Atlantic City Passes Short-Term Plan to Avert Government Shutdown

by | April 7, 2016

By Amy S. Rosenberg

Gov. Christie said he felt as if he were in Alice in Wonderland.

"As I was flying in here, I was thinking to myself, I'm going into the land where up is down and down is up," he said.

Christie did land in Atlantic City on Wednesday, but did not meet with Mayor Don Guardian. Instead, he met with County Executive Dennis Levinson and held a news conference in the County Office Building, just across the courtyard from City Hall.

"There's no purpose in meeting with a liar," Christie said.

The warring mayor and governor did not break bread, needless to say, despite the city's deepening cash crisis. Wednesday night, though, Atlantic City Council voted, 9-0, to approve a modified 28-day payroll cycle that keeps City Hall open past Friday, when cash runs out.

The mayor had earlier warned he would suspend nonessential services and have essential workers issued IOUs until May 2, when new taxes are due. Guardian and Christie both said the delayed payroll buys the city only a month or two before it again risks insolvency.

The impasse over saving broke Atlantic City appeared no closer to resolution.

Guardian, holding his second set of dueling Christie news conferences this week, the first in Trenton, said the governor's words about him disappointed him, but "I've realized that's how politicians talk."

The mayor characterized Christie's entrance into town as coming in "through a back alley" to a "loading dock," and said the governor had ignored years of requests to hold a town-hall-style meeting in Atlantic City.

Christie continued tough talk about city failings, insisting that only a bill authorizing a full state takeover with the right to terminate union contracts would avert economic ruin. "There's no time left," he said.

But in Trenton, a spokesman for Assembly Speaker Vincent Prieto said the speaker would introduce his own bill Thursday, the "Atlantic City Plan for Implementing Economic Recovery Act." The Assembly Judiciary Committee is set to vote on the bill, which would establish a payment-in-lieu-of-taxes system for the city's eight casinos and create an "Atlantic City Planning Committee" for oversight. Prieto opposes undermining union contracts.

The back-and-forth only escalated into the evening meeting, with Councilman Moisse Delgado saying, "We're working under a fascist-type leader by the name of Chris Christie."

Earlier, Christie said Levinson, the county executive, agreed to take over certain functions of the city, to be named later. In return, Levinson said, the governor had "guaranteed" the county would get 13.5 percent of the city's taxes, above the required 10.6, a difference of $4 million a year.

Levinson said he had no interest in a county takeover of Atlantic City police, as was done in Camden, and Christie said suggestions that the department was on the table for regionalization were untrue.

Levinson and Christie did say the county might seek to take over the city's Municipal Utility Authority - its Water Works, in Monopoly parlance.

The city could net as much as $100 million from a sale, but the state's Emergency Manager recommended monetizing the authority as a city department.

Christie urged the county to assume city functions such as health, trash collection, and mowing recreation fields. Guardian later shot back that "our sports fields are synthetic."

Christie claimed that Guardian agreed to a full takeover during a five-hour phone call from New Hampshire. Guardian, however, said that his conversation with the governor was nine minutes long, half about a nor'easter, and that he agreed only to a new compromise bill. Both men agreed that if the city tanks, the tanking will reverberate elsewhere.

"This is about the full faith and credit of New Jersey's cities," Christie said.

"The mayor sits around and talks about scenarios that are like, how many angels can you dance on the head of a pin?"

Christie denied it had been his actions, first appointing bankruptcy lawyers as emergency managers, then saying that bondholders would have to sacrifice, that triggered concern on Wall Street.

Moody's, however, issued a statement Wednesday that "the governor's comment provides another indication that the state is considering impairing the city's general obligation bondholders," and that Christie's actions were "the third signal" that called into question the state's "historically strong support" for local governments.

On Wednesday, City Councilman Frank Gilliam said: "We can't be sending Wall Street money when in fact the city of Atlantic City is in need of money." The city's next debt payment is $1.8 million, due May 2.

Despite his executive order from 2015 that gave emergency managers authority to negotiate with bondholders and other creditors, including Borgata Hotel & Casino, which is owed more than $150 million in tax appeals, Christie said he still needed a full takeover to be able to reach a deal. The city also has about $240 million in bond debt.

Christie continued to criticize salaries in city government and the police department, but shrugged off questions about the state's Casino Reinvestment Development Authority, which pays its executive director $225,000 a year, more than the police chief. He said CRDA was not running a $100 million deficit.

Guardian noted that the CRDA pays no taxes on hundreds of lots it purchased in Atlantic City, and he called the county building "the most luxurious" in the city.

Christie discounted any influence by South Jersey Democratic power broker George Norcross, who was included in a meeting about the takeover at Drumthwacket, the governor's mansion. "He's had none on me," he said.

Guardian was not invited to the Drumthwacket meeting.

Christie said he was not interested in other takeovers. "You think I"m enjoying this?" he said.

Both men called bankruptcy a last resort.

In a bankruptcy, Christie said, "collective-bargaining agreements are null and void anyway."

Guardian said, "He's starving us into bankruptcy."

Christie noted Atlantic City was the third-largest city in the country in gaming revenue and that nongaming revenue was up. He said visitors should not be concerned by talk of a City Hall shutdown.

"I doubt that many people come to Atlantic City to come to City Hall," Christie said.

(c)2016 The Philadelphia Inquirer