BUSINESS & ECONOMY

Atlantic City Officials Narrowly Approve Fiscal Plan

By Michael Hill
Correspondent

The clock is ticking. The state of New Jersey has five days to approve or reject Atlantic City’s mandated five-year fiscal plan as this city by the sea recovers from losing more than two-thirds of its revenues thanks to a decline in gaming and disappearing casinos.

“It is a comprehensive document that we all professionally believe will work if it is adopted and embraced,” said Public Financial Management Managing Director Michael Nadol.

“It’s very, very important that each and every one of us in spite of how we may feel that we do the right thing for the people and the city of Atlantic City,” said Atlantic City City Council President Marty Small.

Among the plan’s numerous points: shrinking Atlantic City government with 100 layoffs, accepting nearly 200 buyouts, cutting the city fleet by more than 121 vehicles, modernizing city services, negotiating big concessions from several unions, redirecting tax revenues to the city and for $110 million, selling the long-dormant Bader Field Airport to the Municipal Utilities Authority. It would keep ownership local to reap the rewards from potential development. Those proceeds and borrowing $105 million would pay the city’s mounting $200 million in liabilities, money owed to the state for missed contributions to city employee benefits and money owed to the MGM and the Borgata through tax appeals. Right now, those casinos aren’t paying the city taxes because the city owes them money.

“So you expect us to go to the well one more time for $105 million?” asked Councilman-at-Large Frank Gilliam.

“Well, as I said, you’re already in the well for that because MGM, Borgata is owed the money and what they’re not doing is paying you $30 million a year,” said Ed McManimon III, attorney with McManimon Scotland and Baumann LLC.

“Can you clarify what changes for us to be able to bond now?” asked Councilman-at-Large Moisse Delgado.

“You’ve taken a step to basically stabilize your government that is noteworthy to the market, to the bondholders, to the bond insurers,” McManimon said.

The man who bought the former Revel hotel and casino for 4 cents on the dollar left the meeting scratching his head.

“They lost a piece of 125 acres of downtown real estate to a water department so they could float a bond. That doesn’t even make good common sense,” said Glenn Straub.

This month, the state Department of Community Affairs urged Atlantic City to raise taxes. The plan, though, calls for no tax increases for five years. But, water rates — among the lowest in New Jersey — could increase to pay for the $105 million bond.

In a raucous meeting Monday night, residents sounded off.

“Not only did you let us down, you lied to us,” said one resident.

“Does everything in this plan have everything in this government body or this city want? Absolutely not,” said Atlantic County Freeholder Ernest Coursey.

Three firms worked on the recovery plan.

“We sought in this plan to deal with reality and deal with some of the unavoidable and unpleasant realities of what is there to be worked with,” Nadol said.

With that reality, the council voted five in favor of the recovery plan, three against and one council member abstained.

“The whole process has been a melee of questionable decisions,” Delgado said.

The mayor and plan supporters said they’ve crossed a major hurdle in making the city financially stable again.

How does Atlantic City Mayor Don Guardian hope the governor receives this plan?

“I hope the governor realizes that it is not necessary to burden the taxpayers of the state of New Jersey with a bailout plan for Atlantic City,” said Guardian.

“They will see that this is not something that we just slapped together. They will see that this is something that makes sense, is doable and is practical and that’s what we were supposed to do and I think that will influence the governor in a positive way,” said Atlantic City Councilman Khaleem Shabazz.

By a razor-thin margin the council approved the plan, a close vote in a city yearning for financial stability and yearning to stave off a state takeover.