UNION CITY - Mayor Rudy Garcia lost important mayoral powers and powerful mayoral allies last week when a majority on the city's Board of Commissioners voted to strip him of certain administrative duties in the wake of a probable tax hike. Problems have been mounting in Union City due to holes in the proposed $30 million municipal budget, which is now ten months late. The state recently decided that the city must increase taxes to fill the holes, since two of Garcia's proposed one-time revenue sources could not be used. At a commissioners' meeting Tuesday morning, three members of the five-member board (of which the mayor is a member) voted to oust Garcia from head of the Department of Public Safety. Garcia can no longer approve contracts and documents and sign paychecks - powers that fall under that department and are vital to the post of mayor. A defiant Garcia said Wednesday, "I'm still mayor, because the people of Union City voted for me. I have never lost the confidence of the people of Union City. I'm here and I'm fighting. I'm mayor by action." Garcia was reassigned to Parks and Public Property after three members gave their approval to rearrange department heads and duties Tuesday at a special morning meeting. Commissioner Michael Leggiero, a onetime supporter of the mayor, will now head the Department of Public Safety. Commissioner Rafael Fraguela, who has been calling for a state-takeover of the city's budget since the introduction of a failed stadium sale, will now replace Leggiero as Director of Revenue and Finance. Commissioner Ray Lopez did not attend the meeting. "I was seeing the problem a year ago," Fraguela said last week. "I was saying we were going to be in a lot of trouble and now we are. Now the people of Union City are going to be paying the price. No one listened to me. When the people of Union City receive the bills it will be a disaster ... it's going to be a high tax bill." Last year, Garcia proposed a municipal budget with two controversial one-shot revenue sources. Leggiero and Fraguela attempted to thwart Garcia's plans to raise budget funds through the sale of the city's interest in the Department of Public Works garage. Garcia also wanted to sell Roosevelt Stadium, but this item was removed from the budget when challenged in court by a local restaurant owner. Commissioner Tina Yandolino, who did not return calls, had until recently sided with the mayor. But last week, she voted in favor of ousting Garcia. "We have full cooperation of Yandolino and Fraguela," said Leggiero. "With this alignment maybe we can now work to get the people's will done." The newly-reassigned board also terminated Tuesday the state-funded $50,000 contract for Garcia ally Pat Politano, who had been serving as Urban Enterprise Zone coordinator. Garcia complained last week that the reason for the termination of Politano's contract was political. The board also re-hired Donald Scarinci of Scarinci & Hollenbeck as special counsel. Garcia had fired Scarinci when Garcia came into power. Lost school board, lost Stack On the eve of the commissioners' reorganization, Garcia was still recovering from a recent takeover of the Union City Board of Education led by Vice President Lenny Calvo. Garcia serves as a member on the Board of Ed. Calvo said last week that he and Freeholder Brian Stack have formed an alliance in an effort to get the city on the right track. Calvo, who opposed the mayor's first attempt to sell Roosevelt Stadium to the Board of Ed., said the public "cannot afford to pay any more taxes." Stack, who said he lost to Garcia by "a slim margin," in his bid for mayor in 1998, plans to run against Garcia in the next mayoral election. He said that while he and Garcia amended their political differences for a while, their recent split should not have surprised Garcia. "I've been telling him for 16 months about the problems," Stack said. "I've tried to work with Rudy, but he listens to no one. I'm not going to let my reputation be destroyed by someone like Rudy. I've had a lot of people I don't even know come up to me in the street and congratulate me on the split from him. I always knew we were from two different worlds." Stack contends that he is "no one's puppet" and that he only recently decided to break ties with Garcia because he "did not have access to records" and only understood the seriousness of the budget problems after asking questions. He added, "The mayor's title is just that. He only has the amount of power the other commissioners allow him to have. They have traditionally given him more clout." I will fight Garcia said he would continue to fight as mayor and promote projects for new schools, housing and a bus terminal that will bring in yearly funds. Concerning Stack, Garcia said, "He's been with me, he's been against me. Apparently he's now against me, but that will probably change. I think the people of Union City get tired of people playing musical chairs." Stack and other critics of Garcia point to the city's handling of its revenues and inability to adopt a fiscal year budget. Union City is the last municipality in the State of New Jersey left to adopt a budget, prompting a local state finance board to recently force a tax levy and set the tax rate at $430 increase for homes valued at $100,000. Homeowners will pay a total of $640 yearly in increases on property taxes since the city had already established a $210 increase on homes valued at $100,000. Garcia said last week that two of his previous budgets were balanced and that this year's was no exception. He said he rejected previous attempts by Fraguela to have the state come in because he knew taxes would be raised. "They got what they wanted," Garcia said. Garcia blames the previous administration that left him "with a $9 million structural deficit." He said Fraguela and Leggiero are to blame for this year's budget problems because they blocked the necessary sale of Roosevelt Stadium and have spent time trying to block the sale of the DPW garage. Stack labeled such blame an "embarrassment" and said, "Rudy introduced the budget knowing he had increased spending and that the anticipated revenues he relied on for the stadium could be disallowed [by the state]. This tax increase is going to be devastating to the people of Union City." Leggiero will serve as chairman of a special budgetary task force aiming to prevent next year's budget from encountering financial problems similar to those of this year. "This has nothing to do with me or any of the other commissioners," he said. "It has to do with doing your homework. There was a lot more that could have been done that was not done." In a letter to Garcia last week, Al Steinberg, director of the state's Division of Local Government Services, warned that each member of the board of commissioners would be fined $25 a day for each day the budget is not adopted after June 10.