New Hoboken Budget: $123.8 Million!

3/25/2009 Update:

Hoboken Budget Recap

A funny thing happened at the adoption of Hoboken’s budget by a vote of 6-2-1. The Mayoral candidates on the City Council took three different votes!

There was no surprise in Peter Cammarano’s “Yes” vote or Beth Mason’s “No”, but Dawn Zimmer’s abstention got a lot of tongues wagging. I wasn’t at the meeting when the vote was taken, but after watching the video version which was originally on Cablevision Channel 78 (and getting after-the-fact press releases from the candidates), I figured this deserved another look. The annual budget vote is the most important one a council member takes each year. Considering they were voting on a whopping $123.8 million dollar spending plan after a year-and-a-half long budget battle, you might expect everyone to take a stand and vote yay or nay. Apparently not.

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READ HOW IT ALL WENT DOWN – AFTER THE JUMP…

(Hoboken Budget Recap, continued…)

How it all went down

After a public hearing, the council weighed in with comments. Mason spoke up first, explaining why she would be voting no. She began by saying she felt vindicated after voting against last year’s under funded budget because Judy Tripodi found so many more problems with the Roberts spending plans going back several years:

“I’ve been saying for years that Hoboken’s budgets have been under-funded. It took the extraordinary powers of a State Fiscal Monitor that had the power to be the Mayor’s boss to finally get the real numbers.

Though Ms. Tripodi has finally brought us the true result of the fiscal mismanagement of this administration, she has unfortunately done little with that information to make the situation better. It is not enough to say things are bad. We must do something to fix it. The budget up for a vote tonight does too little, too late to give relief to the taxpayers.

This process has taken longer than I believe it should have and I cannot accept where we are now considering the timeframe. Now that we have REAL numbers we should move forward together to get this back on track, but I cannot accept this budget.”

– Beth Mason

Peter Cunningham weighs in

Fifth Ward Councilman Peter Cunningham supported Mason’s position and said he would also vote no. Cunningham also thanked his fellow members of he council (including Mike Russo and Theresa Castellano) for voting last June against the original under funded Dave Roberts budget that led to the state fiscal monitor. Cunningham says there was a “Distinct difference in leadership” in that vote.

Though Cunningham said what Judy Tripodi did “to fix the fiscal house” was “better than what we had before” but he was “disappointed” that state operational and fiscal audits remain unfinished and not presented to the council. Cunningham said Tripodi has “blown through a number of deadlines” and there will be very little to show in cuts when next year’s budget process is underway, adding there has been no accountability for all the problems over the course of the Fiscal Monitor’s presence at City Hall.

Dawn Zimmer abstains

There are two reasons to abstain. One is when you have a conflict and can’t vote, and the other is when you can’t make up your mind between a yes vote and a no vote. Dawn Zimmer abstained on a budget she described as, “The most honest that we’ve had in many years, not filled with gimmicks.” Zimmer said the city needs to go back to it’s unions and look for sacrifices, noting some are giving up negotiated raises to save jobs.

Like Cunningham, Zimmer said she was frustrated with the lack of audit reports, using that as her reason to abstain because she did not get all the information she expected. Zimmer called it “Miss Tripodi’s budget” and decided not to vote on it. I’m told this led to gasps of surprise from the audience as supporters and detractors alike wondered aloud how a vote to abstain would be seen as anything other than the inability to make a choice by someone seeking to become the next Mayor of Hoboken.

Cammarano feels the heat, but votes yes

Cammarano began his budget comments by saying “My council colleagues and the people who attend these meetings, who watch them and follow what we do up here know how I feel about last year know how I feel about last year. I’m not going to go over it again.” That announcement was interrupted by spontaneous and sustained applause by people in the audience who were tired of Cammarano’s revisionist history line about how “If only we had passed the budget there would have only been a 7% tax increase.” Though everyone including Tripodi herself has debunked that line by now, it is still the foundation of Cammarano’s campaign.

Cammarano said he would be voting in favor of the budget amendments for the same reason he voted yes a year earlier, “because the city has a legal obligation to pass a budget” and secondly because he thought Tripodi “presented a true budget” that was “not underfunded” and would get Hoboken closer to being “deficit free”. Cammarano called the plan “honest, responsible and balanced”, and voted for it.

Days after the vote, the spin continues

All three Mayoral candidates continued to press their points after the meeting. Cammarano got some ink from PolitickerNJ.com, which is a site read by state political powerbrokers who Cammarano hopes will fund his campaign:

Cammarano called Mason’s “no” vote on a budget prepared with the oversight of a state monitor a curiosity considering Mason voted in favor of the state monitor a year ago, but he reserved incredulity for Zimmer. “Abstention makes no sense,” said the councilman. “Abstaining on a budget vote is not leadership.”

Meanwhile, Zimmer and Mason put out press releases expanding on their points:

So, how would you vote if you were on the council?

Yes, No, or no vote at all? My inbox has been full of opinions, and now is your better-late-than-never chance to post your thoughts in the comments section.

Previous Updates below

3/12/2009 Update:

Budget shrinks by $2 Million

The City Council met for a special meeting to introduce Fiscal Monitor Judy Tripodi’s budget amendments last night. Normally it would be the Mayor’s job to offer the amendments, but David Roberts lost that job after the state moved in to clean up his budget mess. The good news (if there is any) is that the budget has been cut by $2 million after members of the council negotiated with Tripodi to cut the size of a reserve account.

(Check out the updated numbers here)

At $123.8 million the budget has exploded since Roberts took office in 2001, when he inherited a $52 million spending plan. Last night’s meeting was procedural in nature, so it was brief. The big budget meeting has been scheduled for next Wednesday, March 18th. The public will have the chance to comment on the amendments, followed by a final vote on the plan. Watch for lots of posturing and pontificating at that meeting, but no matter the final vote Tripodi has the power to implement her spending plan.

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Check out the Fiscal Monitor’s eye-opening comments below.

3/10/2009:

Hoboken411 EXCLUSIVE:

Judge Judy’s budget verdict is in

State fiscal monitor Judy Tripodi is making it clear that it took several years of fiscal mismanagement to get Hoboken in the budget mess it’s in today. In a three page memo obtained by Hoboken411, Tripodi lays out her Fiscal Year 2009 Budget Amendments, and puts to rest the myth that a failed vote to adopt an under funded budget last June would have saved Hoboken from a massive tax increase.

Tripodi spends months scrubbing the books

The budget process began in August with the introduction of Mayor David Roberts’ first draft of an FY2009 spending plan. It has taken this long for Tripodi to wade through the muck to find what she believes are the real numbers and introduce her own amendments. Tripodi writes:

“The budgets of the past were significantly under funded and the real cost of City operations was not transparent. Over many years, the tax levy remained artificially low while deficits grew exponentially, but were covered by budget gimmickry.”

If you are thinking that sounds more like what Beth Mason has been saying for the last six years than what you expected to hear from Tripodi, you’re not alone. Mason spent many thousands of dollars suing the administration trying to get public records to prove exactly what Tripodi is saying. Operations were not transparent, and we are now paying dearly for it.

Tripodi on the Mayor’s past “Budget Trickery”

dave-roberts-budget-trickery.jpgTripodi also says the $125.8 million budget she is offering puts a stop to the Roberts trickery of the past:

“While this is an exceedingly painful budget, the numbers are real. There are no one-shot revenues, no gimmicks, no smoke and mirrors, every number contained in this amendment has been analyzed numerous times, verified and supported with documentation.”

Tripodi goes on to make it clear that Peter Cammarano’s claim that “If only the council had adopted a budget in June, there never would have been a substantial tax increase” is patently false. The memo from the fiscal monitor frankly states that several years of budget trickery manifested itself into this year’s debacle, and that Hoboken would have had to pay the piper for it eventually either way:

“The failure of Council to adopt the FY 2009 budget exasperated an already failed process… If the city was not placed under State Supervision and the Director did not allow (Roberts’) over expenditures to be raised over 7 years and, if certain actions were not taken immediately (by Tripodi) such as instituting a hiring freeze, spending freeze, laying off of provisional employees, eliminating services and programs, and taking other steps necessary to reduce costs, the tax levy for FY 2009 would have been much greater.”

And just how poorly did Dave Roberts put together the FY 2008 budget? You already know about the last minute $11 million in over expenditures. Tripodi talks about revenue issues as well:

“All miscellaneous revenues anticipated (by Tripodi) are based on 8 months’ realization plus realistic projections of amounts to be received through June 30, 2009. In the prior year’s budget (by Roberts), miscellaneous revenues anticipated were overstated, resulting a shortfall in this revenue category of over $3.1 million.”

The state fiscal monitor also points out how the line item for Roberts’ Over Expenditure of Appropriations reflects an astounding 1/7th of the actual total for the year ending 2008:

“The total for over expenditures and erroneous budget charges of $11,335,748 includes:

  • $7 million in health benefits
  • $1.9 million in police salaries and wages
  • $677 thousand in sanitation and other expense
  • $221 thousand in street lighting
  • $254 thousand in Social Security
  • $112 thousand in electricity
  • and smaller amounts in a host of other line items

But will Hoboken’s taxes ever go down?

hoboken-resident-drops-of-property-taxes.jpgAccording to Tripodi, they should. She notes the taxpayers must “carry a heavy burden of paying for the sins of the past,” but her budget also is a start “in setting the City on sound financial footing.” In addition to his faulty logic about the June budget vote, Cammarano is also promising to lower taxes. Tripodi’s memo makes it clear that taxes are probably falling after this crisis no matter what. It’s just a question of by how much:

“For FY 2010, many of the one time costs will be eliminated. There will be a full year of savings from retirements and layoffs. Hopefully, labor contracts, more favorable to the City, will be negotiated, resulting in savings in many areas. If the city continues on the course of fiscal austerity, this egregious burden on the taxpayers will be reduced.”

So, the bottom line from Tripodi seems to be those council members who refused to adopt an under funded budget in June (Castellano, Cunningham, Mason, Russo and Zimmer) made the decision that allowed the true extent of the budget mess to be revealed and addressed. She makes clear that years and years of trickery led to the 47% tax increase, not a single vote of the council as Cammarano continues to claim.

On Wednesday night the council will hold a special meeting to accept Tripodi’s budget amendments so a public hearing may follow before an adoption on March 18th. Click here for the full Fiscal Monitor Memo, and here for the FY 2009 budget amendment spreadsheets.

For more Hoboken411 coverage, check out:

6/02/08: Special Council Budget Meeting
10/09/08: Massive Tax Increase Coming
11/18/08: Hoboken Budget Hearing – Recap 1
11/18/08: Hoboken Budget Hearing – Recap 2

Leave a Reply

237 Comments on "New Hoboken Budget: $123.8 Million!"

estevens
Member

CalGard – before you get any more agitated about the delinquent taxes, let me try to explain.

2nd quarter 2008 taxes, if all were as it should be, would be due by May 1, 2008. Those tax receipts would have been recorded as revenue for Fiscal Year 2008, which ended on June 30, 2008.

However, Q2 bills did not go out until after June 30 (bills were due by July 28). The city cannot bill for Q2 taxes until the final budget had been adopted. While they are payable in the second quarter of the calendar year, they are payable in the final quarter of the fiscal year which runs July 1 to June 30. The municipality cannot send out estimated billings for a quarter which closes out the fiscal year.

FY 2009 had a line item “Deficit in Operations – 4th Quarter Levy” of $24.4M, the amount of taxes not received for FY2008 as a result (mostly) of the late billing. That figure corresponds with the FY2009 line item “Receipt from delinquent taxes” of $24.8M.

This is simply an accounting mechanism. The city operates on a cash basis – tax revenues are recorded for the fiscal year in which they are received. Nothing nefarious here, nothing incompetent (except for the late “adoption” of the state-mandated budget).

Hope this helps.

CalGard
Member
CalGard
Thank you estevens – I do understand now that you’ve explained it. It is rather difficult to go through available news sources and see what happened in May/June 2008. Indeed, mayor (Roberts) presented the final FY2008 budget, with its ~11M$ surprise deficit, to the council in May. His credibility was nil and the council voted not to approve the budget. They continued to take this position. On June 12 the council had missed a State imposed deadline to submit an approved budget and were individually fined $25/day. The state moved to take over city finances and the council finally approved the budget on June 30. It was only then that the last quarter tax bill for FY2008 could be calculated and issued, when total approved expenses were for the year became official. Its a very interesting story. At the June 30 vote, three council members: Mason, Russo, and Castellano voted against the budget. Russo believed the underfunded budget to be illegal. I have not seen what reason Mason and Castellano had for their nay votes. I can only assume that the three naysayers wanted the $11M deficit to be filled by a huge tax in that final quarter. In response to estevens who said: CalGard – before you get any more agitated about the delinquent taxes, let me try to explain. 2nd quarter 2008 taxes, if all were as it should be, would be due by May 1, 2008. Those tax receipts would have been recorded as revenue for Fiscal… Read more »
CalGard
Member
CalGard

In the March 12 update 411 says:

“The good news (if there is any) is that the budget has been cut by $2 million after members of the council negotiated with Tripodi to cut the size of a reserve account.”

(See sheet 30 FCOA 50-899) in hobokennj.org/docs/businessadmin/Hoboken_Adopted_SFY_09BUDGET.pdf

Yes by $2,010,000. to be exact — between Dec 08 and Mar 09. The problem is that the reserve account is an artificiality, a figment of the imagination, a complete irrelevance in the 9th month of the fiscal year.

This reserve is there to balance the budget if actual taxes collected on time are less than what is due in the budget year.

But again we have what appears to be a miracle. Through negotiation, council members convinced Judy to reduce the reserve appropriation by $2M. After this, the budget still balances. We would have had a $2M surplus without the reduction in reserve. Suspiciously, the amount to be raised by property taxes went down $2M from Dec to Mar. Magically we have a balanced (albeit $3M larger) budget as we go from Dec to Mar. An accounting miracle is simple chicanery or worse.

CalGard
Member
CalGard

As reported here, Judy Trepodi is quoted:

“While this is an exceedingly painful budget, the numbers are real. There are no one-shot revenues, no gimmicks, no smoke and mirrors, every number contained in this amendment has been analyzed numerous times, verified and supported with documentation.”

Judy, I am happy to see you have the supporting documentation. I have questions.

1) Did you provide documentation to the City Council?

2) What are the details of $25M in delinquent taxes. How many taxpayers were late. How much was collected in interest owed. I believe you appointed Sharon Curran to be tax collector. Is she the one who found the additional $10M after she replaced Mr Picardi when he resigned?

3) How did the city make $700,000 on investments last year.

4) What are the $900,000 deferred charges in the Parking Authority?

I apologize if you have answered these questions previously.

CalGard
Member
CalGard

Perhaps some clues as to why city revenues in March were apparently dishonestly inflated: 700% increase in return on city investments and deposits, and the discovery that $10M more had to be recovered from delinquent tax payers.

No 1.

The Hoboken Parking Authority surplus (budget Sheet 35, FCOA 55-545) transferred to the city budget and counted as revenue there was down almost $3M from the year before. Mainly because the 916 Garden street garage was never sold and is costing half a million yearly in loans taken out to fix it. And deferred charges of almost $900,000 are shown on sheet 35, compared to $56,000 anticipated in Dec(incorrectly booked I should add – Judy please correct this before you submit the budget to the state).

No 2

The total budget in Dec was about $121M. It increased to $124M by Mar. But it was balanced because of the allegedly dishonestly reported investment income and delinquent taxes. Last years increased budget then set the stage for an even larger budget we have even yet to see for this year (FY2010) without the requirement to get state approval for a larger than otherwise allowed budget increase.

Ms Zimmer you said: This budget: “The most honest that we’ve had in many years, not filled with gimmicks.” I guess honesty and gimmickry are relative. What did you mean then and what do you say now?

CalGard
Member
CalGard
This whole thread needs reviving. Clearly some of our elected officials are clueless, some dishonest and some both clueless and dishonest. The following is from my post in the recent article “Mason to mull run at Mayor”. ——————————— Those involved in the fiscal management of this city have told amazing stories in the 2009 budget approved by City council in March. 1) In Dec 2008 we anticipated making $100,000 in interest on city investments and deposits. Three months later, in March we are told that we exceeded that by 700%. We made $700,000 last year. (see FCOA 08-113 on Sheet 4 of the budget). 2) In Dec 2008, we learned quite unexpectedly that Hoboken citizens had not paid $15.5M in property taxes when due by May 1, 2008. Not too dredge up the past unnecessarily, but in Dec, Mr Cammarano who was at the council meeting verified this fact with the apparent agreement of the rest of the council members. Three months later, in March we are told that there were actually $25M in deliquent taxes. That is: 75% of property taxes were paid late last year. (see FCOA 15-499 Sheet 11) Now making $700,000 on “investments” seems suspicious to me unless Hoboken has 15 Million dollars invested at about 5% interest. If the city has that kind of money shouldn’t we have paid down our $10M deficit from 2008? Most likely is that the $700,000 is a fiction pulled out of thin air. I’ll leave it up to those… Read more »
CalGard
Member
CalGard
To summarize, council members statements from this article: Mason: “The budget up for a vote tonight does too little, too late to give relief to the taxpayers.” Cunningham: seconding Mason and also “was “disappointed” that state operational and fiscal audits remain unfinished and not presented to the council.” Zimmer: This budget: “The most honest that we’ve had in many years, not filled with gimmicks.” Mason and Zimmer who either plan or mull to run at mayor in November, issued press releases saying the 2009 budget was factual (although Mason did vote against it – as a poltical statement. I mean how do you vote against the facts?) In response to CalGard who said: This whole thread needs reviving. Clearly some of our elected officials are clueless, some dishonest and some both clueless and dishonest. The following is from my post in the recent article “Mason to mull run at Mayor”. ——————————— Those involved in the fiscal management of this city have told amazing stories in the 2009 budget approved by City council in March. 1) In Dec 2008 we anticipated making $100,000 in interest on city investments and deposits. Three months later, in March we are told that we exceeded that by 700%. We made $700,000 last year. (see FCOA 08-113 on Sheet 4 of the budget). 2) In Dec 2008, we learned quite unexpectedly that Hoboken citizens had not paid $15.5M in property taxes when due by May 1, 2008. Not too dredge up the past unnecessarily, but in… Read more »
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