”
Macagnone had made three prior appearances before the council to discuss the board’s request, first bringing up the issue at the Nov. 9 meeting, and was critical of the Borough Council for not yet making a decision.
“I worked for a general one time who said ‘Never get involved in politics because it will go against everything I ever fought for you,’” Macagnone said. “What I see here is politics is being the art of delaying a decision long enough (so it) no longer becomes relevant.”
The Board of Education also had concerns about new students entering the school district as a result of the PILOT. In a report read by Business Administrator Dan Frankel, the development of the residential homes is expected to produce 12 new students.
Councilman Art Rittenhouse motioned for a resolution to provide the Board of Education with 56 percent of the PILOT, which was seconded by Councilman Pat Lembo.
“If we did the 56 percent, it would just about cover the 12 students who are expected to come out,” said Rittenhouse. Rittenhouse’s statement was based on figures provided by Chief Financial Officer Wayne Kronowski.
Mayor Kennedy O’Brien, who could only vote if there was a tie, voiced his support of the school board.
“My advice to the people of Sayreville is you want to give as little money as possible to the governing body and as much money as possible to the Board of Education,” he said.
Before the council could vote, the members had to reveal any potential conflicts of interest they might have. Borough Attorney Michael DuPont explained that the conflicts did not prevent the members from voting, but should be taken into consideration and advised them to “err on the side of caution” before deciding if they would vote.
With the exception of Councilman Steven Grillo, each member had a potential conflict: Councilwoman Victoria Kilpatrick is a teacher at the Sayreville Middle School, Lembo’s wife, Amy, is employed by the school board, Council President Daniel Buchanan’s sister, Lisa Eicher, is a teacher at Samsel Upper Elementary School, Rittenhouse is an agent of Aflac, which provides insurance for the school district’s teachers, and Councilwoman Mary Novak’s daughter-in-law, Melissa, is a teacher at Sayreville Middle School.
Ultimately, Kilpatrick and Rittenhouse chose to recuse themselves from voting. Since Rittenhouse originally motioned for the resolution, his absence from the vote meant that the resolution had to be motioned again. Lembo provided the new motion and Novak seconded it.
The council then voted 3-1 against giving the board its requested percentage of the PILOT agreement. Only Lembo supported the resolution, while Buchanan, Grillo and Novak opposed.
Buchanan opposed the board’s request because the Borough Council did not have a joint meeting with the Board of Education to discuss the PILOT.
“I recommended we have a meeting with the Board of Education so the entire governing body could have a report,” Buchanan said. “That wasn’t done yet. I’m voting no until we can have that meeting.”
Novak argued the board had no way of knowing the PILOT would produce a surplus.
“The law specifically says we can share what’s in surplus and we don’t know if there’s going to be 56 percent there,” said Novak. “To specify a specific amount, I believe, is in violation of the law.”
After the council made their decision, Macagnone continued to voice his opposition to the PILOT.
“Would you agree with me based on everything that transpired this evening that a PILOT program is not a good idea?” he asked Novak.
The PILOT agreement was defended by Sayreville Economic and Redevelopment Agency (SERA) Chairman Michael D’Addio, who was in attendance at the meeting. D’Addio explained the PILOT was necessary to begin development on Route 35 that would revitalize Morgan.
“(The PILOT) is only the beginning of the development that we’re going to plan for Route 35,” said D’Addio. “(Morgan) needed a jump-start. You can’t get development going with a dilapidated club on Route 35. It’s down now, we have people interested in that property to build, the Board of Ed will get their 56 percent of that money, and as we develop Route 35, and more businesses come, they’ll get 56 percent of that money.”
