Budget battle ensues at City Hall
Possible amendments for the 2007 budget 

01/21/2007  HR
 

At the heart of the current budget debate simmering between City Hall and 3rd Ward Councilman Michael Russo is the municipal garage on Observer Highway, which the city has been using to plug budget gaps for the past two years.

The anticipated revenue that the city expects to generate from the sale of the municipal garage on Observer Highway has been included as $3 million line item in the introduced SFY 2007 budget, which is approximately the same amount of money Russo claims to be able to save the city through his amendments.

According to the city's Business Administrator, Richard England, the only issue currently preventing the 2007 budget from getting the state's approval, which would allow the city council to make it official, is a contract involving the sale of the garage and a developer who would be required to provide $3 million to the city on or prior to June 30 of this year, which is the last day of Hoboken's 2007 fiscal year.

Although Russo's amendments would remove this issue and enable the state to approve the budget without forcing Hoboken to first sell off its garage, several concerns were expressed by England in regards to the proposed cuts to the budget.

The initial set of amendments proposed by Russo were introduced during the Jan. 3 City Council meeting.

At the meeting, the resolution was tabled (postponed) by the council due to what the majority of the board agreed was an inadequate amount of time between when they received the information and when they were expected to vote on it.

After revising the budget cuts, Russo introduced a similar series of amendments this past Wednesday evening during the Jan. 17 City Council meeting, only to remove the resolution himself before the council could vote on it claiming that he wanted to give the city more time to review the introduced budget and ways in which it could be amended to save tax payers money.

After reviewing Russo's amendments, England contested the proposed cuts prior to the meeting, saying, "If (Councilman Russo) forces the administration to make reductions without laying people off. The only possible way I could further reduce the budget would be to totally freeze spending. We'd have to stop buying anything that was not contracted or mandated."

In defense of his amendments, Russo said, "The city of Hoboken deserves a better budget than the one it has been given. I'd rather work together with the city than butt heads with the administration."

The "Russo amendments"

Russo's proposed amendments would reduce spending in over 60 of the 124 line items included in the proposed 2007 budget. A line item reflects the amount of money appropriated in the budget for a specific use or department and is represented by either "Salary and Wages" (S&W) for employees or "Other Expenditures" (O.E.) reflecting operating costs.

According to Russo, the proposed cuts came as a result of three months of research involving the collective efforts of seven individuals with backgrounds in finance.

An example of one potential cut being put forth by Russo involves the O.E. line item for the 2007 Elections, in which the amender hopes to have the current $125,000 that is appropriated for the upcoming Council Elections, be reduced to $50,000.

According to England, $50,000 is an adequate amount of money for the elections, however, if a run-off were to occur between candidates, which the Business Administrator feels is very likely being that all six city wards are up for grabs this spring, the line item would then have to be increased to $100,000 to cover costs.

For each additional run-off, England would have to return to the City Council and request an ordinance guaranteeing a temporary appropriation to cover additional costs.

City finds flaws in proposed amendments

According to England, who was hired 12 years ago by former Mayor Anthony Russo, there are several problems with the proposed amendments, one of which is the amender's failure to take into account state laws that mandate increased spending in certain areas of the budget.

In Russo's line item for the Division of Construction for example, the councilman appropriates $1.375 for both S&W and O.E. combined, as compared with the city's budgeting of $1.841 million for construction in 2007.

On paper it would seem like a savings of $466,000.

However, the reason for the proposed amount is due to a state law that requires the city to fund the present construction line item with an amount equal to the revenue brought in by that division in the previous year, which England pointed out was the initial appropriation proposed by the city.

Another issue England discussed was the variances (differences) between the amount of spending proposed by Russo and the amount already spent by the city due to Council and departmental requests.

As of Jan. 4, the city had already spent $892,000 more than would have been allowed in Russo's amendments. According to England, the funds currently spent by the city so far this fiscal year have not exceeded the amount of money budgeted in the administration's SFY 2007 budget.