Roberts said that the reason for the appropriations hike was that it had to include $4.8 million in charges that were deferred last year after medical and other insurance rose well beyond what the city had budgeted. Those costs had to be covered again this year. Roberts said that the appropriations side will drop back down next year. The spending plan covers city services, supplies, and salaries from July 1, 2004 to June 30, 2005. The $72 million figure does not include the approximate $10 million operating budget for the Hoboken Parking Utility, which is kept separately.
While Roberts promised that there would not be layoffs or a tax increase, his opposition fired back by saying that an increase of $12 million in spending is proof that the administration is not controlling its spending.
Roberts defends budget
The good news, said Roberts, is that for the 11th straight year, the municipal portion of the property tax bill should stay stable.
"We're still doing some fine-tuning, but our goal is to bring in a stable tax rate," said Roberts in City Hall Wednesday.
Roberts said one reason taxes didn't go up is that there is more development in Hoboken now to contribute to the tax base. "The value of all real estate in Hoboken has increased during the past decade from $1.7 billion in 1994 to its current value of $2.4 billion," said Roberts. "Hoboken has seen an economic expansion like no other city in New Jersey."
Another money source that prevented taxes from rising were some "one-shot" non-recurring revenues this year. Roberts said Wednesday that the city is currently in negotiations with the Port Authority for a one-time $3 million cash infusion in return for some garage property, and with NJ Transit for a one-time payment of $2.5 million. The exact terms of these deals have not yet been released.
However, in the past, Roberts has been critical of mayors for their reliance and dependence on one-shot revenues.
"For the past three administrations, at one point or another, it has been necessary to use one-time revenues to balance the budget," said Roberts. "It's not an ideal situation, but this year, we have a large number of one-time costs, and to balance those out we will be using [these non-recurring] revenues."
The overspending issue
Another thing that this budget begins to flesh out is how much the city overspent its budget last year. From the moment that last year's $59.9 million budget was introduced, the critics of the mayor said that budget wasn't even close to being an accurate representation of how much the city was spending. It turned out they were right. For the past decade, underbudgeting has been common in Hoboken, forcing the money to be made up later.
Some complain that it's a tool that can be used to maintain a stable tax rate while increasing spending.
In September of 2002, the city suspended then-CFO George DeStefano, who is the brother-in-law of former Mayor Anthony Russo, for allegedly failing "to adequately monitor the city budget" which allegedly led to over-expenditures of $5.4 million in 1999, $1.1 million in 2000, and $2.1 million in 2001, for a total of over $8 million in the three-year period, according to a state report.
DeStefano said that the Roberts administration was looking for a scapegoat and that he was an easy target. He has hired a lawyer and is currently going through the legal process.
Now, the same thing has happened two years in a row with the Roberts administration. Last year, the administration didn't budget for an increase in group health insurance, even though they overspent it in 2002 and there have 20 percent increases in costs over the past several years throughout the state.
Critics of the mayor contended that the overspending was much more than what the administration was admitting. The administration asked for $2 million in emergency appropriations last year, but it was voted down because several council members didn't think that was close to covering all of administration's overspending. Last week, Roberts said that those who voted down the emergency appropriations are to blame for the budget being so high this year. He said that if they had allowed the deferred charges to be added to last year's budget, they wouldn't have to be in this year's.
The opposition speaks
During the election season of 2001, then-councilman and mayoral candidate Roberts blasted Russo for his $55 million budget. At the time, he said that it was an "obscene" amount of money to run the city.
Roberts added that "irresponsible" spending caused and an unnecessary dependence on development and new ratables to stabilize and balance the budget. "With all that new revenue and the overdevelopment that has occurred, there should have been a substantial tax decrease," said Roberts in 2001.
Now, the tables have turned.
With the mayoral election next year, the exact same argument is shaping up as the cornerstone of the opposition's campaign.
Roberts said that the $72 million budget is not as much of an increase as it might appear on the surface. He contended that in Russo's last year, Russo overspent his budget by around $2.1 million, which means, in his estimation, that the budget should have been closer to $57.1 million instead of $55 million. The amount the Russo administration overspent is still a contested number. Members of that administration say that Roberts is overestimating it.
Roberts also said that between 2001 and today there have been several areas with unforeseeable increases in costs. The biggest is group health, which costs the city around $6 million more per year, according to figures provided by the mayor's spokesperson, Bill Campbell.
Another area is garbage collection. Last year, the city's garbage collector went out of business, which cost the city around $800,000 in extra costs.
Next year's outlook Roberts said that since the deferred expenses are a one-time deal, the budget will level back off to $66 or $68 million next year.
He added that he does not anticipate any substantial overspending in this proposed budget. One reason for his optimism is that the city's new business administrator, Richard England, has a reputation as being conservative fiscally. In the past, liberally low estimations have gotten the city in trouble, but Roberts said that England is not a risk-taker and should write a conservative budget.
"Next year, we think that we can produce a budget that is supported by added ratables and economizing, and not one-time ratables," said Roberts.
At Wednesday night's council meeting, the four council members who often criticize Roberts abstained from the voting. The budget was introduced 5-4. It will go to a public hearing Oct. 13 and a final vote.
Councilman Tony Soares said last week that he abstained because the council had just gotten the budget that night and didn't have a chance to delve into it.
"This budget is relying on one-shot revenues, and we only got it at the meeting," he complained. "We had a lot of questions."
At the meeting, 3rd Ward Councilman Michael Russo said he didn't trust the numbers in the budget introduction, and would like more time to check the figures before introducing it to the council.
At the meeting, an attempt at curtailing spending came in the form of an immediate hiring freeze on all city employment - an executive order from Mayor Roberts, dated Sept. 10. The council said that the freeze will be lifted when they are "comfortable" with the numbers in the 2005 budget.
Roberts said Thursday that part of the reason for the high numbers in the budget is that salaries for the police and fire departments are up. He said that contract negotiations are coming up for police, fire, and city employees. Tom Jennemann can be reached at email@example.com.