Hoboken council OKs 1st reading for $4.7M bond, takes flak over possible affordable housing changes

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The Hoboken City Council narrowly approved the first reading of an ordinance to authorize a nearly $4.7 million bond with the local library, allowing them to complete renovations and upgrades, while the city would be able to decrease their multi-million dollar budget gap.

By Marc Bussanich and John Heinis/Hudson County View

Mayor Ravi Bhalla called last night’s night’s special meeting, hosted on Zoom and streamed on the city’s Facebook page, in hopes that the governing body would approve a $4,660,140 bond from the local library.

Acting Business Administrator Jason Freeman provided an overview of the city’s current financial state and noted the budget impacts with and without the library transfer.

“All in all, when you take the existing shortfall we have, combined with the reduction of surplus in year over year, and the added expenses related to Covid, we’re looking at an impact to the overall operating budget of close to $20 million,” he said.

Freeman mentioned major decreases to the parking utility, court fees, and surplus regeneration, which have an estimated net loss of $7.4 million, as well as consistent set backs due to the coronavirus pandemic – which began to have a significant impact on New Jersey in late March.

As a result, there also led to an increase in overtime for frontline responders: police, fire, and the office of emergency management.

Still, he indicated that cost saving initiatives, including layoffs, have left the city in a difficult, albeit more manageable position than some may have expected.

“Overall, the cost saving measures, combined with revenue, we saw a little bit over $10 million in savings and revenue. Where does that leave us? I mentioned that we had a $19.8 million related to the budget impact overall, [plus] $10.9 million in savings and new revenue, which leaves us with a budget gap of about $8.9 million,” Freeman said.

Six months into the year, the Mile Square City has yet to introduce a budget, much to the chagrin of some council members who said last night that they didn’t want to vote on the library bond ordinance on first reading until they saw the first iteration of the city’s spending plan.

Still, Freeman stressed that approving this bond ordinance would cut the city’s budget gap down to just over a million dollars.

“If we move forward with that, it’s about a $4.6 million transfer overall. So, you take the $8.9 million, reduce it by the $3.3 million of added surplus and reduce it again by the $4.6 million transfer, we’re left with a budget gap of about $1.03 million,” Freeman added.

4th Ward Councilman Ruben Ramos said he would like to see certain laid off employees brought back if the budget shortfall, noting that a fire department battalion chief was going to be demoted, prompting him to retire before Audra Carter was promoted.

“There was a promotion made, to battalion chief, to fill that vacancy. Before [the ink on the retirement papers] were even dry. So was that just all nonsensical to force someone to do that, that didn’t want to leave yet, that had no qualms with the job, was doing the job well.”

Freeman was that once the layoff list had been populated, Fire Chief Brian Crimmins said that battalion chief was planning on retiring. Ramos reiterated that was only because he didn’t want to face a demotion.

“We had people that were a year away from reaching full age, their years, and that was cast aside as well … I’d like to see those individuals brought back,” Ramos continued.

While Freeman didn’t make any firm commitment on if that would be a possibility, he said that “we’re working together to find shared priorities.”

Ramos later chided the administration, as well as some of his colleagues, before voting yes, exclaiming that “reform is dead” based on the way this year’s budget process is playing out.

2nd Ward Councilwoman Tiffanie Fisher, along with Council President Jen Giattino, were skeptical about the need to use a swap to make up for a budget shortfall.

“Bonding in the past got us something, which was a lot of open space. Right, wrong or indifferent: we have parks. For this, we actually don’t get anything for that bonding other than a short-term reprieve. This is a big deal, this is using debt to fund an operating shortfall,” said Fisher.

Fisher said that before the bond is authorized by the council, the city should release a preliminary budget.

But, according to Freeman, the city has yet to release a budget because of mitigating factors related to the COVID-19 pandemic. He noted that there’s a real chance that the virus resurges, which would have a negative impact on revenues.

Additionally, there’s some uncertainty about whether the city will receive its usually predictable state aid allocation of $11.5 million. Meanwhile, pension costs are rising.

“We just wrote a check last month for around $11 million to finance our pension obligations,” said Freeman.

As the ordinance came up for a vote, Fisher made a motion to table, which was seconded by Councilwoman-at-Large Vanessa Falco.

The motion failed by a 5-4 vote, with Council members Phil Cohen, Jim Doyle, Emily Jabbour, Ruben Ramos and Michael Russo voting no.

The ordinance ultimately passed by the same margin, with Cohen, Doyle, Jabbour, Ramos and Russo voting yes.

The second reading of the bond ordinance will require six affirmative votes for approval, so therefore at least one council member would have to change their mind between now and then.

This morning, 1st Ward Councilman Mike DeFusco called for a forensic audit prior to a second reading of the ordinance.

“Despite countless requests by the City Council to be presented with a municipal budget, the mayor has outright refused to hold transparent conversations about the troubling state of Hoboken’s finances,” he said.

“Instead, Mayor Bhalla has resorted to an old-school political gimmick, injecting one shot revenue at the expense of future taxpayers … I call on the mayor to work with the Council to conduct an independent forensic audit of city finances and organizational structures to ensure we are cutting the politically connected contracts and patronage jobs that continue to bloat our budget.”

Although a resolution sponsored by Ramos to amend the Western Edge Redevelopment Plan, which involves a large-scale project tied up in litigation, was pulled from the agenda days ago, over a dozen people spoke out against the changes that would hinder affordable housing.

“At a time when thousands of Hoboken’s own residents are marching to demand an end to systemic racism, the City should be doing more to ensure that residential development is affordable and inclusionary, not less,” said Bassam Gergi, counsel to the Fair Share Housing Center group, in a letter read into the record.

“Indeed, Hoboken’s elected leaders have publicly stated over the past few weeks that
they are committed to racial justice. If so, one of the best ways to demonstrate that commitment would be to create affordable housing opportunities for those working families, Black and Latino disproportionately, who have been segregated out of the City by fierce gentrification spurred by the influx of new luxury development and rapidly escalating housing prices.”

The FSHC is the group suing the city over the Western Edge project, particularly over the fact that the current iteration eliminated a 10 percent affordable housing component.

“It’s my understanding that the mayor was willing to sacrifice affordable housing for a pool, probably with a new spin on a tired, old talking point … just like the parks that we’ve spent millions on and [now] low income people can enjoy the pool,” said Cheryl Fallick, a longtime affordable housing advocate who sits on the rent leveling board.

“Just like they can enjoy the parks. This of course leaves out our poor and less affluent people who live here … Make no mistake, that each of you is one of the mayor’s complicit, sometimes eager, accomplices in ridding Hoboken of those pesky residents that cannot fill any candidate’s coffers.”

City officials are expected to meet with members of the FSHC tomorrow in hopes of coming up with a compromise that will avoid litigating the matter at length.