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Posted by Manolo on April 15, 2003 at 05:42:43:
COUNCIL TO APPROVE BUDGET, BUT PROPERTY SALE RAISES NEW RISK TO TAXES, FIRE AND POLICE HIRES Urban Times News
April 11-April 17, 2003 By Steven Glazer Jersey City-Council Members sig-
naled their willingness to approve Mayor
Glenn Cunningham's amended budget pro-
posal after a week's delay for maneuvering
calculated for political appearances. But as
one threat to the city's financial stability was
neutralized, another popped up heralded by
the appearance of Suzanne Mack, executive
director of the Jersey City Redevelopment
Agency, at the Council's Caucus meeting.
Mack told Council members that she could
not give a firm date for the expected closing
of a key property sale that would give the
city the funds needed to balance the budget.
The property sale involves the purchase by
the Board of Education of City-owned prop-
erty at Pershing Field that nets the city $4.3
Million dollars, already counted in the
budget. The sale is not in doubt and is
already contracted between the City and its
Board of Education. The time element is the
risk. explained Cunningham. If the sale
does not close in time, the budget will not be
able to be balanced except by drastic meas-
ures like tax hikes, layoffs or some combi-
nation of the two, according to Business
Administrator Carlton McGee. In political
maneuvering a week earlier, the council
balked at approving a financing plan for the
Municipal Utility Authority that would have
covered the current budget shortfall.
Cunningham responded by calling a meet-
ing of the heads of the city's labor unions to
explain that if the plan were not approved he
would have no alternative but to institute
massive layoffs including police and fire
personnel.
Some 38 Fire Department recruits
have become virtual hostages in the political
wrangling between Mayor and Council.
Cunningham promised to hire the recruits,
expecting to have funds in the coming budg-
et to pay them with. Since he made that
promise, the Council has blocked economy
measures that would have made the funds
available to pay the recruits and then
obstructed a bond sale that would have pro-
duced other funds to enable the city to pay
the recruits. Once the obstacles to the bond
sale were resolved and the sale effected, the
State slashed aid to the city, also factored
into the budget, based on earlier representa-
tions to city officials by the state.
Cunningham's finance chief,
Carlton McGee presented a budget proposal
incorporating those representations calling
for state aid of S10.5 Million to distressed
cities. Instead, the state funded only $2
Million leaving an 58.5 hole in the city's
budget plan. Jersey City, with a population
of 240,000, will receive half as much State
aid under the distressed cities program as
Harrison with a population of 14,000.
Cunningham and his finance team had on
the back burner a plan to restructure the
Municipal Utility Authority in a way that
would produce a three year infusion of $42
Million, solving a host of problems, not
only this year, but two years ahead, and
according to Cunningham, thereafter.
Council members, led by Council
President L. Harvey Smith, pleaded igno-
rance of the plan, though copies in full
mind-numbing detail were delivered to all
Council members in late November. Smith
asked for more time to study the proposal
even as the Business Administrator.
McGee, explained that the time was grow-
ing dangerously short to meet all the
required deadlines. Smith also told the
Council that delay on the measure had
already cost the city considerably as inter-
est rates had risen since the plan was first
introduced. It was agreed that more time
could be arranged and that officials of the
MUA could come to a specially called
Council meeting to walk Council members
through the proposal.
The city's Keystone Council,
again led by Uncle Harvey Smith, in a thin-
ly disguised political maneuver, boycotted
their own specially called meeting. Council
members asked for a detailed explanation
that would allow them to decide on a
finance proposal by the Municipal Utility
Authority. The MUA plan would virtually
assure stable taxes for three years in addi-
tion to solving some problems with the
MUA's own capital structure. By missing
the specially scheduled meeting, the coun-
cil puts the city at risk of missing deadlines
that must be met to implement the plan
before the end of the fiscal year, June 30. If
those deadlines are not met the results
would be either a tax increase for property
owners, massive layoffs of city workers,
including police and fire fighters, or both,
according to Mayor Glenn Cunningham.
Cunningham told the group of
fire recruits who came to attend the expect-
ed meeting that he had sent a letter earlier
in the day to the City's Fire Director to pre-
pare to hire them immediately once the
budget had been approved. Cunningham
got the Fire Director on a cell phone with
the speaker feature turned on. With the
phone on "speaker" Fire Director Jerry
Cala told the assembled recruits that earlier
that morning when he got the Mayor's let-
ter, he had already begun making prepara-
tions to start processing the new class of
recruits immediately after the Mayor's
budget proposal passed. Cala could be
heard on the speakerphone that once the
budget was approved it would take two
weeks to get the class of recruits into the
hiring process and on their way to the acad-
emy. It was clear that the conversation
between the Mayor and Fire Director
occurred well before either knew that the
Keystone Council would be a no-show
later in the day at the special budget meet-
ing.
Cunningham told the recruits
"Not only will I not be able to hire you
without the budget, but I will have to make
massive layoffs all through the City gov-
ernment." Cunningham's budget proposal
depends on the refinancing of the
Municipal Utility Authority to produce suf-
ficient funds to hold taxes level, hire the
fire recruits as promised and add police.
Without that financing, there will be a
deficit requiring either a tax increase or lay-
offs or both to produce a balanced budget.
Cunningham told the recruits that this was
a purely political maneuver to make him
look bad, seen either as reneging on his
promise to hire the recruits or raising taxes.
One of the recruits, who declined
to give his name, told Cunningham that
they understood what was going on in the
political game saying, "We know it wasn't
Harvey Smith, it was you who appointed
us." Cunningham distributed to the recruits
a copy of the letter addressed to Fire
Director Cala saying the recruits would be
hired, as would additional police, just as
soon as the budget was approved and he
could be sure the funds were in hand. But
the council's absence from the special
meeting puts the entire budget at risk to
complete all the necessary steps in time to
satisfy all the deadlines. City Clerk Robert
Byrne explained that it would still be possi-
ble with the Council's cooperation to meet
and approve the necessary ordinances by
April 9th to get the money in the City's
accounts in time to avert a Council engi-
neered disaster.
"I can't hire you until I have the
money to pay you. And I won't be able to
pay you until I have an approved budget
with money it to pay you with,"
Cunningham told the recruits z
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