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The Lakewood Development Corporation was very busy today, awarding major contracts as well as their own budget.

New Jersey's Urban Enterprise (UEZ) Program was enacted in 1983, in the Department of Community Affairs, to foster an economic climate that revitalizes designated urban communities and stimulates their growth by encouraging businesses to develop and create private sector jobs through public and private investment.

Back in the day, the UEZ program provided a dedicated funding source for municipalities to operate economic development programs in the form of a reduced state sales tax which (instead of filling the state's coffers) were then deployed in UEZ communities to promote economic development. That dedicated funding source previously ended in 2011 and former-Governor Chris Christie did not continue it.

In August 2021, Acting Governor Sheila Oliver signed into law the Urban Enterprise Zone Reform Bill which restores and revises the UEZ Program and appropriates $42.5 million in Zone Assistance Funds statewide for FY22, bringing the program back to full operation after having been without a funding source for more than ten years. 

The UEZ Program offers participating businesses incentives that encourage business growth and stimulate local economies, including a 50% reduced sales tax, tax free purchases on certain items such as capital equipment, facility expansions, and upgrades, and financial assistance from agencies such as NJEDA.

Currently, there are 32 zones statewide, which are spread across 37 municipalities and home to approximately 7,267 UEZ-certified businesses which are included in the UEZ program. 

A portion of Lakewood Township is included in a zone in the UEZ program.

The Lakewood Development Corporation (LDC) is the arm of the Township which administers Lakewood's Urban Enterprise Zone program. The LDC uses the annual UEZ grant money to offer business loans and grants to certified UEZ businesses as well as numerous other business encouragement incentives such as business-to-business networking events.

However, the LDC does not use Township employees to do the legwork of consulting prospective grant and loan applicants, processing their applications, or coordinating the business-to-business networking events.

Rather, the LDC contracts out these services to the Lakewood Community Services Corporation (LCSC) which is headed by Rabbi Moshe Zev Weisberg. [Rabbi Weisberg also just so happens to be a board member of the LDC.]

For the 2022 year, the LDC awarded LCSC the following 2 contracts:

a) Consulting services for the UEZ revolving loan programs for a total amount of $96,650

b) Consulting services for UEZ advertising, marketing, and special events for a total amount of $65,500

These contracts total $162,150.

Under the UEZ revolving loan programs, LDC offers businesses a Standard Microloan of up to $35,000 per loan with incentives including no closing costs and a low 3.5% interest rate, and LDC also offers businesses negatively impacted financially by the Coronavirus pandemic a COVID-19 Emergency Loan up to $10,000 per loan with no closing costs and an even lower 1% interest rate. Both loans are for a term of 10 years.

Under the UEZ revolving loan programs consulting services contract, the LCSC assists businesses by providing information regarding various available loans and grants, the review of loan and grant applications, prequalification for the loans, presentation assistance, and Small Business assistance and mentorship.

Under the advertising, marketing, and special events contract, LCSC coordinates the business-to-business networking events as well email marketing for the events (by maintaining an email distribution list).

The $162,150 the LDC previously awarded to the LCSC for these 2 contracts was supposed to carry LCSC through this calendar year.

However, apparently that money already run dry by October. LCSC then asked the LDC for yet another $42,000 to keep them going through the end of the calendar year. Of these funds, $25,000 is for the consulting services for revolving loan and programs, and $17,000 is for the consulting services for the advertising, marketing and special events program.

LCSC was hoping to get awarded these additional funds without any hesitation. And, saying that "Lakewood has a relatively high unemployment rate of 14.4% compared to the national average of 3.7% according to the Reno Gazette, June 2020 and our loan programs help UEZ registered businesses compete in difficult economic times to provide job opportunities to Lakewood residents and help them grow", the LDC board members were ready to immediately award LCSC the additional funds.

However, LDC Attorney Sean Kean advised the LDC that they are legally required to first publish a Request for Qualifications (RFQ) for these consulting services before they can award the funds to the lucky winner of the RFQ.

As such the LDC then published an RFQ. It seeks applicants who possess "knowledge of non-profit corporations, the Township of Lakewood and the subject matter to be addressed under the contract... [and] have a minimum of the most recent 5 years of current experience facilitating advertising, marketing and special events in the Lakewood UEZ".

The RFQ further specifies that "it is expected that applicants responding to this request for proposal will have facilities and expertise in these types of services to satisfactorily carry out the required consulting services ... to the business community."

The RFQ includes a punchline that "due to the fact that the nature of effective coaching requires more often than not the physical presence of the facilitating coaches, Applicants shall be within 5 miles of Lakewood Township."

LCSC then submitted a bid for these contracts.

At today's LDC Board meeting, prior to awarding the contracts to the LCSC, a member of the public commented that the LDC's RFQ wording seem to be very specifically pointed towards one specific vendor (who happens to be the LDC's current vendor), and this may be a violation of the New Jersey Local Public Contracts Law (NJSA 40A:11-4.4) which provides that "the competitive contracting process shall... include all requirements deemed appropriate and necessary to allow for full and free competition between vendors; information necessary for potential vendors to submit a proposal."

The member of the public urged the LDC to table the award of the contracts until they republish RFQ's which do meet the criteria of the State's Local Public Contracts Law.

LDC Attorney Sean Kean rebuffed the public comment by assuring the LDC Board members that the RFQ does meet the criteria of the Local Public Contracts Law because "the LCSC's bid was the one single bid we received for these contracts. No other vendor applied or even asked questions regarding the bids, nor has any potential bidder challenged the bid in court".

LDC Chairman Abe Mueller stated that their attorney satisfactorily addressed the matter and directed the Board members to "move on".

All Board members voted in support of awarding the 3 month contracts to the LCSC, besides for Rabbi Weisberg who abstained on the vote.

The LDC also advanced plans to continue these contracts going for the next 2 years, by approving submissions for State approval to award a 2 year contract (January 1, 2023 through December 31, 2024) for the Revolving Loan Program for $193,304, and for the Advertising, Marketing and Events contract for $135,000.

The LDC will forward these plans to the Lakewood Township Committee, and upon their approval - which is expected to take place ceremoniously at their next meeting on December 8th - the LDC will submit their plans to the State for their approval. Upon receipt of State approval, the LDC will publish an RFQ for these contracts.

Also today, the LDC adopted their annual budget which, according to their resolution, "finances the personnel and administration expenses associated with projects and activities that will lead to increased economic activity or encourage private investment and job creation".

This budget, which will be funded by the UEZ funds that the Township receives from the state, is $417,900. This includes salaries of $122,400 to Executive Director David Klein, $76,500.00 to Joann Wilkes, and $25,480.48 to Anita Doyle (who receives an additional salary from the Lakewood Industrial Commission), as well as benefits (i.e. health insurance) for these employees for a total of $113,000. (Attorney Sean Kean receives $7,000 as his slice of the pie, an additional $20,000 covers the audit).

The total annual budget includes an increase of $10,894, which, David Klein, explained is "to cover incidentals due to the uptick in our activity which is due to additional state funding for our program".

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Anonymous said...

Corruption Corruption Corruption any board member who always have to recuse themselves from voting should get off the board. The other members who vote for it helping their fellow board member should resign too.
This is disgusting how they use the tax money

Aron Goldberg said...

LCSC Director and LDC Board Member Rabbi Moshe Zev Weisberg is also a Vaad member and its spokesman.

LDC Chairman Abe Muller is also a Vaad member. Rabbi Weisberg alone recusing himself from the vote isn't enough as Mueller's vote is also hooking up his partner in crime.

It's especially of interest to note that Partner Mueller is the croney who guided the rest of the Board to not dwell too much on the public comment which questioned the legality of the RFQ.

Chavi Milworm said...

Isaac Akerman voted confidently on the LCSC contracts - he's behaving due to elections.