Chop, chop, chop. 

Council proposes $2M in cuts to $87M budget, but finance director says they're not all feasible

01/20/2008 HR
 
In an attempt to curb spending and reduce a proposed municipal tax increase, Hoboken's City Council Revenue and Finance Committee introduced a plan at Wednesday night's council meeting that if adopted, could reduce the proposed $87 million city budget by approximately $2.4 million.

The budget is now six months late, as local budgets often are, as mayors grasp at revenue deals in order to hold off politically unsavory tax increases.

However, this time, the council, members of the public, and the administration have suggested specific cuts.

The proposed cuts, which were distributed at the meeting by 3rd Ward Councilman Michael Russo, who heads the council's Revenue and Finance Committee, cites three specific ways to reduce spending.

The first is the introduction of a retirement incentive package, which had been previously announced by the administration. The council estimates $900,000 in savings to the city as a result of the deal, which would encourage highly paid employees to retire.  According to Russo, approximately 30 city employees with an average salary of $100,000 each have already expressed interest in the package.

An additional $450,000 is to be cut via the Salary Adjustment Line item, which according to Russo amounts to excess money that had been left over from money that the city previously allocated for the recently completed police contract.

The third and possibly most controversial suggestion is a spending freeze.

This would prohibit the administration of Mayor David Roberts from spending any more during its 2007-2008 fiscal year budget than it did on the same line items in the previous year's budget. This measure would generate a savings of $1.1 million.

However, some of that spending has already exceeded last year's amounts.

Business administrator doubts it's feasible

The city's business administrator, Richard England, expressed doubt on Thursday about the feasibility of the proposal.

England said, "I personally do not believe that the cuts can be made and still maintain a level of service to the community that would be acceptable."

When asked if the entire proposal was feasible, England said, "No; not without a total spending freeze by the administration. And even then, the contractual obligations of the city for the balance of the year might offset any expected savings."

England said that in some cases, the city has already spent more than it spent in the last budget.

The currently proposed budget applies to the city's current fiscal year, which is already half over. It began on July 1, 2007 and will finish on June 30, 2008.

In at least one line item, Finance Supervisor's Other Expenses, the amount allocated has already exceeded last year's by approximately $20,000, according to England. He said the reason is because the city privatized finance operations several years ago, resulting in an annual contract with an outside firm. This year's contract is approximately $20,000 greater than last year's.

Russo dismissed England's apparent pessimism towards the proposed amendment, saying that he believed the cuts to be feasible and invited the administration to sit and discuss the options.

Russo acknowledged that certain line items were on their way to exceeding last year's amount, but said that in order to compensate, the city would have to further reduce other line items through additional cuts.

Cut the horses

Examples in the proposal include the elimination of the mounted police unit, which Russo estimated to cost in the area of $75,000 annually, and costs associated with the master plan for zoning citywide, which Russo said has not needed additional assistance or consulting for quite a while, and therefore does not require the $50,000 line item currently attached to it.

After the changes are approved, then England will send the proposal to the state for approval. After that, the state sends it back to the City Council for a final vote.

Mayor Roberts could not be reached for a response to the budgetary amendments last week.

Audience criticizes and cheers

After listening to Russo introduce several of the main points of the council's proposal, a handful of residents expressed their disapproval with the way in which they perceived the city to be handling the budget thusfar.

Army veteran and community activist John Carey railed against what he described as irresponsible spending on the part of the government, comparing Hoboken's current financial state to that of the state of New Jersey, using his time to read excerpts of a speech delivered by Gov. Jon Corzine in the preceding weeks.

"The public is upset," he said, "and they don't much trust us with the public's purse strings. I can't blame them. The public literally has paid and continues to pay a high tariff for their government's repeated failure to act financially responsible," said Carey, paraphrasing the governor's speech.

"No more use of one-time revenues to fund ongoing operations," Carey said, mentioning an issue that has been criticized for more than 15 years. Traditionally, Hoboken and other towns have sold off city land and other assets to fill budget gaps, but then lose that source of funding for future budgets, making it only a temporary solution.

Carey added, to cheers from the audience, "We need a freeze. We need a freeze across the board [and] we needed it yesterday."

Carey was joined in his criticism by former School Board President and former Chief Financial Officer Michael Lenz, who sued the city when he was terminated from his job several years ago. He won a financial settlement.

"We're continuing to go along without resolving the issues in front of us," Lenz said, "and the issues are we're spending an awful lot more than the town is willing to pay for, and maybe that we don't need."

Later in the evening, Lenz drew cheers and laughter when he said, "We've hit the iceberg and it's time to stop rearranging the chairs."

In response to the criticism from the public, Russo said, "There's $2.8 million of savings or new revenues which would keep the tax levy almost stable, [and would] probably equate to a zero tax increase from last year. We have all been doing our job as council people, some people come up to that microphone and accuse us of not doing our job, but the fact of the matter is that we are."

He added, "We're doing our job and we're on the path to making sure there's absolutely no tax increase."

More revenue

In addition to the $2.45 million worth of cuts in spending, the proposal outlines two additional sources of revenue that weren't expected when the original budget was introduced, amounting to just over $400,000.

The first is new taxes coming from the completion of the first of four Toll Brother Maxwell Place Condominiums along the river, which according to Councilman-At-Large Peter Cammarano, began selling units earlier this year.

Annually, the project is expected to generate $500,000 for the city. But the tax only kicked in halfway into the present fiscal year, so the city is only expecting between $250,000 and $275,000 for this year's budget.

The second revenue addition comes from an unanticipated grant from the county for homemaking services for Hoboken senior citizens, amounting to $127,000.

SIDEBAR

Concerns about parking van and 4-hour limits

In response to a cover story in last weekend's Hoboken Reporter, Councilman-At-Large Peter Cammarano raised questions toward the end of Wednesday's City Council meeting, casting a level of doubt on the Hoboken Parking Utility's recently implemented parking enforcement van.

As reported last week, the HPU intends to use their new computerized van to catch people with permit violations and intends to raise city revenues by doubling the number of cars that are booted in town. Currently, it boots 27 cars per day.

Several business owners and residents said last week that they were unhappy with the Parking Utility's intent to boot cars that have been in Hoboken for more than four hours without a permit, even if the drivers move their cars to another part of town.

Cammarano, who is also an attorney, presented Parking Utility Director John Corea with a scenario in which a car lacking a permit was parked for 15 minutes at one part of town. The car is then driven out of Hoboken, only to return four hours later and be spotted in another area by the van.

Initially, Corea told Cammarano that the four hour-limit for vehicles lacking a permit applies across town, but that the Parking Utility would be focusing its efforts on going after cars that do not move from their original spot.

However, he did not actually dispute that Cammarano's scenario would cause a problem.

Later on in the evening, when approached about the enforcement policy, Corea, who reiterated that the Parking Utility was only enforcing existing laws and not creating new ones, told this reporter that during the four-hour period in question, the van would have taken at least one other sweep through the entire city. So if a car in question was found not to be within the city's limits, the recorded license plate would be erased from the van's computer.

However, there are still concerns. It's possible that a car could stay for three hours, leave, and come back, and still be ticketed.

Corea said the Parking Utility would continue enforcing the four-hour limit no matter where the car is parked in town.

So, despite some complaints, the Parking Utility is presently sticking by the van and the four-hour limit, as stated in the ordinance. - MM

SIDEBAR 2

Council says developers' obligations were met; some not so sure

In a 7-2 decision, the City Council voted in favor of a resolution authorizing a certificate of completion to a residential complex at 1000 Jefferson St., which was recently completed by developers URSA Tarragon.

The complex is part of a group of buildings that URSA Tarragon are building in the city's Northwest Redevelopment Zone. The city named them the developers of that part of town after soliciting proposals several years ago, and they were required to meet certain obligations.

The authorization is traditionally given to developers in redevelopment zones, once they complete a project to the city's satisfaction.

The authorization confirms that the area is no longer in need of redevelopment, and that it cannot be condemned. This prevents the city from using eminent domain to reclaim the land, and makes the property more marketable if the owner chooses to sell it, according to Director of Community Development Fred Bado.

The consensus amongst the majority of the council was that the developer had done what was required regarding its construction obligations at this particular site, as illustrated by the fact that the Building Department already issued a certificate of occupancy.

Yet, some on the council expressed their doubts.

Those members quickly questioned the developer's attorney John Curley about community givebacks tied to other redevelopment projects that URSA Tarragon might be building in the same area of town.

Second Ward Councilwoman Elizabeth Mason, who voted against the resolution, said that she was unsure whether the definition of completion had actually been met, and did not feel comfortable endorsing the measure without the city's special attorney, who handles these matters, being present.

Mason also felt that the current contract between the city and URSA Tarragon, with regards to another redevelopment zone in the area, was not clear enough when it came to defining what givebacks Hoboken would be receiving in return for the zoning variances given to the developer through the redevelopment plan.

Similarly, 4th Ward Councilwoman Dawn Zimmer, the only other council member to vote against the ordinance, expressed her frustration over what she believed to be an unclear agreement between the city and developer with regards to anticipated givebacks.

"I voted against the certificate of completion because I wanted to protect the community and make sure the givebacks, such as affordable housing, were clearly defined," said Zimmer.

The councilwoman added that despite the vote, she plans to work with the council in the future to "ask URSA Tarragon to clarify the givebacks in the amended redevelopment plan."

Tarragon attorney John Curley argued that the developer had fulfilled its part of the agreement, with regards to the requirements in this specific redevelopment plan, and therefore was entitled to the certificate of completion.

The council granted it by passing the resolution.