State Says Mayor and Council Would Face 25-Percent Pay Cuts If They Engage in “Reckless” Fiscal Behavior Next Year
Thursday, February 28, 2013 • 6:40am
PATERSON, NJ – While awarding Paterson more Transition Aid than the city had expected, the state also is preparing to impose a variety of new demands on municipal officials, including a provision that could result in pay cuts for the mayor and City Council members.
In order to get $22.4 million in aid needed to balance this year’s budget, the city council will have to authorize the financing for a citywide property revaluation and adopt an ordinance requiring private groups to pays fees to cover a portion of the city’s expenses for events like parades.
Moreover, the state is requiring Paterson to evaluate whether it would be cheaper to join the state’s employee health benefits program, to reassess the way it handles legal services and to figure out ways to curtail the costs of lawsuits filed against the city.
Perhaps the most stunning condition being placed on the state aid is a provision that would reduce the salaries of the mayor or council members by 25-percent if the state determines they acted with “reckless indifference” to the terms of an agreement providing the city with the funding. The state cites as examples of such violations “incurring lodging or food expenses” without state approval and “incurring overtimes expenses among management.’’
“The purpose of this provision,’’ says a letter sent on Wednesday from the director of the New Jersey Division of Local Government Services, Thomas Neff, to Mayor Jeffery Jones, “…will be to ensure that sanctions for future willful or reckless noncompliance are visited upon those responsible for them, and not the taxpayers of New Jersey or Paterson.’’
In addition to those new requirements, Neff’s letter also says his agency plans to withhold or recoup unspecified amounts of Paterson’s transition aid either for this year or next as a result of what the state deemed as inappropriate expenditures. They include:
- spending on travel and lodging by certain officials that has not been repaid to the city as previously recommended by the state.
- "unsustainable recreation program increases” in fiscal 2013 that were not approved by the state.
- expenditures made on food without state approval.
- $20,000 of inappropriate overtime paid to members of management.
“While the City has made substantial progress in efforts to reduce their reliance on Transition Aid,’’ reads Neff’s letter, “the Division remains frustrated with certain expenditures of funds and the City’s failure to move forward with a revaluation necessary to more fairly allocate tax burdens based on up-to-date market values.’’
PatersonPress.com was not able to reach the mayor Wednesday evening to get his reaction to Neff’s letter. Four of the nine city council members responded to PatersonPress.com’s request for their thoughts on the letter. Several of them said they considered the state's conditions reasonable.
“It’s going to help us govern ourselves,’’ said Council President Anthony Davis. “There have been some wasteful things going on that should not have been going on.’’
Davis said Paterson desperately needed the state aid. “If they’re asking us to agree to some new stuff, I don’t have a problem with that,’’ the council president said. “We’ve got to roll with the punches.’’
“I think the state has seen a lack of effort’’ by city officials to curtail municipal spending, said Councilman Rigo Rodriguez. “To have all these requirements they’re giving us, I think we deserve them. All these years we should have been coming up with a plan on how not to depend on the state.’’
Rodriguez also said he was “100 percent in favor” of the state’s crackdown on spending on food and travel.
“The state does not have a right to micromanage city government in Paterson from Trenton,’’ Morris said. “What they’re trying to do is take over city government through the back door,’’ Morris added. “If you want to take over the city, do it with legislation.’’
Morris also questioned the threatened pay reductions that would be imposed on the mayor and council. He said the state should provide more definitive criteria on how it would enforce such a penalty. “Who determined what’s reckless indifference?’’ he asked. “What is meant by that?’’
Rodriguez and Morris both took issue with Neff’s demand that the council move ahead on a property revaluation. They argued that the investment of about $2.1 million will turn out to be a waste of money because they said the city’s tax assessor’s office still lacks the capacity to keep new values current afterwards.
Under the state’s Transition Aid program, cities getting the special funding must accept the terms of the state’s MOU to get the money. The terms of the MOUs vary from city to city.
Paterson received the second biggest award announced on Wednesday. Trenton got the largest amount with $25.4 million. Camden received $15.5 million, Union City $11.9 million, Newark $10 million and Asbury Park $3.5 million.
A press release issued by the New Jersey Department of Community Affairs said the $94.5 million in Transition Aid issued statewide represented a $14.2 million reduction from the previous year. The press release said the cut reflected Gov. Chris Christie’s “commitment to keeping this discretionary aid as a temporary program for municipalities that are transitioning to self-sufficiency.”
DCA Commissioner Richard E. Constable III said his department would work with the governor “in his efforts at preventing municipalities from increasing user fees, ending accumulated sick and vacation leave payouts for government employees, and giving municipalities greater flexibility in removing barriers to shared services.”