Quote:

As a spokesperson, your job is to represent the views of your Mayor's administration to the public, not to state your own views. So yeah, she'd have one thing to say on this under Hely, and a different take on it under Fulop. This is what spokespeople/PR are paid to do. Don't confuse these as her opinions.

Quote:

All right, well, there's the answer. Seems like Ms. Morrill contradicts herself though, previously defending Healy and now she criticizes him. But if she's hardworking, so be it. I still find it surprising... didn't Healy bring in all new people when he first got elected?

I asked the mayor about this, caj11, and he told me Jennifer is one of the hardest working people in City Hall. He said he had no intention of firing everyone associated with the former mayor.

The article, like other articles, quotes city spokeswoman Jennifer Morrill. I thought she was appointed by Healy, and I thought she would leave when Healy lost the election. Why is she still working for the city? Shouldn't she be off to some higher paying PR firm or something?

I find it really interesting how she defended her former boss Healy when he was mayor, and now has no problem criticizing him now that she works for Fulop. Seems like she should be replaced by a Fulop appointee, as any other decent sized municipal government would do. Maybe I'm misinformed, but it seems odd that the spokesperson job would be an ordinary public servant job that people just apply for and stay at, regardless of who is mayor.

Fulop flip-flop on borrowing $9.5M; spokeswoman throws shade predecessor's way

By Terrence T. McDonald/The Jersey Journal

Is Jersey City Mayor Steve Fulop flip-flopping on deferring retirement costs?

Fulop, who was elected mayor on July 1, attacked his predecessor, former Mayor Jerramiah Healy, last year when Healy asked to borrow $9.5 million to pay for costs associated with a large number of city workers retiring.

At the time, Fulop, who represented Ward E on the City Council, said it is ?bad public policy? to borrow for retirement costs. Twice, Fulop and his allies on the council blocked the Healy administration from moving forward with the plan, and suggested the administration pay for the $9.5 million outright instead by selling property.

READ MORE

GOP legislators point to Jersey City's payouts

By Terrence T. McDonald/The Jersey Journal
June 05, 2013 at 8:04 AM

A group of state Republicans is using recent Jersey City police retirements to argue in favor of statewide reform of sick-leave payouts.

The 20 state legislators sent letters in recent weeks to Democratic state Senate and Assembly leaders asking that they take action on stalled legislation that would ban controversial sick-leave payouts.

In the letters, the Republicans cite news first reported by The Jersey Journal that 25 retiring Jersey City police employees could cost Jersey City around $5 million in payments for unused sick, vacation and comp days.

Mayor-elect Steve Fulop, who becomes mayor on July 1, has criticized the employees, including now-retired Police Chief Tom Comey, for bowing out of city government before Fulop's administration begins and collecting large payouts for accumulated time.

"No public official should have to enter office having to figure out how to save taxpayers from a $5 million bombshell just because Trenton politicians won't do the right thing," said Assemblyman Declan O'Scanlon, R-Red Bank, in a statement. "We can diffuse this bomb in the future with a uniform statewide policy that says: sick leave is for when you're sick."

http://www.nj.com/jjournal-news/index ... ators_point_to_jerse.html

For once, I agree with the Republicans. Yikes! LOL

For once I agree with Brewster. Amazing!

The whole thing is just another example of generations of weak willed politicians balancing their budgets on the backs of their successors. Get the cops to agree to a low raise for now, but promise them real nice candy when they retire, on someone else's watch.

NJ Republicans use Jersey City retirements to argue for sick-leave reform

By Terrence T. McDonald/The Jersey Journal
June 04, 2013 at 2:17 PM

A group of state Republicans is using recent Jersey City police retirements to argue in favor of statewide reform of sick-leave payouts.

The four state legislators, who represent districts in northern and central New Jersey, sent a letter to the chair of the Assembly State Government Committee last week asking that she post a bill the four sponsored that would eliminate future sick-leave payouts for public employees.

In the May 29 letter to Assemblywoman Linda Stender, the four Republicans cite recent news that 25 retiring Jersey City police employees could cost Jersey City around $5 million in payments for unused sick, vacation and comp days.

Mayor-elect Steve Fulop, who becomes mayor on July 1, has criticized the employees, including now-retired Police Chief Tom Comey, for bowing out of city government before Fulop?s administration begins and collecting large payouts for accumulated time.

?No public official should have to enter office having to figure out how to save taxpayers from a $5 million bombshell just because Trenton politicians won?t do the right thing,? said Assemblyman Declan O?Scanlon (R-Red Bank) in a statement. ?We can diffuse this bomb in the future with a uniform statewide policy that says: sick leave is for when you?re sick.?

The other legislators who signed the letter are Assemblywomen Caroline Casagrande (Freehold), Nancy Munoz (Summit) and Donna Simon (Flemington).

Their bill, A-2495, was introduced in February 2012 but has not received a full floor vote. It would end sick-time payouts from the date of the bill's passage, in addition to requiring public employees to show medical documentation for absences of six or more consecutive days.

Today, The Jersey Journal revealed that Comey and three retired deputy police chiefs will receive nearly $1.3 million for their accumulated time. The four men retired effective June 1.

Republican Gov. Chris Christie has railed against the practice of public employees accumulating unused days and trading them in for cash upon retirement, but Christie?s efforts to end the practice have met with resistance from state Democrats who would rather curtail it.

Supporters of sick-time payouts argue that they were agreed upon in collective-bargaining agreements and should be honored.

http://www.nj.com/hudson/index.ssf/20 ... cans_use_jersey_city.html

$9.5M bond to pay for Jersey City retiree costs again rejected by City Council

By Terrence T. McDonald/The Jersey Journal
on December 19, 2012 at 9:21 PM

Jersey City will not be able to borrow $9.5 million to pay for costs associated with retiring employees, thanks to the City Council.

The council tonight voted down the city?s request to approve a $9.5 million bond ordinance by a 5-4 vote. It?s the second time in three weeks that the council has rejected the city?s request to borrow the funds.

Jack Kelly, the city?s business administrator, tonight blasted the council for the move, saying taxpayers will now have to cough up $204 more next year since the city will have to pay the $9.5 million outright instead of paying it off over three years.

The city inherited contracts that promised workers would receive accumulated sick-, vacation- and comp-time pay upon retirement, and now those workers have to be paid, Kelly said.

?By voting no on this ordinance you are asking the current taxpayers to shoulder a disproportionate liability created over a generation,? he said.

If the council had approved the bond ordinance, taxpayers would have paid an extra $66 this year and an extra $39 for the next two years, according to the city.


This is the third year in a row the city has planned to borrow to pay for retirement costs. The city has already paid out $6.7 million this year to retiring workers, and could pay nearly $3 million before 2012 ends, city officials have said.

Council members Diane Coleman, David Donnelly, Steve Fulop, Nidia Lopez and Rolando Lavarro voting against borrowing the $9.5 million, while Peter Brennan, Bill Gaughan, Viola Richardson and Michael Sottolano voted in favor.

Opponents of the bond ordinance said the city should investigate selling property it owns near the Jersey City Medical Center instead of borrowing yet again. Borrowing for a third year is not fiscally prudent, they said.

?I think if taxes go up, the mayor should be responsible for that,? Lopez said. ?He?s been around for eight years.?

Healy said in a statement that any plan to sell the property near JCMC is ?fiscally irresponsible? because there?s no guarantee the land will be sold.

Resident Mia Scanga urged the council to adopt changes that would cap terminal-leave payouts. Scanga said such payouts are a ?rip-off? of taxpayers.

?Just the thought that I should pay for a sick day that you didn?t take in 1985 at the salary you?re getting now really makes me throw up,? she said.

http://www.nj.com/hudson/index.ssf/20 ... o_pay_for_jersey_cit.html

These folks negotiated their sick/vacation day payouts, so there isn't much you can do about those that have already been accumulated. This is a problem with having public workers with collective bargaining rights. They negotiate their salaries and benefits with officials in return for large blocks of votes, but no one represents the rest of the taxpayers at the negotiating table. Although I think many are waking up to the fact that they can elect people who will cap these types of payouts, which is part of the reason for Chris Christie's popularity.

Quote:

It bothers me too - I've switched jobs twice in my career so far - in both cases, I got paid for the unused vacation time when I quit but did NOT get paid for the unused sick time. Simple as that. Anyone else I know in the same situation was treated the same way too. It seems like with a city job, sick time gets treated no differently than vacation time when you leave. It makes no sense.

This really, really bothers me.

Jersey City Property owners are tapped out and maxed already paying some of the highest taxes in the country. Where is the money going?

After the last tax increase, which brought about protests at City Hall, I think if Jersey City raises taxes yet again, there will be riots. WE ARE NOT YOUR ATMs! Repeat after me. NOT YOUR ATMs. Not your ATMs!

Meanwhile, having read the JC budgets, there have been ZERO cuts in spending. They just pick up last years budget and increase that without really looking seriously at it. I did a side by side comparison once.

Time for real leadership. Someone has to go in there and renegotiate these way to generous payouts.

Your average Joe Schmoe doesn't get nearly any of these types of benefits. Something has gone seriously wrong in Jersey City.

Sick days are for sick days. Use em or loose em. Sick days are not meant to be accumulated and then cashed out at your highest pay grade upon retirement. That is a scam and taxpayers are getting ripped off. It's borderline criminal.

Sorry. No tax increases until we see serious spending cuts in JC. Just my point of view.

FG

$o long, farewell
Taxpayers may have to fund hundreds of retirements

by E. Assata Wright - Reporter staff writer
Dec 09, 2012

The city?s 2013 budget is still several months away from being introduced and passed, but the city already expects that it will include a tax increase to pay for retirement benefits owed to hundreds of former city workers.

This comes after the City Council introduced a bond ordinance on Wednesday giving the city permission to borrow $9.5 million to cover what are known as ?terminal leave? payments to city workers who have retired.

The council considered but failed to introduce a similar measure on Nov. 28.

Under the original proposal introduced last month, the average taxpayer would have paid $40 each year in taxes for every $125,000 of property owned to cover retirement benefits between 2013 and 2017. But several members of the council were unhappy with this proposal and argued that they wanted to see this debt paid down sooner rather than later.

The revised proposal pays off a third of this $9.5 million debt in 2013, with the remaining two thirds to be paid off in equal installments between 2014 and 2017. If the revised plan were adopted by the City Council, property owners would pay $67 for every 125,000 of property owned next year and would pay $33 for every $125,000 of property owned in years 2014, 2015, 2016, and 2017.

However, these increases will likely be affected by other revenue and expenses once the 2013 budget is introduced, meaning the actual tax required to pay retiree benefits could increase or decrease.

For the revised ordinance to be introduced, it needed at least six votes from the council. Council members Michael Sottolano, Nidia Lopez, Steven Fulop, Peter Brennan, William Gaughan, Viola Richardson, and Diane Coleman all voted on Wednesday to introduce the revised proposal. Councilmen David Donnelly and Rolando Lavarro Jr. did not attend the special council meeting and thus did not vote on the measure.

A public hearing on the measure and vote for final adoption will be held at the council?s next meeting on Wednesday, Dec. 19 at 6 p.m.

The amount of money owed to retirees is only a small part of the city?s annual expenditures. The municipal budget for 2012 is $486 million.

Kelly: An ?ugly? issue

According to City Business Administrator Jack Kelly, who made a presentation to the City Council during the special session, the city has seen a dramatic increase in the number of retirees over the past two years.

?We have an issue that is ugly to begin with, and that is the issue of terminal leave,? Kelly told the Reporter after the vote. ?In 2010, the state legislature was talking about capping or eliminating terminal leave. As a result, there was an inordinate amount of people who retired. In 2010, we had 303 people who were eligible to retire. In 2011, we were down to 174 because 129 of them got nervous and they all packed it in.?

Terminal leave is any unused sick leave that workers accrue during their years of employment. In many municipalities senior employees who have been on the job for 20 years or more can sometimes have hundreds of unused sick days by the time they are ready to retire. When employees are owed payouts for their unused days, these payouts can top $100,000 or more.

The trend now is to cap or eliminate such terminal leave payments, and as a result, many municipal employees who have a lot of time accrued are choosing to retire.

Before the surge in retirements, Kelly said, the city had been spending about $4.5 million annually on terminal leave benefits for its retirees. By last year, however, this amount ballooned to $9.5 million. To address the problem, the city has, since 2010, chosen to borrow money rather than levy taxes to meet its terminal leave commitments. Under state law, these commitments can be financed over a period of five years.

Kelly noted that these commitments will decrease over time, since fewer municipal employees will be eligible for retirement in the coming years, and terminal leave payments are already being phased out. The city, he said, has been working to eliminate terminal leave by addressing the issue in its collective bargaining contracts that come up for renegotiation.

Fulop to Kelly: ?Show me the budget?

Despite the successful introduction, some council members still have concerns with the revised proposal and it?s unclear whether it will garner enough votes to pass on Dec. 19.

?I?m going to vote to introduce,? said Councilman Steven Fulop, who is running for mayor next year. ?But by no means should this be taken as a vote to adopt. There?s no budget yet. So, whether it?s $40, $67, there?s no revenue. There are no expenses. We haven?t done a budget yet for next year. The argument is, if you?re going to increase $40 or $67, then by the same token you should be able to say to the business administrator, ?Let me see the entire budget.? It should be a working document, if that?s the case. You can?t just pull one thing out of the air and say, ?This is going to cost this [amount of money] if we don?t pass this.? It doesn?t work that way.?

Councilwoman Viola Richardson also expressed a preference for spreading out the retirement debt over five years in equal payments, rather than paying off a third of the debt in the first year.

According to Kelly, this loan would not affect the state?s mandatory 2 percent tax increase cap since ?debt is excluded from our cap.?

http://hudsonreporter.com/view/full_s ... ndary_stories_left_column

I am sorry, but where is the outrage.

This stuff really pisses me off.

Did you read about the Chief of Police from Union City? Here it is. JC public employees have this game down pat.

http://www.nj.com/hudson/index.ssf/20 ... e_chief.html#incart_river

Sorry, Sick days are for SICK DAYS. No freaking carry over. Comp days for days you really have to work. Not comp days for freebies. And NOT carried over.

And vacations have to be used... these guys are liars.... you know damn well they are taking vacations... come on. But they don't claim them and then expect to cash out at top pay 20 years from now. SCAM folks. AUDIT TIME.

No one in the private sector gets this type of crazy. The best I ever got was two weeks vacation... three weeks after five years. And that happened just once and was short lived. And it was again, use em or loose em. Certainly not cash em out at Police Chief level, 20 years down the road cause I couldn't be fired cause of Union job security.

And I never could take more than one week at once... let alone three weeks at a time. and never got fake quasi holidays... MLK, Columbus, etc, etc.

As a tax payer... I am TAPPED FREAKING OUT.

WE THE PEOPLE have seen no cuts in spending while service declines and declines. WHERE IS THE MONEY GOING? Corrupt politicians and Public Union cronies.

I am SICK of paying for SICK days.

I AM NOT YOUR ATM. REMEMBER THAT? I will NEVER recover from Healy's 2009, 2010 tax increases. There is a reason I am UNDERWATER and it isn't Hurricane Sandy. Out of control BS like this stuff.

Time for a TAXPAYER REVOLT.

FG

Jersey City City Council rejects request to borrow $9.5M to fund retiree costs

By Terrence T. McDonald/The Jersey Journal
on December 03, 2012 at 11:10 AM

The Jersey City City Council last week rejected a measure that would have allowed the city to borrow $9.5 million to pay for terminal-leave costs associated with retiring city workers.

While the ordinance received five affirmative votes at Wednesday?s council meeting, bond ordinances need six affirmative votes for adoption.

Council members voting against the ordinance David Donnelly, Steve Fulop and Rolando Lavarro said they don?t want to ?kick the can down the road? by borrowing money for today?s costs.

Business Administrator Jack Kelly repeatedly stressed that he believes it is ?fiscally prudent? to take advantage of historically low interest rates to borrow for what he dubbed an extraordinary number of retiring workers.

Council members Peter Brennan, Bill Gaughan, Nidia Lopez, Viola Richardson and Michael Sottolano voted in favor of the city?s borrowing plan.

At her first meeting as a council member, Ward F Councilwoman Diane Coleman abstained, saying she hadn?t received enough information to vote yes or no.

The city on Friday announced that the council would reintroduce the ordinance for a vote at a special meeting Wednesday.

http://www.nj.com/jjournal-news/index ... ance_to_allow_95m_lo.html

Jersey City City Council rejects $9.5 million ordinance to pay for costs associated with retiring workers

By Terrence T. McDonald/The Jersey Journal
on November 28, 2012 at 8:35 PM

A measure that would have allowed Jersey City to borrow $9.5 million to pay for terminal-leave costs associated with retiring city workers has been rejected by the City Council.

The ordinance, sought by the city?s administration, received five affirmative votes at tonight?s council meeting. Bond ordinances need six affirmative votes for adoption.

Council members voting against the ordinance ? David Donnelly, Steve Fulop and Rolando Lavarro ? said they don?t want to ?kick the can down the road? by borrowing money for today?s costs.

?There is nothing budgeted this year to repay any of this bonding for the retirements that are happening this year,? said Fulop, who called the city?s borrowing plan ?bad public policy.?

The city was seeking to take advantage of a state law that permits municipalities to issue bonds in order to pay off terminal-leave costs in five years instead of budgeting the costs all at once.

Business Administrator Jack Kelly repeatedly stressed that he believes it is ?fiscally prudent? to take advantage of historically low interest rates to borrow for what he dubbed an extraordinary number of retiring workers.

?All these contracts were approved ? now we need to pay the piper,? said Kelly, who added he prefers to pay it off in five years than ?dump it all on the taxpayer this year.?

The city paid $4.5 million to retiring workers in 2009, an amount that nearly doubled the following year. This year, the city has already paid out $6.7 million to retiring workers, and could pay nearly $3 million before the year ends, according to Kelly.

Council members Peter Brennan, Bill Gaughan, Nidia Lopez, Viola Richardson and Michael Sottolano voted in favor of the city's borrowing plan.

At her first meeting as a council member, Ward F Councilwoman Diane Coleman abstained, saying she hasn?t received enough information about the ordinance to vote yes or no.

Seconds before Brennan cast the final vote, Kelly attempted to withdraw the measure from consideration. But as council members told him he couldn?t take that action once voting started, Brennan voted, and City Clerk Robert Byrne declared that the ordinance failed to pass.

City Chief of Staff Rosemary McFadden said officials will discuss tomorrow how to proceed.

http://www.nj.com/hudson/index.ssf/20 ... rejec_5.html#incart_river

Dan - no argument that the money is spent either way and how it is accounted for doesn't change that fact. What I dispute is the idea that it's okay to take what once was, always had been, and should be an operating expense - i.e. something paid for out of the current year's budget - and spreading it out over an up to five year period. By doing that, they will issue a bond against it and increase the city's debt load.

People retire every year. Always have, always will. They have always received payments for unused sick and vacation days. Nothing has changed other than the city has decided to largely strip these expenses out of the budget and pay for them with long term debt - but the budget doesn't decrease by a corresponding amount.

I agree that this is essentially a budget gimmick, however I don't agree at all that it increases the cost of anything. Quite the contrary.

It prevents other types of costs from growing, since the deferred charges in future years count as part of the budget and the growth in most types of budgetary spending is capped.

.
Thank you for the interesting information on how these things work. (I should have paid better attention in my accounting class elective)

I see that JC has done this before. I found one from Oct 12,2011 Ord. 11-124 again for 9.5 million. This one at least had an explanation attached.(below) Fulop is the only one who voted against it. I also read somewhere that Fulop always votes Nay on these.

OK so maybe the first time JC was caught off guard with all of the retirements. But wouldn?t you think JC would have a handle on it now and no longer need emergency appropriations like this? So like T-bird says and it actually states it in the explanation ?. ?without a negative impact on the tax payers of Jersey City?.

Ord. 11-124 (Oct 2011)
INFORMATION SHEET


Special Emergency Notes for Accumulated Absences

This is the second year where the City will take advantage of the law allowing us to sell notes for the payment of employees' accumulated time upon retirement or separation from the City. In prior years, accumulated absences were appropriated in the City's budget. In 2010 and 2011, legislative changes in health and pension benefits resulted in an unexpected rise in employee retirements. The accumulated time payouts for those retirees could not be supported within the budget without a negative impact on the tax payers of Jersey City. Also, to soften the initial impact on the City the retirees were required to accept their payouts in installments until a plan was developed to address these payments. In July 2010, the State Legislature amended the law allowing the use of special emergency notes for this purpose.

Recent Payment History

FY2009 -In 12 months, the City paid $4.5 million for accumulated time.

FY2010 -In 12 months, the City paid $8.4 million for accumulated time.

TY2010 -In 6 months, the City paid $9.2 million for accumulated time. .

CY2011 - As of October 2011, the City has paid out $9.1 million for accumulated time. $6.5 million of this represents payments made to 144 employees who retired or separated prior to 2011.

By law, "special emergency notes "must be paid off within five (5) years of issuance. Therefore, 20% or l/5th of the issuance will be appropriated in the subsequent five (5) City budgets. In the CY 2011 budget, there is an appropriation for $1,860,000 representing the first installment of last year's issuance.

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That "conversion" required "spending", no matter how you parse the language. This is not an innocuous bookkeeping exercise - this is nearly $10 million in actual spending to cover the unused sick and vacation days accrued by this year's retiring municipal employees.

Why is this a problem? Because the city, under current business administrator Jack Kelly, has adopted the position that it views retirements as "extraordinary events" that "can't be anticipated". So now, when budgeting, the city estimates an artificially low amount and then claims a budget "emergency" during the second half of the year - and then largely debt finances the obligation. It's one more trick being used to "stabilize" taxes.

Why would the mayor or his B.A. care if debt continues to ratchet upward? They won't be around to deal with the fallout of future debt maturities. Anything that can be done to manipulate current expenditures into the most favorable budgetary light justifies the ends, from their perspective.

Are you asking "what it's all about" as in what the money is spent on? Or how emergency appropriations work?

The city is only allowed to spend money appropriated in the budget. When an unexpected cost arises, such as severance pay for retirees, the city is not legally allowed to spend the money on it.

So, it adopts an emergency appropriation, which is essentially a supplemental spending approval. Under NJ accounting law, there's no such thing as money spent outside the budget. The emergency appropriation authorizes the city to spend the money and book it as an asset (believe it or not). Therefore as far as the city's balance sheet is concerned, no money was spent: it merely converted $9.5 million of cash into a $9.5 million asset (called a "deferred charge").

The city then charges that asset off in future budgets (typically 1/5 a year for five years).

In other words, the 2013 through 2017 budgets will each include $1.9 million to pay for the cost which was actually paid in 2012. The $1.9 million a year will not actually be spent: it will merely reduce the value of an asset on Jersey City's books.

.
(I saw this in one of the JC public notices that are printed err..small printed in the JJ . It says it was introduced on October 24, 2012 and will be considered for final passage on November 28, 2012. )

(Does anyone know what it is all about? When I see $9,500,000 and ?special emergency appropriation? in the same JC ordinance my taxpayer wallet lets out a scream. )

City Clerk File No. Ord-12-140

1st Reading

CITY ORDINANCE 12-140

TITLE:AN ORDINANCE OF THE CITY OF JERSEY CITY, IN
THE COUNTY OF HUDSON, NEW JERSEY, PROVIDING
FOR A` SPECIAL EMERGENCY APPROPRIATION OF
$9,500,000 FOR THE PAYMENT OF CONTRACTUALLY
REQUIRED SEVERANCE LIABILITIES RESULTING
FROM THE RETIREMENT OF CITY EMPLOYEES

WHEREAS, N.J.S.A. 40A:4-53 provides that a municipality may adopt an ordinance providing for a special emergency appropriation for contractually required severance liabilities
resulting from the retirement of City employees ; and

WHEREAS, the Municipal Council of the City of Jersey City, in the County of Hudson,New Jersey (the "City") has determined to authorize a special emergency appropriation to provide for the payment of contractually required severance liabilities resulting from the retirement of City employees; and

WHEREAS, the estimated cost of the payment of the required severance liabilities is $9,500,000;NOW THEREFORE

BE IT ORDAINED BY THE MUNICIPAL COUNCIL OF THE CITY OF JERSEY CITY, IN THE COUNTY OF HUDSON,NEW JERSEY,AS FOLLOWS:

Section 1.

Pursuant to N.J.S.A. 40A:4-53, the sum of $9,500,000 is hereby Appropriated for the payment by the City of contractually required severance liabilities resulting
from the retirement of City employees, and the same shall be deemed a special emergency appropriation as defined and provided for in N.J.S.A.40A:4?55.


Section2.

The portion of the authorization financed shall be provided for in Succeeding annual budgets by the inclusion of at least one fifth of the amount authorized by this ordinance and financed and as provided in N.J.S.A.40A:4?55.

Section3.

A copy of this ordinance shall be filed with the Director of the Division of Local Government Services.

Continuation of City Ordinance

A Section4.

This ordinance shall take effect upon final passage and publication as required by law.

N.J. Towns Borrow for $200,000 Farewells Christie Abhors

By Terrence Dopp - Aug 10, 2012 12:01 AM ET
Bloomberg

Jersey City, New Jersey?s second- largest municipality, borrowed $19 million in the past two years to cover retiring workers? unused sick and vacation time. Similar deals by other communities are helping double the penalty the state and municipalities are paying on their bonds.

While Governor Chris Christie wants those payouts eliminated, the current legislative session ended in June without lawmakers acting. The impasse between Christie, 49, and Democrats, the majority party in the Senate and House, has been going on since the Republican governor took office in 2010.

?I will not compromise on the issue that we should no longer have cash value attached to sick leave,? Christie told reporters on Aug. 6 in Middlesex. ?That?s a matter of principle for me.?

Christie calls the payouts ?boat checks? because they can top $200,000 and some retirees use them to buy watercraft. Growing obligations for workers? retirement benefits have stressed city budgets from San Jose to Long Beach, New York. Officials say some perks can no longer be sustained as they struggle to balance revenue with spending.

In New Jersey, 428 municipalities faced liabilities of $825 million as of May 2011 for accumulated sick and vacation days, according to Christie?s office. Boat checks and New Jersey?s $42 billion unfunded pension obligation are helping raise borrowing costs for the state and its cities in the $3.7 trillion municipal-bond market.

Penalty Paid

New Jersey and its localities are paying an average yield penalty of 0.57 percentage point over AAA securities to borrow for 10 years, according to data compiled by Bloomberg. The gap is more than double the five-year average. It was 0.35 percentage point the day Christie took office.

Towns in New Jersey paid workers $43 million for unused sick and vacation time in 2010, according to Christie.

Jersey City, a community of almost 248,000 across the Hudson River from downtown Manhattan, has made payouts to 343 retirees since the governor vetoed a bill in late 2010 that would have capped the checks at $15,000. Christie also spurned a $7,500 limit.

Newark, East Orange and Hackensack have also borrowed to make the payments as workers retired ahead of Christie raising their pension and benefits contributions.

?The reforms in Trenton caused a stampede to the door,? Jersey City Mayor Jerramiah Healy, a Democrat, said in a telephone interview.

Borrowing Costs

A Jersey City general-obligation bond due in 10 years and rated Aa3, Moody?s Investors Service?s fourth-highest grade, traded Aug. 6 with an average yield of 2.71 percent, 1.02 percentage point above top-rated municipals with similar maturity, according to data compiled by Bloomberg. That yield difference is down from a 1.23 percentage-point spread on a Dec. 21 trade in the week the city sold the bonds.

Jersey City, which has a budget of $485 million, will continue to be squeezed by the cost for unused leave payouts unless Christie and lawmakers act, Healy said. A cap would be a good start, and then the payments could be lowered or eliminated in the future, the mayor said.

?The governor in his search for the perfect has abandoned the good,? Healy said. ?To carry on in this fashion is just not sustainable for any city, any government or the taxpayers.?

The governor had sought a plan that would have required employees to burn through amassed sick time before using new days off. Democrats have balked at that provision, saying the state can?t strip employees of a benefit they?ve already earned.

?Retirement Fund?

?Sick leave should be for when you are sick -- not a supplemental retirement fund,? said Assemblyman Declan O?Scanlon, a Republican from Little Silver who sponsored a bill to stop workers from amassing the payouts.

Even a $7,500 cap would cost taxpayers $3.25 billion if all 434,000 public workers retired, Christie said.

Senate President Stephen Sweeney, a Democrat from West Deptford, in February proposed legislation that would stop current employees from amassing more for the payments and end them for new hires. Christie called the plan ?encouraging.? No hearings have been scheduled on Sweeney?s measure.

Public-employee retirements in New Jersey jumped 45 percent in 2010 as Christie pushed proposals to raise their pension and health-care contributions, and 10 percent last year as he enacted them. Workers are retiring at a slower pace this year, and filings are on track to drop 30 percent in 2012, based on data from the state Treasury Department as of July 20.

800 Retirees

Julien Neals, business administrator in Newark, said he doesn?t expect a repeat of 2010, when the state?s largest city had to borrow $7 million to cover checks to more than 800 people for unused sick and vacation days. The city caps the awards at $15,000, he said. Yet with an additional 80 police and fire retirements expected this year, Neals said the payouts will still put a dent in the budget.

John Mousseau, a portfolio manager at Cumberland Advisors in Vineland, New Jersey, said allowing workers to cash out unused days is a ?meat-ax? issue: someplace local governments can make a big dent in spending with one trim. The expense is weighing on cities as they deal with less state aid and higher pension contributions, he said.

?Here?s another thing that is wrong, and clearly it needs to be changed,? said Mousseau, whose firm manages $2.2 billion, including $1.2 billion of municipal bonds. ?What you?re doing is raising another liability at an increasing rate for really what is no reason at all.?

Following are pending sales:

ENERGY NORTHWEST, which provides electricity to 1.5 million customers in Washington, is set to borrow $777 million of electric revenue bonds, including taxable debt, as soon as next week, Bloomberg data show. Bond proceeds will help finance fuel purchases and capital upgrade, according to bond documents. Standard & Poor?s rates the bonds AA-, its fourth-highest grade. (Added Aug. 10)

CALIFORNIA plans to issue $10 billion of revenue-anticipate notes as soon as soon as next week. The notes are rated MIG 1, Moody?s highest short-term grade. (Updated Aug. 9)

http://www.bloomberg.com/news/2012-08 ... ells-christie-abhors.html

Jersey City, this policy needs to change. Sick days should be use it or loose it. You shouldn't be able to carry over all unused sick days for 20/30 years.

That is ridiculous.

Fix this right away.

And time sheets for everybody. I have to do time sheets. I think there is massive vacation fraud going on. They are taking the vacations, just not claiming the time.

City to borrow $9 million for retirees' unused leave

Monday, March 21, 2011
By TERRENCE T. McDONALD
JOURNAL STAFF WRITER

The City of Jersey City will have to float a bond this year to help pay for more than $9 million in anticipated payouts to retiring city employees for unused sick and vacation time, officials said.

An "unusually high number" of retirements last year led the city to pay the accumulated-absence liability - which reached $8.4 million for July 2009 through June 2010 - in installments, according to city spokeswoman Jennifer Morrill.

When the state last June passed a law allowing municipalities to issue five-year "special emergency notes" to pay off accumulated-absence liabilities, Jersey City took advantage by borrowing $9.3 million to "buy back" unused time from employees who retired from July through December 2010.

There was a 60 percent jump last year in the number of public employees in New Jersey who filed retirement papers, a spike that labor leaders have attributed to Gov. Chris Christie's efforts to reform current public-pension plans.

Morrill said the city does not believe it will have to borrow a third time to pay for 2012's accumulated-absence liability.

"Once the laws have been passed and the employees make decisions, then we anticipate the rate of employee retirements to return to the levels prior to the governor's promise of reform," she said in an e-mail.

Borrowing to buy back unused sick and vacation time is part of the city's effort to close an $80 million budget gap.

Jersey City City Council looking at setting aside $22 million to cover payouts to retiring workers over 18-month period

Wednesday, October 27, 2010

The Jersey City City Council is slated to consider an ordinance tonight that appropriates $22 million to cover so-called "terminal leave" payouts for retirees over an 18-month period.

These payouts include payments owed for accrued sick days, personal days, holidays, and vacation time, officials said.

The ordinance, which was placed on the council agenda by the city administration, represents the amount the city believes it will have to spend on city employees retiring during the period of July 1, 2010 to Dec. 31, 2011.

The amount of money takes into account recently enacted state legislation that allows municipalities to pay the terminal leave benefits it owes a retiree over a period of five years instead of in one big lump sum payment, city officials said.

At last night's council caucus, Downtown Councilman Steven Fulop called the ordinance a gimmick, which he likened to kicking the can down the road.

"The Mayor's Office wants to do this because they say they don't have the money to pay out," Fulop said. "But they just want to use this opportunity not to pay instead of cutting costs."

But Ward A Councilman Michael Sottolano said at the meeting that setting the money aside for retirees was the responsible thing to do.

The City Council is also slated to vote on an ordinance tonight that would ban the use of plastic bags at large supermarkets and drug stores in the city. Both Fulop and Jersey City Mayor Jerramiah T. Healy are supporting this initiative.

The ordinance would apply to city supermarkets with gross annual sales of $2 million or more and retail pharmacies with five or more locations in the city.

Tonight's meeting is at 6 p.m. at City Hall, 280 Grove St.

BRETT WILSHE

and KEN THORBOURNE

The city would be much smarter not bonding for lump sum payouts. The better financing alternative approach for these liabilities already incurred under the old (current) system, would be to be simply make those payouts over a period of 3-5 years, and capping the annual payouts each year so as not to exceed the value of sick/vacation time that one would have earned at their salary level in a single year when they were employed.

Ultimately, a use or lose regime must be adopted, capping the total amount of accumulated leave time to not more than 120% of the annual one can earn. This would put them in line with most private sector companies, and would permit people to roll-over small amounts of time from one year to the next to provide flexibility.

All the best.

G

Quote:

B.S.

If city hall wants records all they have to do is call 8 Erie and ask.