Following a Dec. 19 meeting, ACT decided to express its concerns in writing to borough attorney Colette Thompson, said spokesman Mike McBride.
The group met to discuss Ordinances 2005-09, 2005-37 and 2005-51, and then decided a formal letter was the best approach to resolve legal questions ACT has regarding the ordinances.
Ordinance 2005-09 — enacted in June — increased the borough sales tax from 2 percent to 3 percent; changed the borough tax code so recreational sales taxes would be calculated on a per-person, per-day basis; and appropriated $1.4 million from the borough’s Land Trust Fund to the general fund to pay for routine government operations.
ACT members orchestrated a ballot initiative in October to send the sales tax back to 2 percent. Voters approved the measure.
Ordinance 2005-37 — enacted in August — would have made the effective date for the sales tax increase Jan. 1, 2006.
ACT contends, however, that 2005-37 also sets effective dates for what it terms “raiding the Land Trust Fund,” without mentioning the fund at all.
Ordinance 2005-51 — scheduled for a public hearing Jan. 3 — would repeal the sales tax increase, repeal sections of Ordinance 2005-09 relating to the Land Trust Fund and call for a by-mail election March 21 asking voters if the recreational sales tax change should be repealed.
Because of the ballot initiative passed by voters regarding the sales tax hike, ACT members are now focusing on the portion of Ordinance 2005-09 authorizing withdrawals from the Land Trust Fund to pay for government operations.
McBride said, without using the words “Land Trust Fund,” the ordinance changed the effective date to July 1, 2005, from July 2006.
“They immediately transferred the money out of the Land Trust Fund,” McBride said.
“We would like them to repeal 2005-09 and 2005-37 and put the money back into the Land Trust Fund,” he said.
When asked how he and other members of ACT believe Land Trust Fund money should be spent, McBride said it should be used for acquiring borough land and to pay for expenses related to the buying and selling of land.
Beyond that, he said, “I don’t think (the borough) ever defined where the money would go.”
“Generally you set up trust funds to use the interest earned; you never spend the principal,” he said.
“This time, they took the interest, and the majority of the $1.4 million was principal,” McBride said.
Under Ordinance 2005-09, the balance in the Land Trust Fund exceeding $2.5 million “shall be made available for appropriation to the general fund.”
The ordinance states disbursement from the fund shall be for acquiring property, managing borough lands and “such other purposes as the assembly may authorize.”
McBride said the very wording of the ordinance violates borough code, which calls for clearly identifying the purpose of ordinances in plain statements preceded by the word “whereas.”
“Ordinance 2005-37 did not comply with the borough code and was passed without public debate,” he said.
The goals of the group’s meeting were to “lay it all out on the table, give people an opportunity to digest it, discuss it and then decide what to do next,” McBride said.
“We had a lengthy discussion of about three hours and identified two specific issues we’re concerned about,” McBride said Tuesday.
Because the language in Ordinance 2005-37 does not address the Land Trust Fund, it does not appear to comply with the borough’s code, according to McBride.
He said what the assembly is attempting to do in 2005-51 is withdraw two of its three components — the sales tax portion of 2005-09 and any mention of the Land Trust Fund.
ACT authored a referendum certified in October to repeal the entire ordinance.
“We went back and forth with the borough clerk on this and the language we settled on in the referendum lists the entire ordinance.
“They have to follow the same rules,” McBride said.
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