City ratifies state’s conditions to receive 75-percent of the $23 million state aid package
By Jayed Rahman
Published: April 26, 2014
Members of the city council ratified the state’s memorandum of understanding in return for the $23 million aid package promised by the state during a regular meeting of the governing body on Tuesday evening.
“Upon the adoption and signature of this document we will be able to receive 75-percent of those funds, and they are much needed,” said Charles Thomas, the city’s business administration.
Some changes were made to the original memorandum, said Thomas.
Community Improvement
Among the changes was a demand from the council to include Community Improvement, the division that issues permits, inside the Economic Development Department.
At the state’s behest the city must split the current Community Development department to create a new Economic Development Department under which will be the Division of Economic Development, Division of Redevelopment, Historic Preservation and Division of Cultural and Community Affairs. Other divisions that currently fall within the bulky Community Development department are to be retained under its umbrella.
“There was a concern that the division of planning and zoning, because it is such an integral part of economic development that it should be part of the Economic Development Department, that has been agreed to by the Department of Community Affairs,” said Thomas.
Kenneth Morris, councilman at-large, suggested the permit issuing department fall under economic development to reduce red tape for businesses seeking to start or expand in the city. “As we begin to move forward with economic development in this city, we need to have this continuum in place to ensure there is no speed bumps or stopgaps to that process,” said Morris.
Longevity pay
“The state wants us to freeze longevity for union and non-union?” asked Ruby Cotton, 4th Ward councilwoman. “But, if we are in the third year with a union contract, legally we cannot freeze longevity, right?”
The business administrator said most of the city’s personnel contracts have or will expire soon at which point the city has to negotiate contracts that do not include longevity pay. “They will really not change this provision,” said Thomas. “The concept there is let’s look at freezing and incorporate that with our discussions with the unions,” said Thomas.
The state wants the city to freeze longevity pay for elected officials and non-contractual employees. Morris said doing that will create inequity between contractual employees and the rest. “Until such time we renegotiate contracts with this provision the non-contractual employees should be on par with contractual employees,” suggested Morris.
“90-percent of our civilian contracts will expire June 30th, 2014. Police and fire contracts are in negotiation,” said the business administrator.
Borrowing over $1 million
A condition in the memorandum demands the city send for review bond ordinances exceeding $1 million to the Department of Community Affairs before it comes in front of the council for a vote.
“That is now changed, there is no longer a requirement that the DCA review the request prior to the council receiving and acknowledging, reviewing a bond ordinance from the administration first,” said the business administrator.
Thomas explained the usual process, where the council votes, approves a bond ordinance prior to sending it to the state for review will be followed.
Tax abatement
“When we have enabling state legislation that allows for five year tax pilot if the developer meets certain conditions,” said Morris, “How does that work if the state is asking ‘we have to sign off and approve’ when we got state enabling legislation?”
Morris referred to the city being part of the Garden State Growth Zone a designation which was approved by the council earlier in the year that grants tax abatements and exemptions of all sorts for developers in order to promote economic development.
Thomas explained that the state is not seeking to review the tax abatements and tax exemptions prior to the city council’s approval, simply that it will review them. “It does not specify or mandate that they approve prior to the council taking action with respect to tax abatement and exemption requests, but simply that they review and have a discussion,” said Thomas.
“Some of the stuff I don’t see how we can get it done by June 30th, 2014,” commented Cotton. “I see what they said they’re going to do to us.”
In the memorandum the state sets out the consequences of not following through on the conditions, “The Mayor or Council, as appropriate, shall have their pay reduced by 25% if the Division determines that the Mayor or Council knowingly, or with reckless indifference, take actions after July 1, 2014 to incur or pay expenses in violation of the terms of the Memorandum.”
“It’s a shame we still have to go through this, and we still don’t have a plan to detach ourselves from the state,” said Rigo Rodriguez, councilman at-large.
Morris voted against ratifying the agreement; Rodriguez, after checking to ensure it passes without his vote, cast his vote against approving the memorandum.
Responding to Cotton’s concern that the city may not be able to complete everything that is being asked, Thomas said, “In the past we had to seek extensions on certain provisions.”