Still butting heads over budget, Emergency meeting called for Monday at 6 p.m.

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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