HOBOKEN, NJ - Several members of the Hoboken City Council have responded to an announcement by Mayor Ravi Bhalla that 26 city workers will be laid off.
“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." Bhalla said in a statement announcing the decision pointing to costs associated with protecting the health and safety or residents, as well as a loss in revenue. “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.
“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.”
While the Friday announcement focused on the impact of COVID-19 on the city's finances the possibility of layoffs were first announced as far back as February when 79 City of Hoboken employees had were given notice that, “for reasons of economy, efficiency or other related reason, it is possible that you will be laid off or demoted from your permanent or probationary positions.”
Previous to that, 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 was 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, and permit fees. In Hoboken, those revenue streams have slowed significantly in the wake of stay at home orders. 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 that he didn’t want to discuss budget matters at closed-door COVID-19 briefings.
Saying that “the current COVID crisis is an unprecedented event in our history where we are facing critical health and economic challenges," Councilperson-at-Large Emily Jabbour added that "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.”
“Initially we thought 79 jobs would be lost and the Administration has worked tirelessly to limit that reduction to 26," Jabour said, suggested that "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.”
“We are working every day to get Jersey City healthy and to get past COVID-19, but we are also taking steps to plan long term to avoid hurting homeowners and renters with increased taxes,” Fulop said. “The more proactive and aggressive we can be now, the better off we will be in the 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.”
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