City Budget Workshop – Day 2

12/9/2007:

Better late than never. For those still wanting to read, here’s the recap for the 2nd day of budget workshops held the last week of November. Part I here.

Read the day three recap in about 12 hours. Then you’ll be all ready for this Thursday’s “special” council meeting and last day of workshops.

City Budget Workshop – Day 2 recap

hoboken-city-hall-small.jpgThe second of four budget workshop meetings opened up without Mayor David Roberts or a member of the corporation counsel’s office in attendance. The conversation picked up where the last budget meeting left off, with Terry LaBruno asking about the statement that cutting $282,000 in spending would cut one cent off the tax increase. LaBruno asked how much would have to be cut for no change in the tax rate. Michael Russo said to reduce the tax levy from the previous year they would have to cut 8 cents, or 1.9 million dollars. Dick England said it could actually be as much as three million dollars.

Dawn Zimmer referred to the construction code office, asking if the city can charge them rent for the space they use at city hall. Russo said they would look into it. Beth Mason asked about estimates for income from the proposed intersection cameras, wondering where they came from. England said it was the “anticipated amount of revenue”, but there are still questions whether the state will even allow the cameras. Mason asked for a copy of the city’s computation of the estimates, and England said he would provide it.

Continue reading the rest of day 2 after the jump (it’s a long read), plus video of the entire meeting

(from above)

The council members continue on…

England said work was still be doing on compiling information on the last seven years of salary and payroll information requested by Zimmer. The council will get two reports including everyone who has been hired from July of 2001 to now, with Public Safety Director Bill Bergin being the last hire. He said they would have to eliminate part timers from the list to compare apples to apples. Mason asked if it was possible to get a summary of which of the jobs reduced went into privatization or a contractual obligations. England noted there would be no salaries on the list, but Zimmer insisted she wanted names and dollars.

Mason said she had many questions for the Mayor, but since he was not there she would save them for another time. Russo indicated Roberts called him to say he had prior engagements, and asked to be relieved of his commitment to attend the meeting. Russo offered to take Mason’s questions in writing to Roberts, but Mason said she had “very specific questions for him,” regarding the Mayors statements about “savings in redundant services by county and government entities.” Mason said “the public deserves the right to know the answer to that question,” noting they need to see documents on sharing services, including a financial rationale, before acting on it.

England said he wanted Mason to sit with the Mayor to discuss it privately because public discussion would “put people in peril.” Mason replied “did you not send out a layoff letter?” England said yes, and Mason replied “if people are thinking there may be layoffs why would talking about that be an issue?” England said “if we have 500 people that are at risk, I will have teary eyed employees.” LaBruno then piped in to say a parking utilty employee asked her “are we going to have to pay for our health benefits?”

Mason brought up the actual size of the budget. “Last night we kept hearing 87 million dollars, I can’t quite come up with that because I get 79 million without the parking utility.” England said the bottom line is a total of appropriations without the parking utility’s 13 million dollars, “so it’s really 92.9 million dollars.” Others through it was closer to 99 million. Mason asked “What is the municipal piece of the tax increase?” and wanted to know of the Parking Utility’s debt service was included in the city budget. England said no. Mason noted a number of trust funds are not included in the city’s budget document, and asked “Can we get the accounts and most recent financial statements?” England said yes.

Peter Cammarano was brief (probably had the “Path Hike” on his mind), saying his only question was answered the night before. He said “My over arching question is what is the impact that we need to reach to get to a flat tax rate. 2-3 million dollars.” Russo said that is a “tough question to answer depending on when ratables are coming on line.” When new buildings start paying taxes they have an effect on the overall levy. Cammarano then gave a mini speech, saying he was ”formulating a series of proposals to hopefully cut the budget. If you look at the Mayor’s budget message the theme is that it’s the same story about county taking more and more money. How does the increase break down as a relative portion? The Mayor’s briefing book has thumbnail assumption county will take over services. Another assumption on top of pile of mayor’s assumptions in this budget.”

Nino Giacchi asked about “down payments on improvements” in the budget. England said the money was set aside to spend on preparing the various redevelopment plans in town. Giacchi noted it went up fro $100k last year to $300k this year, and asked what the specific plan was for the increase. England said it was for the unknown. Giacchi also asked about the green trust loan program, police car lease costs, and emergency authorizations. Giacchi also noted a line on the parking utility’s continuing operations was listed at $1.9 mil but 2007 was realized at $676k. Giacchi wanted to know the reason for the significant jump. England said it was due to the proposed increase in parking fees and meters, including monthly rates at city garages.

Theresa Castellano noted the council was receiving documentation daily by council request. She said the questions are great, “but we have a fact of a budget that has risen 10 million dollars in a year. My focus will be on the initiatives, some I agree with and others I don’t.” Castellano said she would submit comments and questions in writing, and requested a copy of 2009 budget outline the administration said it put together. England said he would give it to the council.

Peter Cunningham reminded England he wanted a list of all projects with PILOTS to be paid and how long the contract runs. He also asked for audits for affordable housing units, because he is concerned the city is not getting all the tax revenues it should for formerly affordable housing units that are now being rented at market rates.

Cunningham repeated his call for an outside consultant to do an efficiency audit, hiring a firm to come in to see where we can run government better. He added “With PILOTS and revenues up over ten percent and higher in years to come that there has gotta be another significant problem within this administration.” Cunningham called for an audit of the use of city vehicles which consumer $25,000 worth of fuel each month.

Zimmer asked if the city directors put together “5-year business plans” for their departments. England said no.

Russo said he wanted to look at municipal and parking utility debt together to see if there could be some savings through re-financing. He also wanted a three-year budget, and wanted to settle any lawsuits rather than spending more money on attorney’s fees. He also indicated he spent time dealing with the health insurance issues, trying to get those costs down. It was mentioned not all health care costs are in each department’s budget, making it harder to see how much money is being spent for each department.

The public speaks

Richard Tremitiedi was the first member of the public to speak, saying he would support a detailed operational audit done by an independent firm.

Jon Gordon noted when Dave Roberts took office in 2001 he received a city spending 51-52 million a year, and that his campaign literature said it was an “obscene amount of money” Gordon asked “Where is sense of urgency with spending up 77 percent since 2002?” He said the city should shut down the cross town bus in 15 days and tell people to call a cab. “Done! That’s privatization!” More from Gordon: “Oil gas and milk prices are up, tolls are up, and you want to increase fees and gotchacams. You haven’t addressed the key issue in the budget in a timely fashion: staffing. David has admitted the city is 20 percent overstaffed. When you do early retirement it ends up costing you more, not less. Take December to figure out what services you are willing to not do. Get surplus people off payroll by end of March. You can budget for that, and its quick. Until you do that you have no right to talk about raising additional fees.”

Jim Vance agreed the workforce needs to be addressed. “We have housing values going down. Prices went in the town in the 80’s and to suggest it can’t tank again is folly. We need to get serious about tightening the city belt. Trash trucks with three people crewing them in NYC there are trucks with one. Lay off a third of people picking up trash. HPU and environmental services trucks with 3 or 4 people driving around all the time. Its time we get serious about saving some money in this town. Make sure people who live here can continue to live here.”

Bill Noonan said “If I were be paying $8000 for single health coverage, I’d have a heart attack. Those prices are insane. The broker is not reducing costs in a significant way by reducing premiums. I will sit down with you to save millions on health care. The employees have to pay a portion so they understand the cost of healthcare. It’s an extra 800 dollars a month here we are paying. Knock it down to three tiers and save money. I’d like to sit down and work on it.” Russo noted Noonan helped with the dental plan, but noted these are all items negotiated with municipal unions.

Mayor Roberts has been saying the city’s total tax rate is going up about 2.5% with his budget, but apparently that includes the school district and county taxes, which may be placing less of a burden this year on individual taxpayers. Michael Lenz asked what percent of the municipal portion of the tax burden is going up, guessing about 10% England said it was maybe 11%. Lenz noted “PILOTS are subject to a great deal of negotiations, we have pegged them to market rents which are being corrected. If those rents go down, so do those pilot payments. When valuations start dropping, people start submitting tax appeals.” Lenz, a former city acting CFO, said at a budget hearing he wanted a line by line chart showing last year and this year to see if there is “wiggle room in the budget we don’t need.” He noted the city debt is “up fifty percent in five years,” adding “We have the capacity to pay it back legally but none of us want to pay those bills.” Lenz also said they should “Stop issuing debt for items that are really operating. Use parking funds for parking purposes.”

Halley Wollowiec also made some comments, but she got her own thread here.

Don Pellicano said he would rather the city control services and not hand them over to the county. “I don’t trust the county, never did never will.” He pointed to the list of PILOTed buildings on and noted a name was missing. “Where is Stevens on this list? Used to give us $100k now we get zero, we should get a half million just for police and fire.” He noted the anticipated revenue to be raided from the parking utility to plug the city budget gap rose to $6.1 million from $4.775 a year earlier, but he said “You won’t get it. You are two late. By the time you get meters in the year is over, so any anticipated income is gone. Where will those meters go? Washington? Observer? Sinatra? More than likely.” He told the council to send a message to the Mayor: “Say basta! – over! – stop!”

Maurice DeGenarro said there must be cuts to the budget, end duplication of jobs, get new ideas. Referring to the sale of still more taxi medallions, he said “Don’t just keep squeezing the goose laying golden egg, because that goose is going to die.” He noted there is not one more parking space in Hoboken even with a 13 million dollar parking utility budget. He told the council to “Be directors and CEOs instead of politicians.”

Maurice Crystal thanked Russo for holding for the budget meetings and Mason for making city council actions accessible, noting he doesn’t come to meetings as often as he used to but watches them on Channel 78. He said “I myself want to stay here. I have gone through hell and high water to be here and stay here. I don’t want to be taxed out of this town. Now I’m having to examine my debt level. Now I have to think about my house.” Crystal noted his sump pump died in the last round of floods. He said “If you decide to take on more debt we should be looking at a plan to make the debts go down. Keep taxes steady or down for golden growth in the future.”

Jim Doyle said “I agree with notion we should be planning. I think you guys have to make a tough decision. If you think services we receive require a tax increase, then so be it. Open space is worth going into debt for.” Doyle said the population will double at full buildup in 2015, and the reliance on pilot payments and short term one shot injections is not long term planning. Doyle added “If you look at the new ballfield in Weehawken you don’t see any 12 or 15 story buildings around that! There are five and four story rowhouses there.” He also asked when the next reval is going to happen

John Keim said it was important to think about this budget vs. six years ago because “$92 million is a lot of money for a town this size. As you take pilot payments denying money to the schools and county my taxes are going up. A million bucks for abbot pre-k, as soon as that ratio changes, that money will be pulled, but we still need the program. Not if but when.” On county services, Keim said we need freeholders to answer to Hoboken, and “if PILOTS are so good my taxes should be going down.” Keim noted he works in retail and will have to sell $80k worth of merchandise to cover his taxes. He also encouraged performance evaluations for employees.

At 9:36 pm, the meeting ended. Two more budget meetings to go followed by the official public hearing.

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