Municipal Budget

Last week, Hoboken Mayor David Roberts came up with his proposals for a spending plan for the new fiscal year that begins July 1, one that faces a $10.5 million deficit.

Of course, any fiscal blueprint for Hoboken will have to be approved by the state Department of Community Affairs, which is actually running the show in the Mile Square City. The state has assumed control of the city's finances after the municipal government failed to approve the last budget. This newspaper believes the failure was a combination of inept administration and City Council political grandstanding, a fatal combination for local taxpayers.

Selling the automated garage, laying off municipal workers, more parking meters -- Hoboken Mayor Dave Roberts introduced his plan to patch up Hoboken's broken budget today.

Roberts said he will introduce his Spending Plan for Fiscal Year '09 at tonight's City Council meeting. He'll need the state of New Jersey's approval before passing anything.

"Anything that I'm presenting needs the state of New Jersey's approval and needs the municipal council's approval as well," said Roberts. "We're not arrogantly ignoring the fact that the state is involved. We understand that all of this will have to be ordained by the state of New Jersey but there's no harm in rolling up our sleeves and creating some new ideas."

What are some aspects of Roberts' three-part spending plan?

Councilwoman Beth Mason

Mason requests more transparency from the DCA

July 12, 2008, Hobokennow.com

2nd Ward Councilwoman Beth Mason is requesting more transparency from the state of New Jersey as they review Hoboken's budget.

Mason says the DCA is only talking about Hoboken's financial health with the mayor -- she wants the City Council in on the conversation, too.

After the jump, read a copy of a letter Mason sent to Susan Jacobucci, Director of Local Government Services for the New Jersey Department of Community Affairs, this past Thursday. Mason is basically asking the DCA to keep the City Council in the loop regarding their financial takeover of Hoboken.

Dear Editor:

Hoboken. A national embarrassment in its administration of its police department. A regional embarrassment in its administration of its finances.

So after almost two complete terms as Mayor, and over a decade on the City Council, Dave Roberts has the gall to blame Beth Mason? And to use quotes from such distinguished (Ha!) Hudson County Mayors as Joe Doria and Richard Turner to defend himself?

Did Dave Roberts follow a rabbit through a rabbit hole to some Alice-in-Wonderland place to use fellow Hudson County pols to defend his incompetence? Let's review the facts:

HOBOKEN - State supervision is definitely underway.

Two hours before Wednesday's City Council meeting, Susan Jacobucci, director of the New Jersey Department of Community Affairs, sent a letter to Hoboken Mayor David Roberts and City Clerk James Farina telling them not to hire any employees or consultants until the Division of Local Government Services completes its review of the city's finances.

The DCA took over Hoboken's finances on June 23 after the City Council failed to adopt a spending plan for the fiscal year that ended June 30. Finally, on June 30, the City Council passed a budget crafted by state officials that sloughed off dealing with a $10.5 million deficit to the fiscal year that began July 1.

The  Hoboken City Council passed a budget this week after a rocky end to the fiscal year. The budget went from $87 million to more than $100 million during the course of the fiscal year. See timeline below.  
SIDEBARS BELOW

This past Monday, the city of Hoboken passed a budget for the fiscal year that actually ended on the very same day.

The 2007-2008 fiscal year budget is far from perfect; it is short $3.6 million in revenue, and it excludes $8.1 million in expenses that will be paid for next year instead. That makes the total shortfall $11.7 million. It also includes more than half a million dollars in unpaid bills. But it has the state's blessing nonetheless.

The approved budget is $92.6 million, but the actual total expected spending from the previous fiscal year is $100.7 million, which does not include a separate budget for the $13.4 million operations of the Parking Utility.

The city's taxpayers could be hit with a 50 percent increase on their next bill, unless the city council comes up with another way to close an $11.7 million budget gap.

During a heated meeting Wednesday night, council members were livid they had not been given precise budget numbers, which they requested last week and believed would be provided at the meeting.

Business Administrator Richard England responded he did not realize he was supposed to bring the information but promised the administration would provide it the next morning - which it did.

The administration proposed to increase a loan that would use the municipal garage as collateral from $13.9 million to up to $19 million. That loan would also need to be secured with a $3.7 million bond sale.

Faced with the choice between a tax hike or de facto borrowing to bridge a several-million-dollar budget gap, the City Council Thursday night voted to do neither, opening the door for the state to take over the city's finances.

Officials have described the budget gap as between $3.5 million and at least $8 million, and several council members said they couldn't vote on a fix for it until they had clearer numbers to work with. Others said they did not trust the administration's budget numbers and would welcome state intervention, accusing Mayor David Roberts of hiding overspending, a charge he denied.

A court date has been set for the lawsuit over the sale of the municipal garage site to a developer who plans to put up residential housing.

In January, MDK Development LLC filed a lawsuit against the city and developer S.Hekemian Group, which won the right to buy the property, charging that the city's bidding process was "arbitrary, capricious, unreasonable," and violates the Local Redevelopment and Housing Law.

"The train has already left the station" said Councilwoman Dawn Zimmer in response to attempts to make major financial cuts "eight months into the FY2008 budget year."

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. 

Deja vu.  And even more remarkable is that the City finds itself with another budget funding shortfall and once again 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.

City Hall Shutdown?  Can it happen again?  YOU DECIDE! Read this five page report with two News4 videos on the 2005 City Hall shutdown.