HOBOKEN – Mayor Dawn Zimmer met with her directors on Thursday to advise them that layoffs would be necessary in order to close a budget gap after the City Council did not pass two bond proposals on Wednesday night.
Zimmer has five allies on the council, but needs six votes for a bond ordinance to pass. Her council foes voted against an ordinance to refinance a parking bond in the midtown garage related to the hospital sale, and also against a $2.8 million capital improvement bond, meaning the ordinances failed by a 5-4 vote.
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Zimmer sent out a release on Thursday after meeting with her staff and directors.
“I deeply regret that this action must be taken, but unfortunately the City Council minority's blocking of these essential bond ordinances leaves me no choice,” she said in a release. “Layoffs should not be necessary at all, but the City Council minority has intentionally created an easily avoidable budget gap that must now be addressed in a fiscally responsible manner.”
The city has a $365 million bonding capacity, and the city has bonded for $112 million thus far.
The city must now close a $7.3 million budget gap to pay off the garage construction bond and to make essential capital improvements, which will likely be paid for through staff reductions. If the council had passed the refinancing bond on Wednesday, the city could have saved $50,000, Zimmer said, due to better refinancing rates. Now, the city must pay $4.5 million to extinguish the non-taxable garage bonds and make them taxable, since the government is no longer operating the hospital.
The council members that voted against the capital improvements bond said they thought Zimmer shouldn’t bond for capital improvements. They also said they voted against the parking refinancing because they disagreed with a related parking agreement that would provide certain access to the garage for the new owners of the hospital for 99 years, regardless whether the property remains a hospital.
Zimmer said the city negotiated the best they could, and this was the deal that was agreed upon between the city and the buyers.
For much more, pick up a copy of The Hoboken Reporter this weekend. - Ray Smith