From: Pamphlet, Teaneck Collection at Teaneck Public Library
Published and Distributed by Teaneck Taxpayers League
Chapter 4: "IN THE FULL TIDE OF SUCCESSFUL EXPERIMENT"
-- Thomas Jefferson, First Inaugural, March 4, 1801
At the Township election in May, 1934, there were sixteen candidates for the Township Council. The Teaneck Taxpayers League won an easy victory and elected all five of its candidates. But following this election, the League was torn with a violent internal convulsion, which culminated at the meeting of the League body held on July 11, 1934. At this meeting the League disbanded its executive committee for attempting to meddle in the affairs of the Township Government.
It is a steadfast rule of the League that it is not to interfere in the conduct of the government. The League may commend and give support to the government, or it may criticize and condemn; but it does not meddle or undertake to exercise control.
The fight in the League involved a split in the Council, and two members of the Council deserted the League at that time.
The most important act of the Council elected in May, 1934, was adoption of an ordinance providing for refunding all the Township's then outstanding debts. During the previous four years the gross debt had been reduced by $1,600,000.00 and nearly $500,000.00 of bonds had been bought by the Township in advance of their maturities, effecting a saving of more than $45,000.00 in principal and interest. Yet the Township had to arrange to pay about $1,500,000.00 still outstanding of the bonds maturing in 1934; about $500,000.00 more in 1935, and nearly $500,000.00 more in 1936.
Little then remained in the trust account, which had been largely used to buy bonds in advance of maturity, and it was certain that such great sums could not be paid out of the current tax collections of those years.
To avert the catastrophe of default and bankruptcy, which threatened only because improvident governing bodies prior to 1930 had issued short-term assessment bonds right and left without considering when or how they would be paid, the Council provided for a refinancing of all of the township's debts, bonded or otherwise, by a $3,000,000.00 issue of general refunding bonds.This entire refunding program was planned and successfully carried out by Township Manager Volcker, with only negligible expense to the Township. If it had been handled by a bond house, the cost to the Township would have been at least $50,000.00 in commissions, and additional hundreds of thousands of dollars over a period of years in higher interest rates.The ordinance authorizing this refunding operation was passed in Council with the votes of its three members still loyal to Teaneck Taxpayers League. Against it were recorded the votes of the two Councilmen who had deserted the League and its principles.The average interest rate of the debts refunded was .054. The refunding ordinance authorized no rate higher than .05. Only enough of the refunding bonds were issued in any year to retire bonds maturing that year and for which funds were not otherwise available. Year by year, when bonds were advertised for sale, bids were received at lower and lower interest rates, and finally the last block of $180,000.00 of these bonds was sold at an interest rate of .03.Two methods were used to retire the old outstanding bonds: (1) Give newly issued refunding bonds in exchange, where holders of the old bonds would accept them; (2) Sell refunding bonds on competitive bids and from the proceeds pay for the maturing bonds in cash.In order to make this refunding plan successful, the Township had to convince prospective purchasers of the refunding bonds that it would be able to pay both interest and principal of the new obligations as they fell due. Financial institutions that deal in municipal bonds required knowledge of Teaneck's credit risk, both for themselves and for their investing clients, before accepting or recommending any acceptance of the new bond issue; so they engaged Dr. Thomas H. Reed, an expert on municipal government and municipal finance, to make a survey of both the government of Teaneck and the Township's financial standing.Full Value for Tax DollarDr. Reed, formerly City Manager of a California city, was at one time professor of government at the University of Michigan, and is the author of various standard books on municipal government.
On August 1st, 1935, Dr. Reed transmitted to the bonding houses that employed him a sixteen-page report. On Teaneck's finances he said:
"In the early part of our report we pointed out the financial difficulties which Teaneck has had to face in the past few years, and which will continue to be a handicap to the township's credit until the refunding operations have been completed. We wish now to express our firm conviction that when the refunding operations have been completed, there will be no municipality of similar size which should, either because of good management or ability to pay, enjoy a better credit standing than Teaneck."
Concerning the Township government, the report said:
"Teaneck adopted the manager plan of government in 1930, and under the able administration of Paul A. Volcker the township has attained a high reputation for economy and efficiency.
"It may be safely said that the people of Teaneck get the full value of their tax dollar in service.
"Among the most interesting of the achievements of the present administration of Teaneck was its success in having the fire insurance rating of the township raised from Class E to Class C. The saving to the property owners of Teaneck in insurance rates amounts to $12,000.00 annually." (Subsequently the basic rating was again advanced to Class B, and the saving in insurance costs to all property owners exceeds $25,000.00 a year.)
"The installation of radio patrol in the police department is another of its brilliant accomplishments. Teaneck now enjoys number one police protection at a minimum cost.
An incident strikingly illustrative of the activity of the township officials in taking advantage of every opportunity to serve the interest of the taxpayer was the purchase by the fire chief of an aerial ladder truck discarded by the New York City department, for $135.00. The chief, a man of many years' experience in fire protection work, followed the auction sales of discarded equipment in the great City and bought this truck from a junk dealer who had bid it in. Repairs and new equipment brought the total cost of the aerial truck to $700.00. It is to all intents and purposes as good as a new one. The newspaper reports of this incident sent the commissioner of accounts of New York City scurrying to find why the fire department threw away valuable trucks, but that does not at all diminish Teaneck's credit for making one of the best bargains in the history of municipal government."
Another important matter that demanded immediate attention was the collection of taxes. In 1933 Teaneck was able to collect only 52% of the tax levy for that year. The whole country was then floundering at the very bottom of the economic depression; nevertheless, taxes had to be collected so that the government could carry-on and pay its current bills.
As of December 31st, 1933, the taxes and assessments past due and unpaid amounted to $2,089,689.57. After the 1934 tax sale, the Township owned 2,344 tax title certificates. Something had to be done immediately to liquidate these frozen assets and to stimulate prompt payment of current taxes. The Township Council decided that a way must be found to force the redemption of its 2,344 tax title certificates, or foreclose those not redeemed.
Tax Title Lien Contract
Prior to 1930 it cost the Township from $300.00 to $350.00 in legal fees to foreclose a tax title certificate. At that rate it would cost a minimum of $600,000.00 in legal fees to foreclose its 2,344 tax title certificates. In order to overcome this apparent impasse, the Township government drew up a contract for disposal of the tax title certificates in bulk, either by getting redemptions, or deeds giving title to the Town ship, or by foreclosure, and advertised for bids on the contract. This contract provided that all the certificates must be disposed of, and that legal fees, costs, and expenses could be paid only out of the interest accrued subsequent to date of tax sale and collected by the Township from those who redeemed their properties.
This contract provision had three very beneficial results:
- it virtually compelled the attorney who entered into the contract to effect redemptions wherever possible, so that there should be a fund from which he could be paid;
- the Township received intact for its own use all the back taxes and assessments paid on redemption and interest up to date of sale; and
- since all the costs were paid out of accrued interest collected on redemption and none out of current tax collections, no burden was placed on the annual budget.
Township Collects $773,434.46
The contract was awarded to Samuel H. Friedman. The Township agreed to pay him $45.00 for each tax title certificate he liquidated, either by securing payment of the taxes due the Township, by securing a deed to the Township, or by foreclosing the right to redeem and thereby vesting a marketable title to the property in the Township. Awarding the contract was a notice to delinquents that they must redeem their properties or lose them by foreclosure.
Under this contract the Township collected in cash from back taxes, assessments, interest and penalties, paid at time of redemption, $773,434.46, and received a marketable title to lands having a total assessed value of $1,134,280.00. Through operation of this contract the Township liquidated $1,907,714.00 of its frozen assets, totaling in assessed valuations over two million dollars, at a cost of only $92,700.00 paid out of interest accrued after tax sale. Before the end of 1941 the Township had received in cash more than $100,000.00 from the sale of property acquired under the contract.
The Township has given to the Board of Education large tracts of land acquired under this contract for present and future school purposes. Still other parcels and tracts of land acquired under the contract are now being used or are set aside for park purposes.
In framing this Tax Tide Lien contract Teaneck's Township Council blazed a new trail. No municipality had ever tried any similar method of clearing away its accumulated holding of tax title certificates.
However, this very important and highly beneficial contract was supported by only three members of the Council, the three League members. The minority members tried to defeat it by every political trick and device at their command. At the insistence of one of the minority members the Bergen County Grand Jury held an investigation of the conduct of the work done under the contract, for the purpose of arousing public opposition to the contract and in the hope that a political indictment might be obtained against the three majority members of the Council.
This minority Councilman publicly charged that the tax title lien contract "reeked with rottenness", and that it was "the foulest act of Political trickery ever perpetrated on the community" He also publicly charged that there was fraud in the procurement of the contract, and graft in its execution. The closest investigation revealed that there was not one word of truth in any of his slanderous and malicious charges.
Teaneck Taxpayers League stood firmly behind the three majority members of the Council in their fight in support of this contract.
Very largely because of the refunding program and the tax title lien contract Teaneck reestablished itself on a sound financial basis and stabilized the value of all real estate in the Township. The defeat of either of these two policies would have brought serious financial embarrassment to the Township and its property owners. Without the active and vigorous support of Teaneck Taxpayers League both of these financial policies might have failed. The minority members of the Council, with the support of partisan politicians, were determined to cripple the Township's finances in order to destroy alike the government, the majority members of the Council and Teaneck Taxpayers League. Any such financial catastrophe would have been blamed first on the form of government, and then on the majority councilmen in control of the government, and finally Teaneck Taxpayers League for supporting the government.
Some of the other important policies adopted and projects undertaken by the majority members of the Township Council, with the support of Teaneck Taxpayers League, during the years between 1934 and 1942 are:
- prohibiting business on Route No.4;
- a beneficial revision of the zoning ordinance;
- planning and starting the development of an extensive park and playground program;
- enlarging the public library and expanding its facilities;
- creating a department of health;
- the adoption of regulations controlling the sale of alcoholic beverages; and
- the adoption of an ordinance forbidding operation of pinball games in the Township.
Practically all of these improvements were opposed by the minority members of the Township Council.
At the municipal elections in May, 1938, Teaneck Taxpayers League endorsed and succeeded in re-electing three members of the Township Council. They were opposed by a combination of Democratic and Republican political leaders.
During the eleven years since 1930 Teaneck's non-partisan Council-Manager form of government has been the most progressive, the most efficient, and the most economical local government in all New Jersey. This remarkable success is due largely to the support given the Township Government by the people through the medium of Teaneck Taxpayers League.
From 1930 to 1940 the amount raised by taxation to run the Township Government decreased from $38.10 per capita to $21.03, a per capita decrease of 45% in ten years. From 1930 to 1940 the net debt of the Township -- that is, the gross debt less cash on hand available for debt payments -- decreased $2,376,000.00, or from $292.00 per capita in 1930 to $96.00 per capita in 1940, a decrease of 67%. The figures are all taken from official records. They show the comparison between government under partisan political management and under the non-partisan, efficient, business-like management inaugurated and maintained by Teaneck Taxpayers League.
These large reductions in taxes and Township debt have been achieved in spite of the fact that the Township government has more than tripled its services to the people. In 1930 Teaneck had no municipal parks or playgrounds. Today, Teaneck has ten public parks and playgrounds in operation and other land set aside for future development into parks. We now have the park along Route No.4 at Garrison Avenue, Central Park, Amman Park, Tryon Park, Mackel Field, Glenwood Park Ball Field, Railroad Avenue Ball Field, Town Hall playground, Hart playground and Hackensack River Skating Pond. The Township government has provided recreational directors and park attendants to supplement the use and enjoyment of its parks and playgrounds.
All of the relief load has been paid out of the annual budget; no relief bonds were issued. Both the fire and police departments have been increased, and special guards are now posted to protect the children at nearly twenty school crossings and in winter at many coasting streets.
In the past eleven years there has been a great increase in the number of miles of streets that must be maintained and now all paved streets are cleaned by motorized sweepers. The Township now has a special shade tree department. It has a trained health officer.
Public Services Increased
All of these services were inaugurated since 1930, and the cost is included in the annual budget. But, as previously said, although the Township government has thus increased its public services threefold and more, nevertheless the taxes have been greatly reduced.
Little has been said in this report about the efficiency of various departments of the government, because this is primarily a story of Teaneck Taxpayers League. Yet it would be a mistake not to mention the fact that each department of the Government has operated efficiently and economically since 1930, largely because they have been subjected to no political interference. The Township employees have proven their ability to do a good job when they are not hampered by politics, and they have likewise proven their loyalty to Teaneck and its taxpayers.
It already has been said that all departments deserve high praise for the kind of service they have been rendering the Township since 1930, and to that statement there are no exceptions. However, conditions warrant special mention here of the fire department, because the changes in the fire department have been most momentous under the municipal manager form of government.
This department has been gradually transformed from a volunteer department to a paid department. In 1930 Teaneck had only ten paid firemen and a part time Chief, who was not in the Township during business hours. It now has thirty-six paid men, including a full-time Chief, all under supervision of the Township Manager as Fire Commissioner.
In 1930 the department's equipment consisted of three one-ton hose trucks carrying chemical tanks, one cities service ladder, and two pumpers with aggregate capacity of 1,350 gallons per minute. Today the department has two pumpers with aggregate capacity of 1,750 gallons and a "quad" (combined hook and ladder truck, pumper with 350 gallon capacity, and hose cart) making total water capacity of 2,100 gallons; a 75-foot aerial ladder; a three-and-a-half ton Mack emergency truck; one hose wagon; one search-light truck and a chief's car.
This improvement in fire equipment has been brought about at a minimum cost through rebuilding old equipment with the regularly employed Township labor, the purchase, repair and repainting of some second-hand pieces, also some minor new purchases, so that Teaneck now has adequate fire-fighting equipment, all in good condition, acquired at a total cost less than one quarter what it would have cost to buy new apparatus equal in capacity and usefulness.
Lower Insurance Rates
As the result of improved fire protection service, the Rating Bureau of the National Board of Fire Underwriters more than six years ago advanced Teaneck Township from Class E to Class C rating, and in April, 1938, again advanced Teaneck to Class B rating. These advances in rating are today saving Teaneck property owners more than $25,000.00 a year in the aggregate in the cost of their fire insurance.
The National Municipal League has expressed high praise of Teaneck's government in several of its publications. In a booklet entitled The Story of the Council-Manager Plan, published in 1940, it said:
"Teaneck, N. J., is considered a model community, with a top-notch record of excellent services, efficient fire and police departments, and an ideal setting for living 'the good life'. Its fire school, set up to train its own firemen, is only one example of the community's leadership. Many other New Jersey communities send their fire department officials regularly to the Teaneck fire school.
"Things were not always so ideal in Teaneck. In 1930, under the old form of government, debt and taxes were out of sight and services were notoriously poor. Then the Council-Manager plan was adopted. After ten years, although the population increased 52 per cent, the total cost of government decreased from $800,000,00 to slightly over $700,000.00,"
Chapter 5: "TRUE PATRIOTISM IS OF NO PARTY."
In the early part of the year 1931, Teaneck Taxpayers League adopted a constitution and a set of by-laws under which it has operated ever since. The constitution provides for the annual election of a president, vice-president, recording secretary, corresponding secretary and a treasurer as the officers of the League. It also provides for an executive committee composed of the officers of the League, a captain from each election district and a representation from the ladies of the auxiliary. Although the executive committee is given broad powers, all of its acts are subject to the approval of the League body.
But Teaneck Taxpayers League is not a political organization, as some people maintain. It is not even accurate to speak of Teaneck Taxpayers League as an organization at all, because the word "organization" used in this way suggests merely a "body of persons" united for a special purpose.
Teaneck Taxpayers League fundamentally is not merely a "body of persons"; it is fundamentally a "set of principles for local democratic government". This concept of the League is an adaptation of a fundamental American political maxim: "measures, not men". These League principles were "organized" as the foundation of the League when it was first formed in 1929. They alone express the League's purpose.
Any person who wishes to actively support these principles may do so either as a League member, or outside the League membership. The "body of persons" supporting the League and its principles as members has been constantly changing. The principles of the League have never changed; they are permanent; they constitute Teaneck Taxpayers League. The only purpose of membership in the League is to permit one to more effectively support the League principles.
To some, especially those who are opposed to it, this description of Teaneck Taxpayers League may seem more euphonic than real. But those who have faithfully supported the League as members for twelve years know that this description of Teaneck Taxpayers League is true and genuine.
To conclude this chronicle of Teaneck Taxpayers League, one more thought should be added. Today the United States is marshaling all her gigantic resources of men and materials in defense of the principles of democracy. On our far-flung island frontiers and in foreign lands men of America are fighting, sacrificing, dying in defense of American ideals. We at home, if we call ourselves true Americans, must prove that our democratic form of government is worthy of their heroic deeds by making the government perform its duty as efficiently, as effectively, and as loyally as those who are fighting to defend it are performing their duty.
The success of democracy in the National and State governments vitally depends upon honest and efficient democratic local governments.
It is therefore the duty of every citizen of Teaneck to help keep Teaneck's government the splendid example of democratic processes that it has been during the past twelve years.