According to assistant business administrator Greg Corrado, no other city “on this side of the Hudson” has its own dedicated tow service. He says the service currently brings in $600,000 in revenue each year, but costs $800,000 to operate, netting a $200,000 loss.

The towing service will “stay the same” operationally, according to Corrado, but using a private company will allow the city “to align our fees with neighboring fees.

Currently Jersey City’s tow pound, located near Liberty State Park at 100 Phillips Street, charges $120 for cars and SUVs, $160 for larger vehicles, and $225 per hour for vehicles weighing in at greater than 14,000 lbs. A proposed cost increase would keep the fee the same for the largest vehicles, but smaller vehicles would now be charged $150 and larger vehicles $200.

Still under discussion is who exactly will receive the license, but at Tuesday’s caucus meeting Kelly said the “ordinance allows pounds within a three-mile radius of the city to be considered for a licensee. We’ve identified two which we think will be adequate.”

According to city spokeswoman Jennifer Morrill the city has begun to look into “several tow pound facilities as part of analyzing the merits of this proposal. Two companies have already expressed interest in participating.”

The companies are Newark’s Dente Brothers, which Morrill says “performs towing and storage for the City of Newark and the New Jersey State Police on the northern segment of the New Jersey Turnpike,” and GXR Auto, located on East Linden Avenue in Jersey City. GXR “is immediately across the street from the new Department of Public Works/JCIA compound” and “has performed services at the city tow pound in recent years,” Morrill says.

Though the cars will be impounded off-property, the city will continue its practice of selling the impounded cars through a JCIA auction. Currently cars may be sold after they have been abandoned for 20 days, and must be sold by 90 days.

“Jersey City begins the process after 30 days, but the actual auction usually takes place after 60 days,” Morrill notes.

Ward F Councilwoman Viola Richardson voiced some concern about working with a private tower, noting that much of the cost to the city “comes from having [the JCIA] consider the circumstances behind the car being impounded. Not everything is so cut and dry.”

She added that she would prefer the pound be located within the city limits, thereby limiting the difficulty of recovering the vehicle for city residents.

City officials say outsourcing the tow pound operations would also save $1.4 million in construction costs related to the new Department of Public Works (DPW) building.

“Currently, the design of the DPW compound contains the provision for a new car pound which will cost approximately $1.9 million to construct. This includes paving, foundations, car racks, lighting, fencing, and security,” Morrill says. “If the area is instead only paved for industrial parking, the cost will be approximately $500,000. The net savings will be $1.4 million.”

Photo of current tow pound entrance via Google Maps

On Tuesday, September 27, I had the opportunity to attend the City Council meeting in Jersey City. As you may or may not know, the City Council finally passed a budget. They also claimed taxes will not be raised. I believe that is a lie, because the City Council always says taxes will not be raised yet a few months later they make up some excuse. I mentioned that even though taxes will not be raised, taxes are still high. I told them they need to find ways to lower taxes.

The problem is every single council member, except councilman Steven Fulop, is double dipping and robbing taxpayers. Most of them are making six figures from their county or state job, so why take a council salary when the city is in crisis? I also mentioned because of that, you don’t need a city car. Let’s save Jersey City taxpayers money. When I become Councilman of Ward A, I will propose two things:

1. End to city cars — there is no need for them

2. If you have another government job, you will receive no council salary or benefits.

It is time for fiscal responsibility, less government and less taxes in Greenville. We need a leader who will bring sense to government.

Demetrius Terry (R)
Declared 2013 candidate for City Council

The vote puts to bed the “living document,” as business administrator Jack Kelly has dubbed the budget introduced in March, as all of the uncertain revenue figures that could not be predicted earlier in the year are now accounted for.

For this year at least, the ongoing debates over the city’s funding priorities will fade to the background — though if residents have their way, not for long. The few speakers at Tuesday night’s public hearing on the budget criticized the timeliness — or lack thereof — of the budget and said the administration must do better planning in future years.

Frequent council critic Esther Wintner said she and others want to see the finalized budget earlier, so “families can budget our own finances for the year.”

Ward E councilman Steven Fulop, who has laid into the administration regarding its budgeting practices, agrees.

“Looking forward, we 100 percent need the budget introduced and completed early in the year to avoid confusion,” he tells JCI. “It would help for longer term planning.”

Still, Wintner thanked Kelly for keeping the city’s promise to keep tax levels flat from 2010, unlike in previous years.

“Over the course of five years we’ve seen an 84 percent increase in our property taxes,” she said. “This has been devastating to the residents of the city.”

After speculation to the contrary — most recently a few weeks ago when a $15 million land deal fell through at the last minute — it was unclear if the city would be able to maintain the tax levels. But even though the administration has apparently done so this year, Fulop notes that more needs to be done to keep taxes in check.

“The administration still can’t control spending and we needed to cut more,” he says. “However, per the administration, the tax increases were front-loaded this year, so when they say there is no increase now it is because it was already done.”

“It wasn’t easy,” Kelly acknowledged, noting the close 5-4 vote on switching retirees’ health care and the $3.4 million in savings it provided as an example of the difficult choices the city has been forced to make.

“We presented a plan in March and that plan hasn’t changed,” said Kelly, who described the city as working towards creating “a smaller, more cost effective government.”

The $490,497,380 spending plan, which the administration says will not include a tax increase, passed by a unanimous 8 to 0 vote (Ward E councilman Steven Fulop was absent). Though both said they didn’t want to “hold up” the budget, Ward B councilman David Donnelly and Ward F councilwoman Viola Richardson did raise questions about the city’s free clinic, saying they hoped it would continue to be funded in the future. But Kelly said the administration still intends to close the clinic next year, even though the plan to do so this year hit a number of bumps in the road.

“It wasn’t an easy budget to work on. There were a lot of sacrifices, municipal workers had to give up a lot of benefits,” council president Peter Brennan said. “But we had to bring this budget in.”

There will be a public hearing during the City Council meeting on Tuesday, September 27 at 6 pm. After the hearing, the budget can finally be adopted.

The new amendment puts the total budget at about $6 million less than the previous amendment — which had included the $15 million in revenue — did, and it puts the 2011 spending plan at $490,497,380. That is $13 million higher than the $477 million budget the administration first introduced back in March.

In a memo sent to council members today, business administrator Jack Kelly outlines the changes in revenue that helped make up for the loss of the land sale. He says revenues from tax abatement PILOT payments were higher than expected, as were local revenues from services like death and marriage certificates and the hotel tax; an accelerated tax sale brought in several million dollars; and a number of federal and state grants covered expenses the city previously thought it would have to pay on its own.

“[These] items total $17.2 million, allowing the city to reduce the land sale revenue by $15.9 million; increase the library appropriation by $100,000; increase the Jersey City Incinerator Authority’s appropriate by $1 million; and fund the salaries for the rescinded layoffs in the Department of Health and Human Services,” Kelly writes.

The latest amendment barely changes the amount to be raised by taxes from previous 2011 plans; that figure now stands at $215,107,285. However, that is $30 million higher than the amount raised by taxation in 2010′s budget, $185,058,594, leading plenty of residents to wonder if the administration’s promises to keep taxes “stable” is legitimate.

Officials tell JCI the taxes will indeed be kept flat, and that comparing the 2010 to 2011 budget is like comparing apples to oranges. The 2010 budget was a fiscal year budget, and when the city operated under a fiscal year the tax collections were out of sync with the budget calendar. City spokeswoman Jennifer Morrill says that was one of the reasons the administration switched to a calendar year budget; “so residents can understand their tax bills better.”

The city’s budget office says the actual amount of money collected via property taxes in the calendar year 2010 was $210,650,041, and the actual amount to be collected under this budget plan in the calendar year 2011 would be $208,448,387.

The council tonight will also vote on another temporary appropriation, since the 2011 budget has not yet been passed. If it clears the council, that will bring the amount to $431,785,552 — or 88 percent of the total 2011 budget.

The practice of appropriating funds before the spending plan is approved has been criticized by some council members and activists over the past few years as bad budgeting, an argument Kelly obliquely refers to in his memo.

“Budgeting is no longer a process conducted once annually to coincide with a date on the calendar; rather, it is a process that has become our philosophy: creating a smaller, smarter and more efficient government,” he writes. “Towards accomplishing this goal, small focus group meetings are held regularly with each department, where forward-looking decisions are routinely scrutinized.”

If the budget amendment is passed by the City Council tonight, there will be a public hearing and vote on adopting the budget next Wednesday, September 28.

In the latest twist in the ongoing multi-pronged fight over the use of city-owned cars by council members and department directors, At-Large councilman Ray Velazquez on Friday asked the Healy administration to prepare a new resolution that would force the city to prepare a report on ways to “reduce and/or eliminate the use of non-essential city owned vehicles.”

The resolution comes after Mayor Jerramiah Healy vetoed a bill pushed by Ward E councilman Steven Fulop, which would require all city-owned non-emergency vehicles to be labeled with a decal signifying they belong to the city. Fulop has said he will push for a veto override, for which he’d need six votes — one more than he got when the bill passed several weeks ago. He’s targeting Velazquez as that sixth vote, but the At-Large councilman — who voted against Fulop’s initial bill — has said he will not support the override measure.

Instead, he is now sponsoring a separate resolution that aims to push the city in the direction of eliminating its cars and instead reimbursing city employees for the use of their own private cars. Velazquez has said he hopes to emulate Hudson County’s policy in this area.

“[The county] has already put this type of plan into work by eliminating as many cars as possible and setting a reimbursement standard for those employees that use their cars during government business,” Velazquez wrote in a letter to JCI earlier this month. “No cars equals: no gas station; no repair costs; no insurance costs and no contracts for the purchase of new cars each year.”

Velazquez’s resolution would require business administrator Jack Kelly to do the following:

1. Examine ways to reduce and/or eliminate the use of non-essential city owned vehicles;
2. Formulate a rate of reasonable compensation to be issued in lieu of a vehicle to those government employees currently using city owned vehicles;
3. Communicate with the Council his findings and recommendations to the City Council within 90 days of this resolution.

Fulop, who is still hoping to put pressure on Velazquez to support his override, says the resolution is “laughable” and lacks teeth. He adds that the At-Large councilman — who is in a crowded race to keep his seat in a November special election — is cowing to the mayor, who Fulop says is the “political boss” who is “financing” Velazquez’s campaign.

“So, Ray sponsors some make-believe resolution to get through the election that has no binding action. If Ray is sincere, there is only one action he can take, he would vote for the veto override that was prepared by the city’s legal department and puts the residents first,” Fulop says. “Nobody likes a rubber stamp and Ray should realize that the public is not stupid.”

Mayor Jerramiah Healy is also reacting coolly to the proposal, pointing out that his administration has already done what Velazquez is asking it to do.

“This administration is constantly reviewing ways to cut costs, including reducing the city’s automotive fleet. As stated previously, automobiles assigned to city staff have been cut by nearly 50 percent from 29 to 15 and fuel has been limited to 18 gallons, or one tank per week, whichever is the lesser amount,” Mayor Healy says in an email. “We’ve cut more than any government entity in this and other areas.”

Matt Hunger contributed to this report

The land deal fell apart late yesterday, just hours before the City Council was hoping to pass the city’s 2011 budget, immediately throwing the spending plan — which had included the $15 million in projected revenue from this sale — into question. But the administration quickly followed the news of the deal’s demise with a promise that the city would move a budget forward “with no tax increase.”

“We have been working on a Plan B for some time in the event that this deal was not finalized for this year’s budget, and have identified additional revenue sources and areas where cuts can be made,” Kelly said in a statement released yesterday afternoon. “We have been able to realize additional revenues that were not readily apparent earlier in the year and conservative revenue estimates have proved just that, conservative. Items such as PILOT [Payments in Lieu of Taxes, from abatements] revenues, receipts from delinquent taxes and hotel tax revenues have been realized above initial projections.”

But residents at Wednesday night’s council meeting seemed unconvinced, with a handful of public speakers at the meeting hammering Kelly about the budget question.

The often-unperturbed Kelly, who said he receives daily emails from “20 or 30 people” about the budget, showed more irritation than usual at the constant questioning.

“It’s disingenuous to say we don’t have a budget or a spending plan. We have a spending plan that we haven’t veered from,” the business administrator said. He called the budget “a living document,” noting how things can change through the course of a year.

“Yes, this one item of $15 million did not come to fruition, but it’s not like we were resting on our laurels. We were looking at additional spending cuts and revenue,” he continued. “The budget process is 12-month-a-year process.”

He said that the council will meet with the administration on Tuesday to address in detail how the city will make up for this shortfall.

At least one council member — Ward E councilman Steven Fulop — remained as skeptical as the residents, dismissing the notion of a “spending plan.”

“I spoke with the state today,” said Fulop. “They’re concerned about the budget.”

The state, which has to sign off on Jersey City’s spending plan, warned the administration back in July that the city could face state penalties, a bond downgrade, or even the loss of control over the setting the property tax rate if it failed to adopt its budget by August 26. Kelly responded with a letter promising that the city would adopt a budget by September 14; that promise is now broken as the budget must once again change before being approved.

Fulop hammered home a point he’s made for several years about faults in the city’s budgeting process, which usually involves the spending plan being passed well into the year it covers, with the majority of its funds already spent through emergency appropriations. As of the last council meeting, 86.2 percent of the then-$496.6 million 2011 budget — $428 million — had already been allocated.

The councilman and mayoral hopeful also pressed Kelly on where the $15 million was coming from.

“Now miraculously we find $15 million, when we were fighting about the [free health] clinic and about our library cuts and layoffs?” Fulop wondered, saying he was surprised how “easy” it was to find the money all of a sudden.

“It hasn’t been easy; just ask the [hundreds of] people laid off,” Kelly replied. “We did not miraculously find money; we were conservative with our revenue projections.”

What exactly the administration’s “Plan B” is remains unclear, since all of the increased revenue items touted in yesterday’s announcement were also touted when the previous budget amendment was unveiled — and that plan still included the $15 million land sale deal.

It also remains unclear how the administration will keep its promise to not raise property taxes. The most recent budget amendment, which included the land sale, called for $215,107,176 to be raised by taxation; that was already $30 million higher than the amount raised by taxation in 2010′s budget, $185,058,594. However, city spokesperson Jennifer Morrill told JCI earlier this month that property taxes “will be slightly lower in calendar year 2011 versus 2010″ despite that change, a message reiterated yesterday by the administration’s promise of “no tax increase.”

A special meeting of the City Council has been scheduled for Tuesday, September 20 to introduce the revised budget amendments, and a public hearing will be held on Tuesday, September 27, prior to the regularly scheduled City Council meeting. The council will then be able to vote on adoption of the budget at that same meeting.

As we reported earlier today, the land sale was apparently contingent on the developer being granted a long-term tax abatement for the market-rate housing units on the site. But the JCRA says that wasn’t what derailed the deal. Instead, Tessler’s concerns for “market conditions” and the “uncertainty for construction financing” were the primary cause for tabling the project, according to a release sent out by the JCRA.

“The agency worked diligently to bring this matter to a swift conclusion so as not to delay the city from making decisions regarding its budget,” JCRA executive director Robert Antonicello says in a statement. “The agency has been directed by the mayor’s office to revisit the site for alternative solutions.”

City officials have put the $15 million projected land sale into the proposed 2011 budget; no word as of yet how this will change that document. We’ll keep you posted.

Rendering of the once-proposed development courtesy of the JCRA

New questions are being raised this week about a $15 million deal for land behind the Jersey City Medical Center after it was revealed that the deal may be contingent on the developer being granted a generous tax abatement.

As the Jersey City Redevelopment Agency (JCRA) and the potential purchaser of the land, Tessler Developments, talked to council members at Monday night’s caucus about the developer’s plans to build a massive proton therapy center on the site, Tessler’s representative acknowledged that it will seek a tax abatement for part of the deal, and may walk away if it doesn’t get one.

“We are going to apply for an abatement,” Tessler representative Charles Harrington said. “My client does have the option to waive the deal.”

The abatement will be sought for the approximately 1,000 market-rate housing units the developer plans on building as part of the $291 million complex, which will also feature commercial development and the area’s first proton therapy cancer treatment center.

“This is a very substantial investment and not just for my client,” Harrington continued, calling the deal a “job generator” that will bring nearly 500 jobs to Jersey City. “When you invest so much money, you look for as many constants as you can.”

Harrington, however, said there was no specific language in the agreement addressing tax abatements, and JCRA director Robert Antonicello said such language could not be put into a land deal agreement, a point echoed by city spokeswoman Jennifer Morrill, who stresses there’s no guarantee Tessler will receive an abatement.

“There are several steps prior to the granting of a tax abatement, including site plan approvals,” she says. “As with all tax abatement applications, [this] will be reviewed on its merits.” 

The $15 million land deal, which city officials hope will plug a large hole in Jersey City’s 2011 budget, has drawn criticism from Ward E councilman Steven Fulop, who first raised the issue of the abatement on Monday. He says that the problems with this deal are a result of the city not having a firm grasp on the overall budget process.

“By relying on this $15 million to plug a budget hole as opposed to making cuts earlier in the year, the mayor is ensuring that the administration, council and taxpayers have no leverage when negotiating the tax abatement with the developer,” he tells JCI. “The developer knows the mayor put all the chips in this basket, so there is no way the city will have leverage to negotiate what is best for the taxpayers.”

In his comments to JCI, Fulop echoes broader criticisms of Jersey City’s tax abatement process, pointing out that a number of officials and advocates, including the state comptroller, have said the process is unfair in its current form.

The state comptroller’s 2010 report, for instance, suggested that “tax abatements should be used carefully and sparingly given the multitude of pitfalls, their far-reaching impact, and the reality that exemption from taxation is a departure from the normal allocation of tax obligations.” A report released in 2009 by statewide policy think tank New Jersey Policy Perspective said abatements should be used sparingly, and only in areas of Jersey City that wouldn’t receive developer interest to begin with.

“The land sale should move on its merits and the taxpayers should not have a gun to their head to give developers a tax abatement on 1,000 market-rate Downtown condos,” Fulop says. “It is not fair to force additional tax abatements on the residents that may not be the best deal for residents.”

The City Council will vote tonight on the introduction of an ordinance that would transfer the final 25 or 30 percent of the land in question to the JCRA, which is required to happen before the deal with Tessler can go through.

Rendering of the proposed development courtesy of the JCRA

The property in question has been the subject of debate and controversy since April, when Ward E councilman Steven Fulop began to question whether the city could actually receive $15 million for it, as it had estimated in its 2011 budget. A few months later, a state official said the city was “highly unlikely” to fetch the full price.

But now it appears that it may, with the Jersey City Redevelopment Agency (JCRA) having lined up Tessler Developments as the designated developer for a massive complex that would include not only the region’s first proton therapy center, but also commercial space and about 1,000 market-rate apartments, some earmarked for those undergoing treatment.

According to the Wall Street Journal, the procedure is somewhat controversial in medical circles:

The treatment involves using a proton beam to precisely deposit a cancer-treatment dose near a tumor or affected area with less scattered radiation to the rest of the body, said Dr. Glen Gejerman, co-division chief of urologic oncology at Hackensack University Medical Center. It has so far been studied on brain tumors and on lung, pediatric and prostate cancers.

The controversial therapy is supported by some doctors who say it targets tumors more effectively than conventional radiation and is safer on surrounding tissue and organs.

Others have been critical, saying the relatively new therapy hasn’t been subjected to enough peer-reviewed research.

The City Council will vote next week on a resolution transferring the land to the JCRA, after which plans and engineering drawings would be submitted to the city’s Planning Division for approval, a process city spokeswoman Jennifer Morrill says will take between 9 and 12 months. She said the city expects construction to start by the end of 2012, or early 2013 at the latest.

The administration is still hoping to include the $15 million in this year’s not-yet-passed budget, but Morrill says they are still “working with the state” on that.

Fulop, who has criticized the land-sale process, says that he and his colleagues haven’t yet seen any plans for the site.

In addition to City Council and Planning approval, the project still also must be licensed by the New Jersey Department of Health and Senior Services as an ambulatory care center. No application has been submitted, the agency tells the Wall Street Journal.

But Yitzchak Tessler, Tessler’s owner, tells the paper he’s requesting licensing. To help fund construction, he says he has lined up $250 million in private investments, as well as signed contracts for $90 million worth of equipment and software.

Rendering of the proposed development courtesy of the JCRA