Paterson Top Stories

In a Fiscal Crisis, City Council Calls For Quicker Action On Municipal Budget

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PATERSON, NJ – Facing a $10 million structural deficit, the City Council approved a temporary budget Tuesday night that will provide about $23 million to cover municipal expenses during the month of August.

The vote was unanimous, but several members made it clear they were not happy with what they called the lack of progress the administration has made so far on the fiscal 2013 budget.

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“This is not what we’re looking for,’’ Councilman Julio Tavarez said of the interim one-month spending plan. “What we’re looking for is the budget.’’

In the past two years, the city was not able to complete its budgets until more than eight months of the fiscal year had elapsed. As a result, any spending cuts that were made had limited impact on the annual tax levy because most of the money already had been spent. Paterson had a 29 percent tax increase in fiscal 2011 and a three-percent hike in fiscal 2012.

The city’s acting business administrator, Harry Cevallos, told the council Tuesday night that he planned to hold departmental budget hearings in September. Councilman Andre Sayegh, a member of the finance committee, said he wanted a preliminary budget done by September as well.

The City Council sent Mayor Jeffrey Jones’ administration a message on July 1, the first day of the new 2013 fiscal year, when it refused to approve a $58 million, three-month temporary budget. Instead, the council approved a reduced $15 million temporary budget for July, as an incentive for the administration to expedite the process.

On Tuesday, council members were upset that they were being asked to approve a $38 million temporary budget - $15 million for July and $23 million for August. They wanted an explanation why the bills for August would be $8 million higher than what was in place for July. At first, no one could provide that answer.

“We know we’re in a fiscal crisis,’’ said Councilman Willliam McKoy. “Is this not important enough to have somebody here who has a handle on why it’s $38 million?’’

Eventually, officials produced a memo that said the $8 million difference stemmed from three factors – a quarterly payment to the Passaic County Sewerage Authority, payments on municipal debt, and the fact that the calendar for August had three paydays instead of the normal two.

“We keep spending dollars without knowing an overall number for what we spend,’’ said Councilman Rigo Rodriguez.

One of the key components of Paterson’s budget has been the transition aid the city gets from the New Jersey Department of Community Affairs. In 2011, Paterson received $28 million and in 2011, $21 million. The state has made it clear that Paterson should expect another reduction in 2013, as part of the state’s goal of weaning municipalities off transitional aid.

Under an agreement with the state, Paterson was supposed to provide the state with a transition plan on how it would curtail use of transition aid by June 30. The state gave all municipalities a one-month extension on the deadline for their transition plans. But Paterson’s report is not yet ready.

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