No early exit for Atlantic City from state takeover

Despite expectations that the state takeover of Atlantic City, imposed nearly two years ago by then-Gov. Chris Christie, would end under Gov. Murphy, New Jersey officials said Thursday the takeover will likely last the full five years called for in legislation designed to rescue the city from financial chaos.

Citing "chronic challenges" faced by the city, attorney Jim Johnson, whom Murphy appointed to review the transition to local control, recommended the opposite. "Atlantic City has a number of challenges that will only be resolved with significant direction from and partnership with the state," he wrote in a 64-page report.

State oversight should last the full five years authorized by the 2016 Municipal Stabilization and Recovery Act unless the city's reliance on state aid has been "substantially reduced or eliminated" and its municipal workforce is on "strong footing," the report said.

Johnson, Murphy, and Lt. Gov. Sheila Oliver, who oversees the state's Department of Community Affairs, were in Atlantic City for a state Democratic convention and held a news conference at the Richmond Avenue School to release the report.

"We are thrilled to welcome this much-needed road map to a much brighter future for Atlantic City," Murphy said at the news conference, also attended by Mayor Frank Gilliam. He called the report a "plan to rebuild faith in Atlantic City's leadership." It joins a half-dozen other reports commissioned by Christie and others in recent years that were also heralded as blueprints to solve Atlantic City's problems.

In a statement, Gilliam said: "The citizens of Atlantic City deserve to have their local elected officials control their destiny." He said he had "waited patiently for this day," which he called "a huge step in the right direction."

The recommendations in the report were "still under review by the administration," according to a summary released by the state.

The takeover, which gives the state control over the city's workforce, payroll, and assets, was fiercely fought by Atlantic City officials, including then-Mayor Don Guardian, amid fears that the legislation would lead to state seizure of assets, such as the city's Municipal Utilities Authority water works.

Those fears have largely eased under the new administration, and finances have stabilized, but the city's police and fire unions continue to fight pay and staffing cuts unilaterally imposed by the Christie administration. The takeover law suspended civil service benefits for the city's public unions.

Murphy also ended the role of former U.S. Sen. Jeff Chiesa, a Christie ally, who billed $400 an hour and whose law firm has collected more than $4 million for its work in Atlantic City. That work has continued despite the reduced role. Johnson, by contrast, was hired by Murphy at a salary of $1 a year.

Among the recommendations in the report:

• The city has failed to "foster or reward" its municipal employees. That, combined with its history of corruption among public officials, has led to a compromised "municipal infrastructure." Johnson recommends increased training for senior managers, new technologies for data management and collection, and "movement back toward civil service benefits for city employees."

• Beefing up the city's planning functions, including a new master plan for the city (one exists that was created by the state), consolidating planning functions now undertaken by the city and the Casino Reinvestment Development Authority, which oversees the Tourism District. The report suggests physically moving the two planning overseers to the same space. The plan further recommends a review of permitting regulations and a focus on "catalytic strategic projects, such as a food market," a shift to "neighborhood-based investments," and support for families facing foreclosure.

• An increased emphasis on public health issues, including "significant disparities in care and outcomes" between African American and white residents.

• Concerning public safety, the report recommends reviewing staffing levels, providing "implicit bias and de-escalation" training, standardizing internal affairs investigations, and creating a Citizens Advisory Board.

Johnson also recommended a task force to review recent casino closings (five since 2014, though two have since reopened, and a third reopened as a non-casino hotel) and expanding the city's efforts to promote itself. Much of the money that went toward marketing the city was redirected by the state takeover legislation to bolster the city's coffers.

Concerning economic development, Johnson recommended shifting the focus to "millennials and young entrepreneurs," and developing strategies to "enhance commuter access" to Atlantic City. Under Murphy, NJ Transit recently suspended rail service to Atlantic City until January amid outcry from local officials.

Johnson further recommended new initiatives for the under-18 population, which is particularly affected by the city's 30 percent poverty rate. He recommended expanding high-quality summer and after-school programs and redirecting the CRDA, which has focused on real estate development and casino projects in recent years, to invest in Atlantic City's youth.

"Let's keep in mind there are 10,000 children who live in Atlantic City," Murphy said as he unveiled the report. "We see them, and we will not forget them."

As for the city overall, he said: "Atlantic City has been counted out time and time again. I don't want to see this historic city on the ropes ever again."

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