City Budget Hearings
11/29/2007 Day 1 Update:
Complete recap of the first day of the Hoboken FY2008 budget hearings.
Budget and Finance Committee Chairman Michael Russo laid down the ground rules for the committee of the whole session. The meeting would only run an hour and a half (it actually went closer to two hours), the council would get their shot to ask questions individually, and at the end the public would only be allowed 3 minutes each to speak, but only to ask questions, not make comments or statements. Russo said there would be two “fact finding” meetings (the second is tonight at 7pm) followed by two more meetings after that on December 4th and 11th for further discussion, followed by the mandatory public hearing at the regular city council meeting on December 19th. Mayor David Roberts was there with Business Administrator Dick England, Chief Financial Officer George DeStefano and other directors to answer the council’s questions. Russo decided to go around the table beginning with 4th ward councilwoman Dawn Zimmer, who sits at the far right side, and end with 2nd ward councilwoman Beth Mason, who sits on the far left of the table.
Read the rest of this comprehensive overview with detail you won’t see anywhere else after the break.
Zimmer kicks it off
Zimmer began by asking if it was possible to have the city directors come in and give the council an analysis of their budgets with their recommendations and written backup. Russo interjected, saying he was not going to ask directors to justify every cent. It was pointed out several directors were in attendance and would answer questions they could, and other questions would be answered at future meetings. Zimmer than asked for the annual debt statement, annual budget statement, and W2 tax forms issued by the city for the last seven years to all employees. (Note: The annual debt statement was given to council members at the beginning of the fiscal year.)
The W2 request took some people by surprise, and Zimmer said she wanted them to determine if the Mayor was truthful in his comment that though the budget is up from $53 million to $87 million during his time as Mayor, the headcount of employees is only up by 8 people. Business Administrator Dick England said getting the W2’s would be extreme, but he would get the council printouts of employee lists for the time period they are asking for. England also said the Mayor already called on directors to hand in a “bare bones” budget, so there is no need for department heads to explain how they would cut their own budgets further.
Zimmer also noted the Mayor placed a $4 million revenue item in the budget “from the sale of the Municipal Garage.” The Mayor has been refinancing the garage for years to fill budget gaps, $7.9 million in FY2005 and $5 million in FY2006. The budget also includes $1.2 million for debt service of the Mayor’s Muni Garage back-door borrowing scheme this year. Roberts said he was confident the garage would be sold this year, with bids now being analyzed. Zimmer noted it was still unclear how much a new garage would cost and where it would be located. Roberts said there is strong consideration to properties that lie on the northwest broder of the city, and discussions with the county and Weehawken to create a regional garage solution to save money. Zimmer expressed concern about the habit of selling municipal assets for budget purposes. Russo said it was “duly noted.”
Mayor’s Office Budget Questions
Zimmer noted the Mayor said he wasn’t going to be taking his salary, but the salary is in the budget. Roberts said after scrutiny from the council and the media that he would be taking his salary in a more traditional way and donating it. He also noted the salary line in the Mayor’s budget would be going down because Suzanne Hetman moved from the Mayor’s office to run the Rent Control office.
Now, they didn’t get into this during the meeting, but here is the background: Ms. Hetman was making $90,000.00 as one of the Mayor’s aides, some say placed there to be the eyes and ears of State Senator Bernie Kenny at City Hall. With Kenny exiting stage left and Roberts claiming he will not be running again, Ms. Hetman was recently placed in charge of the Rent Control Office to guarantee her continued employment in city government beyond the next election. This move came at the expense of experienced workers in the Rent Control office who were looking to succeed the retiring Carol McClaughlin. Zimmer asked if Hetman’s salary was adjusted in her new role, and England said no. Ms. McLaughlin was making about $70k in her longtime position, while Ms. Hetman is making $90k today for a job she is just now being trained to do by more experienced people who now answer to her. Welcome to Hoboken.
Peter Cunningham’s Turn
5th ward councilman Peter Cunningham said he was concerned there is a lot to go over in the budget without the backup. He said he wondered how “real” the revenue and expense projections in the budget are. He also asked for accountability within the divisions to stay within budget, saying “If we set budget numbers we have to expect directors and direct reports to stick within the numbers.” Mayor Roberts said new Health and Human Services Director John Pope has also looked at that numbers and made service cuts already.
Cunningham asked why the line items for the Office of Constituent Services went up from $164,000 to $208,000, and Zoning Administration went from $95,000 to $145,000. Councilman at Large Peter Cammarano said these were salary increases. Cunningham asked why. Russo said they were mandated by contract. Cunningham asked for backup to substantiate those numbers. England said there are four employees in Constituent Services, and Roberts said there are no new employees in the division with the most recent hired two years ago. The Mayor added he would urge the council to take into account Mr. England picked a number to get the office funded through the year, and if the council wants to cut the number, there will be a cut in service. Roberts added they all are “real numbers not over or under inflated with the normal increase a salaried employee would expect.”
What’s the Constituent Services Office?
Often belittled as the “office of which way do I go?” the Constituent Services office was created by Mayor Roberts in 2001 and opened in 2002. It is located as you walk in to city hall on the right, and is where people get directions on where to go in the building. At the time of it’s creation it was widely seen as a way to get Councilman Ruben Ramos’ mother Sandra Ramos on the City Payroll. Hired at $30,000 in 2002, Sandra Ramos’ city salary has nearly doubled since. Originally a three person office, Roberts made room in the budget to hire former 3rd ward councilwoman Rosanne Andreula in constituent services after she lost her seat (and her city-paid health benefits) to former Mayor Anthony Russo.
Terry LaBruno: spend more
Councilwoman at large Terry LaBruno said she wanted to find more money in the city budget to fund the Jubilee Center, which risks closure for lack of funds after losing grant money. LaBruno also wanted to make sure there was enough money to pay for all the lawsuits the city faces from employees and people looking for public documents. She was concerned the city was “under-budgeted” in the line item for “special counsel”, which was listed at $750,000 when $1.1 million was spent last year.
LaBruno also said she thought the federally funding Hoboken Housing Authority should be paying the city Payments In Lieu of Taxes. People quietly tried to assure LaBruno that that would not be legal, but she continued by pointing out that the Applied Housing projects pay PILOTS, so why not the HHA. Applied is privately owned while the HHA buildings are government owned and exempt from taxes and PILOTS.
LaBruno did say she wanted to freeze what the city contributed to its generous health plan. Roberts said in 1997 healthcare cost the city $4 million, and this year it is $11 million. The Mayor noted the City and the Board of Education are paying a million dollars extra for redundant coverage of spouses who work for the city and school district. Roberts noted he was in favor of asking for an employee contribution toward family medical coverage, but it must be done through contract negotiations.
The sister-in-law of the Police Chief and wife of a Fire Department Battalion Chief also focused on the jump in the public safety budget. England noted much of the jump is to budget for retroactive payments to employees due to their contract negotiations. Firefighters and Municipal Employees for the latter half of last year and beginning of this year for firefighters and municipal employees, while they are waiting for the results of binding arbitration with the police unions which will kick into this year’s budget.
Ramos says NAY to horses
Councilman-at-large Ruben Ramos focused on the huge line items for public safety and insurance costs. He asked if the 42 million dollars included overtime. Dick England said yes, adding they are currently working with union heads and management to figure way to address overtime “so no one gets hurt.” He noted court appearances are on overtime, and he wanted to work with the court and PD to reschedule appearances during regular work hours.
Ramos asked about overtime in environmental services, England said it is better to have fewer people making overtime than to pay medical and pension for new employees. Roberts took this opportunity to tout his plan to target employees for retirement buyouts. Ramos noted it was unclear in the budget how much the mounted police patrol is costing taxpayers, adding “I would rather keep people than police horses. If that is an option (new public safety director) Mr. Bergin should look into that.”
Ramos was also concerned about auctioning more taxi licenses to gain another million dollars in one-shot revenue. He asked “How many times have we been to that well? This is about horses vs. people.” Ramos also wants the city to charge businesses on Washington Street collection fees for recycling? Environmental Services Director Joe Peluso said it’s up to the city council. The extra commercial pickups in the weekend cost the city $400,000, and the city could charges businesses a million dollars and keep the change.
Ramos ended by saying “It’s all about finding new revenue sources to find new ways to make money for the city of Hoboken. That is where we should concentrate our efforts.” That’s right. Not cutting the budget, finding new “revenue sources.”
Castellano keeps it brief
An ailing 1st ward councilwoman Terry Castellano noted the 2.5% tax increase in the Mayor’s spending plan depends on the city council accepting all his initiatives. Castellano told Roberts “I have several problems with cutting medical transportation and the crosstown bus, and I put you on notice I am not happy with many of these initiatives.” Roberts said it is difficult to choose between unpopular things to do but they did their very best, adding “Everybody wants to go to heaven but nobody wants to die.” The Mayor said it’s up the council to continue the dialog, and offer alternatives. Noting the 8 million dollar jump in the budget, Castellano said every year “we hear we need to tighten our belt, please cut the spending.“ Roberts said the savings would come in later in the decade.
Now Batting: Nino Giacchi
6th ward councilman Nino Giacchi wanted to be sure the council would receiuve a list of department employee salaries that will also include pension cost information.
He said he wanted very specific information about line items that have increased by 25 to 50%. He questioned whether the 2009 budget could actually go back down to $75 million, as the administration is saying is possible if the council approves all the proposed buyouts. In response to that idea, Giacchi said “We need some reality here.” Giacchi also asked why there is revenue from a riverfront development in the budget again this year, when it was in the budget last year and never came in. England said they anticipate receiving the money this year. Giacchi also noted the Parking Utility Surplus was not as large as originally thought last year, but the administration was predicting it would be even higher this year at $5,358,059.00. Roberts said new technology will lead to more ticket writing and revenue, and he will be asking for the ordinances to raise fees and add meters to raise more money from parking.
Now to Cammarano
True to form, councilman at large Peter Cammarano used the question and answer session as an opportunity to lecture and pontificate. He started by acknowledging the comments of Councilwoman Castellano, but he said “I do have to remind my colleagues for better or for worse this is our budget now and we have options on the table.” Cammarano asked “What dollar amount corresponds to a percentage point increase in taxes.” Dick England said if you remove $282,000 in spending, you will take 1 penny off tax rate. He also noted it’s possible that the amount of money generated by two and a half percent tax increase may lead to a surplus due to the growth of the community. England said “We are growing faster than we are anticipating”. Someone in the audience responded “and we are spending it faster.”
Then Cammarano did his “save the taxpayer” stump speech while the Mayor did his “Hoboken’s future has never looked brighter” speech. Roberts did admit “There are areas we can continue to cut, but it is a very limited amount.” In the end, Cammarano seemed to miss the point of the “budget workshop.”
Mason ends the round
Due to her position at the table Russo recognized 2nd ward Councilwoman Beth Mason last. She thanked the mayor for attending the meeting, which Roberts was not planning to do before Mason put him on the spot at the last council meeting. Mason then asked who on the council the Mayor had met with privately to discuss his budget. He listed everyone but Mason, Cunningham, and Zimmer, but said he had offered opportunities to meet with all. Mason then said “I hope you understand why my interest is to do what we are doing now to get as many questions out in a public forum like this.” The point was rather than deal behind closed doors, the place to deal with the council’s budget questions for the administration was in public for everyone to see. Mason asked for any documents provided to the finance committee to formulate this budget, asking “What other documents were used to compile this budget beyond those mentioned here.” England went through the list, and not emergency appropriations. Mason asked for those documents, and said she wanted to put them online for people to review and comment on.
Mason the asked the Mayor to eleaborate on his plan to reduce the workforce, since he was making big promises about savings but not saying how services would be effected. Roberts said since the concepts were “not yet agreed to, I don’t want to talk about specific divisions, but would talk privately in the mayors office” where he said he could be “very specific.” Roberts said there are services that the state and county provide that the city is duplicating, and “When times are good and taxes are not going up, its in city’s benefit to have this, but when we need an increase we no longer have the luxury.”
What about these buyouts?
Mason then noted while he was cutting there he was adding 15 police officers and 10 firefighters. Roberts said the firefighters are being hired through a five year grant while the city is on the hook for the patrolman. With so many cops rising through the ranks of the department there are fewer at the rank of patrolman.
Roberts said the majority of his proposed 15% reduction in the workforce would come from about 40 employees eligible for retirement after 25 years of service. In the event the incentive does not attract enough people over a 15 month period, Roberts saud “then there will have to be some hard decisions to closing out and laying off a division.” Mason asked when the city will begin to see the savings, and Roberts said it will be the next fiscal year. Mason wanted to see all the forecasts the administration had come up with to get to those answers. Roberts said they could but England said it would take some time.
Big money for unused vacation days
Mason also asked about the total “Compensated Absence Liability” of $16.7 million, and England said that is an “unfunded disaster scenario”, and essentially an IOU to employees from the city for all the unused vacation and sick time they have carried over through their time on the payroll. Mason noted a number of directors may be retiring after many years of service, which could result in some huge unfunded payouts. Mason also said she would follow up with additional questions.
Turning to the Public
Richard Tremitiedi got up to thank the Mayor and council for allowing him to take part in the budget process through he $1 a year consulting Job. Perry Belfiore noted the health benefit costs “nightmare” and asked if anyone from the city had talked to Hoboken University Medical Center about picking up the unfunded portion of the city’s pharmacy benefits plan. Belfiore said it could increase HUMC’s business and save the city money.
Kurt Gardiner spoke about cost cutting, suggesting the runaway vacation and sick time allowances need to be reigned in. He was told it had to be done through negotiations and collective bargaining. Cammarano noted the city went to arbitration with the police unions over the unlimited sick time issue.
Helen Hirsch asked “What is the problem with eliminating duplication within family health insurance? Why does this have to be complicated?” Russo said it was actually a contract issue that needed to be negotiated. Hirsch noted there is no revenue listed for the many programs in the cultural affairs department. She was told “it’s a trust account” but there is no information in the budget about it. Ms Hirsch wanted to see the accounts of these “trust funds”. Apparently there are quite a few of them in the city with not very much oversight.
Before adjourning, Russo said he wanted the following for the next meeting:
- The capital budget including “what we must do and what we could hold off.”
- Details on the two cent open space tax.
- All municipal and parking utility debt broken down by year over the next ten years.
- All pilots and abatements regarding affordable housing,
- A breakdown of lawsuits pending, including cases that could be settled immediately.
The next meeting is tonight at 7pm at City Hall.
City Budget Hearings Start Tonight
Have any ideas on how to cut the Hoboken budget?
Tonight and Thursday night you will get your chance to share them. The City Council is holding “Committee of the Whole” meetings to run through Mayor David Roberts’ FY2008 Spending Plan, complete with its eight million dollar surge in spending over last year. When Roberts first moved into the corner office at City Hall in 2001 the budget came in at $53 million. Now he wants to spend $87 million ($34 million more, for those who are “math challenged”).
The budget was placed on the city’s website in a form some say is too simplistic with not enough detail. Rather than posting the entire budget in an industry standard Excel spreadsheet including years of historical information, the city only posted a 60 page PDF file that provides only the budget details what the state asks for. You can see how much a department is budgeted to spend, but little about where that money is actually going. In this form it’s less a budget and more a general statement of projected income and spending. It’s also not summarized properly, likely done on purpose to confuse the lamen.
Mayor Roberts has been criticized for the hands off way he prepares the budget. When asked in open session how the administration comes up with a spending plan, Business Administrator Dick England once admitted the Mayor’s department heads send in how much they want to spend in the new year, and it goes into the budget. There is no bottom-up, zero-based budgeting, no review of what departments and personnel are spending over a long-term basis, and no long-term planning.
The city estimates how much revenue will be coming in, tests the waters on how many one-shot revenue items it can get away with (selling taxi licenses, auctioning off municipal property, front-loading PILOT payments) and – voila! – that’s how much the Mayor spends.
You can find the budget worksheets (for what they are worth, in this form) here:
Anticipated Parking Utility Surplus
The Parking Utility ended FY2007 with an operating surplus of $5,358,059.00.
- Does that money go to fix the deteriorating garages on Hudson Street? No.
- Does it pay the $2 million bill from Unitronics to fix the 916 Garden automated garage? No.
- Does it go toward building new parking facilities in growing parts of town? No.
That money will be used to fill the Mayor’s budget gap, while Roberts asks the City Council to borrow another $2.2 million to pay for Parking Utility upgrades, further increasing the city’s massive debt service. Incredible.
Massive Debt Service
The Total Municipal Debt Service listed is $6,732,460.47 for FY2008, up from $5,466,241.00 in FY2007. Mayor Roberts’ ongoing back-door borrowing scheme involving the Municipal Garage is set to cost $1,194,27.80 this year, rising from $829,631.00 last year, all to avoid tax increases in the 2005 Mayoral election year as well as in 2006. The Parking Utility has an additional debt service burden of $2,625,566 listed for FY2007, but nothing listed under FY2008.
Massive Legal Bills
Thanks to the city’s many employee lawsuits and refusal to provide public records to citizens, the combined budgets of the Corporation Counsel and Special Counsel plus expenses rose to $1,581,300.00 in FY2007. For FY2008 a $490,181.40 figure is listed for Corporation Counsel, while the other legal items are left blank. Hmmm, wonder why?
Compensated Absence Liability
Thanks to liberal municipal government vacation/absence rules that allow employees to carry over their sick and vacation time through their careers, the city has a total “Compensated Absence Liability” of $16.7 million. That breaks down to $9.3 million for vacation liability, and $7.4 million for terminal leave liability. When people retire, they get big checks as going away presents. For instance, Police Chief Carmen LaBruno is rumored to have up to three years of days off the city would be on the hook for when he retires. Sweet! Let’s go to the casino!
In FY2007 the city paid $3,698,858.00 into the retirement funds for police and firefighters. In FY2008 that shoots up to $4,512,606.76. The payout the Public Employees retirement find rises from $363,719.00 to $443,737.18.
The City Council meets tonight at 7pm at City Hall to discuss the budget, and again tomorrow night at 7pm. Mayor David Roberts says he will be there too.
If people don’t show up to ask questions and make comments, the Mayor and Council will assume everyone is cool with the way the city spends your money.