People For Open Government Blog

New Jersey $123 Mln Swap Fee Enriches Banks at Public's Expense

2005-11-03T21:18:00.000-05:00

By Andrew Pratt (Bloomberg) --
New Jersey didn't find it necessaryto tell taxpayers that it was about to pay Wall Street banksalmost $123 million of their money to end a bad bet on interestrates made on an otherwise routine government borrowing. The state gave no public notice that board members of itsEconomic Development Authority would be deciding May 17 whetherto end the interest-rate wager by paying Lehman BrothersHoldings Inc. and Morgan Stanley enough money to wipe out theaverage property tax bill of 22,000 New Jersey homeowners. The penalty New Jersey paid stemmed from an interest-rategamble the state made in 2000 under then-Governor Christine ToddWhitman, using complex and unregulated contracts calledinterest-rate swaps and options. While such tools are widelyused by state and local borrowers across the U.S., officialsoften don't disclose the risks or potential costs, and taxpayers don't get the details needed to evaluate them. "Democracy depends on transparency,'' says Randall Dodd,president of the Financial Policy Forum, a Washington-basedinstitute that studies government borrowing. "There are noreporting requirements and information is hard to get onderivatives - very hard if not impossible.'' Derivatives, which include swaps, are financial obligationsderived from debt and equity securities, currencies andcommodities. Federal disclosure rules that govern municipal bondsales don't apply to derivatives. The swap contracts that New Jersey canceled in May weresold on the premise that they would lower the cost of a $375 million bond issue arranged to shore up state pension funds.Instead, they cost the state fees and a lost opportunity torefinance at lower rates.

Nationwide

New Jersey isn't alone in paying fees to cancel swaps.Taxpayers in New York and Shelby County, Tennessee, paid a totalof about $50 million this year to Wall Street bankers, whengovernment officials decided the New York MetropolitanTransportation Authority and Tennessee county needed to paycancellation fees on wayward bets in their derivative contracts. U.S. states, cities and counties are involved with morethan $400 billion of swap agreements, according to estimates byNew York-based Moody's Investors Service. At least 27 stateshave used derivatives as part of their public financing,according to New York-based Standard & Poor's. New Jersey alone has more than $5.1 billion in derivativecontracts that would have cost the state $425.7 million in feesif they were canceled in September, according to a report byBeverly Hills, California-based CDR Financial Products Inc.,which was hired by the state in 2003 to advise on its swaps.

Swap Fees

In a swap, two parties pledge to exchange interest paymentsover a period of time. Typically, a municipality agrees to pay afixed rate, while the bank pays a variable rate that changes inrelation to a benchmark rate or index. Banks usually assess a fee on swaps contracts by adding to the rate an amount that the state or locality has to pay eachyear in interest on the total dollar amount of the contract. Ifinterest-rate swings make it cheaper to borrow in other ways -as they did for New York's Metropolitan Transportation Authorityand Tennessee's Shelby County - a municipality can pay banks to end the contract. Taxpayers had little opportunity to learn about the NewJersey pension swaps or their proposed cancellation. The development authority is required under New Jersey lawto give notice to two state newspapers and the secretary ofstate's office, which keeps records of all public meetings, atleast 48 hours before a meeting. It isn't required to publicizean agenda and didn't do so before the board met to vote tocancel the swap.

One-Line Notice

A one-line notice of the meeting, held at the authority's headquarters in the state capital of Trenton, was faxed tonewspapers on May 13. The notice doesn't mention the swaps. Any members of the public who attended the meeting couldn't get background material explaining the swaps proposal untilafter the 12-to-0 vote. The authority posts minutes on its Website within a few weeks of its regular gatherings. Minutes ofthe May 17 special meeting weren't posted until mid-October and were available only by request before then. Approval was rushed because state finance officials under Treasurer John McCormac and the banks wanted to get the transaction completed before interest rates rose, says CarenFranzini, chief executive officer of the Economic Development Authority. Franzini, who isn't a voting board member, heads the staff that evaluates the proposals that go before members. Lehman Brothers spokeswoman Kerrie Cohen and Morgan Stanley spokesman Mark Lake declined to comment.

Big Borrower

The authority never hands out background documents until board members can review them and make changes during the meeting, Franzini says. The development authority sold more than $4.5 billion indebt last year, making it the largest municipal borrower in the nation behind California and New York City, according to NewYork-based Thomson Financial. While New Jersey requires that voters approve largeborrowings, the state, like many others, has argued successfully in court that such state-created authorities are independent and can borrow without voter approval. New Jersey will face decisions on whether to pay toterminate other swaps if interest rates don't rise. The state had 34 active swaps totaling $5.1 billion onSept. 1, according to the CDR report. The agreements include $3.75 billion of derivatives tied to debt of the state's SchoolsConstruction Corp., which was set up in 2003 ago to overseepublic school construction. The majority of the swaps lock the state into debt at borrowing costs higher than current rates. The state would havehad to pay $425.7 million to cancel those swaps in September, the September CDR report shows. That figure will rise and fallwith interest rates.

`No Shelf Life'

Kelley Heck, a spokeswoman for acting New Jersey GovernorRichard Codey, a Democrat who isn't running in the Nov. 8 election, referred all questions about the state's swaps toThomas Vincz, spokesman for state Treasurer McCormac. Vincz saysthe state uses swaps to provide certainty about its debtexpense, and that the market value of a swap is relevant only if the state decides to cancel it. "Market values of swaps change on a daily basis, so snapshot portfolio assessments have no shelf life when measuringan issuer's long-term goals, history and position with thisfinancial tool'', Vincz says. "New Jersey has locked in historically low interest rates for many long-term borrowing needs, and its swaps strategy has already yielded debt service savings to state taxpayers.''

True Cost

Douglas Forrester, 52, the Republican candidate for NewJersey governor in next week's election, says he wants to createan elected, independent office of state auditor that wouldmonitor borrowing practices, including swaps. The state auditoris now an appointee of the legislature. "The current problems are a result of inadequate disclosure requirements that have masked the true cost of publicborrowing,'' says Sherry Sylvester, a spokeswoman for theForrester campaign. U.S. Senator Jon Corzine, 58, the Democratic candidate forgovernor, says swaps are complicated and he would hire the best people possible to see if New Jersey can manage them better. "Until I can look at it closely, I can't tell you what the state should do,'' says Corzine, a former chairman and chief executive officer of New York-based investment bank Goldman,Sachs & Co.

Access to Information

Taxpayers who want to learn about authority borrowing orthe state's derivatives program will have to do extensiveresearch. Getting access to reports by swap adviser CDR on theperformance of the state's swaps, contracts detailing the termsof the pension swaps and options, and memos and meeting minutes explaining why the agreements were canceled required filing requests under New Jersey's Open Public Records Act with boththe state and the Economic Development Authority. Bloomberg News filed its first request for information about the state's swaps on Aug. 22. On Oct. 17, it received thelast documents it requested, including CDR's financial analysisof the decision to cancel the pension swaps and minutes of theMay 17 meeting where the authority's board voted to cancel them. The U.S. Internal Revenue Service is concerned about the use of swaps in the municipal bond market. The agency is probingwhether financial advisers to states and local governments were paid excessive fees on swap contracts or allowed banks to make inflated commissions, according to Charles Anderson, a Baltimore-based manager of field operations at the IRS's tax-exempt bond office.

Alabama County

The IRS is conducting a review of a sewerage financing byJefferson County, Alabama, to determine whether the county hascomplied with federal tax laws requiring states and cities torebate arbitrage profits to the Treasury, according to a letterthe IRS sent the county on Oct. 21, 2004. The county, which includes Birmingham, the state's largestcity, bought $5.8 billion of swaps to refinance its seweragesystem and paid fees on some of the contracts that were almosttwice the national average, according to data compiled byBloomberg. Vincz, the New Jersey Treasury spokesman, says the staterarely comments on correspondence with the IRS and declines tosay whether it has received any letters about its swaps.

`Considerable Risk'

Martha Haines, head of public finance regulation at theU.S. Securities and Exchange Commission in Washington, saysstates and cities aren't always equipped to evaluate the risksinvolved in using swaps. ``Swaps and other derivatives are sophisticated productsthat entail considerable risk,'' Haines says. ``I am concernedthat many of the small issuers now considering derivatives donot have the knowledge or the resources necessary to safelyengage in these products or to hire experienced advisers toassist them.'' Fees paid to cancel swap contracts can eat away at theresources available for public services and projects, includingschools, roads and fire trucks. The $123 million paid by New Jersey could have coveredthree-quarters of the state's annual costs for NJ FamilyCare, aprogram that provides health care to uninsured children in105,000 families, according to state figures. Michael Decker, senior vice president and head of researchand policy at the New York-based Bond Market Association, saysswaps used properly can save the public millions of dollars. ``Swaps are all about managing risk,'' Decker says.``They're not necessarily for everybody and for everytransaction. But they do in many cases save state and localgovernments money, which is why their use is growing.''

Upfront Fee

New Jersey's swap was paired with an option agreement. Inan option contract, the bank pays the municipality an upfrontfee. In exchange, the bank gains the right to require themunicipality to begin a swap at a specified interest rate by anagreed date. Long-term swap options were risky for New Jersey because itis impossible to predict interest-rate movements over extendedperiods, says Robert Brooks, 44, a finance professor at theUniversity of Alabama in Tuscaloosa. ``These were essentially bets about what interest rateswould be over the horizon, and municipalities are not equippedto make those kinds of forecasts,'' Brooks says. ``That may beappropriate behavior for a hedge fund, but it's not for amunicipality.''

New Jersey's Plan

State officials sold the interest-rate swap options in 1998and 2000 as part of a plan to refinance $375 million of fixed-rate pension bonds with new debt and a swap when they becamecallable three years later. The bonds are used to replenish funds used to pay publicretirement benefits. Unlike most of the state's municipal debt,this type of debt is taxable because proceeds are used to makeinvestments, rather than for capital projects. The swap options looked like safe bets, says JamesDiEleuterio, who was New Jersey's treasurer from July 1997 toAugust 1999, when many of the decisions about the options werebeing made. The options locked the state into a rate that wasconsidered a low cost of debt, says DiEleuterio, 52. The statetook bids to make sure it got the largest possible payments forthe options, and netted $65.8 million from the sales,DiEleuterio says. ``When it was presented to me based on the potential of$65.8 million in upfront cash, we did evaluate it as a gooddeal,'' DiEleuterio says.

Three-Year Bet

State officials erred in 2000 by placing a three-year beton interest rates, far longer than a municipal borrower shouldconsider, says the University of Alabama's Brooks, who is co-author of ``Interest Rate Risk Management: The Banker's Guide toUsing Futures, Options, Swaps and Other Derivative Instruments''(Probus Publishing, 1993). New Jersey's option contracts with Lehman Brothers andMorgan Stanley allowed the banks to start a swap with the statebeginning in February 2003. The terms called for the state to pay a fixed interest rateof 7.6 percent on $375 million, the same rate it paid on the oldpension debt. In exchange, banks would pay the state a floatingrate that would cover interest payments on the new bonds. If rates had stayed the same or climbed, the banks probablywouldn't have exercised their right to force New Jersey into theswap, and the state wouldn't have gone ahead with the relatedrefinancing. New Jersey would have been ahead by $65.8 million,the amount of the upfront fees.

`Risky Swap'

Instead, rates fell, and the banks started the swap,locking New Jersey into a higher rate than it could haveobtained in the open market. ``It was a risky swap because the pension bonds were issuedwith such a high interest rate, and rates went downsignificantly after that,'' says New Jersey's McCormac. Vincz, the Treasury spokesman, says the state doesn'tcollect the records needed to determine how much banks make fromNew Jersey's swaps. Banks usually lock in their profit byentering a second agreement with a third party immediately afterentering a swap with a local government. The bank pays the third party a fixed rate of interest thatis lower than what it received from the state or localgovernment. The difference between the two payments is thebank's profit. The terms of the second swap, known as a hedge,aren't on public record and aren't kept by the state, Vinczsays. The state could have gotten a rate of 5.7 percent to 6percent in 2003 had it been able to sell conventional fixed-ratedebt instead of refinancing with variable-rate debt and theswap, according to a Bloomberg index of taxable municipal bondrates.

Converted

As rates fell this year, Lehman Brothers and Morgan Stanleyagreed on a plan that would allow New Jersey to cancel the swapwithout taking money from the state budget. Under the plan, state officials converted the $375 millionof variable-rate pension bonds to debt paying a fixed rate of7.4 percent. They were able to do so because the terms of thebonds allowed for the debt to be tendered, or bought back by thestate, and then resold with new interest-rate terms. Investors were willing to pay a premium of $1.33 for every$1 of the converted bonds because the new fixed rate on the debtwas higher than prevailing interest rates. That premiumgenerated $123 million in cash that the state used to pay thebanks to get out of the swaps.

Best Way

Selling the bonds at a premium was the best way for NewJersey to get out of the swap agreement without taking moneyfrom other state programs, state Treasurer McCormac says. Vincz says the state canceled the swap to save $5 millionin interest costs and eliminate risk and expenses associatedwith the contracts. Debt payments on the premium bonds areslightly lower than the state made under the agreement, allowingthe swap to be canceled without any additional expense,Franzini, the development authority's chief executive, says. The premium bonds also locked the state into paying a ratethat will result in at least $136 million more in interest costsover the next 25 years compared with the rate it could haverefinanced at in 2003 if it hadn't had swap options in place,according to Bloomberg data. ``You hope to God they didn't set out to run theirportfolio this way because they ended up with a big bunch oftransaction costs,'' says Dodd of the Financial Policy Forum.``They tried to cloak these losses by selling bonds at apremium.''

`Absorbed'

Records of the May 17 meeting, when the authority voted tocancel the swap, show then-state Finance Director Ann Flynn, whois now a managing director at RBC Dain Rauscher Inc., tellingboard members that the $123 million termination fees wouldn't berecovered. The cost would be ``absorbed'' into the newly issuedbonds, with the premium going to pay the termination, Flynn saysat the meeting. Because the fixed rate on the converted bonds is lower thanthe rate on the canceled swap, New Jersey's debt payments on the$375 million of bonds aren't any higher after terminating theagreement, Franzini says. Cancellation won't bring back the opportunity to refinancethe debt at the lowest possible rates, Franzini says. James Poole, a former state finance director who helpedmake the decision to sell the swap options in 1998 and 2000,wouldn't comment on the agreement. Poole now works for theSchools Construction Corp., which oversees $8.6 billion in stateschool construction projects. Roland Machold, 69, who took over when DiEleuterio quit astreasurer and signed the agreement authorizing the swap options,says he doesn't recall the details of the transaction. Macholdis now retired.

Not for All

David Moore, an Orlando, Florida-based managing director atfinancial advisory firm Public Financial Management who hasarranged swaps for Florida school districts in Orange, Hillsborough, Pasco and Lee counties, says he wouldn't recommendthem to all his customers. "Swaps are a good financial tool that can significantlybenefit our clients but must always be entered into by clientsthat have been educated and understand all of the features", Moore says. "There are many of my clients that at this point in time Iwould not encourage to enter into swaps,'' he says.

-With reporting by Eddie Baeb in Chicago, Martin Z. Braun inNew York and Judith Mathewson in Washington. Editors: Williams,Neumann, Henkoff, Chan.

To contact the reporter on this story: Andrew Pratt inTrenton, New Jersey, at (1)(609) 278-1270 orapratt@bloomberg.net.

To contact the editor responsible for this story:Beth Williams at (1)(212) 617-2307 orbewilliams@bloomberg.net

Proposed Hoboken Ordinance - Competitive Negotion

2005-10-15T21:55:00.000-04:00

AN ORDINANCE REQUIRING COMPETITIVE NEGOTIATION
FOR PROFESSIONAL SERVICES CONTRACTS

Be it Ordained by the Mayor and Council of the City of Hoboken as follows:

Section 1. Short Title:
Competitive Negotiation Ordinance

Section 2. Purpose:
WHEREAS this municipality has a strong commitment to open and fair competition; and
WHEREAS qualification based, competitive, negotiation procedures help to ensure open and fair competition through published rules and decision- making criteria;
THEREFORE, it is accordingly found and determined that the paramount public interest is served by requiring that the City award all contracts or agreements to outside consultants for the provision of professional services on the basis of competitive negotiation.

Section 3. Definitions:
1. “Professional services” for purposes of this ordinance means, as defined at N.J.S.A. § 40A:11-2(6), services rendered or performed by a person authorized by law to practice a recognized profession, whose practice is regulated by law, and the performance of which services requires knowledge of an advanced type in a field of learning acquired by a prolonged formal course of specialized instruction and study as distinguished from general academic instruction or apprenticeship and training. For purposes of this ordinance, however, professional services shall not include professional artistic services as defined at N.J.S.A. § 40A:11-2(6). Professional services shall include financial services or insurance services.

Section 4. General Provisions:
1. The municipality shall award all contracts or agreements for the provision of professional services on the basis of qualification based, competitive negotiation.
2. Professional Service contract requests for proposal shall be published by the posting of a public notice at least 10 days prior to the awarding of any contract for professional services.
3. The public notice shall be:
a. Prominently posted in the public place reserved for Sunshine Law notices;
b. Mailed, telephoned, telegrammed, emailed or hand delivered to at least two newspapers designated to receive such notices because they have the greatest likelihood of informing the public within the municipality, one of which shall be the official newspaper of the municipality; and
c. Filed with the clerk of the municipality.
4. The public notice shall, at minimum, include:
a. A description of the professional services needed, including, where appropriate, a description of tasks involved.
b. Threshold qualification requirements setting the highest possible, minimum standards for qualifying to compete for the particular services and tasks involved.
c. Notice that standardized submission requirements and selection criteria are on file and available at a stated location in the City.
d. Deadline and place for all submissions.
5. Standardized submission requirements shall include:
a. Names and roles of the individuals who will perform the task and a description of their experience with projects similar to the matter being advertised.
b. References and record of success.
c. Description of ability to provide the services in a timely fashion (including staffing, familiarity and location of key staff).
d. Cost details, including the hourly rates of each of the individuals who will perform services
and time estimates for each individual, all expenses, and, where appropriate, total cost of “not to exceed” amount.
6. The selection criteria to be used in awarding a contract or agreement for professional
services shall include:
a. Qualifications of the individuals who will perform the tasks and the amounts of their respective participation.
b. Experience and references.
c. Ability to perform the task in a timely fashion, including staffing and familiarity with subject matter.
d. Cost competitiveness.
7. All submissions shall be kept on file during the term of the related contract, and shall be
public records after the deadline for the submission of proposals.
8. In the event that compliance with part or all of the requirements of this ordinance is impracticable as regards a particular contract or agreement, the City council may waive part or all of the requirements by a majority vote of the full council together with publication of a resolution setting forth with specificity the reasons such waiver is required.

Section 5. Severability and Effectiveness Clause:
If any sentence, paragraph or section of this ordinance, or the application thereof to any persons or circumstances shall be adjudged by a court of competent jurisdiction to be invalid, or if by legislative action any sentence, paragraph or section of this ordinance shall lose its force and effect, such judgment or action shall not affect, impair or void the remainder of this ordinance.

Section 6. Effective Date:
This ordinance shall become effective pursuant to law.

New Jersey Law Journal Article- Town Without Pity

2005-10-03T22:18:00.000-04:00

Town Without Pity

Henry Gottlieb 10-03-2005
©2005 New Jersey Law Journal
http://www.njlj.com

Towns and the lawyers who work for them should pay heed to what's happening in West Milford, a woodsy patch of northern New Jersey where the search for ethically clean attorneys is hitting new heights.

West Milford is the only town in the state with an ordinance that requires its lawyers to grant access to their records on file with the Office of Attorney Ethics - files that may contain secret stuff like pending investigations or grievances that turned out to be frivolous.

Two weeks ago, the town council proved it wasn't kidding. It found that Arthur Timins, outside counsel for tax appeal defense, failed to comply with the December 2003 ordinance and fired him.

The ouster comes less than a month before the Appellate Division is to hear arguments on the legality of the ordinance, or at least whether the town must make the ethics information it receives from the OAE public upon request.

"We're looking for attorneys who aren't afraid to divulge their entire ethics history and then we will get the cream of the crop," Councilman Robert Nolan says. "If you have anything you don't want to disclose, then you shouldn't be coming to West Milford looking for work from the township."

Others aren't so sure. Last year, Passaic County Assignment Judge Robert Passero ruled against public disclosure. The appeal, to be heard in Hackensack on Oct. 18, will decide whether he was right, but it also gives the appeals court an opportunity to wipe the law off the books.

That would be OK with Salvatore Alfano, a Bloomfield solo who is defending the town clerk's decision to keep the secret data out of the public's hands. He's afraid the ordinance, taken too far, could encroach on the Supreme Court's power to regulate lawyers.

"Your honor has to put a stop to it in place, and this is the place to stop it," he told Passero.

Political Factors

The lawyer with the most reason to dislike the measure is the freshly removed Timins, of Roseland's Shiriak & Timins, who says that his ethics record is clean, that the council knows it and that he complied with the spirit of the law. Timins insists he was targeted for firing because he was the local Republican Party's election campaign treasurer and Democrats on the six-member council wanted him out. Two Republicans bowed to pressure and voted to oust him, he says. Timins had represented the town when the ordinance was adopted, and he submitted the requisite waiver, authorizing the OAE to send the town authorities his ethics history. Under the ordinance, lawyers retained by the town and its school, planning and zoning boards are required to submit the waiver within seven days of being hired or rehired.

As a practical matter, the waiver is similar to those granted by applicants for many public positions, giving prospective employers access to privileged information held by previous employers. Timins says he doesn't agree with the law's philosophical underpinnings. He says towns are entitled to counsel who are "currently competent and currently ethical." The information in the OAE's public files - the history of past public discipline and current formal complaints - should be enough of a record on which to base an appointment, he says.

Past grievances that came to nothing and current investigations that may be fruitless do not reveal whether there's anything wrong with a lawyer's ethics at the time he or she is hired, he says. This past July 6, the town council passed a new resolution approving Timins' appointment for tax appeal work, but Timins' didn't send in another waiver. Nor did he respond to a reminder sent to him on Aug. 22 by the town clerk. On Sept. 21, the council voted 4-2 to fire him because he hadn't filed the waiver. Timins says he didn't send in the waiver because the one on file since 2003 gave the council all the powers it needed and that he didn't have to send it in because the July 6 resolution hiring him wasn't really an appointment: It was the codification of a fee agreement. And while the ordinance is explicit about the seven-day requirement, there was nothing in the letter referring to the deadline, he says.

Since his firing, Timins has sent in the waiver and would like the council members to accept it, he says. If they don't, he's not likely to sue to get his job back, mostly because the $105 hourly rate in the contract doesn't make the effort worthwhile, he says. A simple request won't work, says town attorney Fred Semrau of Dorsey & Semrau in Boonton. "I believe at this point it would be too late because the ordinance is very clear," he says. "It's very strict." The waiver has to be sent in within seven days of an appointment or reappointment and "it was a reappointment." Semrau says of the ordinance, "I think it's very good. The client, who is the governmental entity, should have the information about the attorney they are hiring." A leading local municipal lawyer agrees with him. Robert Renaud of Palumbo & Renaud in Cranford, chairman of the New Jersey State Bar Association's Local Government Law Section, says he can't think of any bar to a municipal requirement that prospective retained attorneys make their private ethics histories available. It doesn't even have to be codified in an ordinance, he says. On the other hand, making the information public doesn't seem right, particularly information about unfounded grievances, says Renaud, giving an off-the-cuff opinion and not speaking for his section.

Fighting the Old Guard

The idea for the ordinance came from John Paff, a Libertarian Party leader in Somerset County. He makes a livelihood owning rental properties, he says, sparing him from 9-to-5 commitments and giving him leisure time to work as a self-appointed public advocate for open government and lawyer accountability.

After years of needling, cajoling and sometimes suing public officials to pressure them into opening records to the public, Paff has almost become a member of the establishment. His lawyer-watching Web site, www.cjnj.org, posts such OAE documents as lists of pending complaints, otherwise accessible only in district ethics committees and OAE offices. Paff says that in 1996 he recommended an ordinance like West Milford's to town officials in Franklin Township, where he lives. But they weren't interested. He also has received polite but terse turndowns from governing bodies in Boonton and Mountain Lakes. Paff found common cause with a group of homeowners in West Milford, including a retired New York Times editor, Martin O'Shea. A critic of old guard politicians who kept tight control over public business, O'Shea has sued town officials for noncompliance with open records laws, edited an online newsletter delving into minutiae of local decision-making and campaigned to have longtime town attorney Martin Murphy investigated for alleged conflicts of interests. As it turned out, Murphy was admonished by the Disciplinary Review Board and was replaced as town attorney by William DeMarco, who has a firm in Wayne. When the ethics waiver ordinance was adopted in 2003, DeMarco complied. Paff's request for DeMarco's ethics history touched off the case that is now in the Appellate Division.

Town clerk Kevin Byrnes filled the request but blacked out most of the document on grounds it was a personnel record exempt from disclosure under the Open Public Records Act. Paff, represented by Montclair solo Richard Gutman, sued Byrnes and is arguing in the Appellate Division that the redaction was illegal. Under OPRA, personnel records are disclosable if another law requires it, and that other law is the waiver ordinance, Gutman argued. Alfano, as counsel to Byrnes, argues the ordinance violates OPRA's strictures against disclosure of material barred by state law and public policy, including rules against disclosure of material the Supreme Court deems confidential. What's more, he argues, the ordinance is defective for not telling lawyers explicitly that the information will be made public.

Special City Council Meeting September 14th Recap

2005-09-14T19:17:00.000-04:00

I attended the special City Council Meeting on the topic of the 2006 Hoboken Municipal budget.
All from City Council were in attendance except for City Councilman Chris Campos who had a death in the family and was not present. The 2005 Corrective action plan for the budget was not discussed even though it was on the Mayor's initial memo calling the meeting.

The meeting was short, about 30 minutes and sparsely attended. After a presentation by Mayor David Roberts the City Council approved 8-0 to present the budget at the October 19th City Council meeting. They said they would submit the budget to the Jersey Journal on October 3rd.

Highlights from the Mayor's presentation included the following statements in no particular order:

W hotel to break ground in 2005.
Budget will be 67 million down from 71 million.
negotiating all 6 munipal union contracts to hold increases to 2%.
Strong cost cutting measures for every department.
Consolidation and Privatization of services without a reduction in services
The Mayor Cited Senator Kenney as a key for Hoboken to get appropriations prioritized from Trenton
Mayor listed Board of education Budget as a key concern.
Other concerns were Health Care and Fuel costs.

Other notable comments from City Council:

Council woman Terry LaBruno suggested a Quality of Life Committee to be headed up by citizens.

Council man Mike Russo stated that while he had been a big critic of the Administration in the past, he was proud to see this Budget presented much earlier than the past and with the reduction in spending that was necessary. (Not an exact quote).

After the 8-0 vote to present the budget on 19th of October the meeting was adjourned.

Voting on engineer splits Hoboken Council

2005-09-13T22:55:00.000-04:00

Tuesday, September 13, 2005
By BONNIE FRIEDMAN
JOURNAL STAFF WRITERHOBOKEN

The nine-member City Council narrowly agreed to appoint an engineer from the company Schoor DePalma Wednesday night, signaling the first rift in the newly elected council.The appointment of Robin Persad to serve as the city's engineer sparked criticism from members of People For Open Government, who accuse Mayor David Roberts of violating the city's pay-to-play ordinance banning companies who hold city contracts from donating to political campaigns.

Two Schoor DePalma employees contributed to the last election cycle, including Ralph Tango, who gave $1,600 to the Roberts Team, and William Kersey, who contributed $300 to the Hoboken Democratic Party."I hope you vote against this resolution," said Bob DuVal, a member of the grass-roots organization. "Once again this is pay-to-play, a practice that nine out of 10 people in Hoboken voted against, and I hope you reject the resolution."Council members Theresa Castellano, Michael Russo, Michael Cricco and Theresa LaBruno voted in favor of tabling the resolution in an effort to gain a more thorough legal opinion.

Remaining City Council meetings 2005

2005-09-12T19:57:00.000-04:00

This was gathered from the City of Hoboken's Web Site:

Remaining City Council meetings 2005

Wednesday Sept 21, 2005
Wednesday Oct 5, 2005
Wednesday Oct 19, 2005
Wednesday Nov 2, 2005
Monday Nov 14, 2005
Wednesday Dec 7, 2005
Wednesday Dec 21, 2005

The City Council will caucus at 6:00 PM preceding each Council Meeting at 7:00 PM in Council Chambers, City Hall. All information pertaining to the Council agenda may be obtained from the City Clerk prior to each Council meeting.

Special City Council Meeting to be held September 14th

2005-09-12T19:54:00.000-04:00

From the Desk of Mayor Roberts
The Honorable Christopher Campos
President, Hoboken City Council
94 Washington Street
Hoboken, NJ 07030
September 9th 2005

Dear Council President Campos:
I hereby call a Special Meeting of the Hoboken City Council for Wednesday, September 14, 2005 at 6:00pm in the City Council Chambers, 94 Washington Street, Hoboken, New Jersey for the following purposes:

- Introduction of the SFY 2006 Municipal Budget
- Presentation of the Corrective Action Plan for the 2005 Audit.

Very truly yours,
DAVID ROBERTS
MayorCity of Hoboken

Cc: City Council Members
Richard F. England, Business Administrator
Joseph J. Sherman, Corporation Counsel
James J. Farina, City Clerk
Jersey Journal/The Record/Star Ledger

Hoboken Goverment Web Sites

2005-09-12T19:52:00.000-04:00

Here are some useful links for Hoboken's Government Services....

Hoboken City Hall Web Site:
http://www.hobokennj.org/

The 2004 Audit Report released in 2005 after the June 14th run-off election:
2004 Hoboken Audit Report

The Hoboken Board of Education Web Site:
http://www.hobokenk12.powertolearn.net/

Hoboken Pog Blog has been created

2005-09-12T19:01:00.000-04:00

The Hoboken "Pog Blog" has been created to facilitate meaningful communication amoungst its members and any one else who is interested to follow the issues concerning this goal.

For any sugestions on content please email the acting Adminstrator at
kgardiner1@optonline.net.