Merging neighboring Interlaken and Loch Arbour together was the sole topic during a joint meeting of the two small communities held on Wednesday, November 12.
About 200 residents from both towns packed the Allenhurst fire house on Hume Street to hear the first public presentation about a merger plan for the two adjacent towns.
Some residents, from both communities, said they either felt that the presentation was very thorough and professional while others said they thought it was a hard-sell that made them nervous.
Loch Arbour is seeking the merger to reduce its school tax rate which skyrocketed a few years ago due to a change made by the state Legislature to a pre-existing school-funding formula with Ocean Township.
Interlaken taxpayers would benefit from a merger by having the borough’s debt wiped out and by homeowners seeing a substantial reduction in their property taxes, according to Loch Arbour Mayor Paul Fernicola.
“There will be significant tax savings for both communities. There is no risk to Interlaken and I think this is a win-win for both towns. Both communities are fully developed and the character of each town will not change,” he said.
Interlaken Mayor Michael Nohilly said that Interlaken has not appropriated any money to do any research into the merger proposal at this point and that the joint meeting is a possible first step.
On Nov. 14, Loch Arbour submitted an independent fiscal study to Interlaken, which was a requirement from Interlaken before they would even consider the merger issue.
Under the proposed merger plan, all of Loch Arbour’s land, including its beach club, would become part of Interlaken and the village would cease to exist.
“Everything would be governed by the Interlaken Council and its various boards- everything would be under the jurisdiction of Interlaken,” Fernicola said.
Loch Arbour has 135 homes, four businesses, two vacant lots, and less than 200 residents. The village’s 2.5-acre beach club took in $300,000 this summer and, after expenses, netted $170,000.
Fernicola also presented a Nov. 7 letter from Acting State Commissioner of Education David C. Hespe stating that if the merger were to take place then Loch Arbour children would be educated the same way Interlaken students are educated.
Hespe recently signed off on a plan where Interlaken’s school-age children are educated at West Long Branch schools and Shore Regional High School at a per-pupil tuition cost.
Loch Arbour has about 20 potential school-age children but only about 14 are likely to go to public schools, with the rest going to private schools, Fernicola said. He added that both West Long Branch and Shore Regional have said that they can easily accommodate the extra students.
Under the proposal, there would be a 24 percent tax savings for Interlaken residents for the first 10 years after the merger, or about $2,000 a year for the average home.
Loch Arbour would also pay Interlaken $5 million over a 10-year period with the money generated through a Loch Arbour special-taxing district comprised only of village residents. The money would be issued in 10 payments and used to retire Interlaken’s debt and to eventually create surplus.
The Interlaken tax rate for an average home (assessed at $620,795) would drop from $8,400 to about $6,400, or by about 24 percent, during the first 10 years of the merger while the Loch Arbour tax rate for an average home ($1,051,702) would drop from $21,800 to $14,200, or by 35 percent, which includes the $5 million in special tax assessments.
After the first 10 years, the Interlaken tax rate should remain reduced about 21 percent and the Loch Arbour rate by 49 percent since the $5 million will then be paid off.
Legislation is currently pending that would allow for the creation of these special-taxing districts but one can also be set up with approval from the state Department of Community Affairs (DCA) if the legislation is not approved.
“The special-taxing district is an important and integral part of the consolidation,” Fernicola said.
Any potential lawsuits, especially one from Ocean Township over the loss of Loch Arbour as a tax-paying consolidated school district, would be solely paid for by Loch Arbour residents, although many professionals at the joint meeting said such a lawsuit is unlikely and would have to filed with the state, not with Loch Arbour or Interlaken.
The next step in the merger process is for Interlaken to agree to draw up a merger plan that will be presented to the DCA for review and possible approval.
“There is no risk to Interlaken to submit the plan for the state’s initial response,” Fernicola said.
The entire merger process would require Interlaken to help draw up and submit the plan, get approval from the state to create Loch Arbour’s special-taxing district, hold three public meetings on the merger and, eventually, have a 50 percent majority vote by registered voters in each community to finalize the deal.
DCA Director Tom Neff, who attended last week’s meeting, said that a merger now would make it less likely that the state would take action itself on the issue in the future.
“It makes it less likely the state may force a merger that you may not want,” he said.
He also said, “At the end of the day, you will not more forward unless the people want it. And we will make sure it is done correctly and protect you.”