The city of Bayonne is shuffling to deal with outstanding money it needs to fill its budget for the recently completed fiscal year, and is also scheduled to vote this week on whether to borrow money for the new fiscal year until certain funds can be received.
This Wednesday, July 28, the City Council will vote on whether to take out $50 million in tax anticipation notes to cover upcoming city expenses until revenues from August tax bills and the transfer of funds from the Bayonne Local Redevelopment Authority can be received. The BLRA is currently negotiating the final details of the $235 million deal to sell three portions of land at the former Military Ocean Terminal to the Port Authority.
The $50 million amount represents about one third of the city’s upcoming 2011 annual budget, which technically began July 1 but will not likely be passed until next May or June, as budgets in Bayonne are often passed late.
“We are in a good position financially.” – Terrence Malloy
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Malloy said the anticipation notes from a sale earlier this year come due in August, September, and October, and allow the city to maintain funding to pay salaries and other bills until the funds from the sale of a portion of the former Military Ocean Terminal can be transferred to the city.
The City Council also will vote Wednesday to allow the city to send out its next round of tax bills in August, which will also help the city meet its obligations.
The city is technically under state financial monitoring, although unlike in Hoboken, Atlantic City, Paterson, Newark, and Camden – which faced similar monitoring in the past – no specific person has been assigned to oversee city finances.
Need money for last year, as well
The Local Finance Board is largely responsible for overseeing the correction of the city’s budget problems. Most recently, these include the fact that the $134 million budget for the fiscal year that just ended – 2009-2010 – is still short $27.5 million in funds. The state has given the city until July 30 to ink a contract with the Port Authority to meet 2010’s budget obligations and close the deficit that remained.
This is the fourth year the city has not met budget obligations by the time they passed the fiscal year budget, which they passed 11 months late (in June). But in the past, the city managed to sell land at the former Military Ocean Terminal site before the June 30 end of the budget year so that the money could be used in that year’s budget. This year, since the funds were not received by June 30, the state had to grant an extension in order to plug the money in as soon as it is received.
“We are in a good position financially,” said Chief Financial Officer Terrence Malloy.
Credit on tax appeals
One tool for dealing with cash flow problems involves a method of more slowly repaying residents who win tax appeals. Several residents who recently won appeals against the city have received tax credits toward their next tax bill, rather than getting a refund check.
Malloy said this is part of a mixed strategy for repayment that allows the city to avoid setting aside large amounts of cash to cover repayments.
The strategy started in 2009, when the city faced a 70 percent increase in tax appeals that nearly depleted is $2.25 million reserve. This year, the city still has a reserve of about $549,000, Malloy said.
While the city tends to win most of its tax appeals, it often negotiates settlements.
The increase in appeals has to do with the downturn in the economy and the sudden drop in property values, city officials say.
Some residents have been concerned about the city’s way of repaying them, as some attorneys take a percentage of the settlement as a fee, and if the city issues a credit, taxpayers would have to pay the lawyers and then wait for the tax credit. However, “Most homeowners do not use attorneys. They represent themselves,” Malloy said.
SIDEBAR
Mayor and council to make appointments to boards
Mayor Mark Smith and the City Council are expected to make appointments to the various boards at the July 28 meeting.
These appointments include Donna Marie James to the Alcoholic Beverage Control Board for a three-year term; Michael Crimaldi and Joseph Coughlin to the Construction Board of Appeals for four-year terms; Joseph Hurley to the Insurance Commission for a two-year term; Robert Dawson to the Library Board for a five-year term; Terrence Ruane and Ray Greaves to the Bayonne Local Redevelopment Authority for a five-year term; Thomas Jacobsen to the Municipal Utilities Authority for a five year term; Robert Kubert, Jennifer Greaves, and Michael Pierson to the Bayonne Parking Authority for five-year terms; Debbie Czerwienski to the Bayonne Planning Board for a five-year term; Debra Noble and Jason Moncrief to the Rent Control Board for three-year terms; and Joseph Hurley and Agnes Gillespie to the UEZ Board for five-year terms.
Keith Weichert is expected to be named to the Zoning Board to fill the one-year unexpired term of Raymond Rokicki. Also appointed to the Board of Adjustment were Edoardo Ferrante, Clifford Adams, Alan Apfelbaum, Janina Fitzgerald, Joseph Macre, and Mark Urban. Dr. Brian Beebe was appointed to the Planning Board to replace William Birtwistle, and Gary Chmielewski was selected to replace Jason O’Donnell.
City seeking applicants to key posts
The city of Bayonne appears to be poised for a massive change in professional services, posting on their Web site for key positions in nearly every department. The city posted requests for applications for positions in the prosecutor’s office, the city’s legal department, the Bayonne Local Redevelopment Authority, and various boards.
The move appears to be part of a restructuring of city government under new Mayor Mark Smith, and the foreshadowing of changes expected to take place over the new few months. Several departments may see shifts in leadership, including Municipal Services.
The city is also expected to name a new director of public safety – which would combine directors of the police and fire departments. The fire director position is currently vacant. Mayor Smith currently serves as director of the Police Department.