Following years of flat taxes, the city budget ballooned in 2008 and almost doubled taxes for residents. Since then, the council has been trying to figure out whether the budget is bloated or honestly represents the costs of the city that should have been accounted for in past years.
After being presented with an 8 percent tax decrease in 2009 and the promise of future budget cuts, new costs are cropping up instead.
The bonding will allow the city to pay for the repairs over 15 years.
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Word is bond
On Wednesday, the council approved the initial steps to bond for $12 million to repair crumbling piers at Castle Point Park and at Sinatra Park, where the soccer field has been unusable for months.
The city is seeking federal and state grants to fund any portion of the repairs, but in order to have money available for the repairs (as some grants require), the city must first borrow.
The cost of repairs for the two piers is roughly $10 million, according to the city’s engineering firm.
Wooden-piled piers like Sinatra Park and Castle Point Park are being destroyed by small mollusks called teredos, or “shipworms,” that are eating away at the footings.
The teredos were nearly extinct from the Hudson River, but after years of clean-up efforts they have made a triumphant return at the expense of the piers.
Newer piers like Pier A or Pier C have steel-wrapped wooden piers to protect them from the mollusks.
The bonding will allow the city to pay for the repairs over 15 years, like a mortgage, according to Finance Director Nick Trasente, but if grants are awarded the city can pay down the debt ahead of time.
The bond ordinance will be done in conjunction with the Hudson County Improvement Authority, netting the city interest rates of between 1 and 2 percent.
Paying the retirement bill
The council was presented with another bond ordinance to cover the pension costs of a botched retirement plan under the administration of former Mayor David Roberts. Three years ago, the city presented something similar to an early retirement incentive plan to the employees, but the state nixed the plan. Before the state stopped the plan, several employees had already enrolled and retired, and others enrolled and began using up vacation days until their retirement began.
The early retirements cost the pension system $4.2 million, according to the state, and they sent a bill to the city.
Another side effect after the state axed the plan was a lawsuit filed by the employees who had enrolled but were denied retirement after the state cut the cord.
The state didn’t immediately ask for payment of the $4.2 million, but they are demanding payment this year.
One City Hall worker close with the proceedings has been maintaining that it unfairly asks for payment of pension costs for employees who have passed the retirement age, just short of mandatory retirement. The source said these workers could have retired on their own freely, which wouldn’t have placed any cost on the city.
Fiscal Monitor Judy Tripodi has maintained that the bill is correct and she has been trying to convince the City Council to bond to cover the $4.2 cost and pay for it over a few years.
Faced with the bonding ordinance last week, the council finally decided to challenge the bill under the prompting of Councilman Nino Giacchi.
Giacchi said the state knew about the program before it was implemented and called for a review of their pension determination.
“I find their logic difficult to understand,” he said, adding they should fight it “tooth and nail.”
Councilman Michael Lenz agreed that the city should challenge the bill, and the council denied the bond request.
Another source at the city said if a mistake was made by a city official to roll out the retirement plan without state approval, the city could possibly investigate using insurance for employee missteps to cover some or all of the cost.
Whether the challenge lessens the bill or not, the council intends to cover the cost of the retirement debacle in this year’s budget, according to Lenz.
The budget will cover spending from last July 1 through this coming June 30.
Audits and culpability
The council is still interested in how the city budget went off the track in 2008. They agreed to take bids for a forensic accounting firm to investigate the matter.
The council had previously taken some steps to bring in forensic accountants, but they were cut off by Tripodi, who said it would be a waste of city money.
Council President Peter Cunningham disagreed and said that these accountants are usually paid out of a percentage of the savings they can pinpoint in the city budget.
The council is only requesting bids at this point, which doesn’t carry a price tag for the taxpayer, so Cunningham is hoping Tripodi will wait to see what the possibilities and costs are.
Fire and police audits
Tripodi promised state resources to conduct police and fire audits when she arrived, but only the police audit has been completed and it has not been released to the council.
The council unanimously approved a resolution demanding that the state release the audit last week, echoing calls from City Hall and the taxpayers.
The council also approved bid requests to begin the Fire Department efficiency study.
Paying the bills and the lawyers
Councilman Michael Russo and Councilwomen Beth Mason and Theresa Castellano voted against temporary emergency appropriations, which pay salaries and city costs while the budget is being finalized.
Russo continued to hammer Zimmer’s administration and the council majority for not cutting the budget, and asked whether Corporation Counsel Michael Kates receives a salary.
Kates told Russo that his law firm was hired by the city, and that other employees from his firm are cleared to handle the business of the city as well. Kates does not get benefits or a salary; his firm is contracted.
Timothy J. Carroll may be reached at tcarroll@hudsonreporter.com.