(ABOVE: hMAG file photo)
The City of Hoboken publicly announced on Friday that it would be laying off 26 workers.
“Like many other municipalities, states, and organizations across the United States, COVID-19 has had a major impact on the City of Hoboken and its finances. The City has taken on additional new costs to protect the health and safety of residents, while also realizing substantial losses in revenue due to the crisis,” said Hoboken Mayor Ravi Bhalla. “The negative budgetary issues from COVID-19 and an additional anticipated loss of revenue in the weeks and months to come, compounds an already difficult budget for this year that I’ve communicated about previously.”
Communicated via the City’s daily COVID-19 updates, the layoffs came just days after the Hoboken City Council passed a resolution calling for transparency in the budget process.
Mayor @RaviBhalla COVID-19 update: 23 new cases (369 total), rapid testing begins at Riverside, no rent increases permitted in rent controlled apts during State of Emergency, difficult budgetary decisions, schools closed through 5/15, all current regulations in effect next week pic.twitter.com/c516mtYFUV
— City of Hoboken (@CityofHoboken) April 17, 2020
“Less than 48 hours after the administration refused to provide additional insight on the budget to the City Council and failed to share preliminary numbers as promised, we’re learning, through a Nixle alert, that a portion of our workforce is being terminated next month,” said First Ward Councilman Michael DeFusco. “Now isn’t the time to be putting people out of work, we need to properly analyze our city’s spending and make cuts that will not impact essential, day to day, city service and emergency response.”
Hoboken’s fiscal problems were no secret coming into the current COVID-19 crisis.
In a December 17, 2019 memo obtained by hMAG to Mayor Ravi Bhalla from the City’s Business Administrator Stephen Marks, the outlook for Hoboken’s financial position is outlined—highlighting a combination of healthcare costs ($1,513,450), elevated pension costs ($578,345), and anticipated annual salary increases in the face of collective bargaining negotiations with the City’s six municipal labor unions ($3,200,000).
Those increases are being met by anticipated revenue shortfalls on court fines, investments, debt service increase (bond repayments), departmental budget increases, higher waste disposal fees, and an increase in New Jersey’s Joint Insurance Fund premiums.
According to Marks, “The grand total for anticipated increases for personnel costs and other expenses is $7,420,795,” adding “which does not include the impact of the projected decrease in the municipal surplus regeneration.”
Meanwhile, the City has been drawing from the surplus to cover expenses. Typically those funds are restored via revenue streams such as the Hoboken Parking Utility (HPU), municipal court fees, permit fees. In Hoboken, those revenue streams have slowed significantly. State initiatives on court reform have also made an impact. During a City Council meeting on February 5, Second Ward Councilwoman Tiffanie Fisher made it known that, “it’s not a $7 million deficit, it’s potentially closer to $14 million. It’s a giant number.”
Marks has since vacated his position as Hoboken’s Business Administrator, taking a similar job in Kearny, where he resides.
“Frankly, it’s unacceptable for the Mayor to mislead the public about our municipal finances and use a global health crisis as an excuse for a budget deficit we learned of two months prior to the local outbreak,” said DeFusco. “I have already been in touch with the Council President asking for a special meeting for us to be publicly presented with the financial information we requested through a resolution on Wednesday night.”
DeFusco and Fifth Ward Councilman Phil Cohen shared a rather terse exchange at the conclusion of the April 15 Council Meeting, in which Cohen accused DeFusco of being a “showboat.”
“It’s unfortunate that during the COVID-19 national pandemic, Councilman DeFusco continues to play politics. Councilman DeFusco has had the chance to provide input and gather budget information during the daily COVID-19 calls the Mayor’s staff has held with the City Council, but the Councilman has failed to do so, or even attend the vast majority our virtual meetings,” said Cohen. “It’s sad that Councilman DeFusco, again, is pushing his political ambitions to the fore, while the City addresses an existential public health crisis.”
A spokesperson for DeFusco tells hMAG the budget matters cannot be discussed at COVID-19 briefings because conversations about Council agenda items are prohibited outside of a publicly posted meeting.
Councilperson-at-Large Emily Jabbour says, “The current COVID crisis is an unprecedented event in our history where we are facing critical health and economic challenges. Given this reality, the Administration and City Council are doing everything we can to prepare a responsible budget while managing a crisis with conditions that change daily.” She adds, “Initially we thought 79 jobs would be lost and the Administration has worked tirelessly to limit that reduction to 26. Councilman DeFusco is playing politics, again, for the sake of his planned mayoral campaign. This latest attack, with respect to the budget, is more of the same—and it’s not productive to play politics when this Administration is on the front lines, making critical decisions for the city. I know that the Administration is doing the best it can to navigate this crisis and does not take these decisions lightly.”
The city has also taken on previously unanticipated costs for its emergency response to the global health crisis, and municipal service revenues are expected to sharply decrease as a result of social distancing measures put in place. All of this, understandably, will add to the budget deficit.
“Transparency is important in this process,” Hoboken Second Ward Councilwoman Tiffanie Fisher told hMAG, immediately following the Council’s resolution vote. “It would be a shame if we missed an opportunity to avoid these layoffs. Right now we just don’t know.”
Neighboring Jersey City, facing an anticipated $70 million shortfall due to COVID-19, has offered voluntary buyouts to 400 municipal employees.
“We’re hemorrhaging money,” said Jersey City Mayor Steven M. Fulop recently told NJSpotlight. “Every year we have a lot of employees, like every municipal government, that are kind of on the fence about whether they should retire or not, and we think that this structure might help them make that decision and ultimately save us money long-term.”
The Hoboken Administration maintains that it has been working to address previous budgetary challenges, but the pandemic and the already-shaky fiscal standing makes the situation impossible without layoffs in City Hall.
“As a result, we had to make the unavoidable decision to submit a plan to lay off 26 positions, which makes up approximately 4% of the total workforce,” said Bhalla. “I hold a responsibility to the taxpayers of Hoboken to do everything possible to mitigate a large tax increase due to these factors and must act on that obligation.”
Hoboken Municipal Employees Association President Diane Nieves told Hudson County View, “We are disappointed that the city, instead of requesting an extension of the layoff plan, chose to issue layoff notices to city employees during this uncertain time. The City listed employees because they were deemed non-essential, yet during this crisis these employees are still working so that the city could function.”
Nieves went on to indicate that she was among those who lost their jobs with the City.
“This layoff list also clearly targets me, the union representative, in retaliation for opposing the layoffs and for not blindly accepting the awful medical plan that the City was demanding,” she said. “Many of the employees targeted for layoffs are senior employees and they are clearly being targeted because of their age and time on the job. The city is harming loyal employees because of its mismanagement.”
In his statement on Friday, Mayor Bhalla says, “I recognize the impact this decision will have on some of our employees and their families, and we will do everything possible to assist them with their next steps. During these challenging times, unfortunately, difficult decisions have to be made to protect the long term fiscal health of our City.”