Budget Concerns Mounting, City Council Set for Hearing

Council leaders finally considering 2022 budget after months of delinquency

TRENTON, NJ – Mayor Reed Gusciora stressed the importance of City Council’s budget hearing this week, as outside agencies pressed for adoption of the 2022 City spending document.

The City Council has scheduled a budget hearing for this Thursday, October 20 during their regular meeting, and they will be discussing the docket tonight starting at 5:30. Public comment regarding budget adoption on Thursday will be heard at tonight’s meeting.

One of the departments being harmed the most by Council inaction is Trenton Water Works. The ability of the Water Department to fund projects going forward is at serous risk. Last week, the City received a letter from the New Jersey Infrastructure Bank (I-Bank), state-partnered financiers of the Water Bank Program, seeking compliance with water project funding agreements.

In July and August, the I-Bank notified Council of the imminent risk of default because a budget has not been passed. Last week, they again extended a missed deadline and wrote, “the City must remedy its budget convent default by or before Friday, November 25, 2022.”

“The City’s enactment of a budget by November 25, 2022 is critical if the City is to remain in good standing with the Water Bank [Program] and maintain the City’s ability to realize the financial and infrastructure opportunities offered by the Program, and which will allow the City to effectively operate and maintain the TWW in a manner that is fully and timely compliant with the applicable covenant obligations in the Loan Agreements,” bank officials wrote in the letter.

As of October 1, 2022, all six City Council members have been fined $25 per day for not meeting their obligation to pass a municipal budget in a timely manner, per State law.

“The main function of the City Council is management and approval of the City budget,” Gusciora said. “Everything we do relates to the budget, from water upgrades to road paving. Some of the damage is already done, but there will be more catastrophe to come if Council doesn’t take immediate action.”

The administration introduced the 2022 proposed budget to City Council in April. The City transitioned from a fiscal year budget to a calendar year budget last year, so the 2022 budget proposal represented an unprecedented 30-month stretch where the City did not need to raise the municipal portion of tax rates.

Below is a timeline of budgetary actions this year.

CITY OF TRENTON
2022 BUDGET TIMELINE

MARCH

APPROPRIATIONS PASSED: 22-095 Transfers made by Finance of the TY 2021 Appropriations for $2,073,000. (Pass 5-2; Vaughn and Rodriguez vote no)

APPROPRIATIONS PASSED: 22-096 Emergency Appropriations to the CY 2022 Temporary Budget for $64,655,101.28. (Pass 5-1; Vaughn votes no)

APRIL

PROPOSED BUDGET: Council passes resolution to receive Mayor Gusciora’s proposed budget with no municipal tax increase. ⧉

BUDGET HEARINGS CANCELLED: Council President Kathy McBride refused to hold budget meetings until the City hires a “budget officer” to “explain” the proposed budget.

APPROPRIATIONS PASSED: 22-102 Emergency Appropriations to the CY 2022 Temporary Parking Utility Budget for $200,000. (Pass 7-0)

DEPARTMENT REVIEW CANCELLED: City Council leadership cancels departmental budget hearings for Law, Administration, and Public Works.

DEPARTMENT REVIEW CANCELLED: City Council leadership cancels departmental budget hearings for Finance, Municipal Court, Housing & Economic Development, and Inspections.

BUDGET DEADLINE: State law requires City Council adopt a fiscal year municipal budget by the end of April.

MAY

REQUEST FOR HEARINGS: Gusciora writes to McBride refuting her requirement for a budget officer and advising that specific questions about the budget should be communicated and the Administration will provide detailed responses. ⧉

JUNE

APPROPRIATIONS REJECTED: 22-229 Emergency Appropriations to the CY 2022 Temporary Budget in Current Fund including Debt Service for $ $28,184,505.54. (Fail 4-3; McBride, Rodriguez, Vaughn, Wilkins vote no)

APPROPRIATIONS REJECTED: 22-245 Emergency Appropriations to the CY 2022 Temporary Utility Budgets CY 2022 in Current Fund for $19,011462.64. (Fail 4-3; McBride, Rodriguez, Vaughn, Wilkins vote no)

APPROPRIATIONS REJECTED: 22-246 Emergency resolution authorizing emergency appropriations to the CY 2022 Temporary Budgets of the City of Trenton Current Fund including Debt Service for $46,970,773.32. (Fail 4-3; McBride, Rodriguez, Vaughn, Wilkins vote no)  ⧉

EXECUTIVE ORDER: Mayor Gusciora issues Executive Order 22-04 permitting payment of City debts and continuation of uninterrupted services to residents and businesses. ⧉

JULY

DEPARTMENT REVIEW: Council holds budget hearings for Municipal Court and Finance.

DEPARTMENT REVIEW: Council holds budget hearings for Housing & Economic Development and Inspections.

DEPARTMENT REVIEW: Council holds budget hearings for Mayor’s Office and Health & Human Services.

DEPARTMENT REVIEW: Council holds budget hearings for Water.

DEPARTMENT REVIEW: Council holds budget hearings for Clerk’s Office and Recreation.

DEPARTMENT REVIEW: Council holds budget hearings for Police and Fire.

TAX DEADLINE EXTENSION: Municipal tax deadline extended for third quarter bills. ⧉

AUGUST

CREDIT DOWNGRADE: Moody’s downgrades City of Trenton’s bond grading following City Council refusal to pay debt service. ⧉

SEPTEMBER

STATE INTERVENES: To allow the City to issue fourth quarter tax bills, the NJ Department of Community Affairs sends the City a letter confirming use of the tax rate from the April proposed budget to generate tax bills.

OCTOBER

BUDGET HEARING: City Council leadership schedules hearing to adopt, or adopt with amendment(s), the 2022 municipal budget.

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