VIDEO > State Rejects Atlantic City Rescue Plan. Take-Over Soon?

Atlantic city
Small & Guardian

The State of NJ rejected Atlantic City’s 5 year, financial rescue plan. The Mayor’s office was notified just before 5p, on Tues, Nov. 1.

In the plan, the State sees no financial stability for Atlantic City, triggering what could be an imminent state takeover. The state will now determine next steps. How much of a take over? Mayor Guardian & City Council President Small said the city would appeal the decision. A takeover could, in effect, neuter the Mayor and City Council.

With the state rejection, NJ can seize city assets, take over municipal functions, hire and fire, and ignore union contracts.

What NJ State did NOT like about AC Rescue plan:

    • No balanced budget for 2017
    • Ambitious, but deficient & speculative
    • Underestimates debt service
    • Overstates property tax revenues
    • Proposed sale of Bader Field to MUA is pure speculation
    • City did not dissolve MUA (water company)
    • No plan to monetize and develop hidden jewel: Gardners Basin
    • MUA wants to borrow, in order to buy Bader Field. This makes city vulnerable to debt
    • City still has no agreement with Borgata. Casino assessed at $850 million, but worth $1.6 billion, still withholding quarterly tax payments. AC owes Borgata $150 mil from recent tax appeal


Press of Atlantic City: It may be a mistake to sell a valuable city property to an authority that doesn’t answer to voters and has no experience in redevelopment. The potential for the MUA to mishandle one of the city’s most valuable assets would be great.

Link to full decision from state.

Gary Hill, a board member of the MUA and the CRDA, believes the state is trying to micromanage Atlantic City issues and the local economy. Hill is also Director of the MBCA, co-founder of Schultz-Hill Foundation, and is employed by John Schultz Associates.

Read the Inquirer’s editorial here.

Read Amy Rosenberg coverage here.

 

 

5 Comments

  1. Although Mayor Guardian and Council President Small are portraying their actions as for the benefit of the Atlantic City taxpayer, the real truth is that neither wishes to become irrelevant which is what they will become once the State takes over.

    If they really cared about ALL Atlantic City taxpayers they would have made the more difficult cuts instead of grasping for the low hanging fruit..

  2. It IS a mistake to sell a valuable city property to an authority that doesn’t answer to voters and has no experience in redevelopment. Politics, pure and simple.

    1. Amen! Amen! This scheme was all about providing for the status quo by protecting the jobs and salaries of those who work for the authority, not keeping water rates low for residents. This from the same Mayor who told us during his first unofficial state of the city during the Metropolitan Business & Citizens Association luncheon that taxes would not be raised. They must think we’re stupid!

      Lease or sell the MUA to a major water company or Atlantic County and use the proceeds to pay down the city’s ballooning debt. Yes, water rate would likely go up, but I would argue not as much as the cost of bonding $110 million to buy Bader Field. In addition, by using the funds to retire debt, there would be an immediate benefit to the taxpayers since debt service takes up a large percentage of the city budget.

  3. In a perfect world this plan might have a chance, but there are way too many moving parts, any of which can unwind as the economy continues to weaken.

    One glaring issue is the assumption that property values have hit a bottom which is absurd. Look through the many listings within Bella or Ocean Club Condominiums or in the Cove and one will see that the trend is still downward in price. As property values continue to fall and the owners appeal their assessments, tax revenues will also drop leading to a shortfall in funds. If the Mayor wants to talk about “Inaccuracies,” he need look no further.

    Another potential threat, which was briefly touched upon by one of the plan’s designers, is a national recession. Such an event would lead to further holes in revenues, whether through less SAFER money, CMPTRA aid or simply lower tax revenues.

    The plan might work in a vacuum to provide for the status quo. However, with no margin for error, unforeseen variables would quickly cause it to implode.

  4. My favorite part of this plan as is the case with much of what this administration does is to rely on handouts from various other agencies or levels of government.

    Hey Mayor….How about giving me $100+ million dollars so I can live beyond my means, but I don’t want you to say a peep about what I’m going to do with it. If that’s not enough, next year and for the foreseeable future I’ll come back to you for another $100+ million. Why change?

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