Atlantic City mayor: City can save millions to avert state takeover
ATLANTIC CITY - In bracingly wonky detail, Mayor Don Guardian took a room full of his city's residents step by step Tuesday night through the city's work-in-progress plan to right its financial ship and stave off a threatened state takeover.
ATLANTIC CITY - In bracingly wonky detail, Mayor Don Guardian took a room full of his city's residents step by step Tuesday night through the city's work-in-progress plan to right its financial ship and stave off a threatened state takeover.
In a related matter, Guardian said the Casino Reinvestment Development Authority had agreed to auction many of the 450 lots it owns and on which it does not pay taxes.
Millions of dollars have been kept off the tax rolls for years by the state CRDA, contributing to Atlantic City's cash crisis. Guardian said the lots would not include those in the South Inlet.
Guardian said the city was in the final stages of securing a $70 million bridge loan from the state, which would be paid back with casino revenue redirected to the city via the state by recent legislation.
Guardian and City Council have until Nov. 3 to show the state they can achieve a balanced budget and make the case that the state does not need to come in and take control of the government.
Its $239 million budget in 2016 is complicated by $240 million in debt - mostly from tax appeals won by casinos - and a separate debt to Borgata totaling about $150 million.
Tuesday night's meeting was the first of several planned to brief residents on the progress. Some expressed skepticism that the state would accept any plan after 150 days and thought it would just move to take over.
Guardian noted that the last few years have seen no shortage of ideas to save money and raise money. "It always kills me when someone says we have no plan," he said.
Among the highlights:
The city has hired bond counsel to renegotiate its debt payments, with a goal of an annual reduction of $10 million, from $38 million to $28 million.
The state is now fully participating in court-supervised negotiations with Borgata to achieve a payment plan. Guardian again suggested that a monetizing of the city's Municipal Utility Authority - its water works - would achieve $4 million annually that could be used to pay down the Borgata debt.
Guardian said the city is working with the MUA to achieve those cost savings without either selling or leasing the authority, bringing it in-house as a city utility, or turning it over to Atlantic County. That could be done by increasing commercial and non-Atlantic City water rates and other efficiencies, he said.
Parking, mercantile, licensing, and other municipal fees have been increased, resulting in $800,000 more this year, and an anticipated $1.5 million more from new parking meters next year, Guardian said.
He said that police and fire departments are implementing cost-saving measures, but that both are critically short in supervisors. Police have agreed to forgo promotional raises until a new contract with lower salaries is approved.
The city is doing cost analysis of outsourcing various services, including trash, recycling, payroll, tow lot, and parking enforcement. He said the city would ask the county to take over senior transport, Meals on Wheels, and other health-related services.
He said the city is saving about $1 million from reduced energy costs from LED replacement lights.
He noted the $1.7 million the city raised by auctioning off city lots, which, he said, he had offered free when he became mayor and had no takers. He said Bart Blatstein had purchased the Garden Pier and another lot for $5 million. An auction next month will feature two big ticket items: Bader Field, the defunct municipal airport, and another 10-acre lot on Route 30.
Bruce Abrams, who works at the city's Art Museum on the Pier, expressed concern that the city was giving away too much. "Your hand is being forced to sell things now," he said. "Some things are priceless. I'm really taken aback by what's been done."
Other ideas include licensing more beach vendors and issuing offseason beach permits for four-wheel-drive vehicles. Guardian drew the line at one idea: beach tags. "The only people we're going to remove from the beach are poor people," he said.
The next meeting will be July 26.
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