Where are investigations heading?
Fiscal monitor may stay another year, gives updates on money mistakes

02.28.09 - Hoboken Reporter

Six months ago, state fiscal monitor Judy Tripodi came to Hoboken to oversee the city’s finances, in the wake of the City Council’s last-minute budget passage. Since then, she has uncovered some problems and errors in City Hall’s financial initiatives that the taxpayers may have to pay for.

As the May mayor/council election approaches and city officials jockey for attention, several city officials said last week that Tripodi may be asked by the state to extend her stay in Hoboken from August 2009 to August of 2010.

Tripodi is looking to reform various issues with health care, retirement incentives, contract structuring, and general accountability in City Hall. “We’re looking at a lot of the things that resulted in this city’s fiscal problem,” she said last week.

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“For the first time, we have accurate [budget] numbers.” – Judy Tripodi
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A $4.2 million bill

Two weeks ago, Tripodi and other city officials met with the state over an early retirement incentive plan for city employees, a plan that was supposed to save taxpayers money but now may cost them $4.2 million extra.

Tripodi said last week that discussion at the meeting focused on spreading out payments over a number of years, but that the city gave no concession that anything was done wrong.

The state was receptive to the request to spread the payments out, she said. She also said the state pointed out that the bill was a cost incurred by the city, not a penalty.

Tripodi’s calculations detailing the total cost-savings of the program, if there are savings to be had, are still ongoing. Some key people in City Hall believe the program will end up costing the city a significant amount of money, rather than saving any.

Unqualified for benefits

Months ago, Tripodi said several people were receiving health benefits from the city even though they are no longer qualified. Some of the recipients were past city employees, and others are currently part-time.

The city has not released any information regarding how long these individuals were on benefits, so the total cost to taxpayers can not be determined.

Despite numerous questions from the Reporter, city officials have failed to explain how some of these individuals were added to the health care rolls, since some were originally taken off after they left the city’s employ. While Mayor David Roberts has said that one former councilman was added back on to a “limited” health care plan, no such plan exists. Neither Roberts nor Tripodi nor anyone else has publicly said who approved the benefits.

Until recently, two former city councilpersons were among those incorrectly receiving benefits, as was a former police officer whom sources say threatened to sue the city over unfair treatment by former Police Chief Carmen LaBruno.

Tripodi said last week that no documentation exists regarding the approval of those benefits, because there was no process in place by the city to record the information.

Tripodi now has set up official controls to document such approvals in the future.

She said she found no paperwork linking the benefit approvals to any specific directors or other officials.

Sources claim that notations were made on health care enrollment forms when the approvals were sought, but Tripodi denied this.

The city has denied requests for specific documents from the Reporter regarding the benefit approvals, saying that they are protected by personnel regulations.

“There were internal controls in place,” Tripodi said, citing mostly checks to assure people are removed from benefits in a timely manner. “You can’t help it if someone wants to do something outside of controls.”

Tripodi said accountability in situations like this is important, but it is more important to correct the way Hoboken does business in the future. Tripodi has said in the past that she will not investigate to see if someone specific is at fault.

Building a true budget

Tripodi is focusing right now on creating this year’s city budget, covering spending from July 1, 2008 to June 30, 2009. The budget is estimated to be more than $120 million. Last week, she reviewed a rough draft of an internal audit that had “a lot of negative findings.”

“They [the private auditing firm] did find a couple of things that we had to correct right away,” she said, noting that a final draft will be released and a corrective action plan will be put in place.

About the budget she’s working on, she said, “I’m pleased, because for the first time we have accurate numbers.”

She said some tax relief may come in 2010, but not 2009. This fiscal year, Hoboken property taxes climbed 47 percent (including city, county and school taxes put together. Municipal taxes alone climbed 84 percent).

“In 2010, the ghost of 2008 will be gone,” she said. “But I don’t think it will ever go down to the 2006/2007 levels.”

Election issue

As the mayoral election nears, some candidates are debating whether bringing in the state has helped or hurt the taxpayers. Tripodi was the one who mandated the tax hike in order to close budget holes.

Tripodi said last week that bringing in the state was “absolutely” necessary.

“You had to have someone from the outside come in and take an objective look,” she said. “And be an enforcer.”

As far as staying in Hoboken through 2010, Tripodi said the decision is up to the state Local Finance Board. She said she wouldn’t be opposed to it.

“It’s not possible to complete the kind of work that needs to be completed in a one-year period,” she said.

She said that, without offense to the next mayor, whoever it is will need to really “learn the ropes of municipal government.”

Maxwell Place walkway

Another problem uncovered by Tripodi had to do with a development grant.

Several years ago, the developers of the Maxwell Place residential development promised to provide the city with a park and walkway when zoning approvals were handed out. At the developer’s request, the city sought a state grant to help fund the project. They received $8 million.

However, three weeks ago, sources said that the city might actually owe several million dollars of its own to the developer, in addition to passing along the grant money.

Last week, Tripodi said the city is not liable for any part of the project, besides passing along the grant money.

She said the developer, Toll Brothers, is responsible for any funding above the $8 million grant. They may have to pay up to $4 million more.

“Was it handled well? No,” she said last week, citing procedural problems with routing the grant money and seeking necessary approvals. “Nothing was handled well here with the big contracts.”

Rumors of directors being asked to resign over the missteps – none have – circled last month, and were further substantiated by other city officials since then. However, Tripodi did not confirm this, and no one resigned.

SWAT hearings ongoing

Last April, the city released administrative charges filed against nine police officers. The administrative charges were taken from details of alleged police mismanagement laid out in an internal investigation by city attorney David Corrigan.

The Corrigan Report chronicled alleged mismanagement by former Police Chief Carmen LaBruno and former SWAT team commander Lt. Angelo Andriani.

LaBruno was allowed to retire without being saddled with any charges, but Andriani and several other officers are facing suspension or termination as a result of the charges.

A judge has been retained by the city, and a source close to the proceedings said last week that hearings are underway and testimony is being given.

LaBruno will most likely give testimony in most of these cases, another source said.

State Financial Monitor Judy Tripodi is going to help choose the new police chief. Last week, she had no comment on the status of the police investigation and disciplinary hearings, saying that matter came before her time.