More taxes for Hoboken coming?

2/11/2009 Update:

While Mayor Dave Roberts continues to protest that he did nothing wrong when he implemented his golden parachute buyout plan, the state of New Jersey continues to say otherwise. Here is an update on the investigation into what went awry with the Roberts Early Retirement Incentive Program (ERIP) from Fourth Ward Councilwoman Dawn Zimmer:

Zimmer chimes in:

dawn-zimmer-hoboken-councilwoman.jpg“New Jersey law permits municipalities to implement ERIPs (sometimes called “buyouts”) only as part of a downsizing process in which jobs are eliminated as a result of “inter-local agreements” – that is, agreements to provide governmental services on a joint or consolidated basis. Hoboken has not entered into any such agreements, and, therefore, cannot legally implement an ERIP. Even when an ERIP is authorized by law, it still cannot be implemented without prior approval by the State Department of Community Affairs (DCA). Such approval requires the municipality to demonstrate that the incentive program would result in a reduction in the number of employees and employment costs to provide government services. For reasons that are still unclear, it appears that Hoboken did not seek the approval of the DCA prior to implementing the plan.

Most importantly, even if an ERIP is authorized by law and properly approved by the DCA the municipality is required to pay the increased pension costs resulting from the incentives. The cost is determined through an actuarial analysis and the City is directly billed for those costs.

See more of Zimmers comments – as well as previous updates after the jump

(More Hoboken taxes? continued…)

“In summary, it app ears we implemented an illegal ERIP that should never have been permitted at all. Our Corporation Counsel, Steve Kleinman, and our then business administrator Dick England, should have known this, and they should have advised the Mayor and the City Council of that fact prior to even spending the time drafting the ERIP. We were also never advised that the City would be responsible for the increased pension costs, a cost that we would have incurred even if the plan had been legal. That cost was not budgeted for, not included in the economic analysis provided by Mr. England, and not disclosed to the City Council in any way.

Still, we would have discovered the error in time had we submitted the ERIP for approval to the DCA as required. The DCA would have advised us that the plan was not authorized by law, and would not have permitted us to implement it. But the Administration implemented the plan without obtaining the required prior approval from the DCA. In fact, one person retired on January 1 before the resolution to approve the plan was even presented to the City Council on February 6th last year.

Based on the misrepresentations made to it by Mr. Kleinman and Mr. England, the City Council passed this illegal and inadvisable plan unanimously (Council members LaBruno and Castellano recused themselves because of conflicts). Had we been given the correct information I believe this plan would not have passed. I know I would not have voted for it.
Potential options to solve this crisis:

Understandably, Hoboken taxpayers are outraged by this situation, and many have asked why the program cannot be rescinded.This option is being explored, but the concern is that it may open the City up to 25 lawsuits from the people who already took the retirement package in good faith. Another option may be to bond to spread this expense over the long term. Doing so would require special approval from the state, because bonds are not typically permitted in circumstances like these.

While I am generally against bonding to cover up our overspending and other mistakes, I would consider this option now because it is obvious that the Hoboken taxpayer cannot possibly bear another increase in the 3rd and 4th quarters. I understand Mayor Roberts is making pleas to the State and his political friends to get Hoboken out of this mess. I am not optimistic but I hope that he is successful.This situation is inexcusable.Those responsible for promoting and misrepresenting this irresponsible plan to the City Council and the public must be held accountable. Right now I am still on a fact finding mission, and will be in touch with more news as soon as possible. “

Previous update below

2/6/2009:

Well if the bloated Hoboken budget and property tax increases weren’t enough – here’s “millions more” we might have to worry about:

hoboken-city-monitor-judy-tripodi-hoboken-retirement.jpg

Judy Tripodi finds millions in unauthorized spending

Memorandum from Judy Tripodi
DATE: February 5, 2009
TO: Mayor David Roberts; City Council Members

SUBJECT: Unauthorized Early Retirement Incentive Program

“This is to inform you that the State of New Jersey, Department of the Treasury, Division of Pensions and Benefits has written a letter to the City reaffirming its determination that that the City enacted an unauthorized Early Retirement Incentive (ERI) program. In the letter, the Division details the basis of its determination and cites previous legal cases. A copy of this letter is available upon request.

More importantly, the Division of Pensions has determined that the City’s additional pension liability for the unauthorized ERI is a total of $4,252,621 for FY 2009. The breakdown is $3,710,996 for uniformed personnel in PFRS and $541,625 for all other employees. In addition to those costs, the City was charged $6,186 in fees incurred for the preparation of the actuarial analysis.

The City was presented with bills in the amount of $4,258,807 which are payable upon receipt.

With the additional wages due as part of the retirement package offered by the City and the increased pension costs, there is a negative savings of $2.8M for FY 2009. It also means that the City must fund another $4.2M in its FY 2009 budget.”

ORIGINAL LETTER HERE

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138 Comments on "More taxes for Hoboken coming?"

HHoney
Member
HHoney

[quote comment=”139006″]they will just ensure that the state’s tax money is collected in a timely fashion in the future.
quote]
This is important. They will collect the state’s money but the city council were told that the state would not necessarily collect any money owed the city like PILOTs, judgements, etc. This is one of the reasons why Zimmer, Mason, Russo, Cunningham and Castellano were asked to reconsider because taxes would have to be increased to cover not just the property tax reserve and the mismanagement but also for the payments in arrears and uncollected judgements.

hobokinen
Member
hobokinen
I wonder how Mason was against the state control, when it appears that she, together with Zimmer, Russo, Castellano and Cunningham and all the other city council members, caused the state takeover or at least significantly contributed to it by their prolonged inaction. From the transcript, it is obvious that the council members had absolutely no idea how the system works, what their rights and obligations are, and thus they allowed the state to come in and do their dirty job (i.e. simply raise taxes by an exorbitant percentage). The state clearly told them (read the 47 pages for yourself!) that they have the power to hold city directors accountable and stop the insane spending (the council members keep claiming that they have no power and no one listens to them – all they have to do is going on record in one of their meetings and publicly propose specific reductions in the budget). The state also clearly spelled out for them that they won’t investigate any mischief, improprieties or mismanagement nor will they restructure the city, they will just ensure that the state’s tax money is collected in a timely fashion in the future. DCA TRANSCRIPT JUNE 2008 The transcript demonstrates very clearly the incompetence of this city council, whose members are also very aware of the mayor’s shenanigans. None of them have the courage to take significant action, though. Even to this day, they all refuse to take a position publically what cuts they would make and instead… Read more »
Tama Murden
Member
Re 135.: While I appreciate your perspective, I disagree in approach. Even if court documents may indicate and council members deem themselves powerless to take any action, it is neither futile nor misguided to speak out and let constituents know expectations and suggested plans. And just suppose we successfully elect a good government slate into office—what then? If, as you claim, it’s futile because there’s no way to get her out & she & her higher up cronies are in charge, what can even the best candidates really do? Work with her toward Hoboken’s’ best interests when that’s clearly not her agenda? How, specifically? That surely needs to be addressed in all candidates’ campaign platforms. Voters want and need to know. Even if Judy T. doesn’t like/ignores what’s expressed, too bad. It’s still important for Council members, candidates & taxpayers to voice concerns regarding her performance & priorities. It seems pretty clear whether Council members are conciliatory or not, there’s no working with her. She will do what she wants anyway, with apparent blatant disregard for anything but her perpetuating-the-larger-corruption-problem agenda. So what is there to lose if she’s called out? If she uses her power to “punish,” call her out for that, too. But then I’m not, nor ever desire to be a politician. NJ government, at all levels, is a huge dung heap. It’s time to call it as we see it. If I wasn’t clear in previous posts, I hold deep respect for Beth Mason for her… Read more »
Red Haven
Member
Red Haven
Tama, this is all futile and misguided. [quote comment=”136285″]Re 131.: Then the Council can use due process to petition the State for a replacement. The Council had a choice of several Monitors. Use legislative powers to choose another—at least try.[/quote] The council had the choice of TWO monitors, each reccomended by the state which skewed the applications in Tripodi’s favor. The council does not have the “legislative powers” to choose another at this time. Again, don’t take my word for it. Go ask the council member of your choice (any one of the nine) or OPRA the court documents associated with the state’s case against the city that led to this monitor. Read the case and Tripodi’s contract and then tell me how she can be removed. [quote comment=”136285″]It was the executive, not the legislative branch of muni government that ultimately resulted in the State Monitor. What is the Council afraid of?[/quote] If you read the court documents you will find the monitor was not just brought in because of the developments last spring, but going back several years. In it’s lawsuit the state holds the executive and legislative branches of Hoboken government over many years equally to blame for this fiscal fiasco. You are oversimplifying the situation without all the facts in hand. [quote comment=”136285″]If nothing else at this point, the Council would do well to muster the collective humility to acknowledge it made a mistake in its choice of Monitor.[/quote] COLLECTIVE humility? Don’t forget hiring Judy Tripodi was… Read more »
truth1
Member
truth1

All the active citizen groups should force Judy to meet with them in an open forum (announced much in advance, noticed in the media, newspapers and held at the high school). The public has a right to know what is going on!
The council (under supvervision has limited powers) and with the May elections coming, history has shown that unfortunately, little if anything positive will be done. The new Mayor and council-at-large will have to be pro-active and lead the remaining governing body to do their job and set things right. Judy T. does leave much to be desired, but the thrust should now be for the public to force her to be open and compel her to communicate information such as the soon to be completed (we hope!) operational audit reports of every city department and her expectations in any resultant action(s)to be taken in the interests of all the citizens of Hoboken. 💡

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