Urban Times News
February 21-28, 2003Mcgee Juggles Chainsaws On A Tightrope
UTN Staff
(Jersey City) Like all consummate
professionals, Jersey City Business
Administrator Carlton McGee makes it
look easy. The Chicago native's calm
demeanor does not convey the frenetic tension behind the creation of a balanced budget for a distressed city of a quarter million
highly diverse inhabitants. Starting behind
the eight ball with a $54 Million deficit
inherited from a previous administration.
McGee heads the Cunningham administration's struggle to break even and balance the
opposing forces to level taxes, increase
services and upgrade the quality of life in
general.
Coordinating multiple moving targets, MCGee has had to win over a hostile council loyal
to political opponents to achieve
the administration's goal of balancing the
budget and do it all staying within the guidelines of the State's Local Finance
Board. By accepting State aid under the
Distressed Cities program. the City had to
agree to requirements including restricted
bonding ability, and a hiring and pay freeze.
That conflicts directly with the city's need
to add and replace equipment and satisfy
demands for increased personnel in police
and fire departments. McGee knows that
the council will do everything possible to
withhold cooperation in an effort to force a
tax increase that can be blamed on Mayor
Glenn Cunningham, even though upward
pressures on taxes can be traced to resistance from the council and the council's
political boss, Congressman Robert
Menendez.
Menendez is "boss" of the Hudson County
Democratic Organization and is the political adversary of Jersey City's Mayor. Glenn
Cunningham. A little more than a year ago
a war broke out between the two former
allies over a patronage contract award to
attorney Donald Scarinci, Treasurer of
Menendez for Congress. Cunningham
refused to get involved with the patronage
award and the situation has steadily deteriorated ever since. Menendez retaliated in
part by organizing resistance to
Cunningham's administration by the City
Council, most of whose members depends
on the Hudson County Democratic
Organization for patronage jobs with the
County government and for campaign
fundraising through HCDO which
Menendez controls.
McGee has had to contend with council
resistance to obvious economy moves such
as a change in the way the city's health benefits plan is paid. By paying directly to the
insurance company and not through a state-run pool that includes other municipalities, the city could pay $200,000 a month less for
identical coverage. But the council majority,
led by L. Harvey Smith has held hearings,
interviewed "experts" and required ever-
increasing amounts of additional informa-
tion to "understand" a simple concept. All
the due diligence has delayed a decision on
the payment method and months have
dragged by at $200,000 per month. As the
months dragged on and the lost savings
mounted through the past six months, the
renewal rate for the existing insurance plan
increased by an additional $1.5 Million for
the year. increasing the cost differential
between the two alternatives to $3.9 Million
annually. McGee has explained numerous
times to council members who still say they
do not understand how the proposal works
despite McGee's intricately detailed expla-
nations. McGee has explained to the council
in meetings of the entire governing body
and to subcommittees and to individual
members of the council. Six months and
counting and McGee is still exhorting the
council to approve the change to allow the
cash-strapped city to save $3.9 in the next
12 months.
When the administration first presented its
budget proposal in Mid-November it
seemed that Cunningham had pulled a rab-
bit out of a hat with a balanced budget that
called for no new taxes and hired additional
police and fire personnel and new equip-
ment for police, fire, and street maintenance
equipment. Council member William A.
Gaughan argued with McGee but voted to
introduce but not approve the budget along
with other members of the anti-
Cunningham council. It was Gaughan who
said prophetically at the time the budget was
introduced that assumptions included the
budget proposal were questionable, espe-
cially the assumption that the city would
receive not less than the same $10.5 Million
in State aid to distressed cities as it had the
year before.
Almost exactly as Gaughan predicted, only
two weeks later, administration officials
were shocked to, learn; that the State aid to
Jersey Cite tinder the distressed cities pro-
gram had been chopped 80 per cent to only
$2 Million from $10.5 Million. Gaughan's
uncanny accuracy prompted speculation that he had already known of the reduction
at the time he made the remark and before
State finance officials had informed the
Cunningham administration. Gaughan
serves as chief of staff, at $95,000 a year, to
the new County Executive, Tom DeGise,
another Menendez partisan. Politically con-
nected sources charged that Menendez
exerted influence with Governor
McGreevey to reduce aid to Jersey City. Of
the eight cities in the state that receive aid
under this program, Jersey City was hardest
hit to date. Union City, whose mayor Brian
Stack is also currently at odds with
Menendez, has not yet learned what this
year's allocation will be. Other cities in the
program have gotten amounts slightly less
than they received last year. Harrison, for
example, received $3.9 Million versus $4
Million the year before, according to Chief
Financial Officer Elizabeth Higgins.
Yet, McGee stoically continues to answer
council questions and objections to the
budget proposal that he now says will
require radical measures if the city is to
avoid a tax increase and layoffs. From bal-
anced budget as originally presented,
McGee now says that extraordinary meas-
ures will be required to offset the shortfall of
$8.5 Million in state aid, and the continued
cash hemorrhage of more than $300,000 a
month for insurance payments.
The council quickly approved the outlay of
$490,000 for a 100-foot aerial ladder truck
for the Fire Department. McGee explained
that to spend precious cash on a wasting
asset makes no sense whatsoever and
deprives the city of the use of that cash for
any other purpose. The ladder truck could
easily be leased without the need to lay out
any cash, McGee explained. "To buy, or
worse yet, pay cash for a depreciating piece
of equipment is irresponsible. That is how to
wind up with an aging fleet of 20-year old
vehicles that require continuous mainte-
nance," said McGee, "But those decisions
are not mine to make. The council knows
what they are doing, and if that is what they
want to do, then that is what they will do.
The decision to raise taxes is in the hands of
the council."
