lavin convo

Kevin Lavin , right, and Don Guardian, Atlantic City Mayor left talk about cuts for Atlantic City Friday, March 27, 2015.

Edward Lea

Kevin Lavin wants to talk about the future, not the past.

“Atlantic City is in a financial crisis,” he said during a Tuesday conference call with consultant Kevyn Orr. “It’s actually a lot more severe than we thought when we started 60 days ago.”

Even so, on Friday, Lavin, whose role as Atlantic City’s emergency manager will continue for at least three more months, said he wasn’t focused on assigning blame.

“We are where we are,” he said. “Let’s figure out a way to move forward.”

The details of that path became a bit clearer this week with the release of Lavin’s report, though many major unresolved issues continue to cause concern among the political and financial worlds alike.

Lavin and Mayor Don Guardian say their first goal is getting the city through 2015 without succumbing to a $101 million budget deficit and without running out of cash, something Lavin says the city is on track to do by May unless action is taken quickly.

Lavin’s background includes managing corporate restructurings. Orr served as Detroit’s emergency manager during what became the largest municipal bankruptcy in the nation’s history. Their backgrounds led many to believe that a bankruptcy judge would soon have authority over the municipality’s loan payments and union contracts.

But that isn’t the message Lavin is delivering.

“There’s no plan to put the city into bankruptcy,” he said Friday, echoing what he said Tuesday and what Orr said Jan. 22, the day the pair were appointed.

The city’s cash-flow issue was also treated as a surmountable problem, assuming proper financial management.

“Liquidity will be tight a few times during the year,” Lavin said, “but we believe we can get through those shortfalls.”

Lavin’s plan breaks down the city’s actions into two categories: cutting expenses and driving up revenues. That means layoffs, consolidations and deferring obligations, such as pension and health care payments.

It also counts on the state Legislature’s passage of five casino payment-in-lieu-of-taxes, or PILOT, bills that would redirect $47.5 million this year from the Atlantic City Alliance and Casino Reinvestment Development Authority to debt service.

Total city debt stands at $494 million, according to Lavin’s accounting. A draft 2015 budget showed that debt service will cost the resort $36.9 million this year.

Lavin hasn’t publicly endorsed the PILOT in its current form, but his report factors in its funding and he supports its general goals.

“A lot of hard work went into crafting the PILOT, and I see it as an important tool helping to revitalize and stabilize Atlantic City,” Lavin said Friday.

The legislation has the backing of Senate President Stephen M. Sweeney, Sen. Jim Whelan, D-Atlantic, and Assemblymen Vince Mazzeo, D-Atlantic, and Chris Brown, R-Atlantic.

Christie has yet to endorse the legislation, though a Friday statement from spokesman Kevin Roberts urged the Legislature to send the governor a bill “combining the efforts of the Emergency Manager with those of Mayor Guardian and the legislation proposed by the Senate President.”

Sweeney quickly described the call as “an empty and disingenuous gesture.” He and his fellow Democrats have said they wouldn’t bring the PILOT up for a vote until Christie backed it. There’s no point, they said, in introducing legislation that will be vetoed.

That calculus isn’t without reason, said Professor John Weingart, associate director of the Eagleton Institute of Politics at Rutgers University.

While Democrats have introduced numerous bills Christie has blocked, overcoming a veto requires Republican votes, which Weingart said rarely happens — even when legislation passes initially with bipartisan support.

As an example, he noted that just weeks ago, 13 Republican senators who voted in favor of a bill to change the rules governing the Port Authority of New York and New Jersey flipped during a failed attempt to overcome Christie’s veto of the legislation.

“If Democrats are serious about the need for (the PILOT), they’re correct in assessing that the only way it’s going to pass is if the governor supports it,” Weingart said.

However, he also noted that Democrats can benefit politically by attacking Republicans for failing to support the bill.

“It does paint the Republicans in a difficult light, or a light that raises some questions,” he said.

Some Democrats are embracing Roberts’ statement Friday as reason to push ahead with a vote.

“I would anticipate that we would put it up for a vote, yes,” Whelan said.

But the stalemate still has some analysts raising red flags. On Wednesday, the credit rating agency Moody’s Investors Service said it was taking another look at its rating for Atlantic City, in part because the city is so short on cash that it needs the PILOT to become law within 90 days.

“The emergency manager’s proposals are perhaps a little aggressive, especially given this timeline,” Josellyn Yousef, Moody’s lead analyst for Atlantic City, said Friday. “We’re looking for the adoption of the bill in a timely manner, (but) that’s a very short time frame to get the legislation passed.”

On Friday, Guardian sidestepped politics while offering support for the PILOT.

“I can’t think of two people who have been more supportive than the governor and the president of the Senate,” he said. “We need the governor and the Senate president, as well as the other players, to agree (so the) bills can go forward.”

“I’m hoping the Governor’s Office now has some more confidence and they see the bills are just as important” as other forms of state aid, Guardian said before explaining that Christie put Lavin on the ground to confirm what Atlantic City truly needs.

“This is what the city is saying — is it for real?” the mayor said of the question Christie wanted Lavin to answer. “He’s trusting us, but now he’s trying to verify.”

Contact John V. Santore:

609-272-7251

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Press copy editor since 2006, copy desk chief since 2014. Masters in journalism from Temple University, 2006. My weekly comics blog, Wednesday Morning Quarterback, appears Wednesday mornings at PressofAC.com.

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