City introduces $113M budget
Plan has small tax reduction; council also discusses new hotel and Pier A
by Marilyn Baer
Reporter Staff Writer
Mar 19, 2017 | 2605 views | 0 0 comments | 10 10 recommendations | email to a friend | print
COUNCIL
Director of Finance Linda Landolfi introduced the 2017 proposed municipal budget of roughly $113.2.
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The City Council will host three workshops on March 27, March 29, and April 3 to discuss the proposed $113.2 million municipal budget, which the nine-member council introduced at this past Wednesday’s council meeting.

The workshops are open to the public and will focus on specific sections of the budget, such as the Police Department. They take place at 6 p.m. at City Hall.

The budget is slightly lower than last year’s, which was $113.3 million. It covers city spending from Jan. 1 through Dec. 31.

The budget includes a slight decrease of 1.25 percent in the municipal tax rate, but asks for the same total tax levy as last year (the amount to be collected from residents, which is expected to be $53.9 million). The lower tax rate is because there is an increase in ratables, or the total value of taxpaying properties – meaning more properties are contributing, so each property owner’s rate is lower.

The budget is also funded by state aid and fees, such as parking tickets and permit fees.

At the meeting Wednesday, the council also approved funding of $4 million for repairs to Pier A Park and discussed the proposed Hilton hotel.

The budget

A property owner’s total tax bill includes three main components: municipal, school, and county taxes, along with smaller components for the library, municipal open space, and county open space. The city budget affects the municipal rate.
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“In terms of salaries and wages about 70 percent of that budget goes to public safety.” – Linda Landolfi
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More than a third of the budget, or roughly $45.8 million, goes to salaries and wages for city employees, including members of the Fire Department and Police Department, an increase from $41.8 million from the previous year. This does not include health insurance, also a high number each year.

According to the city’s Director of Finance Linda Landolfi, “In terms of salaries and wages about 70 percent of that budget goes to public safety.” The Department of Public Safety receives about $33.5 million in salaries and wages.

The budget also includes $5 million in capital spending on the city's aging water mains. “The six-year capital plan in the 2017 budget will have $5 million per year for each of the next six years for water infrastructure,” said city spokesman Juan Melli.

The city included a six-year capital plan as part of the 2017 budget. The plan, ending in 2022, totals approximately $99 million and includes $17.5 million for the design and construction of the Northwest Park at the former BASF site, as well as $10 million for the Southwest Park acquisition and construction.

The council could schedule a public hearing and vote on its adoption as early as the next council meeting on April 6.

Pier A rehabilitation

The City Council approved a bond ordinance authorizing supplemental funding for the repair of Pier A Park, appropriating the sum of $4 million.

They also authorized the issuance of a general obligation bond in the principal amount of up to $3.8 million.

According to the city, over 1,000 steel pilings, which are the foundation for Pier A Park, are degrading as they are not properly coated to the mudline.

“This issue was discovered when the city conducted an evaluation of our entire waterfront after the collapse of Sinatra Park,” said Mayor Dawn Zimmer. “Funding for the maintenance of Pier A and the waterfront are provided by an account established by a 1994 agreement between the Port Authority and the city.”

According to city council attorney Brian Aloia, the account funds are managed by the South Waterfront Board which is made up of the Port Authority, the city, and the three developers (Applied, SJP, and Mack-Cali).

According to Aloia the city has had issues when negotiating for the money to fund repairs, as the Port Authority has been absent of several of the board meetings and wishes to no longer be a part of the board.

“This action has caused a stalemate so that the board has not been able to come to a final decision on the funding of the repairs,” said Zimmer. “If no agreement can be reached, the city will pursue all appropriate legal options to protect the infrastructure and financial interests of the city of Hoboken.”

The council subsequently approved a contract in the amount of $5.3 million to Reicon Group LLC for the piers rehabilitation.

According Aloia, work on the Pier A Rehabilitation project would begin immediately for the underwater evaluation of the steel piling, with construction delayed until July due to spawning fish.

Hilton Hotel

Denis Martin of KMS Developers spoke to the council about a proposed Hilton Hotel, which would be built on the parking lot of the existing post office on first and Sinatra Drive.

KMS was contracted by the postal service in 2012 to upgrade the facilities to make them more efficient and modern, including a new freight elevator and larger loading dock.

He said the new hotel is projected to provide $ 1.77 million annually in real estate and hotel taxes to the city and school district without adding residents or students.

“This newly created source of revenue helps the city stabilize taxes and fund city improvements,” said Martin. “For a long time this site has been intended to be developed.”

Martin said the 2010 master plan reexamination also cites a hotel as an appropriate use for the area.

Ben Seidel, CEO or Real Hospitality Group, said his company has analyzed hotel activity in Hudson and Essex counties and believes there is a demand for a hotel in the area, and it will provide local jobs.

Councilman Peter Cunningham said he hoped there would be a plan before the council during last week’s meeting, but believes it will be introduced at first reading during the next council meeting on April 6 before going to the Planning Board.

Marilyn Baer can be reached at marilynb@hudsonreporter.com.

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