City Budget Workshop – Day 3
The third budget workshop meeting of the Hoboken City Council may not have been “the charm”, but it was an opportunity to get a better idea of the budget priorities of each of the council members. They focused first on the Mayor’s latest round of proposed one-shot revenue items to keep the tax increase down, and discussed potential reductions in spending. The Mayor’s plan includes an 11% increase in city taxes, which translates into an overall property tax increase of 2.5% when you add the School District and Hudson County parts of the bill.
Read more about the meeting (or watch video it in it’s entirety) after the jump:
Instead of watching this video for three hours, see the recap summarized below:
Budget and Finance committee chairman Michael Russo opened the meeting with a discussion of the “assumed revenue source list provided in Mayor David Roberts budget proposal. The one-shots include:
- $4 million from the sale of the Municipal Garage
- Re-allocating $2.4 million from a UDAG affordable housing Grant
- $1 million from the sale of new taxi medallions
- $700 thousand from unspent surplus funds
- $600 thousand from the HHA for Police Services
- $300 thousand surplus from unspent capital line items
- $100 thousand from raising parking sticker fees
- $50 thousand from intersection “GotchaCam” revenue
- $33 thousand from 916 Garden Garage fees
Russo wanted the council’s opinion on each of the items, going around the table one by one to get to a consensus on which to leave in the budget, and which to make cuts to make up the revenue.
Issue 1: Muni Garage Money
Councilwoman-at-large Terry LaBruno started off by saying she thought the $4 million one-shot from the sale of the Muni Garage should remain, and that the city needs to take action to sell it “whether it’s the best deal or not” because it is costing $100,000 a month to continue to finance the Mayor’s back-door borrowing deals that filled a $7.9 million budget gap in 2005, and a $5 million deficit in 2006. The city is paying now for the deals to hold taxes steady for two years to keep people from noticing the massive annual deficits.
Russo than agreed that the garage should be sold sooner rather than later because the $13 million note not the city has been paying in order to hide Roberts budget troubles is “coming due next year, with no way to refinance or get around it.” Russo said if the garage is not sold “next year’s budget has a $13 million hole.” (The likelihood that the city could not refinance the deal is minimal, though the terms are not likely to be as favorable if they have to roll it over yet again.)
Councilman-at-large Ruben Ramos then said he wants the “maximum money” for the city’s asset, which may be an allusion to his efforts to steer the property to a favored developer who did not even participate in the latest round of bidding for the property.
Councilman-at-large Peter Cammarano reminded the council the issue of the garage sale would be answered the following Thursday night at a special meeting. Fourth ward councilwoman Dawn Zimmer agreed the city needs to sell the garage, but said her concern is including the $4 million in the budget as revenue. She asked, “What are we going to do to replace the garage?” and noted she was uncomfortable having to bond for money for a new garage, when the proceeds of the old garage have been used to fill three years of budget deficits to avoid tax increases.
Later in the meeting LaBruno asked for an update on talks to build a new garage in a joint venture with Weehawken, and perhaps Hudson County. It was noted there would be state money available to do a feasibility study for a combined municipal garage, since the state was encouraging municipalities to join in shared services to save money. Preliminary discussions involve a piece of property on in northwest Hoboken straddling the border with Weehawken. If a joint garage is built, it will likely be less expensive than building a garage for Hoboken only, and may receive special state aid.
Sixth ward councilman Nino Giacchi noted if the Garage is sold for $25.5 or $26 million dollars (the two bids under consideration) the city will pay back $13 million on the note, plus put $4 million in the budget, leaving $8.5 to $9 million for the new garage, which shouldn’t cost anywhere near that much money if handled properly.
Fifth ward councilman Peter Cunningham agreed with Zimmer that he would prefer to cut the budget and not have the $4 million dollar revenue item from the sale included. Labruno said she wanted it in the budget, and even said she would consider taking more than $4 million from the sale and plugging more of the Roberts deficit with it.
Cammarano also said he wanted the money in the budget, and in an allusion to an offer from his favored developer, said getting “anything else but the highest price for it is folly.” Second ward councilwoman Beth Mason asked if there was a chance the city won’t get the money even if it is put into the budget. That was a question nobody seemed to want to answer. Russo pronounced there was a majority in favor of leaving the $4 million in, and moved on.
Revenue Item 2: UDAG Grant $$$
This $2.4 million dollar item comes from a refund of an Urban Development Action Grant loan from the city to Applied Development, which was used to build affordable housing units within the market rate Hudson Square North apartment complex on Hudson Street. Applied offered to repay the city to clear the mortgage ahead of a likely sale of that property. Ramos quickly noted that the repaid grant money is “not revenue” and that it can only be used for very specific community projects. England noted it “needs to be used for socioeconomic stuff” offsetting services “geared for socially deprived areas.”
First ward councilwoman Theresa Castellano asked, “How do we know this money doesn’t go into a black hole in the budget?” Russo added, “We need to see where the administration wants to spend the UDAG money.” Mason added, “We should take it out because we took the money with a promise to pay for specific things with it.” The fear is that Roberts will re-allocate the money throughout the budget with no additional benefit to those in the community it was designed to help in the federal program that made the money available in the first place. The council is waiting to hear where Roberts wants to spend the money.
Revenue Item 3: Taxi Licenses
Mayor Roberts wants to raise a million dollars by auctioning off more taxi medallions. The Taxi industry was against the last round of medallions auctioned because the more taxis in town, the less money they make. The taxi owners and drivers were told last time there would not be more auctions, but Roberts wants to do it again anyway, this time with an emphasis on “green” cabs, such as hybrid vehicles.
Giacchi asked what the expected sale price would be for the medallions. Cammarano said it could be $150,000 per medallion. LaBruno said, “Maybe we could reduce the number” to lessen the burden on existing cabbies. Ramos said he doesn’t feel comfortable selling 10 more medallions, and noted taxi stops at the light rail stations and uptown ferry terminal have been approved, but are not moving forward. LaBruno said it’s because the cabbies want to be by the PATH. Ramos then noted he is still waiting to hear what the actual cost of the police horses are, as he wants them cut before placing an added burden on the cabbies. Cammarano said he will “fight tooth and nail” to keep the mounted patrol, and added he wants a lesser number of medallions auctioned.
Zimmer, Cunningham, and Giacchi said they wanted to keep the $1 million in the budget and sell the medallions. Mason said she was concerned that given the economic environment that the council may be counting on money that may not come through. “If we don’t make those numbers, we are significantly into this budget year,” noting it will be hard to make up any shortfall should the auction not go as well as Roberts planned.
Later in the meeting England said it’s possible that fewer than 10 licenses could sell for a million dollars, and that the city could put a million dollar limit on the sale and if one medallion went for a million, or four went for $250k each, etc, then the auction would end. Giacchi asked for the legal department to look into whether the auction could be set up like that, which could drive the price of the taxi licenses higher.
Including the unspent $700,000 was considered a “no brainer” by the council. Mason noted the $600,000 line item for the HHA to pay the city for police/security services was higher than the $540,000 listed in July as part of the last contract with HHA. England said contract negotiations were “75% locked up” for the $600k number for this year, and that the contract could be in front of the council by the 12/19 meeting.
Parking Sticker Fees
Russo said there doesn’t appear to be a lot of support for raising residential parking permit fees from $15 to $20, which would raise another $100,000 in the New Year as the permits become due for renewal. Castellano said she wanted it out of the budget. LaBruno said she wanted to limit the number of residential parking stickers a housing unit can hace to a maximum of two. Cammarano said he wasn’t opposed to a price increase, and added he wanted “effectuate a policy to discourage more cars and discourage larger cars,” adding he wanted to “pro-rate cost of parking sticker according to wheelbase or weight” of a vehicle. He said the owner of a Mini Cooper should pay less than the owner of a Hummer to park on city streets. Zimmer asked if the council could include a discount for seniors, and was told seniors already get their permits for free. Russo said he wanted to take the item out of this year’s budget and take the time take a more comprehensive look at the resident parking situation in Hoboken.
$50k from “Gotcha-Cams”
Mason said she still wants to see a cost/benefit analysis of this program, and is concerned the city is just “picking a number out of the air” that won’t actually materialize. Mason also followed up on a comment England made earlier about having the budget finished well before Roberts chose to propose it to the council in November. “Did you say you had this budget finished in July?” England admitted he did have a working document at that time. Mason the asked “Why didn’t it come before us until Thanksgiving?” England didn’t answer, but after six years Mayor Roberts budget modus operandi is well known: wait until halfway through the budget year (or later) to propose a spending plan so the council has little choice but to approve it, and no real opportunity to make serious cuts that will actually effect spending during the current fiscal year. Russo then moved on to the $33,000 projected from rental of spots at the 916 Garden automated parking garage, saying it was just “catching up” now that the garage is coming back on line after a $2.2 million retrofit.
Call for new revenue items
After discussing the revenue items offered by the Mayor, Russo asked for council suggestions on how to add new revenue to the budget, saying, “no idea is a bad idea.” He started with Zimmer, who had none to offer. Next was Cunningham, who asked if the PILOT payment report he requested was ready. He noted that that is revenue, and wanted to see the report to make sure the city was receiving all the PILOT revenue it is supposed to. Mason noted it looks as though some PILOTS have gone down, instead of remaining the same. England said CFO George DeStefano had supplied the information to him, but apologized for not giving it to the council. Cunningham said he thought we might be able to yield more money from glass recycling. He said if Hoboken did a better job recycling glass it might be able to lower recycling costs, especially when it comes to the buckets of beer bottles from bars.
Castellano said she wants a surcharge on commercial recycling so the city can realize up to $500k in revenue. The council president said she wanted to tap into those making the most money on Hoboken’s success – the bars, restaurants, and developers – and leave things like the cross-town bus alone. Mason noted she did a historical analysis of recycling revenue since 2001, noting it was $400k then, but only $117k now. Cunningham wrapped up, and Russo moved to LaBruno, who said she wants to raise license fees on limousines from $50 to $750, raise fines on illegal cabs, and raise fees on Fire Department inspections of business from the current $25. Ramos supported raising recycling fees on bars and restaurants, but said as a give-back for that revenue the city should relax the rules about when the hospitality industry is allowed to set up out-door seating. Castellano said she wanted to make money by selling special parking permits for contractors working in Hoboken. Giacchi noted the city should provide increased service and benefit to residents when it asks for higher fees, not just raise fees to raise revenue.
Cammarano Claims New Ratable
When it the revenue question came to Cammarano, he offered one that made people groan. He tried to take credit for adding a “new ratable” at Maxwell Place that had “just come on line” as his own addition of $275,000 in revenue to the budget. The Mayor himself noted this new ratable was not in the budget and was coming on line at the first budget meeting, and Cammarano decided to “claim” it as his own contribution. Watch for it in future campaign literature. He offered no other new revenue items.
Mason Spotlights Cultural Affairs
Mason noted some revenue is nowhere to be found in he budget, such as the money from people who but space at the street festivals. Mason asked, “Where is that?” England replied, “It goes into a black hole.” After that laugh, he said the Cultural Affairs department was “basically self sufficient” although the salaries are paid out of the recreation budget, and festival security and cleanup costs are paid for by the taxpayers. Mason pressed on, saying when the city sells space the revenue is not seen by the council, which still has to approve payment of the bills for the festivals. She asked for an accounting of the trust fund, saying these were great events to call attention to a community that needed help many years ago. Giacchi agreed that the events are charming, but have a tremendous impact on the community. He asked whether the fees could be increased to help pay for it all, and maybe get cheaper bands to save money.
New Human Services Director John Pope said this year $262,076 has been raised in the Cultural Affairs trust fund and $163,000 was spent. He said the festivals have a greater economic impact on the community, even if it costs the city money. Mason asked if government should still being footing the bill. Giacchi said it is strictly economic, and that the council needs information about costs. Mason suggested corporate sponsorship for recreation department programs to offset costs.
Russo: Docking and Water Hookup Fees
Russo then made his suggestions, including instituting city docking fees for boats that come in to places like the Shipyard. He also proposed a connection fee that could be assessed each time a new condo is connected to the United Water system. Mason noted the city used to receive revenue from bus shelter advertising, but she it doesn’t appear to be in the budget anymore. England said he has “not been able to locate the revenue for that”. Mason than noted the city was supposed to be getting revenue from all those new phone booths that finally came on line years after that deal was made, but not money is in the budget from that revenue stream either. England admitted the city is supposed to getting revenue from both, but “I haven’t found it yet.”
It was at this point Russo dropped the bombshell about the potentially missing million dollars from the parking meter collections reported first here on Hoboken411. On the subject of the Parking Utility, Mason noted under appropriations expenses there is $2 million listed, when back in July the list was $5,246,846, saying “That’s a big swing.” England said that includes debt service. Giacchi then expressed his support for bonding to pay the $2.2 million to Unitronics for its overhaul of the 916 Garden automated garage.
Cunningham agreed that it is a capital expense, but asked “How many times?” He said the city has bonded for the garage so many times while it puts the surplus revenues from parking into the general fund to pay regular expenses. Cunningham said he is already getting complaint calls at the newly reopened facility, and said its time to sell the automated garage. He also said Unitronics should not be paid until it is certain the facility is working properly.
Mason resumed the discussion of potential cuts, noting the major categories are salary and wages, which take up 67% of the budget, not including healthcare and insurance. She said that is a “huge chunk” and “we have to look into that area”, however she suggested directing the Mayor to make across the board cuts.
Cammarano said he had “on and off the record conversations” with administration officials about a list of cuts he was offering. He started with a deletion from the salary line in the Mayor’s office of $35,000, presumably related to the transfer of Suzanne Hetman and her $90,000 salary from the Mayor’s office to the Rent Leveling office. This is not much of a real savings, since Hetman replaces an employee who retired at a $70,000 salary, and added $20,000 to the Rent Leveling line item. Cammarano then suggested $50,000 could be cut from the Police budget through modifications in overtime and shift assignments, with a similar cut in the Fire department budget. He also suggested the Office of Emergency Management salary and wages line could be cut by $60,000 by moving an employee out of that department. He proposed the permanent termination of health care coverage for city council members, saving $100k, though it was noted some council members are not taking the coverage anyway.
Cammarano also suggested a $20,000 cut in the “master plan” line item, and cutting the Mayor’s advertising slush fund in half to $6,000 in what he called the “Helen Hirsch Clause.” Hirsch has often complained about all the “Mayor Roberts wishes you a happy whatever” ads that end up in the paper at taxpayer expense. However, the Mayor’s “Public Celebration Advertising” line is just the tip of the advertising and junk mail iceberg, with expenditures hidden elsewhere in he budget.
Castellano wants hiring freeze
Castellano the proposed a hiring freeze to be lifted only “when the council sees fit”. She said she did not include Police and Fire in that, adding the city should hire two entry level hires when one top level, high-dollar veteran leaves. Castellano suggested the city should work within those numbers rather than hiring 10 or 15 new recruits at once. She also suggested freezing the line on “other expenses” to last year’s number and directing the Business Administrator to work within those numbers capping it at a 3% increase. Castellano also called for the Mayor, his directors, council and other “statutory” officials not part of a collective bargaining agreement to take an immediate 10% pay cut for a savings of $189,000. LaBruno said she didn’t like the idea of salary reductions, and that she would leave her day job rather than take a pay cut, and said it as more “for show.” That got Castellano angry, and she laced into “the other Terry” until she apologized. Mason said the council needs to take the first step, and that the salary ordinance needs to be brought into line.
Ramos: Stable the Horses
During his turn to discuss cuts, Ramos repeated his call to stop funding the Police Horses, saying it is “a luxury we can’t afford.” Cammarano then interrupted to say he is putting together numbers to persuade the council it is a “worthwhile program,” adding he will get the council “hard and fast numbers.” One of the problems is there is no “Mounted Patrol” line item anywhere, so the council cant tell how much it really costs. Police horse expenses are hidden in several areas of the convoluted budget.
Cunningham and Zimmer’s proposals
Cunningham said the city’s fuel charges of $300k irked him, and he is concerned that without any efficiency or forensic audit, the city is not going to have any savings. He wants tighter controls in place to see where the city cars are going, and called for a hold on vehicular activity besides public safety to find out where the bulk of expenses with fuel charges are found. Cunningham also recommended no salary increases for 2008 except for those governed by contractual obligations, no overtime with the exception of two to three percent for public safety. He asked England for a pro forma of the 2008 budget with no overtime and no increases. After that, he suggested the city should consider layoffs.
Zimmer began her turn by agreeing with Castellano’s hiring freeze proposal, said she supported the call to for the council to give up health benefits, and said he city should urge employees to begin finding ways to cut benefits, including offering better incentives for employees to forgo their “unbelievable” health benefits, taking a spouse’s benefits instead. Zimmer also suggested the city look to cut its energy costs. The conversation was taking place in a City Hall where the heat is so poorly regulated people run air conditioners and open windows in the middle of winter.
Public Comment Highlights
Jon Gordon noted the council was talking about giving contingencies for any business owners that might have to pay more in recycling fees, but asked what contingencies he would be getting in exchange for paying higher taxes and an extra $240 a year to park in a city garage. He said it’s time for the city to consider auctioning more Liquor licenses to make money, and said each new PILOTed condo project should include an up-front $5000 per unit impact fee payable to the city.
He said the Mayor’s early retirement plan was the “elephant in the room”, repeating that “David has admitted the city is overstaffed by 20%” He called for a 20% staff cut by the end of March, and said buyouts don’t save money.
Helen is happy, wants more cuts
Helen Hirsch said she was “delighted with what I’ve heard and hope that you continue on this trend. It is rewarding.” She then asked for an analysis of the total cost of insurance and maintenance “for all internal combustion engines chasing around the city.” Hirsch also suggested he council “diplomatically” look into “courtesy jobs” of names placed on the payroll, and asked why there are essentially two constituent services divisions, one for English speakers and one for Spanish speakers. She noted the constituent services office is hardly overwhelmed, and that whatever purposes it serves could easily be handled by one person who is bi-lingual. This made Ramos uncomfortable, since his mother Sandra works in that office, and has seen her salary nearly double since Roberts created her patronage job for her in 2002.
Cheryl Fallick supported Mason’s proposals for the recreation department, suggestion it could be turned into a “profit center” through corporate sponsorships. She also suggested the audit of employees called for by Cunningham was a “great idea” and suggested the audit look into comparable salaries as well. Fallick said the anger in town comes not only from the “fantastic benefits” city employees receive, but the fact that salaries are also in line with the private sector, even though originally the benefits were supposed to be making up for the lower than average public sector salaries they used to come with. Fallick also said the price of a residential parking permit should double for the second, third, and fourth cars people register. She also noted the “ratables chase” that has gone on for decades in the city, and asked, “Has anybody looked at the costs of these new ratables?” Mason answered that studies have shown it costs the city more than a dollar to service each new dollar of ratables. Cammarano disagreed.
The next budget workshop will get underway after the 6pm Special Meeting on Thursday night. It could begin as soon as 7pm, but don’t bet on it.