A.C. OKs fiscal plan, cuts 100 more jobs

{child_byline}CHRISTIAN HETRICK

Staff Writer

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{span class=””print_trim””}(tncms-asset)86558028-917f-11e6-93e5-00163ec2aa77(/tncms-asset){/span}ATLANTIC CITY — After the city approved a fiscal recovery plan to avoid a state takeover – including a $103 million settlement of the $150 million tax refunds the city owes the casino – Borgata denied any agreement Tuesday.

Joe Corbo, the vice president and general counsel for the casino, said in a statement there has been no agreement and the casino will wait until the city reaches a consensus with the state to continue negotiations.

“Borgata has not agreed to accept any offer to settle its tax refund judgments and pending tax appeals. Borgata has had an ongoing dialogue with City and State representatives this year in an attempt to reach a fair and equitable settlement. In those meetings we have repeatedly expressed our willingness to compromise the amount due to Borgata. Once the City submits its fiscal plan and reaches consensus with the State, we look forward to resuming our settlement negotiations and putting this matter behind us,” the statement said.

City officials Monday night approved the plan, 5-3-1. City officials went to the state Department of Community Affairs on Tuesday to submit the plan, and the state will have until Nov. 1 to accept the plan or take over the city’s finances for five years.

The city plans to cut 100 more full-time workers, sell Bader Field to its water authority and settle with Borgata Hotel Casino & Spa over tax refunds, among other cost-cutting and revenue-raising measures. If implemented, the city’s budget would drop to $207 million by 2021, according to a summary of the plan. The city’s budget was $262 million in 2015.

“It is a comprehensive document that we, professionally, all believe will work if it is adopted and embraced,” said Michael Nadol, a consultant from The PFM Group, which helped the city draft the plan.

The cornerstone of the plan is selling Bader Field, a 143-acre former airstrip, to the Municipal Utilities Authority for $110 million. Those proceeds, plus $105 million in low-interest financing, would pay down all outstanding debt to Borgata, MGM and the state for deferred employee benefit costs, according to the summary. It would leave the city with $30 million in reserves.

The plan indicated that the city and Borgata would settle for $103 million on tax refunds the city owes the casino. The city owed Borgata $150 million in tax refunds before interest after successful tax appeals by the casino. A financial consultant for the city said the settlement had not been finalized, as Borgata waits to see if the state will accept the city’s plan.

The city would reduce its full-time workforce from 965 to 865 post-recovery plan. That would be done by transferring a majority of the city’s senior and health services to Atlantic County, bidding out 10 services to the private sector and using early retirement buyouts to have “as few disruptive layoffs as possible,” according to the summary. The city has offered buyouts to 165 senior workers.

Atlantic City would also see savings in renegotiated labor agreements that include no salary increases, an elimination of longevity for future workers, a more affordable medical plan and a reduction in overtime pay. The labor deals also end terminal-leave payments and use a new salary scale with longer pay progressions for future police hires.

The plan does not include a tax increase for five years and relies on state aid to balance budgets. The city received $13.5 million in Transitional Aid in 2015. By 2021, the city projects receiving $13.8 million. The city will get $26.2 million in Transitional Aid for 2016, city officials said.

The city wasn’t united as it rolled out its plan to stave off a takeover.

Residents, activists and four councilmen held a news conference ahead of the meeting, accusing city officials of not being transparent about the plan and the city’s finances. Councilman George Tibbitt said he didn’t receive the 120-page document until 11 a.m. Monday, six hours before the meeting. Steve Young, of the National Action Network, called the situation a “conspiracy.”

The four councilmen — Tibbitt, Frank Gilliam, Moisse Delgado and Chuen “Jimmy” Cheng — tried but failed to adjourn the meeting to get more time to review it. They suggested postponing the vote for two days.

“You expect us to say, ‘Take this Monday, vote on it Monday,’” Gilliam said. “The public doesn’t have a clear understanding (of the plan). We don’t have a clear understanding. I may be able to speed read, but I can’t speed read 120 pages in five hours.”

Councilman Kaleem Shabazz said, “We don’t have any more time for people to obstruct.”

Council President Marty Small said the councilmen had the chance to meet financial consultants earlier this year but chose not to.

“Every part of this process you voted against saving the city from the state,” Small said to Gilliam. “You say you don’t want the state to take over, but your actions and your votes speak otherwise.”

The tense meeting spilled over into public comment, where some residents yelled at the dais.

Mayor Don Guardian held a news conference after the meeting and said he expects the state to accept the plan, but added that they city will appeal to court if the state rejects it.

A state committee hearing on the plan takes place Wednesday in Trenton.

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