State board blocks Paterson from borrowing money citing ‘fiscal uncertainty’ after repeal of sewer reforms | Paterson Times

State board blocks Paterson from borrowing money citing ‘fiscal uncertainty’ after repeal of sewer reforms


Mayor Andre Sayegh’s administration sought the approval of the state Local Finance Board to borrow $6.2 million for various projects, but was blocked because of financial uncertainties resulting from the repeal of the sewer reforms.

Sayegh sought approval for three bond measures to fund park improvements, public safety equipment purchases, and library repairs. The Local Finance Board postponed action on all three applications to borrow funds on March 10.

“The LFB tabled Paterson’s bond applications because of the fiscal uncertainty caused by the City Council’s repeal of the sewer utility. A repeal of the sewer utility will cost the City at least $2 million in Transitional Aid, which equates to the funds provided to Paterson by the State in order to establish the utility,” said Lisa Ryan, a spokeswoman for the New Jersey Department of Community Affairs (DCA). “In addition, it is expected that a return to the old billing practices, which paid for sewer costs mostly out of the City’s operating budget, will result in a deficit similar to that seen in 2019 of $5.5 million. Without being able to properly evaluate the full fiscal impact of the Council’s actions to repeal the sewer utility, the LFB moved to table Paterson’s requests.”

Ryan said the city can refile the bond applications.

The City Council repealed the mayor’s sewer reforms on February 23 citing his failure to rectify problems such as failure to bill big users like the school district and sending incorrect bills to residents. He had more than a year to address the problems, but has not, said council members. He later vetoed the council’s repeal. Council members overrode his veto two weeks ago.

Sayegh’s business administrator Kathleen Long last Tuesday blamed the City Council for the unfavorable actions taken by the state board.

“This was a direct result of the action taken by the council,” said Long.

“There’s a lot of consequences for the actions the council takes,” said councilman Al Abdelaziz, a Sayegh ally.

Abdelaziz claimed the board’s action could mean no road surfacing in Paterson this spring.

“Roads are still going to get repaved,” said council president Flavio Rivera. He pointed out there are plenty of money the administration can use from previous road resurfacing bonds.

“I don’t want the community at large to think an action was taken so your streets are not getting paved. That’s not true,” said council vice president Lilisa Mimms.

Mimms blamed the Sayegh administration, pointing out the mayor had a year and half to correct the problems with the sewer billings. Sayegh did little or nothing, according to council members, forcing the governing body to repeal the sewer utility.

“We have residents whose bills went up 300, 400 percent and still no resolution,” said Mimms. Sayegh’s sewer reforms led to massive increases in sewer fees for homeowners and businesses.

Some felt Abdelaziz was trying to unfairly place blame on the City Council. His comments triggered a series of back and forth attacks among council members and administration officials leading to a chaotic meeting last Tuesday.

“We have to stop fighting, pointing fingers. That’s not helping the situation. You’re making it worse,” said Mimms.

Council members have repeatedly told Sayegh and Long to produce a revised plan to re-create the sewer utility with flat billing to avoid losing the $2 million in state aid and creating a $5.5 million hole in the budget.

Council members envision a self-liquidating sewer utility without the water usage based billing that they believe has caused many of the problems.

Sayegh has yet to present an alternative plan to re-create the sewer utility. Instead, he has been lobbying council members to reconsider the repeal over the past week.

Late last week, Sayegh convinced the City Council president to place a measure on the council’s agenda to reconsider the repeal. The council will decide whether to reconsider the repeal on Tuesday night.

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