Teaneck, N.J., Eyes 7th Straight Year of Borrowing for Severance Pay
TEANECK, N.J. — Teaneck's council is set to vote Tuesday, Oct. 27, on borrowing up to $800,000 to cover payouts owed to retiring or laid-off township workers. If it passes,…
TEANECK, N.J. — Teaneck’s council is set to vote Tuesday, Oct. 27, on borrowing up to $800,000 to cover payouts owed to retiring or laid-off township workers. If it passes, it would be at least the seventh year in a row that Teaneck has spread these payouts over several years with special emergency borrowing instead of paying them out of a single year’s budget, according to the township’s own audit.
Ordinance 49-2026 is up for a public hearing and final vote at the Oct. 27 council meeting, according to the agenda posted this week. The meeting opens at 6:30 p.m. at 818 Teaneck Road with a closed session. The public portion starts at 8 p.m. in the Council Chambers, and residents can also join by Zoom.
Six years of severance borrowing
Teaneck’s 2025 annual audit is attached to the same agenda for certification. It lists a “special emergency” appropriation for “severance liabilities” approved in each year from 2020 through 2025:
- 2020: $1,615,446
- 2021: $987,000
- 2022: $1,600,500
- 2023: $965,000
- 2024: $690,000
- 2025: $990,000
That adds up to $6,847,946. With this year’s $800,000, the total would come to $7,647,946 since 2020.
State law (N.J.S.A. 40A:4-53(h)) lets towns spread “contractually required severance liabilities” over as many as five years, so the cost doesn’t land in a single budget. Each year, at least one-fifth has to be paid off. The audit shows Teaneck still owed $2,958,600 of its 2021–2025 severance appropriations at the end of 2025. Its total special emergency balance was $4,148,885, which also counts a 2020 COVID deficit and a 2023 property revaluation. The 2025 budget raised $1,881,874 toward those balances.
What the ordinance says
The ordinance says the township “has accrued contractually required severance liabilities” for employees retiring or being laid off in 2026, and that $800,000 is needed. It would pay for them with special emergency notes. At least one-fifth of the notes must be paid off each year, and all of them by the end of the fifth year.
A companion resolution on the same agenda, No. 335-2026, would authorize issuing those notes. It needs at least two-thirds of the council to pass.
A $42.9 million note sale
Resolution 336-2026 would authorize the chief financial officer to sell up to $39.85 million in tax-exempt bond anticipation notes and up to $3.05 million in federally taxable special emergency notes. According to the resolution:
- The $39.85 million covers $31,848,400 to roll over most of a $32 million note issued Dec. 15, 2025, that comes due Dec. 14, 2026, plus $8,001,600 for new capital projects and the cost of the sale. The 2026 budget pays the remaining $151,600.
- The $3.05 million covers $2.25 million to roll over part of a $3,536,000 special emergency note that also comes due Dec. 14, 2026, plus the new $800,000 for severance. The 2026 budget pays the remaining $1,286,000. The resolution says the older note paid for severance liabilities and the revaluation the Bergen County Board of Taxation ordered for tax year 2024.
The audit lists the 2025 special emergency note at 3.90% interest. The township’s December 2025 bond anticipation notes carry 4.00%.
What was said Oct. 6
When the ordinance was introduced on Oct. 6, the township’s chief financial officer told the council it would cover payouts to 10 employees, most of the money going to three recent retirements. He said a $100,000 reserve for these costs was dropped from the 2026 budget to help bring down the tax increase. He also said the interest rate wouldn’t be known until the note sale in early December.
Councilwoman Hillary Goldberg said she would not vote for a future budget that doesn’t increase that reserve. She voted no on the introduction, according to the township’s meeting video.
The discussion starts at 1:11:37 in the township’s video:
Also on the agenda
- 2025 audit: The audit by Bowman & Company LLP reports “no current year findings.” It shows the township ended 2025 with $6,052,811 in fund balance and used $5.5 million of it, or 90.87%, in the 2026 budget.
- Bond counsel: Resolution 334-2026 would appoint Wilentz, Goldman & Spitzer.
- Lawsuit settlement: Resolution 337-2026 would approve a $115,000 settlement of a lawsuit over an Aug. 4, 2023, crash involving a township employee near Circle Driveway and Arlington Avenue. The resolution says the settlement is not a finding on the merits.
- Ordinances 48, 50 and 51-2026 (towing fees, Teaneck Road parking, and a Hargreaves Avenue school zone) are also up for final votes.
The ordinance and resolutions are pending. The council has not voted on final adoption.
More Bergen TV coverage of local government finances: Hackensack, N.J., ends GOAT building tax break, OKs PILOT lien sale; Tenafly, N.J., rejects cell-tower bids below its $4 million minimum; and Mahwah, N.J., data center ban and DPW bond cancellation.
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