State Will Maintain Oversight Of Atlantic City Finances For Four More Years

Municipal Stabilization and Recovery Act signed into law by Gov. Murphy
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Amid a flurry of more than 100 bills being considered by the New Jersey state Senate and Assembly last week, Gov. Phil Murphy also signed eight previously passed bills into law on Thursday.

One of those mandates that state officials continue to manage Atlantic City’s finances for another four years — on top of five straight years of current oversight.

The bill, which earlier last week passed unanimously in both chambers, is known as the Municipal Stabilization and Recovery Act.

“The Act authorizes the Local Finance Board, through the Director of the Division of Local Government Services, to exercise municipal powers and functions that are, or may be, substantially related to the fiscal condition or financial rehabilitation of a municipality in need of stabilization and recovery.

“Most notably, the director may dissolve local departments and agencies; dispose of municipallyowned assets; amend or terminate existing contracts (excluding financial instruments); hire, terminate, and transfer personnel; enter into shared services agreements; and modify the terms of collective negotiations agreements to which the municipality is a party.

“The Local Finance Board may empower the director to retain professional staff and bond counsel, and exercise municipal redevelopment powers. … The bill repeals a section of the Act, which permits a municipality in need of stabilization and recovery to use early retirement incentives as a mechanism to stabilize its finances, restructure its debts, or assist its financial rehabilitation and recovery. The only municipality under State control pursuant to the Act is the City of Atlantic City.”

Change of heart by governor

The unanimous sentiment in the legislature is a blow to some Atlantic City elected officials who have chafed at the restrictions imposed by former Gov. Chris Christie in 2016.

Murphy, then already the leading candidate to be the Democratic nominee for governor in the 2017 race, campaigned on a promise to end the takeover.

“You have to find a better solution,” said candidate Murphy. “As opposed to big-footing the community, I’d be working with the community.”

Murphy in 2016 also criticized the state’s takeover of various school districts in impoverished cities.

“Show me the evidence where it’s been successful and where the people of the community have benefited,” he said then. “I don’t see the evidence.”

But not all city council members want less state supervision. Last Monday, two city council members announced their support for a New Jersey State Police takeover of the Atlantic City Police Department amid a recent surge in violent crime.

Some casino execs welcome state eyes

In 2020, Hard Rock CEO Jim Allen was critical of the way the city is run. Hard Rock opened to great fanfare in mid-2018 after a $562 million overhaul of the former Trump Taj Mahal casino site.

“Frankly, the town’s in worse shape today than it was when we bought the building,” Allen said.

“When you’re in a resort environment where safety and security is so important, if the city can’t get something fixed as simple as the street lighting, then maybe a change is needed,” Allen added of issues along several blocks of Pacific Avenue.

Lt. Gov. Sheila Oliver, assigned by Murphy to focus on Atlantic City’s future, said in April: “What the problem was in AC, historically, was generation after generation of ineffective and inefficient municipal leadership.

“Having [the takeover] meant that the state has to sign off on personnel actions, has to sign off on appointments to boards and authorities, has to sign off if someone wants to make an $11,000 purchase.”

Bill to revise Racing Commission auditing practices

Still to be finalized as the legislature winds down for the summer this week is a bill that would set certain standards for an annual audit by the state Racing Commission.

The bill passed the Assembly, 75-0, on Thursday but awaits a vote in the Senate.

A state agency’s review of the accounting practices of the commission that was released earlier this year prompted the legislation.

The bill requires the enforcement of internal control monitoring procedures to ensure that all licensees of the commission have their fingerprints taken, and that all fingerprints are renewed in a timely manner and in accordance with all applicable State and federal laws; that all employees’ access privileges to the New Jersey Racing Commission Licensing, Mutuels, and Breeders system are authorized and are commensurate with their job duties and classification; all equine fatality reports are complete and submitted in a timely manner to the commission during the fiscal year; all revenues are collected in a timely manner, properly recorded in the State accounting system, and accounted for in the New Jersey Racing Commission Licensing, Mutuels, and Breeders system; all fines and fees imposed on licensees are collected and licensees who do not pay their fines are suspended; and all interfund transactions between the New Jersey Racing Industry Special Fund and the General Fund are processed with the assistance of the Department of Treasury.”

The audit reviewed the history of 65 horsemen who were fined from 2000 to 2010, and 35 more from 2016 to 2019.

Of the 100 overall, 18 did not have their licenses suspended while the overall group owed $272,000 in fines dating back almost 20 years.

“The commission should suspend the racing licenses of individuals who do not pay their fines,” the report concluded.

Photo by Rosemarie Mosteller / Shutterstock

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