HOBOKEN — Hoboken’s local government could once again face state takeover after a resolution to move line items in the current budget failed to garner a supermajority vote of the City Council. The resolution would not have authorized any additional spending, but would have moved approximately $2 million from the $100 million budget to different line items to pay unforeseen bills.
Council opponents of Mayor Dawn Zimmer said they wanted more information about where the money was going and why it was being moved. The resolution packet posted online and distributed to council members lists the departments that would receive money and where it would be moved from, but the four council members opposed to the mayor said they wanted a further explanation.
Zimmer even made a rare appearance at the council meeting, urging the council to vote yes. Earlier in the week, the state Department of Community Affairs warned the council by way of a letter that spending without appropriating funds is against a state statute, telling them to pass the resolution.
Councilwoman Beth Mason, who is one of Zimmer’s more vocal critics, said that it’s not the council who put the city in this situation; it was the administration.
Part of the resolution included money for the Fire Department salaries.
“So you don’t want to pay the fire people?,” Council President Ravinder Bhalla said to the council members who spoke against what he called a “routine” transfer.
Councilman Michael Russo, who ultimately voted against the resolution, said he had no problem voting for a line item transfer, but he said he just wanted to see where the money was going and why.
“We’re asked to vote on money and we have no idea where it’s going,” Russo said.
When showed the resolution packet item which outlines where money would be moved after the meeting, Russo told The Reporter that he asked city officials at the last meeting for an explanation of why funds were moved, and never received a response.
One portion of the budget transfer resolution would have moved approximately $500,000 for special bankruptcy counsel, which is needed to pay Paul Hollander, the attorney who worked for the city during the hospital sale process, and his associates.
At the meeting, Hollander defended the job he did for the city, outlining previously unheard stories from the sale process.
He said the creditors in the bankruptcy of the hospital’s operator originally wanted the city to kick in $25 million for a settlement, but he would not accept that proposal. He also said that the creditors committee then asked the city for $22 million and $19 million, respectively, but he would not budge. Even when the creditors asked the city for $5 million for a settlement, the council minority shot down the request. However, eventually the new owners received a parking discount in the city garage which Hollander said amounts to approximately a $150,000 savings for the purchaser. Hollander, who earns $540 per hour in the city, said he often worked until the late hours of the night on the case.
The resolution received five yes votes and four no votes, but six votes were necessary for the resolution to pass. Zimmer has five allies on the council, and four opponents. The result of the vote, according to sources, could put the city in jeopardy of facing a state takeover since they will not be able to pay bills they have not allocated to certain departments. – Ray Smith
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