Special Council Budget Meeting
6/2/2008 3am Update:
The Hoboken City Council met for a very rare Sunday night emergency session to see if Mayor David Roberts would bring the actual budget numbers that were supposed to be presented at a special meeting last week. They still didn’t think the numbers were reliable, and Roberts didn’t even come to the meeting to attempt to back them up. Now there is less than a month to go in the fiscal year and a deficit of at least 11.7 million dollars looming. Seven years of Roberts’ budget tricks to delay the inevitable are about to explode in the form of a major tax increase.
Here’s how it went down…
The Roberts administration asked the council to approve a request for a budget “Cap Waiver” from the state Department of Community Affairs’ Local Finance Board which would allow the city to spend more money that allowed by law. The first public speaker asked for an explanation of the cap waiver asking, “What is the 11.7 million dollars?” Council President Theresa Castellano eventually responded it’s “Anyone’s guess,” referring to the lack of information and pre-crisis cooperation from the administration.
Helen Hirsch let’s ‘em have it
Council watchdog (and candidate for Democratic Committee) Helen Hirsch said she was happy the council “finally got a spine,” saying Mayor Roberts was “not honest”. Hirsch said “Democracy in action, Roberts style” includes ignoring the will and authority of the council. She asked, “Who in Hoboken injured Bernie Kenny?” and what about “the missing Hoboken Parking Utility money?” Hirsch wrapped up by asking, “How many secret documents are there?”
A frustrated public speaks out
One dollar-a-year Mayoral advisor Mo Degenarro got up and (surprise!) yelled at the council, saying these budget problems are both the mayor’s and the council’s fault. Bob Duval complained about more taxes and spending, which Castellano lamented was “Business as usual.”
CONTINUE READING THE REST AFTER THE JUMP!!
(City Council meeting, continued…)
Former City acting CFO Mike Lenz spoke in favor of Roberts’ request for a cap waiver. He called for the affirmative vote on the Mayor’s cap waiver even after reconfirming that he doesn’t trust the Mayor’s numbers. Richard Tremitiedi – the other one-dollar-a-year Mayoral Advisor – also supported the cap waivers saying, “We have to bite the bullet.”
$11.7 million? How does this happen?
City Business Administrator Dick England was asked “How does this happen?” He mentioned the underfunding and (likely improper) ongoing deferral of health care costs into future budget years, increased salaries, retirement payoffs, overtime and more. The standing-room only crowd applauded when another speaker said, “If this were a corporation, the board would ask for the CEO (Roberts) to retire.”
Second ward councilwoman Beth Mason said she doesn’t trust the numbers from Roberts, which she has been complaining about throughout the budget process. Mason had run her own analysis, and said the deficit numbers she found are “well above $11.7 million,” and noted the mayor said in writing that he would be at the meeting. (He wasn’t.)
Fourth ward councilwoman Dawn Zimmer felt the cap waiver request wasn’t high enough, and England responded by saying “don’t get caught up with the numbers.” That was followed by a sarcastic laugh from the crowd.
Taxes go up no matter what
Third ward councilman Michael Russo reminded the council that whether they authorized a cap waiver or not, it has “no effect on taxes. They will go up regardless.” Fifth ward councilman Peter Cunningham was again confused as to what the real numbers were… Russo chimed in saying he asked for all documents to be spoken about “under oath”, and the administration refused to do so. Russo said the council was lied to, and he immediately wanted the meeting to be closed. It wasn’t.
Cunningham again said the council was deceived and lied to by the administration and Mayor, adding things like the retirement payout (aka Golden Parachute) for Police Chief Carmen LaBruno was not included in the numbers.
Push comes to shove
City attorney Steve Kleinman read the resolution aloud, and indicated if approved, they would be in Trenton this afternoon to state their case to the Local Finance Board. Kleinman repeatedly called the $11.7 million dollar deficit a “worst case scenario” and said the city might be able to “pull a rabbit out of a hat.” The council was not impressed with the lawyer’s arguments.
Sixth ward councilman Nino Giacchi asked England for more explanations of the over spending. He cited examples such as $250k for retired captains (which was an oversight), $90K in unannounced recycling tax from the state of NJ, and more money needed to pay for the rising price of gasoline. Giacchi said he was concerned the tax hike would drive newer residents out of town.
Giacchi and Cammarano call for a Yes vote
Councilman-at-Large Peter Cammarano spoke in favor of the cap waiver because of the minute chance that the state could offer the city some “financial hardship” funds, but said the mayor’s action was worse than criminal. Cammarano is widely believed to have been bumped off the Mayor’s reelection ticket next year.
The council then asked when they’d be able to look at FY09 budget. Kleinman and England said that some bills don’t come in till later in July, and that even if they receive a draft by July 15th, it’s likely some numbers will have to change. Kleinman said that they could at least get a decent “spending plan” in advance. Compare that to the 11-month “Historical diary of overspending” Roberts dumped in the council’s lap. Castellano noted that she was very proud to be someone who has “never supported this Mayor and administration” which continues to “disregard the will of this council.”
Here comes the state
The vote against the cap waiver application was Castellano, Cunningham, Mason, Russo and Zimmer against and Cammarano, Giacchi, Terry LaBruno and Ruben Ramos for. It failed 5-4. This means the state of New Jersey will have to grab hold of the city’s books and strike a tax rate. It does NOT mean there will be a state takeover of Hoboken’s government. It only means the state will need to come in a deal with the mess. A fed up public cheered.
6/1/2008 10pm Update:
In a nutshell; more later.
Cap waivers denied, state to come in
- Mayor Roberts didn’t show up
- To a cheering crowd, the council voted 5-4 against the cap waivers (For: Cammaranno, Giacchi, LaBruno, Ramos; Against: Castellano, Cunningham, Mason, Russo, Zimmer)
- State to come in to determine tax levy
Additionally, some onlookers believed that certain council members were “afraid” to relinquish control to the state, and feel that the budget shortfall will be much higher than it already is.
Let’s play the money game:
Full recap tomorrow.
Read previous updates after the jump…
Spoke with Mayor Roberts this morning, and was expecting a statement about the budget. I got it later in the afternoon, when I was incommunicado. Here it is:
“Dear Hoboken 411:
Thank you for the opportunity to discuss the City’s plan to deal with our financial situation.
First, I am disappointed that the City Council voted down the $3.6 million Public Works Garage Bond Ordinance, especially since the Council had said all along they wanted to use revenue from the Garage sale in this year’s budget and this was a creative, legal way to do so. But I have not given up, and I am right now working hard to see whether we can still obtain that same $3.6 million without increasing our bonded indebtedness. I intend to report on the success of my efforts by this Sunday’s meeting.
Second, with respect to our health care, please know that at no time did any employee lose health coverage – not for a single minute. In the amended budget I will be proposing, the City will still pay more than 12 months of premiums, but we will ask that some end-of-year payments be legally deferred to avoid unnecessary pain to the taxpayers. Although the State will have the final say as to our plan, I ask that the Council support this amendment because I believe our taxpayers deserve any relief we can give them.
Third, if nothing else, this situation has forced my Administration to take a hard second look at the City’s spending practices. Although were is only so much I can do this year, for the next year I will be introducing a budget no later than July 15th. This budget will include some very painful cuts, but right now my priority is to do all I can to ease the burden on taxpayers. I hope that the Council means what they have been saying and truly will support me in my efforts.
I deeply regret that taxes will rise this quarter, but I believe that we can significantly limit the pain to taxpayers with these three steps, and we will be on our way to a much leaner and healthier City Government.
Very truly yours,
MAYOR DAVID ROBERTS”
Added full PDF (towards the bottom)
Hoboken411 obtained a document this morning showing that the overspending was much worse than imagined.
The Roberts Deficit: $11,701,523.87
How underfunded and overspent is the Hoboken budget? That is the question members of the public and the City Council have been asking for weeks. Last night Mayor David Roberts attended a budget hearing, but couldn’t (or wouldn’t) give the answer. Neither would members of his finance teams. In fact, Fred Tomkins of the firm Donohue, Gironda and Doria (who Roberts outsourced the finance office to) did not attend last night’s meeting. His colleague Katherine Kinney of DGO was there instead. When pressed by the council Kinney apologized for the delay in the numbers because Tomkins had “left the area” and they were working on it.
Shouldn’t the City of Hoboken be able to look at it’s assets and liability at the touch of a computer key? Apparently they can’t, and 11 months into the budget year the council is only now being given the true picture of the Dave Roberts deficit.
In a memo obtained exclusively by Hoboken411, Kinney declares the following projected deficit includes all expenses the City has incurred and will incur by June 30, 2008. (click to enlarge)
That’s right. The budget deficit is not the 3 or 4 million dollars Roberts was selling to the council a few weeks ago. Not 5-7 million or even 8-10 million. The deficit is over $11.7 million dollars. You will note the numbers on that memo say “As of May 27, 2008”. So why then were members of the administration not more specific about this last night? The buzz in the room was that the Roberts Team had this number before the budget meeting, but didn’t want to share it.
The plot thickens ahead of Sunday night’s emergency meeting.
Bottom line: Nothing accomplished, do it again on Sunday.
“Waste of time”
The overall assessment of last nights meeting was that “it was a waste of time because Mayor Roberts didn’t come in with the right numbers. We’ll do it all over again on Sunday, June 1st at 7pm.”
- The city will now have to rush to try and beat the deadline from the state, which has to sign off on any changes they make – since the Mayor so “woefully overspent” the so-called “budget.”
- Dick England threw out “scary” numbers, indicating that the Hoboken taxpayer could be on the hook for up to a 50% increase in their 4th quarter property tax bill.
- “Loud LaBruno absent. Why was she unable to attend such an “important meeting?””
Seems as if Hoboken is in charge of the “time budget” as well.
Since I’ve been out of commission for a bit, my friend is calling me and sending text message updates about tonights Budget Meeting down at City Hall.
First thing out of her mouth was “Train wreck!” and that the night started out with Business Administrator Richard England not even being prepared for the meeting. Later, “Public Safety Director” Bill Bergin seemed to get nervous and suggest that the video cameras get shut down, and the meeting take place behind closed doors (the way Hoboken USED to be run!) He assumed that the “public display” was being used for political posturing and alignment rather than constructive progress.
Lots of work ahead
…or the State comes in and makes the call.
Steve Kleinman (Hoboken Corporation Counsel) said that many meetings, workshops and hearings would have to take place, including over the weekend(!) This would be necessary in order to meet a June 6, 2008 deadline the NJ Department of Community Affairs established before they come in and exercise their authority to adjust the tax rate in Hoboken.
More later… plus “exciting” photos of nervous politicians and city employees.