Monday, October 24, 2016

AC approves recovery calling for job cuts, Borgata pact

ATLANTIC CITY — The battle over a state takeover entered its final stretch Monday, as city officials approved a fiscal recovery plan, 5-3-1.
Christian Hetrick of the Atlantic City Press writes:
The city will submit the plan to the state Department of Community Affairs on Tuesday. The state will then have until Nov. 1 to either accept the plan or take over the city’s finances for five years. 
The city plans to cut 100 more full-time workers, sell Bader Field to its water authority and settle with Borgata Hotel Casino & Spa over tax refunds, among other cost-cutting and revenue-raising measures. If implemented, the city’s budget would drop to $207 million by 2021, according to a summary of the plan. The city’s budget was $262 million in 2015.
“It is a comprehensive document that we, professionally, all believe will work if it is adopted and embraced,” said Michael Nadol, a consultant from The PFM Group, which helped the city draft the plan.
The cornerstone of the plan is selling Bader Field, a 143-acre former airstrip, to the Municipal Utilities Authority for $110 million. Those proceeds, plus $105 million in low-interest financing, would pay down all outstanding debt to Borgata, MGM and the state for deferred employee benefit costs, according to the summary. It would leave the city with $30 million in reserves.
The city and Borgata would settle for $103 million on tax refunds the city owes the casino. The city owed Borgata $150 million in tax refunds before interest after successful tax appeals by the casino. The settlement has not been finalized as Borgata waits to see if the state will accept the city’s plan, a financial consultant for the city said.
The city would reduce its full-time workforce from 965 to 865 post-recovery plan. That would be done by transferring a majority of the city’s senior and health services to Atlantic County, bidding out 10 services to the private sector and using early retirement buyouts to have “as few disruptive layoffs as possible,” according to the summary. The city has offered buyouts to 165 senior workers. 
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