What will state do? Releases supervision blueprint for Hoboken’s finances, will appoint monitor

The state was forced to get involved in the city’s finances this past June after the City Council declined to pass the mayor’s $102 million budget, citing the fact that it was underfunded and that they had not received correct budget numbers until late in the fiscal year.

The mayor himself admitted last week, at a public meeting on Wednesday with the state, that the council had received incorrect numbers. But he charged that the council did not vote for measures he believed would fix the problem.

“The budget presented to the municipal council was incorrect,” he said Wednesday in Trenton. “It was wrong. It was incorrect. There was a sizable mistake that was uncovered. But the reactions of what we all did as a result of that mistake were very telling.”

The council members and the mayor have blamed each other for the city’s fiscal problems. Roberts has charged that the nine-member council held the budget up for political reasons, and the mayor even proposed two weeks ago that the number of people on the council should be cut nearly in half to reduce political opposition. However, the five council members who voted against Roberts’ plans have said they were not confident in the numbers they were given at the end.

Last week, the state’s Local Finance Board (LFB), part of the Division of Local Government Services at the Department of Community Affairs (DCA), officially voted 5-0 in Trenton in favor of state supervision.
“This is not a ‘takeover,’ ” said Susan Jacobucci, the chairman of the LFB. “It is state supervision provided by statute.”

She said the mayor and the City Council will still be expected to fulfill all of their duties, including passing new ordinances and bills. However, most financial measures will require state approval.

At the meeting, Jacobucci assured residents and officials that the process will be “transparent” and will last one year from the date of the meeting.

“There’s no reason that Hoboken should even be here today,” she said. “It’s a sad state of affairs when Hoboken can’t even pass a budget.”

She added, “The only people that the mayor and the council have failed … are the residents of Hoboken.”

She said that at the end of the fiscal year, the council defied a direct order from the state to pass a budget. Once the mayor turns in a budget, it is the council’s job to study it, amend it, and eventually pass it.

On Friday, Mayor Roberts said that the council engaged in “political brinksmanship” to make him look bad.

Roberts said that the council should be coming up with budget-cutting measures and that instead, they are waiting for the administration. He said that this year so far, they have rejected most of his revenue-increasing measures. But the council members have said they are rejecting them because of the damage they will do to the public.

The tax impact
After the most recent budget was delayed until June, the state first got involved. In the end, the council passed the budget on the very last day of the fiscal year, June 30, 2008. However, the $92.6 million plan did not account for a more than $10 million revenue gap that now will have to be partially made up via taxes or layoffs.

The fiscal year runs from July 1 through the following June 30 of every year. The city now has to come up with a new 2008-2009 budget, with the state’s oversight.

Mayor Roberts has said that this year’s budget will include a municipal tax increase of at least 7 percent.

Residents will also have to make up the budget gap via raises in business fees and possible raises in parking fees (see last week’s cover story). The mayor has come up with a number of fee-raising initiatives that he says will put money into the budget, but council members have rejected some of them because they will force residents to pay even more.

‘Put … ego aside’
Besides Susan Jacobucci, the four other Local Finance Board members present made comments to the attendees.

Board member Ted Light said, “[The supervision] has occurred from the inability of the governing body to manage their own affairs.”

Board member Francis Blee called the mismanagement of Hoboken “incomprehensible and inexcusable.” The former state assemblyman is also a professor at Stockton College.

“I always tell my students, even though they’re intertwined – public policy and politics – in order to make sound public policy at some point, you have to cut the ties with the politics,” he said. “You’ve mired the public policy process in politics, whether it be personal or whatever reasons, and that’s wrong.”

Board member and Weehawken Mayor Richard Turner tamed the expectations for the intervention.

“There’s no way you can totally restructure a municipality in one year,” he said. “This budget will be painful.”

Board member Lizette Delgado said, “I think everybody needs to put their ego aside and really remember that who elected you into office were the citizens of Hoboken.”

She added, “You’re only hurting the citizens of Hoboken.”

‘Embarrassed’
At Wednesday’s meeting, Jacobucci laid out the specifics of the supervision (see sidebar).

Also at the meeting, several city officials and residents spoke out.

Roberts said he was “embarrassed” about having wound up in front of the state. “It’s regrettable, and I underscore regrettable, that we’re here today,” he said.

He said that public safety, health care, pension, and other increases are out of his control.

“I stand here embarrassed; I stand here with a sense of disgust and responsibility,” he said, stressing again, “and responsibility.”

Council divided on intervention
Council members Peter Cunningham, Beth Mason, and Dawn Zimmer spoke in front of the LFB at the meeting. The trio is among five council members who voted against asking the state to waive limitations on spending and taxation in June. Without the waivers, the council could not adopt the overspent budget. That vote resulted in a failed budget, and thus the state supervision.

Roberts believes those five members should have asked for a waiver. But they have said that they did not want to pass a budget that was so high and underfunded.

Cunningham is one of the few council members who is welcoming state fiscal intervention. He said he hopes it increases efficiency and accountability in the city.

But at the meeting, he said he was “concerned [the state] won’t be able to get the job done.”

Cunningham also said he will be watching to ensure that political allies of the mayor – namely DCA Commissioner Joseph Doria – do not use the intervention to further the mayor’s political agenda.

Zimmer said at the meeting she accepted her share of responsibility and that the budget problem was a “symptom, not the disease.”

Mason voiced her objections to the supervision and made clear that she would rather hire professionals to aid in the fiscal management of the city.

The city currently uses the financial firm of Donohue, Gironda, and Doria (no relation to Joseph Doria), but Mason has pushed to have an operational and financial overhaul, led by a firm “with expertise and a proven track record.”

Mason became emotional as she spoke. She recited a quote, “Democracy dies behind closed doors, and the people’s ability to govern themselves dies with it.”

Council member Theresa Castellano, who had voted with Cunningham, Mason, and Zimmer in May, said on Thursday that the votes against the mayor’s budget were not for political reasons. She said that they could not vote in favor of the budget the way it was.

“Underfunding a budget is not political,” she said.

Also on Thursday, Councilman Peter Cammarano called the state supervision “an awful milestone in the city’s history.”

He said he wished the mayor hadn’t “dug this hole” and that the council was at fault because they didn’t do what they could have to avoid it.

“Our duties are severely restricted at this point,” he added.

Councilman Michael Russo, who is the Finance Committee chairman, said, “Everybody should be ashamed of themselves.”

“The resident doesn’t care whose fault it is,” he said. “They just want to know what we’re going to do about it.”

He added, “The true leaders will emerge.”

Cammarano, Mason, and Russo are all rumored to be candidates for mayor next May. Roberts said he will run for re-election.

Residents have their say
Residents Mo DeGennaro, Helen Hirsch, and Lane Bajardi, who often speak at council meetings, attended the meeting in Trenton.

DeGennaro spoke before the board, asking once again for the city to be run more like a business.

“I’m glad the state is coming in at this particular point, because it’s gotten out of hand,” he said.

Hirsch said Hoboken is under scrutiny – “on trial” – and that people are watching.

She asked whether there is a connection between corruption and high taxes, and said Roberts needs to be “harnessed.”

Bajardi attended the meeting but did not speak.

For questions or comments on this story, e-mail tcarroll@hudsonreporter.com.

CORRECTION APPENDED: Cammarano said the council could have done more, not the opposite.