PATERSON, NJ – State officials on Wednesday warned that Paterson would have to begin issuing layoff notices and alerting vendors that their services may be terminated if the City Council does not approve a temporary budget for February.

A high-ranking official in the New Jersey Department of Community Affairs (DCA) issued the letter less than 24 hours after the ongoing budget battles between the city council and Mayor Jeffery Jones’ administration reached news levels of ferocity. Council members are asserting that the administration illegally issued payroll checks last week, while the mayor has said the council is acting like a “lynch mob.”

“The direct consequence of the City Council’s failure to act will likely be that the City Administration will have to begin shutting down government services,’’ said Thomas Neff, the director of the New Jersey Division of Local Government Services in a letter sent to council members and the mayor on Wednesday.

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Jones said he saw Neff’s letter as vindication of the way the administration has handled the situation. He asserted that the letter found the council at fault. “They’re not being judicial and fair, they’re being obstructionists,’’ the mayor said of the council. [Editor's Note: This story was updated to include input from Jones.]

Neff's letter outlined what one city official called "doomsday" scenarios for Paterson. “Further, the City Administration will have to notify public employees, pursuant to legally required notification requirements, of their final days of employment and notify vendors their services are no longer statutorily funded,’’ Neff continued.

“The disruption and pain associated with City Council shutting down its own government services is unwise – especially since the Division’s announcement of an aid award is just one week away and a permanent budget can be adopted immediately thereafter,’’ Neff added. “Consequently, it is advised that the City Council should adopt a temporary budget and avoid the chaos and disruption that deliberate inaction would otherwise create.’’

Neff said in his letter that the DCA would notify Paterson and other cities on February 27 how much money in Transition Aid they will get for 2013.

The Jones administration has said that it cannot complete its 2013 budget without knowing how much in aid it will received. But council members have argued that the city could craft a budget based on the state’s previous preliminary estimate of $20 million in aid for Paterson.

In an effort to signal its displeasure with the lack of a final budget, the council last week rejected the city’s temporary budget for February, thus withholding its authorization for the city to pay any bills this month.

But municipal administration officials conferred with the DCA late last week and decided to go ahead and issue last week’s paychecks for city employees. In his letter, Neff said federal and state laws requiring employees to be paid for time worked trumped the council refusal to enact a temporary budget.

Councilman Kenneth Morris, who has been among the council’s leaders in the demand for a final budget, said on Wednesday afternoon that the council never said the paychecks should not have been issued, only that the administration should have notified the council that it was taking the extraordinary step of writing the checks without authorization. Morris said the administration should “not have acted unilaterally.’’

Morris also said he was not swayed by Neff’s letter. “I’m not going to approve an irresponsible temporary budget,’’ said the chairman of the council’s finance committee.

Morris also said the DCA bore some of the responsibility for Paterson’s budget bind because the state has waited until nearly two-thirds of the fiscal year has passed without notifying the city of its Transition Aid award.

When asked abot Morris' critcism, DCA spokeswoman Lisa Ryan rersponded: "Councilman Morris’ contention that the State not announcing a Transitional Aid award until February is responsible for the City Council shutting down their government lacks any credibility.  The City hasn’t adopted a budget before April or May even when aid awards were announced as early as October." 

City Council President Anthony Davis called the ongoing budget battle sad. "Enough is enough,'' said Davis. "I'm not with this side or that side. Unfortunately, we all take the blame - the state, the council and the administration.''

"At the end of the day, who suffers?'' Davis asked. "No one but the residents of the city.''


Councilman William McKoy said he wondered whether Jones would have taken a different view of the spending authorization question if he were still a city councilman. When told of McKoy’s comment, Jones responded, “When I was on the council, I never did anything that stupid.’’

Jones also said he hoped the budget battles would not impact the state’s decision on how much aid to give Paterson. “I believe we’ve done what we’re supposed to do,’’ the mayor said of his staff’s efforts to curtail spending. “We’ve operated in line with everything that anybody can imagine.’’

The preliminary budget currently includes an anticipated $20 million in Transition Aid. Paterson asked the DCA for $28.5 million, which would be enough to close the city’s current $8.5 million deficit.