While an independent audit commissioned by the state found that Jersey City continues to struggle financially despite a remarkable economic boom, the mayor’s office attacked the report as a mere political tool.
“It lacks all credibility now,” said Mayor Bret Schundler’s Chief of Staff Tom Gallagher last week, “because it’s being used as a political weapon.”
Gallagher took exception to the timing of the initial story, which appeared in Monday’s Star-Ledger, a day after Acting Governor Donald DiFrancesco officially announced his run for governor.
(DiFrancesco was forced to pull out of the race Wednesday.) Schundler is seeking the Republican nomination, and was DiFrancesco’s competitor until the acting governor withdrew from the race. Gallagher pointed out inaccuracies in the story that reported independent auditors Arthur Andersen had recommended that $5.3 million in cuts be made to the city’s budget.
However, the report recommended $3.85 million in savings from cuts in city departments, and $1.5 million in additional revenue that could be raised.
The state commissioned the report at the time of its award to Jersey City of millions of dollars in Distressed Cities Aid, in April 2000. The current aid from the state mandates a hiring freeze. Compliance with recommendations from the state would be necessary for further aid.
In the report, released last week, auditors found the most waste in the Division of Purchasing and Central Services. They said that $1.05 million could be cut, followed by the public library at $690,954, “cross cutting” at $648,321, and the parking authority at $607,927.
Frequent Schundler critic and certified public accountant Mia Scanga crowed last week over the report results.
“Anyone who had any accounting finance background could see it,” she said of the city’s financial situation. “It’s transparent. Everything Bret Schundler does is a disaster.”
“Financially,” the report’s introduction reads, “Jersey City is struggling.”
The 286-page report offered several recommendations. It also questioned whether abatements were truly needed for further development, suggested closure of several library branches, and recommended disbanding of the Department of Neighborhood Improvement (NID) and reinstating of a finance department, and called for the reduction of 125 full-time city employees.
The report also found:
• The city is restricted in its ability to generate new revenues, and must manage its resources carefully. “In some cases,” the report reads “structural inefficiencies and managerial challenges limit the success of Jersey City operations.”
• The city is a “complicated amalgamation of departments, divisions, agencies and authorities.” It found the city’s use of semi-autonomous independent public authorities as “uncommon among New Jersey municipalities.”
• “Jersey City government is suffering from a lack of comprehensive planning,” the report reads. “There appears to be no written vision for the future of the city (with the notable exception of economic and community development). Nor are there articulated goals for the government or comprehensive plans for how such goals might be achieved.”
On tax abatements for development projects, the report found: “Jersey City may not need to offer tax abatements for various reasons.”
The city offers other financial incentives to develop there, the report found, like proximity to New York City. The report concluded that while abatements have been available for some years, developers have only recently taken advantage of the incentive, and that Jersey City has already created a “critical mass” of development, making abatements moot for attracting more business.
Wants libraries, departments cut
The report also made recommendations for re-calculation of abatement awards.
The report found duplication among a variety of services, and suggested cutbacks, merging and privatization. It also suggested the closure of the Pavonia and Pearsall library branches, and suggested the merger of the West Bergen and Marion branches.
The report recommended the dissolution of the Department of Neighborhood Improvement (NID), a Schundler creation. The two departments contained within the NID would, under the recommendation, move to other city departments.
The combination of both internal housing inspections and external inspections of sidewalks and neighborhoods were not effective, the report concluded, and “still act independent of one another.” For councilman and mayoral candidate Robert Cavanaugh, who frequently questioned the city’s finances, the report was vindication.
“I’ve been saying this stuff since 1995,” he said of the findings.
Gallagher was unconvinced.
“There’s an old saying about consultants,” he said of Arthur Andersen, “They tell you what you want said. It’s pretty much a joke.”
The full report can be accessed on the Department of Community Affairs website: www.state.nj.us/dca.