With layoffs potentially impacting 79 Hoboken employees on May 7, as the City attempts to grapple with a significant budget shortfall, the many of City’s financial practices are beginning to come under scrutiny.
Hoboken faces a nearly $7.5 million increase in expenditures, couples by a projected decrease in the municipal surplus regeneration for 2019 by what could be as high as $6.5 million. When added together, those numbers represent quite a hole for Hoboken to fill as they prepare to work on the 2020 budget.
“Layoffs are a worst case scenario,” said Hoboken Spokesman Vijay Chaudhuri, “and every effort will be made over the coming weeks to produce a budget with the City Council that reduces costs and keeps Hoboken fiscally sound for the long-term.”
First Ward Councilman Michael DeFusco has expressed his views on the budget issues in a letter to Hudson County View.
“At the heart of the matter is Mayor Bhalla’s over reliance on politically connected contracts and patronage jobs dolled out to political supporters,” says the Councilman.
In his letter, DeFusco alludes to the City’s stipend policy, claiming, “Last month, a state task force listed Hoboken as engaging in ‘questionable benefit and compensation practices that reward employees with paid time off or cash payments.'”
hMAG was able to obtain a copy of the City of Hoboken’s monthly stipend payouts. Among those listed as recipients are several high-ranking members of the Bhalla Administration, as well as police officers and a number of other City personnel. Altogether, the 40 payouts on the list we were given totaled over $10,000 per month in payments to salaried municipal employees, ranging from $55 to $1,851.
hMAG‘s reached out to the City on the topic of the stipends, asking how the stipends came about, how they are determined, and if they’re steadily issued.
“In order to effectuate cost savings without having to hire additional employees or outside services, the City of Hoboken provides stipends for employees for services beyond his or her normal scope of duties,” said Chaudhuri. “Stipends can be awarded for a range of services including legally required recording of meetings as mandated by the Open Public Meetings Act, legal duties on municipal boards, and emergency services for the Office of Emergency Management. Many of these duties are performed outside of the employee’s regular work hours, including nights and weekends. This is a typical cost-savings practice that has been utilized in the City of Hoboken for decades, and is common in municipalities across New Jersey and the United States. Each stipend amount and length of award is determined by the respective director of each department, and is commensurate with experience and duties performed.”
The City Spokesman maintains that this is a way for the City to do more with less, thereby saving Hoboken money overall.
“Thanks to utilizing in house legal services rather than hiring outside legal firms, Mayor Bhalla has reduced spending in the Office of Corporation Counsel by nearly half a million dollars since coming into office. The use of stipends has allowed the City to bring more services in-house while realizing substantial cost savings of at least $1 million over a three-year span.”
Earlier today, Mayor Bhalla finally spoke on record about the budget situation.
“To be clear, the majority of the increases stem from fixed costs that do not involve discretionary spending by my administration,” says Bhalla. “In fact, since I came into office, I’ve made an effort to reduce spending in departments like Corporation Counsel by reducing the hiring of outside law firms. We’ve conducted more legal work in house, which has resulted in a net reduction in the legal budget by nearly $500,000 in just a two-year span. We also hired an engineer in-house for work that was previously conducted by outside engineering firms, which has resulted in six figure savings for the City. And, we’ve reduced the Mayor’s office to two full-time employees, the same staffing level as during Mayor Zimmer’s administration. In short, where we’ve had the ability to reduce spending, the large majority of the time, we’ve done so,” he maintains.
In comments to Hudson County View, Councilwoman Tiffanie Fisher said, ““There are inconsistencies in the mayor’s statement vs. what I have observed over the past few months, which is a finance team guided by sound fiscal principles and an inexperienced mayor’s office driven by concerns about the potential negative headlines surrounding this budget mess.”
The next Hoboken City Council meeting is tonight at 7:00.