"We are very proud to present this plan and we anticipate its full approval," says Atlantic City Mayor Donald Guardian.

Atlantic City officials have unveiled a five year financial rescue plan that they hope will be enough to prevent a state takeover.

The plan, which passed the city council in a 5-3-1 vote Monday night, would cut the city's budget down to $207 million by 2021 compared to a spending plan for 2015 that was $262 million.

City officials said they will submit the plan to New Jersey's Department of Community Affairs Tuesday and the state will have until Nov. 1 to decide whether to accept it.

If the plan is rejected, state intervention would take effect empowering New Jersey's Local Finance Board to alter the city's outstanding debt and municipal contracts.

A major component of the recovery plan revolves around selling Atlantic City's former municipal airport property to the Atlantic City Municipal Utility Authority for $110 million with proceeds utilized to pay off its outstanding debt.

A summary released by the city at the meeting said that the $110 million plus $105 million in low-interest financing would pay down all outstanding debt owed to the Borgata and MGM casinos as well as repay the state for deferred employee benefit costs.

Once finalized, the sale would leave the city with $30 million in reserves.

The plan also includes a settlement between the city and the Borgata in which the city pays the casino owners $103 million of the $150 million in tax refunds it owes the casino.

A $33 million settlement with MGM would also be reached under the proposal.

The recovery plan summary noted that the city borrowed $183.7 million from 2012 to 2014 for earlier tax appeals with existing tax appeals driving more than 80% of its projected debt service through 2040.

Another cost-saving measure introduced as part of the five-year plan is cutting the full-time workforce by 100 from 965 to 865. City officials said the headcount can be reduced by transferring a majority of its health and senior services to Atlantic County under a shared services agreement, competitively bidding out 10 services to the private sector, and using early retirement incentives.

Following the city council approval, Mayor Donald Guardian thanked in a statement the city's financial advisors PFM Group and NW Financial as well as bond counsel McManimon, Scotland and Baumann for their hard work comprising the plan.

He stressed that the plan includes no tax increases and decreases reliance on state aid.

"We have put together a five-year recovery plan with the expert advice of some of the most respected and well-known financial firms in the country," said Guardian. "We are very proud to present this plan and we anticipate its full approval by the Commissioner of the Department of Community Affairs."

Guardian said last week while giving an outline of the rescue plan that the city will issue tax-exempt bonds as part of the recovery efforts.

They would be backed by proceeds of the Casino Investment Alternative Tax and secured by New Jersey's Municipal Qualified Bond Act.

Guardian said the bonds would receive an investment grade rating and see interest rates of less than 4%.

Debt service on the bonds is estimated at $4 million per year for each of the next five years and $7 million yearly for the remaining 20 years, which Guardian stressed will be covered by cost savings in the recovery plan.

Atlantic City nearly defaulted in June before state lawmakers approved a rescue package on May 27 that gave it 150 days to adopt an acceptable five-year turnaround plan and plug a deep budget shortfall.

The Jersey Shore gambling hub, which has suffered five casino closures since 2014, is rated CC by S&P Global Ratings and Caa3 by Moody's Investors Service.

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