Hoboken budget: health benefits, labors contracts, & new revenues will impact layoffs

3

The costs of the City of Hoboken’s healthcare benefits plan, six labor union contract agreements, and generating new revenues are a few of the biggest issues heading into a budget season facing a multi-million dollar budget gap.

By John Heinis/Hudson County View

“First, the City’s actuary has analyzed the projected cost of employee medical benefits for 2020 and expects there to be a 7.3% increase in medical costs ($1,413,450) over 2019,” Hoboken Business Administrator Stephen Marks wrote in a December 17th letter to Mayor Ravi Bhalla.

” … Second, the City has received a pension bill from the State of New Jersey for 2020 which is $578,345 higher than this year.”

Marks’ comments are not particularly surprising for those that have been following Hoboken’s budget woes, as he noted in the beginning of the year that a roughly $7 million shortfall could lead to 80 layoffs.

Concerns were compounded after the city council voted to increase parking costs and fees last week, particularly after 2nd Ward Councilwoman Tiffanie Fisher exclaimed that this year’s deficit could reach $14 million.

This morning, officials sat down with reporters at City Hall to answer questions about the budget for over an hour.

“The narrative that being put out there that our philosophy is to spend now, worry later is just false. It’s just not true,” said Jason Freeman, the director of operations for Mayor Ravi Bhalla.

He will split business administrator duties with Caleb Stratton on an interim basis once Marks leaves Hoboken for Kearny on February 16th.

While Freeman agrees that the city only regenerated $5.5 million of surplus after spending $11.5 million in 2019, he said that he doesn’t expect this deficit to hit anywhere near $14 million since the budget is being constructed as if only $5.5 million of surplus will exist.

“We are doing as much as we can to stress alternative funding option knowing that it’s difficult to put more spending in the budget,” added city spokesman Vijay Chaudhuri.

Many of the particulars discussed were outlined in the aforementioned letter by Marks.

For example, Marks estimates that “expected contractual personnel costs” is $5,691,795. That includes $3.2 approximately million to settle all labor contracts and $2.5 million for salary adjustments.

A little over a million dollars should be allocated for police, firefighter, and civilian employee unions for their respective contracts that span between 2018 and 2020, Marks wrote.

Revenues have also dropped in areas such as the municipal court, down $400,000, and the parking utility, down $600,000, while solid waste disposal fees have increased $100,000, officials explained earlier today.

While this year’s budget will inevitably also come with a tax increase, most residents and electeds alike have expressed a greater concern about layoffs.

In a January 15th letter to New Jersey Civil Service Commission Chair/CEO Deirdre Webster-Cobb, Marks outlines out a demotion/layoff plan that includes 79 municipal employees.

The plan includes 38 employees from the Department of Administration, four from the city clerk’s office, one from the Department of Community Development, 10 from the Department of Environmental Services, four from the finance department, 11 from the human services department, six from public safety, and 5 from the department of transportation/parking utility.

Chaudhuri said that these decisions were taken seriously and included hours worth of deliberations with city directors, further stating and that the full list of employees would only be laid off in the worst case scenario.

“All things are contingent on ‘are we able to have successful concessionary bargaining with the unions? Are we able to move forward with new revenue generators?’ Laying off 79 people is the worst case scenario,” he stated, again emphasizing that healthcare costs and contract negotiations are a swing of millions of dollars for the city.

According to state Civil Service guidelines, a layoff-plan needs at least 75 days to be implemented: 30 days for civil service to review the plan and 45 days notice issued to each employee being laid off.

Furthermore, a temporary hiring freeze went into effect as of January 6th, according to another letter from Marks to Bhalla.

While the dollar amount available in the Open Space Trust Fund, this account has been pivotal to help fund park construction and improvements, as well as litigation on matters such as Union Dry Dock, according to the mayor’s office.

Additionally, Freeman notes that $2.48 million was spent on salaries for offices of the mayor and business administrator, as well as corporation and outside counsel, in 2016 – compared to $2.2 million in 2019.

Freeman served in the deputy chief of staff post, which has since been eliminated, before he took over as director of operations – a new position in the mayor’s office.

Bhalla also no longer has a chief of staff, with John Allen now serving as assistant corporation counsel.

Both Chaudhuri and Freeman said that it was too early to calculate the tax increase and/or layoffs without a preliminary budget, which should be released in the next week or two.

1st Ward Councilman Mike DeFusco, one of four electeds who voted against parking increases last week, chided the administration’s layoff plan and called on them to replace Fairview as their insurance vendor if they’re serious about saving money.

” … 79 hard working men and women are facing the very real possibility of having their lives flipped upside down with impending layoff notices. We are talking about eliminating the income for young families, single parents and long time employees, some of whom have dedicated themselves to helping Hoboken residents for decades,” he said in a statement.

” … We can no longer look the other way as this administration continually puts politics and personal agendas over good and transparent local government.”

Fairview Insurance had ties to a super PAC that supported DeFusco’s opponent in the November ward council races.

3 COMMENTS

  1. Its the mid-term of this administration, and clearly they still have no idea how to manage a budget.

    It’s too bad the layoffs don’t include those in this article who obviously don’t know how to handle this situation and shouldn’t hold such positions. In his own category is Marks, who saw this coming and got out of dodge.

    What is concerning about this is not just knowing how much the deficit is ($7M? $14M? Somewhere in between? Who knows!) is that the people who got us into it are the ones who have to get us out of. Again, these people should not be in office or hold these positions. None of the charges mentioned above should have been a surprise – but this administration they are acting like they had no idea it was coming. They can meet with reporters and give the charade that they being ‘transparent’ about it all but the fact remains its their own incompetence that shows the most.

    • Ravi was focused on his political career getting out of Hoboken the entire time. He’s literally eating the surplus and crushing Hoboken taxpayers and municipal workers. How come they aren’t eliminating that dumb cushy Constituent office? They’re eliminating essential workers to keep the chunky and overfed Jason Freeman and Bleepjay and their fat patronage salaries.

      What a disgrace!

Comments are closed.