In A.C., financial reality keeps new mayor's goals modest

Atlantic City Mayor Don Guardian was marking 100 days in office.
Atlantic City Mayor Don Guardian was marking 100 days in office. (AKIRA SUWA / Staff Photographer)
Posted: April 12, 2014

ATLANTIC CITY Marking his first 100 days in office, Mayor Don Guardian introduced a team of department heads Thursday who discussed goals tempered by the omnipresent fact that city government is virtually broke.

The initiatives include increasing community policing and aggressively attacking graffiti. About half of the 11 directors spoke of installing technology to run their departments more efficiently.

But there will be no hiring or promotions in the new fiscal year, Business Administrator Arch Liston said at the City Hall event. Instead, he spoke of savings - $1 million each from the Police and Fire Departments - from instituting such a freeze.

"We have to rightsize government," said Liston, whose last positions before being picked by Guardian were manager of Galloway Township and business administrator in Hoboken.

Property-tax appeals by casinos - which have successfully argued that their values are nowhere near 2008 levels and therefore they deserve significant reductions in their assessments - have severely hampered the city's ability to raise revenue, said City Solicitor Jason Holt.

Residential and other commercial-property owners have followed suit, further draining city coffers.

Michael Stinson, director of finance and revenue, who held the same job under Mayor Lorenzo Langford, said the city had borrowed close to $187 million since 2007 to make refunds to casinos and has yet to repay $100 million of that debt.

Stinson said after the meeting that the city could be on the hook for an additional $100 million by the end of this year to settle casino tax appeals from 2013 and 2014.

"There's a direct spillover effect on the budget," Holt said.

Guardian presented a $262 million budget to the nine-member council last month. He said residents could expect to see a 47 percent tax increase - 65 cents per $100 of assessed value - because of decreased property values citywide. City residents absorbed a 22 percent increase last year.

Casinos continue to struggle amid bruising competition from Pennsylvania, Maryland, and New York.

In 2013, the then-dozen casinos (Atlantic Club closed this January) posted a 35 percent earnings decline, according to data released Monday by the state Division of Gaming Enforcement. The Atlantic City gaming market posted a $235 million gross operating profit last year, compared with $360 million in 2012.

Atlantic City has been under a state fiscal monitor the last three years, mainly because of the adverse impact the casino tax appeals have had on the resort's finances.

Guardian submitted an application March 14 seeking $20 million in state aid ($10 million in transitional aid and a $10 million essential services grant to aid police and fire with costs) from the Department of Community Affairs to help bridge the gap between revenue and spending in the budget year that starts July 1.

Liston said at Thursday's meeting that the city expects to hear from DCA on the state aid in 30 to 40 days. A prerequisite for the city to get the money is to show it is taking measures to become more efficient and cutting costs.

Holt, for example, noted that his office was becoming paperless in the new budget year to save on printing costs and was better monitoring billable services by outside counsel.

Elizabeth Terenik, the new director of planning and development who got the job just a week ago, is focusing on turning underutilized properties into revenue generators.

Paul Jenkins, director of public works, wants to make the city a more attractive place to visit and live, with expanded cleaning of back alleys and lots, and aggressively attacking graffiti problems.

Community policing and reestablishing trust between the department and residents was a priority, said new Police Chief Henry White. He wants to restore the city's Police Athletic League to foster that relationship.

"We want to be a part of the community, an interwoven part of the community," White said.

Ron Cash, a holdover from previous administrations who was made director of health and human services by Guardian, said his department was researching more efficient parking meters and had a partnership with the Atlantic City Alliance - the resort's chief marketing arm - for a summer concert series and other communitywide events.

The alliance, too, had an announcement Thursday - country singer Blake Shelton, who serves as a judge on The Voice, will be this summer's headliner for a free beach concert here July 31.

Last summer's free concert, with Jimmy Buffett and Wilson Phillips, attracted 50,000 fans.

The alliance is starting the next leg of its $20 million marketing campaign, "DO AC," which will focus on promoting events to make up for declining gaming revenue. New ads are to begin appearing April 20.

"There is competition for the gaming dollar, but Atlantic City excels at offering the gaming experience combined with spectacular events, a free beach, Boardwalk, and fabulous hotels," said alliance spokesman Jeff Guaracino.

A separate $1 million "DO AC" campaign was launched in Chicago and Houston this month to support new nonstop service on United Airlines to Atlantic City International Airport. The flights began April 1.


sparmley@phillynews.com

856-779-3928 @SuzParmley

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