How ironic...  Almost three years to the day that Hoboken City Government "closed down" back in March, 2005, Hoboken Mayor David Roberts and the City Council are once again battling over the City budget. 

And even more remarkable is that the City finds itself with another budget funding shortfall and must rely upon a cash advance (LOAN) on the sale of the Municipal garage complex.  

Thus far, budget years FY2005, FY2006, and FY2007 have all relied upon cash advances from the sale of the Municipal garage and “budget magic” to balance the City’s budget.  This past November, the Roberts Administration introduced the FY2008 budget.  The $ 87M spending plan relied upon a $ 4M cash advance from the sale of the garage and the potential for a 2.5% tax increase.

After four Special City Council Budget Hearings and additional discussions at scheduled Council Meetings, the Council’s REVENUE AND FINANCE COMMITTEE chaired by Third Ward Councilman Michael Russo provided the Administration with recommendations to lower the budget and do away with the tax increase.

The Administration’s response arrived in the form of an AMENDED FY2008 BUDGET.   Small accolades for negating the TAX INCREASE, but the new spending plan INCREASED from $ 87M to $ 93M and relied upon an INCREASE in the cash advance loan from the Municipal Garage sale from $ 4M to $ 7M. 

City Hall Shutdown:

Can it happen again?  Consider this….  The May 2009 Mayoral race is on the horizon and several sitting Council members have expressed an interest to be wannabe contenders.   Throw into the mix strong rumors that Mayor Roberts is contemplating a reelection bid and you have an explosive political mixture. 

How does the Administration defend the FY2008 AMENDED BUDGET?  The budget INCREASED from $ 78M in FY2007 to $ 94M in FY2008, a $ 16M INCREASE.   How does the City Council explain 8 months of emergency appropriations without benefit of an enacted fiscal year budget?  There is more than enough blame to share between both the Administration and City Council. 

Fourth Ward Councilwomen Dawn Zimmer summed it up nicely at the March 19, 2008 City Council meeting when she said “the train has left the station.”   In all probability ZIMMER is correct considering that 75% of the budget year has passed and funding has already been consumed, all based on monthly emergency appropriations.   Budget cuts for the remaining three months will have little effect on remaining contracts, allocated funding, and expended line items. 

And...  It seems as though almost everyone is ignoring the Superior Court lawsuit initiated by unsuccessful Developer MDK Development LLC and a private citizen that attempts to overturn the Municipal Garage sale on bidding irregularities.  If the suit is successful and the garage sale overturned, expect to see a serious budgetary meltdown along with a few Mayoral aspirations come crashing to a squelching halt.

As for the three freshman Council members, MASON, ZIMMER and CUNNINGHAM.  Each have their own style of "command presence" but that will be a topic for another day.

Still butting heads over budget

Emergency meeting called for Monday at 6 p.m.

03/20/2005 HR

HOBOKEN, March 20, 2005.  For the past several months, a divided Hoboken City Council, in the middle of an election cycle, has been battling over how to reconcile a $7.9 budget gap. How this issue is resolved may help determine who wins the May 10 mayoral and City Council elections and will affect how much residents pay in property taxes.

In Hoboken, over the past four years, city spending has gone from $54 to over $72 million, but during that time, the administration of Mayor David Roberts and his supporters on the City Council have approved budgets with no tax increases. They've done this by relying on non-recurring revenues to plug sizable structural deficits, a practice that has been common in Hoboken for the past dozen years.

The City Council minority has argued that Roberts hasn't adequately controlled spending, and has been pushing current expenses off to future years. They said that Roberts has been using these "one-shot" revenues to push off what they believe is going to be an inevitable tax hike until after the election.

Meanwhile, Roberts contends that the city is in good fiscal shape, and that his opponents are just trying to "create havoc" before an election. "In September of last year, I presented the City Council with a balanced budget with no tax increases and no reduction of services," Roberts said. "Today, I continue to stand by the budget I submitted and stress that the council must act responsibly on Monday night for the good of the people of Hoboken."

He said the budget is now in the council's hands to approve.

"If the City Council has a better idea, then they should put their idea forward and take a roll call vote," Roberts said.

Battle over how to raise $7.9 million

For some time now, the central issue in this budget has been the sale of the municipal garage. Roberts proposed that to fill the gap, the city should sell its municipal garage to the Hudson County Improvement Authority, which would generate more than $7.9 million. The HCIA would buy the garage and then would lease it back to the city. Passage of the garage sale will take a two-thirds vote by the City Council.

The council minority has stated it will not vote to sell city assets for budget relief. Their position is that it's not worth it to leverage the city's future fill a budget gap.

"These one-shot revenue items, which will be taken from future budgets, are a disaster," wrote Council members Michael Russo, who is running for mayor, and Theresa Castellano in a letter that was sent to every Hoboken home. They added, "Will the mayor try to sell City Hall to balance his next budget?"

All four of the council minority members said that Roberts has spent too much, and now must reconcile that spending, even if it means raising taxes.

Councilwoman and mayoral candidate Carol Marsh Thursday refuted Roberts' claim that they are the ones holding up the budget process. She said that while the garage sale does take a two-thirds vote, the passage of the budget only takes a simple majority.

She said that the council majority could approve a budget that doesn't include any proceeds from the sale of the garage. But that would likely cause a tax increase.

The tax bill issue

Complicating the issue is that in January the city's tax collector sent out "final" tax bills to every Hoboken property owner.

The City Council minority contended, and it was later confirmed by the city attorney Joseph Sherman, that these tax bills were illegal because a tax collector doesn't have the authority to send out the final bills without a budget.

The four-member minority called for the bills to be rescinded, but the administration took its time in putting the resolution on the council's agenda. Because the election is in May, timing is everything. To force the action, at the Feb. 16 City Council meeting, Russo, Castellano, Marsh and Soares each said they would not vote for another temporary budget until the tax bill situation is resolved.

Because the city doesn't have a final budget, it is living on month-to-month temporary budgets. The temporary budgets have to be approved by a two-thirds vote of the council, rather than the usual simple majority. At the March 2 meeting, a resolution to rescind the tax bill passed unanimously. After bills were rescinded, the council minority passed the temporary budget.

Even though the council majority voted to rescind the bill, they felt they were being rushed to a decision. "We were being extorted," said Councilman A. Nino Giacchi. "If we didn't vote for it right then and there, they were going to close down the city."

The resolution called for the tax collector to send out a new estimated third quarter tax bill and to inform taxpayers that they are not to pay their fourth quarter bill until a budget is struck.

But notice that was sent out wasn't exactly as specified in the resolution. The notice said that the previous tax bills were "inadvertently issued" and that the city "may be issuing" new fourth quarter tax bills. Roberts said Friday that he did exactly what he was advised to by the state, and that the wording of the notice was approved by the Department of Community Affairs.

Councilman Michael Russo contended that Roberts is just trying to buy more time until the election by not actually sending out new "third quarter" tax bills.

Déjà vu

The council minority Wednesday night voted down, for a second time, the temporary emergency appropriations. They said they will continue to do so until the tax bill resolution is followed.

So now what? Since Thursday morning, the city has been operating without a budget. So technically, the city could have been shut down.

"By refusing to act [by voting for temporary spending], the obstructionist faction on Hoboken's council has put our city in great jeopardy," Roberts said. "Hoboken is on the verge of a complete government shutdown because of the irresponsible and reckless behavior of these four Newt Gingrich Republican wannabes - two of whom are running for mayor."

Council President Richard Del Boccio said that the council minority shouldn't play fast and loose with the salaries of city employees.

"We have a legal, moral and financial responsibility to pay the employees of this city," Del Boccio said. Now, for the second time, Susan Jacobucci, the director of the state's Division of Local Government Services, which is part of the Department of Community Affairs, has ordered the council to approve its temporary budgets. "The city will not be able to continue delivery of essential services for the health, safety and public welfare of its residents," said Jacobucci in a March 17 letter. "Additionally, the city will not be able to fulfill its contractual agreements, resulting in a loss of services and potential litigation."

She said every council member that "willfully fails or refuses" to comply with her order will be fined $25 a day. The council minority has until March 27 to appeal the order.

Also, the state said that the council needs to move forward with a vote on a final budget.

Possible impact of vote

During Wednesday's meeting, Councilman Christopher Campos called Hoboken Police Chief Carman LaBruno and asked him if the community safety is now in jeopardy.

LaBruno said that if the vote "results in a reduction in manpower," the police force wouldn't be able to "provide the same security as we do now."

But LaBruno qualified that statement by saying that the HPD has "a commitment to the public." He said he doubted that any officers wouldn't show up for work because there isn't a budget in place for a few days. LaBruno also said that he has been in communication with the Hudson County Prosecutor or the state police, in case emergency assistance is needed.

"I must tell you that this is a problem that needs to be addressed quickly," LaBruno said.

So did the world stop?

On Thursday, without a budget, did the city really shut down? The answer was, no. Employees still came to work, police still patrolled the streets, and firemen were still in the firehouses.

According to city officials, as long as the City Council passes a new temporary emergency appropriation by Monday, employees will get paid as they normally do.

Marsh said that the administration's claims that their voting down the temporary budget would shut down the city and jeopardize the safety of the city's residents "are nothing more than scaremongering."

But Roberts said that any further non-action by the council will result in dire consequences.

Roberts has called an emergency meeting for Monday to approve the emergency appropriations at 6 p.m.

Monday at City Hall. This is not a vote on the overall city budget, just on appropriations to keep the city running. "If on Monday, the council still refuses to meet its legal responsibility, I will take the following actions," Roberts said. "I will ask the state to force the obstructionists to fulfill their legal obligations, direct the city attorney to seek a court order holding in contempt council members who refuse, and most importantly, if the budget is not adopted on Monday evening, I will immediately consult with state officials regarding ordering a total shutdown of all non-essential municipal services."

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Back open for business

After shutting city services, City Council passes temporary budget

03/28/2005 HR

City services were re-opened at the end of last week after a stalemate over the city's $72 million budget had forced non-essential services to shut down for two days.

Since the City Council has not yet approved Mayor David Roberts' permanent city budget, which was proposed back in September, they have been passing temporary budgets each month to keep the city running. On Monday, four council members who have been opposing the mayor's spending policies (including two who are running against him for mayor May 10 voted against the latest temporary budget.

Non-essential city services were closed because city workers couldn't be paid. However, police and firefighters continued working, as per state law.

The matter boils down to a disagreement between the council minority faction and Mayor Roberts' administration about how part of the 2004-2005 budget is funded. The mayor wants to sell the city's municipal garage to the Hudson County Improvement Authority, getting $7.9 million to plug the budget gap, and leasing the garage back until it is eventually sold. But the four minority council members say that the city has been relying too much on one-shot revenue deals involving selling city assets, and they say that after Roberts is re-elected, taxes will go up. They say he has not cut spending enough.

However, Roberts has said that spending is up because of skyrocketing employee health insurance costs and other matters beyond his control. He says the council minority is playing politics to make him look bad. For analysis on the budget situation, who's responsible, and how it got to this point, see "How did it get this far?."

Closed for business

As of Tuesday [March 22, 2005], Hoboken City Hall became a ghost town where doors were locked and department were closed; only the press and senior city staffers who were working for no pay were roaming about.

About 12:30 on Tuesday, Roberts distributed a letter to all employees that shut down most of the city's government.

"Based on the actions for four members of the city council who have refused a state order to approve emergency appropriations to fund municipal services, we are forced into a very serious crisis that results in the immediate suspension of services," read the letter.

Whether the move worked out in favor or against Roberts politically depends on whom one asks, but Roberts was armed and ready when the matter came to a head Monday. Roberts and his political consultants were at City Hall that day telling the New York media that the minority was to blame for the shutdown.

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The unions speak

At Monday's meeting, several city employees agreed with Roberts, blaming the minority faction of the council for voting against the temporary budget. Others just implored the council to work together.

"[Council members] are playing Russian roulette with the city employees," said Joseph Grossi, the head the municipal employees' union. He added that many of his members are on the lower end of the pay scale and live paycheck to paycheck.

Anton Peskens, president of Hoboken Fire Officers Local 1076, asked the council to "please leave politics out of our paychecks."

Policemen's Benevolent Association Local No. 2 President Vincent Lombardi said that his union is considering whether to file an official grievance, because the shutdown might be against their collective bargaining agreement that was signed with the city. But he did say that Hoboken officers would be policing the street during the political crisis.

"This is a childish game about political ego, and grandstanding in an election cycle," said Lombardi, who said he blamed the council minority.

Sgt. Kenneth Ferrante, president of the Hoboken Police Superior Officer's Association, said the council minority is just fueling their own political ambitions.

Thursday in court

On Thursday morning [March 24, 2005], the state Department of Community Affairs and the city's attorney were in Superior Court in an attempt to get a court order to force the City Council minority to vote for a temporary budget. But Judge Maurice Gallipoli declined to do so.

Gallipoli instead said it was time for the Hoboken City Council roll up their sleeves and agree upon a budget. "Sane people interested in city of Hoboken would not stop working until a budget resolution is reached," Gallipoli said. "But we're making an assumption that we are talking about sanity, not politics."

Since Gallipoli refused to get involved, the council held a special meeting Thursday night.

They vote together

Thursday at the council meeting, the nine council members came together to end the city shutdown by passing a temporary budget.

The council also passed an amendment that the salary of city workers would not be affected by the temporary appropriations for the next six weeks. It was determined that they would be paid through May 7 even if the council had problems resolving the final budget. The measure was an effort to make sure they are paid through election time, to keep politics out of the process.

The crowd cheered at the result of the vote.

After the council called a recess, Mayor Roberts said, "I am happy and relieved that the people are going back to work. The library will re-open, the streets will be cleaned, and God willing, everyone will have a happy Easter." Councilwoman and mayoral candidate Carol Marsh said, "I'm very glad the employees are back to work. I'm sorry it happened in the first place. When and if they decide to sell the garage, I hope it is a plan that makes sense for the community for generations to come."

Garage, or Neumann-Leather building?

But of course, not all the problems are solved. The city is still without a permanent 1994-1995 budget, at the city still wants to sell its garage to the HCIA to get the $7.9 million.

Roberts recently proposed an alternative that, to some, is more dire: up-zoning the area including the garage so the city can sell it directly to a residential developer for a very high price. This could also put a building full of artists' lofts in jeopardy, as the zoning would change for the nearby Neumann-Leather building, and the owner could sell it at a higher price.

A public hearing on this alternative is planned for the Wallace Elementary School for April 6, which could be quite packed and heated, as the artists in the building do not want to be driven out.

So for now, the council has a few choices: Sell the garage to the HCIA, sell it directly to a developer, raise taxes, or somehow cut $7.9 million from the budget in the next two months.

Councilman Tony Soares charged that Roberts, by bringing up the rezoning option, is pitting artists and longtime residents against taxpayers and the council minority. After all, the situation is now that artists could lose their building if the garage/HCIA deal doesn't pass.

A new vote on the plan to sell the garage to the HCIA was proposed at Thursday night's meeting, but the motion was tabled.

At the meeting, 5th Ward Councilman Michael Cricco said that the mayor should be commended, as the garage is an eyesore and needs to be developed.

But Carol Marsh responded, "What are we going to sell next year?"

Mayor Roberts replied that the deficit problem would be solved with the sale of the garage. The matter will come up for a vote at the next council meeting.

Mayor and council: Please stop politicking and do your job
 
03/28/2005 "Letter to the Editor"

Dear Mayor Roberts and Hoboken Council members:

We are Hoboken homeowners concerned about the path of the current budget crisis. We understand why things have reached this point but are dismayed by the lack of responsibility all sides are taking to resolve this matter quickly and fairly.

Both points of view are valid. The Mayor's rationale for having proposed a sale-leaseback for the Observer Highway municipal garage and now, alternatively, seeking to simply sell the property, in order to close a nearly $8 million budget shortfall. We also understand the city council minority's rationale for voting against the sale-leaseback proposal on grounds that this approach is not the soundest way to close the gap because one should not sell such use a valuable asset unless there is a dire emergency. However, we are deeply troubled by how your own political self-interests have allowed this situation to snowball into a city shutdown.

Below we explain why the proposal from the City Council minority to increase the municipal portion of the residential property tax is unfair and unjust, we offer alternatives to the the Mayor's garage proposal (whether as a sale-leaseback or as an outright sale) for closing the permanent budget gap.

First, the City Council minority's proposal of increasing the municipal portion of the residential property tax to close the budget gap is completely unfair and terribly short-sighted.

Second, there are numerous other ways to help fill this budget gap. Consider the following alternatives:

- greater efforts to impose and collect fines - in particular, Hoboken could pass a new, stronger noise pollution measure (quiet from 11pm to 7am);

- cuts to unnecessary or duplicative programs, staff, and services;

- levy additional taxes on businesses;

- levy a City sales tax on consumption or use;

- levy a City income tax so that non-property owners pay their fair share;

- and other options that you as elected officials have an obligation to determine.

Third, criticizing steps taken so far. Your handling of the budget shortfall has been lousy and too politically calculated to give us comfort that you are doing right by homeowners, especially in light of Monday's shutdown.

The Mayor supposedly raised the budget gap issue back in July 2004 and gave his proposal of the garage sale to fill it. Some members of the City Council immediately expressed opposition, suggesting the unfair alternative of raising the municipal portion of the residential property tax, a step the Mayor does not support in light of the May 2005 election. Knowing that you each had suggestions for solving the budget shortfall problem that the other side opposed, did you ever bother to spend quality time from July 2004 (when the budget shortfall issue emerged) until now (when a City shutdown has occurred) exploring alternatives and working toward compromise?

It seems like all you did was play politics by digging your heels in deeper in favor of your side's solution while 8 months quickly passed you by. That's outrageous!

In sum, the Mayor and City Council MUST work together IMMEDIATELY to solve this budget gap crisis. We did not elect you to play games with each other. We elected you to make fair, just, diligent, rational decisions.

Please do your job.

Thank you,
Two concerned Hoboken Taxpayers

Playing politics with city services
 
03/28/2005

Dear Editor:

Mayor Roberts shut Hoboken down on March 22, rather than face up to the $8 million budget shortfall in his so-called balanced budget. On March 24 he was in court demanding that I Carol Marsh, Tony Soares, and other minority council members be ordered to vote for the Temporary Emergency Appropriations (TEA's) exactly as he proposed, or allow the shut down to continue.

The Honorable Maurice Gallipoli scolded the city for seeking judicial intervention. "If there is an emergency it's not of my making, and I'm not inclined to fix it" he said. "If some ill falls on the city, it's because of the inability of elected officials to come together and that tragedy is on their hands."

The judge was clear that the proper resolution was for the council to adopt a balanced budget - something Tony Soares and I have been saying for seven months. He noted that we were forbidden to speak at the meeting where the appropriations failed, and suggested that, had we been heard, this shutdown could have been avoided.

The Mayor has been stalling the budget until after the election, but last night, when we were finally allowed to speak, the budget process sputtered to a start:

* The council agreed to hold their first public budget workshop in many years, if not the first ever, and set a target date of March 30 for adoption.

* We demanded that the certified audit - almost three months overdue - be available at that session, and at least got promises to "try".

* The council agreed, after weeks of heel-dragging, to my suggestion that we not fund salaries for Mayor, Council, and Directors until we pass a budget.

* Roberts admitted that the May tax bills had been sent out without legal authority, and agreed to notify taxpayers, so no moneys will be collected until the budget is final.

* And yes, unanimously, we funded operations until May, getting everyone back to work and paying them for the days lost to the Mayor's unauthorized furlough.

The Mayor has tried to make political hay out of our "refusal" to pass the March 21 TEA, calling us obstructionists. He ignored the fact that 16 times before we had approved the funding requested. He had even enlisted state officials to support his claim. Gallipoli had harsh words: "The state should have gotten involved a long time ago and forced them to pass a budget".

Now finally, we go to work, and it's not going to be easy. Mayor Roberts has presided over budget growth of $20 million, from $54 million in 2002, to $72 million in 2005. The structural deficit has risen sharply. There are no good answers to the fix he has gotten us into.

But closing the City and calling TV cameras doesn't help. Mayor Roberts had illegally overspent his budget by millions each year in office. His refusal to do so now was calculation - not conscience. City employees were entitled to 45 days notice before being laid off. City residents were entitled to an adopted balanced budget months ago.

Mayor Roberts, it's time to put politics aside and get that job done.

Carol Marsh