If Atlantic City fails to come up with a plan for fiscal solvency by November—which would trigger a state takeover of the resort—it won’t be for a lack of trying.
The city has hired public finance attorneys to restructure some of its $240 million of outstanding bond debt, city Mayor Don Guardian announced. The New Jersey law firm McManimon, Scotland & Baumann will work on reducing the city’s debt load, most of which was incurred after the city lost several major tax appeals by casinos.
Guardian announced the move at a public forum held to inform residents of the city’s efforts to meet the state deadline.
Many members of the public speaking at the meeting wondered if bankruptcy was still the best option for the city, which faces more than $400 million in debt it can’t currently pay back, according to a report in the Press of Atlantic City.
“Bankruptcy scares investors away. It chills financial markets. Bankruptcy doesn’t solve our problems,” said Councilman Kaleem Shabazz, who also attended. Plus, he said, the state would still have to approve the municipality filing for bankruptcy.
Instead, the state legislature passed a rescue package that would have the state takeover all of the city’s finances unless the city can come up with a fiscal plan. In the meantime, the city will receive a bridge loan from the state to continue operating.
Guardian said the city is making other moves to try and cut $60 million from its budget.
“We’ve got to lose $60 million,” Guardian said. “That’s like another root canal. We’ve got to take that hit because we have to reduce our budget $10 million for the next 10 years. That’s $100 million.”
Guardian said the city is considering privatizing some services and has asked for bids on these services including sanitation and recycling, payroll and towing. The city has also asked Atlantic County about sharing senior citizen transportation and some other services, the Press reported.
Guardian said the city will try to stave off layoffs from privatized services by hopefully having personnel moved to the potential new suppliers.
“I don’t want to say we’re not going to have layoffs,” Guardian said. “But certainly if a company took over our recycling, I would expect them to pick up the five, six people we have at recycling.”
The city has also increased fees for parking meters and city licenses.
Guardian said that since he took office in January 2014, the city reduced its workforce by 28 percent to 904 as of the end of April, with more employees scheduled to leave this month, the Press said.
The city also held an auction for several city-owned plots of land, raising $1.7 million and the state Casino reinvestment Development Authority has agreed to auction off land it owns in the city, which will hopefully return them to the tax rolls.
One option that the city will not consider, officials said, is charging for admission to the city’s beaches. Atlantic City is one of only two New Jersey beach municipalities—along with Wildwood—that allows free beach access. Guardian said he would veto any such move to protect beach access for the poor.
