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The Numbers Game: What’s a Transition Cost and What’s Not?

What constitutes a transition cost for consolidating the two Princetons and what doesn’t?

It is a question that comes up almost every month now in discussions about the merger. It’s also a question that has political implications, as officials across the state watch how the Princeton experiment unfolds.

In June, headlines announced that the transition to one Princeton would probably cost $1 million to $1.5 million more than the $1.7 million taxpayers were told was the estimated cost when they voted on the measure last year.

Extra costs that were not budgeted include severance packages for employees and  cost associated with merging the dispatch centers for the police department.

But now some officials are saying that certain costs should not be included in the transition costs.

“Some of the costs of creating a consolidated Princeton seemed to be migrating into transition costs, yet they are costs that have been deferred for several years,” Consolidation Commission Chairman Anton Lahnston told commission members last night. “In discussions, I’ve heard some costs attributed to the transition that are not transition costs. They really are normal upgrades.”

Township Committeewoman Liz Lempert said costs fall into three categories: obvious transition costs, non-transition costs, and “a gray area.”

“It’s part of our discussions with the state,” Lempert said. “We might buy something and need to replace it in two or three years, but because of consolidation we are doing it now.”

New dispatch equipment for the police department is an example of costs some officials don’t think should be considered transition costs.

“Both systems were going to out of compliance and needed to be upgraded,” Lempert said. “To upgrade both systems, had we not consolidated, would have been more expensive than the amount of spending to build a new system for the consolidated town. It’s a somewhat grey area.”

The state has agreed to pay 20 percent of the transition costs for the Princeton merger. The state representative to the commission, Eugene McCarthy from the Department of Community Affairs, said dispatch equipment would have to be upgraded in 2013 anyway because of new federal rules requiring a different system.

“It kind of muddles the picture,” McCarthy said. “The River Road public works facility is another good example. You’ve been postponing that project forever.”

The issue came up again later last night at the Transition Task Force meeting. Task Force member Scott Sillars reported that not including a recent contract for $38,000 with architecture firm KSS, the task force has spent $59,000 of it’s $149,000 budget.

Some members of the task force asked for an overview of transition costs to date. Sillars said information will be presented next month. He also suggested that public safety costs for dispatch should not be included in transition costs, and said severance costs are coming in lower than the amount originally estimated.

“The taxpayers want to know what the costs are,” Task Force Member Jim Levine said. “They are going to think of the $750,000 public safety costs as transition costs. They should know it would have been paid regardless.”

But Borough Mayor Yina Moore raised an eyebrow when the suggestion was made that some costs associated with the merger should not be considered transition costs. Moore said defining what is a transition cost and what is not is a slippery slope, and suggested that all costs should be spelled out so other towns considering a merger can get the full picture of the consolidation process and costs.

Krystal Knapp

Krystal Knapp is the founding editor of Planet Princeton. She can be reached via email at editor AT planetprinceton.com. Send all letters to the editor and press releases to that email address.

  • Walter Broner

    IMHO, transition costs should not include contributions to capital outlays that had been planned separately by the merging entities. They should include include specific consolidation costs due to merged departments and therefore elimination of some duplication of services balanced by the cost of combining records, databases, altering operational facilities spaces to accommodate different staffing needs. What sort of discussion has there been regarding the waste and recycling pick-up? Will routes become more streamlined? Will costs of disposal change due to overall volumes? For the above issue, the cost of a study to streamline the processes is a legitimate transition cost.

    Let’s say the discussion is about upgrading a police/emergency dispatch system. If both entities had planned for these in their budgets, then the cost of the consolidated system should not be a transition cost. A transition cost, by definition should include payment for a temporary measure, not for a system which will then serve the combined entity beyond the transition period. Just my 2-cents.

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