The greatest concern to all municipalities is the freezing up of their credit markets, Township Manager Joseph Hartnett said.
All 566 municipalities in New Jersey, including Montclair, borrow money to meet daily expenses.
So, as panicky residents watch the stock market tumble, Montclair officials are making sure all bases are covered amid the economic crisis.
Hartnett explained, "We also borrow money to fund construction projects, called bond anticipation notes, until we secure permanent bonds. There have been a couple of cases that have come in New Jersey where towns have had difficulty selling their bond anticipation notes."
Montclair was "fortunate" in that respect, Hartnett said, because the township has already secured two bond sales this year, one in May and the other in August.
"We’re keeping a close eye on the situation," he said.
There are upcoming bond anticipation notes for the long-delayed $35 million school on Washington Street – for which the Montclair Board of Education broke ground last month – as well as some rollover notes from the previous year.
"We have about $28 million in bond anticipation notes coming up in December. Hopefully, the situation will have settled down by then," Hartnett said.
If the situation does not calm down by December, Hartnett said, "It may be harder to sell them [anticipation notes] at a favorable interest rate."
While 58 percent of the local property taxes goes to the schools, the biggest municipal expenses are police and fire services that receive more than 40 percent of the taxes collected.
Sharing services with other municipalities is a cost-saving method favored by Montclair officials.
Montclair has about 38 shared service agreements within the township, including the Montclair Board of Education and the Montclair Public Library, and with nearby municipalities, Hartnett said.
"We always try to work with other towns and government agencies," he said.
Montclair provides Glen Ridge with fire services. Police cars are bought through a cooperative purchasing system with Cranford.
Instead of buying liability, property, workers compensation, and other insurance, with separate insurance companies, Montclair is a member of a joint insurance fund called The Garden State Joint Insurance Fund.
As part of the program, Montclair shares insurance costs and risks among 18 other municipalities, Hartnett said.
"That saves several hundred thousand dollars each year," he said.
