Council Report: The Budget, Cutting a Deal on Affordable Housing and Lyndon LaRouche

At Wednesday night’s City Council meeting, the main topic on the agenda was the city’s Fiscal Year 2009 budget, but there were also eight ordinances signed into law, four ordinances introduced, a bunch of resolutions passed and … a couple of Lyndon LaRouche supporters.

The sparsely attended (especially by our local papers!) meeting clocked in at just about 2 hours on the dot. At-Large Councilwoman Willie Flood was absent, and Ward A Councilman Michael Sottolano had to leave early and couldn’t vote on the second read ordinances.

The Budget — Better Late Than Never?

The city’s budget for Fiscal Year 2009 was introduced on Feb. 9 — seven months into the fiscal year, which runs from July 1, 2008 to June 30, 2009. The city has been funding its programs through temporary appropriations approved at City Council meetings every two weeks. Wednesday’s meeting included the public hearing on the budget, and four members of the public expressed their concerns about — or support for — the budget. (Read the entire budget here, if you dare.)

The budget itself includes a $15.5 million reduction in spending from FY2008 coupled with a $15.5 million decrease in revenues, both dropping to $460.2 million from $475.7 million. The city also has nearly $500 million in debt obligations, via bonds and other instruments.

Council gadfly Yvonne Balcer was first up to comment. She asked if the budget accounted for the controversial bill being pushed by Gov. Corzine to allow municipalities to defer payments into the state pension system.

City business administrator Brian O’Reilly said that it does take that cost saving of $14.8 million into consideration, adding that the bill was going to be voted on in Trenton as soon as this coming Monday. He told Balcer and the council that the new state bill had been tweaked a little from the original. Now the pension deferral would only be for one year (earlier it had been a three-year phased program) and the repayment period — which would start in 2012 — has been shortened to 15 years from 30.

The bill, which was first introduced in December and failed to gain enough backing to clear committee, has more supporters on board now, according to O’Reilly.

But Balcer and at least one City Council member weren’t wholly convinced.

“What’s the contingency plan?” Ward E Councilman Steven Fulop asked.

“We believe that this legislation will pass,” O’Reilly said. He said that if it does not pass, the city would create a contingency plan next week to cover the shortfall, adding that he “had some ideas” about what could be done.

O’Reilly also pointed out that the state pension funds, which are invested in the financial markets, were losing money hand over foot anyway right now, so perhaps it would be best to keep this money out of those investments.

When asked by Balcer how much the deferral would cost the city (in payments and interest) over the course of the entire repayment period, he said he wasn’t sure but that the state had done calculations.

Balcer also wanted to know how much of the budget’s revenue was made up of “one-shot deals.” City clerk Robert Byrne took a bit of umbrage to Balcer’s ignorance of the budget details.

“No budget has been more available than this budget,” he said, noting that it had been available on the city website for at least a month and that Balcer should have looked at it. She said she hadn’t known.

O’Reilly said that there was only one pre-payment relating to PILOT (Payment in Lieu of Taxes) programs in this budget. Fulop pointed out that there were plenty of other one-time payments in the budget, though, like a $10 million payment from Honeywell, sales of city real estate on Newark Avenue and Bright Street and the pension-deferral savings.

Balcer also complained to the council and the business administrator about the budget’s timeliness — or lack thereof. When you introduce a budget so far into the Fiscal Year, she noted, “you can’t make changes because the money’s already been spent.”

Balcer also cited recent massive property tax increases in Hoboken and West New York as a sign of things to come in Jersey City if it didn’t stop relying on one-time budget fixes. Jersey City’s last citywide property revaluation for tax purposes was in 1988.

West Bergen/Lincoln Park Neighborhood Coalition president Charlene Burke was next up, asking if the city had looked at any reduction or altering of city employees’ health benefits, a move that has spread through the private sector like wildfire.

“It’s on the table,” O’Reilly said. He said that talks are being held between the city and its major employee unions about including such cutbacks in their next contracts.

Housing advocate Telissa Dowling and Jersey City Firefighters Union president Joseph Krajnic rounded out the public comment on the budget.

Dowling wanted to know what percentages of the various tax abated housing projects were dedicated to affordable housing. While O’Reilly said that kind of information wasn’t part of the budgetary process, he gave Dowling suggestions on whom to contact to find that out.

While saying he was “not overly thrilled with this budget,” Krajnic said he’d support it, but spent most of his time pledging his support to the state pension-payment deferral plan.

With the public hearing on the budget closed, it will be brought back to the council as a second read ordinance at the March 25 meeting, where, if approved, it will become a binding document.

Cutting a Deal on Affordable Housing for Seniors

Twelve years ago, the city approved a site plan for a developer to create a rental building on the corner of Essex and Greene Streets in Paulus Hook. That developer later went bankrupt, and the property was purchased by Redwood Homes, Inc.

The property — now known as Essex Commons — was slated to include 14 affordable units for seniors. However, Redwood sued the city in state Superior Court, claiming that the 1997 site plan and the 2001 zoning of the property were invalid, since they hadn’t directly entered into the agreement with the city but merely purchased the property secondhand.

A resolution before the council on Wednesday approved the city’s settlement of the suit with Redwood. As a result, the city will remove the affordable housing restrictions and Redwood will pay $400,000 into the city’s Affordable Housing Trust Fund. Market rate rentals in the building range from $2050/month for a one-bedroom to $3500 for a three-bedroom, according to one rental website.

The settlement was pretty much the only point of intra-council contention at this week’s meeting. Fulop voted against the resolution, saying the developer knew at the time what it was getting into, and that the settlement was “selling us short.” He later told JCI that the settlement amount was “a pittance,” adding that it would barely cover the cost of building two affordable units elsewhere in the city. Ward F Councilwoman Viola Richardson agreed and also cast a no vote.

Council president Mariano Vega, while paying lip service to the need for Redwood to provide affordable units, voted in favor of the resolution (despite the fact that his vote came last and would not have changed the outcome). Saying he was “left with a dilemma,” Vega said the choice was to “shoot the dice” and see if the city could win in court, thereby forcing Redwood to provide the 14 affordable units, or to take what we could get. “I’m not a gambling man,” Vega said as he cast his yes vote.

Open Space Grant Applications

The council approved resolutions authorizing eight separate grant applications to the Hudson County Open Space Trust Fund for parks around the city, and supporting the applications of five Jersey City organizations. The grants are all due on March 30.

Magnolia Avenue resident Allison Hamilton-Rohe thanked the council for supporting the grant to acquire a vacant lot to create Hilltop Park in the “island” section of the city near Journal Square. She pointed out that there was no parkland in the area, and that this would be a welcome addition to the neighborhood. Ward C Councilman Steve Lipski, who represents the area, said the grant application was a big step towards the creation of the park and that the process was “a real testament to community action.”

Charlene Burke brought up the grant application for development of Boyd McGuiness Park, located at Duncan Avenue and JFK Boulevard. “When will the community be involved in its development?” she asked. Burke claimed that the grant application had been pushed forward with no input from community groups.

City business administrator Brian O’Reilly fired back, calling Burke’s claims “a baloney sandwich.” He said that he’d met with her several times about the development of the park, and furthermore, that the grant application doesn’t mean the city has a plan for the development. Instead, the city is trying to capitalize on the availability of trust fund money by submitting a number of applications. If the grants are approved, then there will be more community involvement and the creation of plans for the parks, both he and Vega noted.

Other park projects having grant applications submitted are: Berry Lane Park in the Lafayette neighborhood (land acquisition), City Hall (preservation), PJP Siegel along the Hackensack River (land acquisition), the Lafayette Pool and Recreational Facility on Van Horne Street (development), and the currently non-functioning Harmon Street Pool on Communipaw Avenue (an adaptive reuse study). The city is also supporting grant applications from the Liberty Science Center, Friends of the Loew’s, Friends of Liberty State Park, the Educational Arts Team and Jersey City Public Schools.

First Reads

Four ordinances were introduced by 8-0 votes on Wednesday. None of them should prove to be all that controversial. You can read them all here.

Ordinance 09-028 has two parts. First, it authorizes the payment of up to $11,471,819 to a number of property owners to whom the city owes refunds after they have appealed tax bills. This batch of refunds is due June 30. The second part of the bill authorizes the city to finance these payments by issuing the same amount of money in municipal bonds.

Ordinance 09-029 continues for another year a lease between the city and Saint John’s Baptist Church. The church leases the vacant lot at 826 Ocean Ave. and uses it for a youth recreation facility.

Ordinance 09-030 establishes an “imminent hazards procedure” for the Department of Fire and Emergency Services. It would give the fire code official the power to order an immediate evacuation of any building if its fire protection system was deemed inadequate, creating an “imminent hazard.” Alternatively, the fire official could order a Fire Watch and decide that any number of monitors should keep an eye on the property for a certain amount of time. The property owner would be tasked with providing the monitors.

Ordinance 09-031 repeals the No Parking Any Time law on the west side of Marin Boulevard between Grand Street to the light rail crossing, in order to provide some on-street parking for residents in the new construction (Liberty Harbor and Gulls Cove) in the area south of Grand.

Second Reads

Eight ordinances were voted into law by 7-0 votes on Wednesday with little debate. For our rundown of the ordinances, see our last council report. For the official documents, click here.

Yvonne Balcer thanked the council for passing Ordinance 09-023, which names an intersection in the Heights after civic activists and brothers Anthony and Herbert Huels. She said they had “the highest love and respect for the city.”

Councilmen Steve Lipski and Bill Gaughan, who were responsible for bringing this legislation to the council, agreed with Balcer and poured on their kudos for the Huels brothers.

“They didn’t suck up to politicians,” Gaughan said, noting that he’d had many a disagreement with the brothers. “But they are what make our neighborhoods.”

LaRouche Supporters Warn of ‘Financial Apocalypse’

As I walked into the council chambers, I saw a man handing out some flyers. Seeing as I have a love for flyers (the poorer the spelling, the more interested I am), I took a few. Imagine my surprise when I saw the header on one featuring none other than perennial presidential candidate Lyndon LaRouche. It was like being back on a college campus, right here on Grove Street.

Turned out that Hackensack resident Jerry Pyenson was there to speak before the council and urge them to pass a resolution calling on Congress to pass the LaRouche-initiated Homeowners and Bank Protection Act, which would freeze all foreclosures and place banking institutions under federal protection.

“You were lied to by the economists,” Pyenson told the council as he warned that, without action, the U.S. would be up against something darker than the wrath of Hitler and Mussolini. He noted that Newark, Paterson, East Orange, Edison and Orange had all passed similar resolutions.

Five speakers down the line, fellow LaRouche supporter Adam Rodriguez addressed the council, railing against the “London-centered banking system” and warning that we were “heading for a new Dark Age.” As Rodriguez began his remarks, Jersey Journal columnist Earl Morgan sighed loudly and ambled across the room to chat with business administrator Brian O’Reilly.

Nary a council member responded in any way to Pyenson’s or Rodriguez’s remarks.

Odds and Ends

* As we reported several council meetings ago, the hulking building at the corner of Newark Avenue and Grove Street (121-125 Newark Ave.) was to be sold by the city via public auction on Feb. 26. The lucky buyer? Brooklyn’s Lazer Mechlovitz, who picked up the property for a mere $2.61 million — the starting bid was $2.5 million. As J CITY Theater’s Clay Cockrell noted when we recently talked to him last month about the sale of another city-owner propert, this is a tough time to be selling off real estate.

* One resolution before the council on Wednesday was the authorization of a two-year contract to All American Poly Corporation for providing “large black plastic bags” to the Department of Public Works to use for our parks’ garbage. The $42,496 contract was questioned by Vega, who brought up the fact that the city had recently passed the so-called “green ordinances,” one of which calls for the city to purchase environmentally-friendly products whenever possible. O’Reilly explained to him that this contract was procured prior to the passage of those ordinances, which seemed to placate Vega for the most part. The council president still said that he hoped to not see black plastic bags in the future. “If we do the proper research,” he said, the city could most likely find a comparable “green” product.

* What else did the city agree to buy on Wednesday? $3,000 was allocated to enlist the services of an as-of-yet-unnamed expert to help the city develop a “community forest management plan;” $111,434.07 was awarded to Dell Marketing for a storage area network with data backup — on tape, a medium some say is expensive and obsolete; $52,070 was awarded to Access Control Technologies to provide security maintenance for the Department of Public Works; a one-year contract for $15,650 was entered into with Allied Car Care Center for car washing and detailing;  and $104,000 was added to a 2007 contract for construction management at the new Public Safety Communications Center.

* The concert series at Liberty State Park known as Summerfest received a $5,600 boost from a Hudson County grant.

* Moments of silence were observed for former Mayor Healy aide John Reilly (by Brennan) and for homeless advocate Joseph DelMonte (by Lipski).

Jon Whiten

co-founded the Jersey City Independent. He is currently the Deputy Director of New Jersey Policy Perspective.