Wednesday the city took a step toward the dissolution of the Hoboken Parking Authority (HPA). The mayor announced definitively earlier in the week that his administration wished to do away with the Authority, citing a lack of proper planning, duplication of services and cost overruns associated with construction of the 916 Garden St. automated parking facility, among other reasons.
Critics of Roberts’ say the mayor just wants to raid the HPA’s coffers so he can fill budget gaps and make more political hires. The city has used more than $15 million of the HPA’s money to plug budget gaps in the last 12 years.
At Wednesday’s City Council meeting, the nine-member elected council introduced an ordinance to dissolve the HPA. It also introduced an ordinance that establishes a Hoboken Parking Utility, a public entity to be operated and accountable to the City Council and the mayor. The new utility would assume the financial obligations of the Authority and receive all revenues arising from all contracts and service charges to parking services. Presently, the HPA funds itself with revenues from its three garages, meters, and towing.
It is important to note that an ordinance’s introduction is not a final vote. There still must be a public hearing and a final vote before the legislation is adopted. The state’s Local Finance Board also must approve it at a meeting next month.
“After years of mismanagement and failure to plan for Hoboken’s growth, it’s time that the city take control of the Hoboken Parking Authority,” said Roberts Tuesday. “The management of parking and traffic is a paramount issue, especially for a city like Hoboken. The Parking Authority has historically taken a piecemeal approach to the way it conducts business, and just as the city has a master plan, we need a long range planning of our parking facilities as we move forward.”
The Parking Authority was created by city ordinance 33 years ago.
City Business Administrator Robert Drasheff said Wednesday night that the council is looking for culpability when it comes to parking issues. “For many years the mayor and council have been held accountable for the city’s parking problems but have not had the full authority to provide solutions,” said Drasheff.
Echoing Drasheff’s reasoning, City Council President Ruben Ramos Jr. said that the council is ready to take fully responsibility for parking issues. “The residents come to us first,” said Ramos. “We take the brunt of the blame for it. It should be in our jurisdiction.”
Drasheff added the new utility can be “fully operational” by the first quarter of next year.
Brief history of HPA
In 1969, the Hoboken Parking Authority was founded by city ordinance to facilitate the creation of garages and new parking spaces in the city. Since 1982, the quasi-governmental, autonomous agency has not received a single penny of city tax dollars. Instead, it operates on money it receives from meters, revenue from its garages, towing fees and interest on cash funds. A seven-member volunteer board oversees it, and members are appointed by the mayor and approved by the City Council.
In the beginning, the HPA got started by floating $8.5 million worth of bonds to build three parking garages on Hudson Street, commonly referred to as garages B, D and G. The three garages were finished in 1975 and have a combined total of 1,800 spaces. All three are still in operation today, and they currently have empty spaces for rent.
The city had to make a guarantee in order to float the bonds. They said that they would make up any debt on the bonds that the HPA could not pay. That agreement was entered into in 1970.
From 1973 to 1982, the city paid approximately $4.2 million in debt service until the HPA was able to pay for itself. In 1983, the HPA recorded a profit for the first time. But because of the initial agreement, it never had to pay the city back for the $4.2 million.
Since 1982, the Parking Authority has turned a profit every year except 1985. Although the 1970 agreement stated that the HPA would never have to return any of the money the city paid out on its behalf, City Council members sometimes felt that it was the HPA’s “moral obligation” to return some of the money.
According to HPA records, in the last 12 years, the HPA has given more than $15 million to the city in the form of Payment in Lieu of Taxes (PILOT) and land acquisition payments.
It is also important to note that the HPA does not pay any property taxes on its garages and other assets, since it’s a quasi-governmental agency. This has often been used as justification for elected officials to ask the Authority for money.
Financial issues
One of the biggest issues regarding the dissolution of the HPA concerns finances. The city has hired NW Financial Group, LLC of Jersey City to complete an assessment and valuation of the city’s parking facilities.
The dissolution of the Parking Authority is permitted under New Jersey law, provided that all bond issues and outstanding interest due are paid and discharged and all other claims against the Authority are settled.
According to a NW Financial report, the HPA has four outstanding bond (loan) issues totaling $29.5 million dollars that are scheduled to be paid off over the next 25 years. For the city to dissolve the Authority it would have to get those bonds refunded and the re-bond them under the auspices of the new Hoboken Parking Utility.
According to Dennis Enright, a consultant with NW Financial, based on current market conditions, it is estimated that the city would realize savings of $910,000 to $2.077 million depending whether the bonds will be refunded on a tax-exempt or taxable basis.
Michele Russo, HPA Commissioner and wife of the former mayor, said Wednesday that if the city were to absorb the HPA’s debt, the city’s bonding capacity would be adversely affected. The bonding capacity is the amount of money the city is permitted to borrow. “If City Hall were to burn down, the city wouldn’t be able to go out and get a bond to fix it,” she said Wednesday night.
Enright countered that argument by saying the city’s bonding capacity would be unaffected by the dissolution. He said that because the utility will be a “self-supporting” entity, the amount that it bonds does not have any effect on the city’s ability to take out bonds in the future.
Before the dissolution can occur, all the finances must go before the Local Finance Board. According to Enright, the board, which meets in Trenton, will likely vote on the issue at its next meeting on Oct. 9. If that board OKs the move, the City Council could hold a public hearing as early as the Oct. 16.
What will be different?
“The transition will be smooth and orderly,” said Roberts about process of going from a Parking Authority to a Parking Utility. “We are truly turning the page as it relates to parking in Hoboken.”
The new utility will be accountable directly to the mayor and the City Council.
If the dissolution is successful, the new utility will be responsible for enforcing the meter and resident parking violations, managing the city’s garages and parking lots and devising an overall parking agenda, including the possible future construction of new garages.
Roberts said Thursday that there will be a “higher level of awareness” when it comes to parking. The example the mayor gave is that there are empty spaces available in the city’s municipal garages and no one seems to know it. Roberts said that the city will undertake an advertising campaign so that residents know which spaces are available in the city.
The mayor also said he would like to see a “change in demeanor as it relates to parking.” He said that in the past the public has had a difficult time getting information from the HPA.
Hoboken resident Elizabeth Markevitch spoke to that issue during the public portion of Wednesday’s City Council meeting. “They meet in a small room that the public barely has access to,” she said about the HPA, “and they seem to spend a lot of the time in closed session. The public needs to know what is going on at these meetings and needs more access to these meetings.”
Once the HPA is part of the city, the mayor said, the public will be able to directly approach himself or the City Council with their questions.
As for the rates at the garages, Drasheff said that the NW Financial’s analysis of the possible dissolution of the HPA was completed using the current garage rates. He said that he does not foresee the city immediately raising rates in the garages once the city takes control of them.
Council and public reaction
Councilwoman Theresa Castellano was the only member of the council who voted against introducing the ordinance that would dissolve the HPA. Castellano admitted that the HPA is not perfect but did say that dissolving the autonomous agency is going too far. “It is a slap in the face to everyone that works there,” she said. Instead of doing away with the Authority, she suggested a task force be formed to look into the operations at HPA. She also said that she is very concerned about what would happen to the Parking Authority employees.
Drasheff responded that “all employees will be retained” but once the utility is created the city intends to increase efficiency by eliminating overlapping and duplicated services. Roberts added Thursday morning that the city would retain the HPA’s executive director, Joanne Serrano, while it creates a new management plan for the utility.
City Councilman Tony Soares said Wednesday that he still hasn’t decided what his final vote will be, but did say he is leaning toward voting in favor of the dissolution. “If you have a hangnail you don’t chop off your own toe,” said Soares Thursday. “On the other hand, this is a hang nail that isn’t going away. It’s probably better in our control than in the hands of a third party.”
Former HPA Commissioner Daniel DeCavaignac had prognosticated four months ago that the HPA would be dissolved. Earlier this summer he resigned from the Authority over philosophical differences with Roberts on an over all parking agenda. In his final days as a commissioner he often hinted his suspicions that the HPA would soon be dismantled.
He said Thursday that he fears that the city is dissolving the HPA with the intentions of using it to fill budget gaps and hire political allies. “I would like to see those funds and assets be accounted for and earmarked only for parking and open space projects,” said DeCavaignac. “I hope that those funds don’t end up disappearing into more contracts and jobs.”
He also said that he hopes the mayor comes up with a real and substantial approach to parking. “The city needs to articulate its strategy for parking,” he said. “That is something that the Parking Authority has never done and it has suffered the consequences.”
The final nail
The troubled and oft talked about garage at 916 Garden St., according to Roberts, is a major factor in the decision to do away with the HPA. “The decision to abolish the Authority was prompted by chronic delays and cost overruns associated with the construction of the 916 Garden Street parking facility,” said Roberts in a statement Tuesday.
According to the mayor, the 324-car automated garage is now $5.5 million over budget and still not operational. According to HPA’s attorney, the Certificate of Occupancy for the building could be issued any day now. Once that is issued the HPA will consider phasing in the public’s cars at the controversial project.
Wednesday night, HPA Commissioner Donald Pellicano said that the mayor is overstating the overruns and said that whatever overruns there have been, the HPA has paid the balance out of its operations budget. He added that no taxpayer funds have been spent on the project.
Roberts said that the HPA is just “masking” how much extra the HPA is spending on the project. According the mayor, an audit of the Authority’s finances revealed that the Parking Authority has avoided calling attention to the ballooning cost by using operating revenue to pay the cost of overruns.
Enright said that it is “highly unusual” to use money from the operational budget to fund large-scale construction projects. Usually, he said, entities will use bonds to pay for projects that are projected to be long-term revenue producers.
Councilman Michael Cricco, in whose ward the garage sits, said that he is tired of residents coming up to him complaining about the progress at the garage. The HPA is solely responsible for the project. The Authority approved the project and is overseeing its construction. “It has been a nightmare,” said Cricco. “A thorn in all of our sides. If we’re taking all the heat we should be responsible. All of my concerns center on 916 [Garden] and go out from there.”
Robotic Parking Inc., the Florida-based company responsible for creating and installing the technology in the garage, has made an undisclosed offer to buy the garage. According to HPA officials, the Authority is still considering the offer.
The mayor has also launched an investigation headed by Police Chief Carmen LaBruno to examine if there has been any wrongdoing associated with the construction of that garage.