Hoboken will remain under state oversight for an additional year as the New Jersey Local Finance Board yesterday voted to continue its enhanced supervision of the city.
The decision means that Hoboken will continue to go before the LFB for approvals on all borrowing and a state monitor will remain at city hall to help the municipality get back on solid fiscal ground. Typically, local governments seek LFB approval on refundings and non-general obligation bonds and notes, and can issue new-money GOs without state authorization.
Last September, the state opted to place Hoboken under supervision when it failed to approve a fiscal 2008 budget before the end of the fiscal year on June 30. In addition, the city ended fiscal 2008 with a $10 million deficit.
The LFB, a division of the Department of Community Affairs, oversees local borrowing throughout the state and signs off on municipal operating budgets.
City Council President Dawn Zimmer became Hoboken's acting mayor in early August following former Mayor Peter Cammarano's resignation. Cammarano, who took office on July 1, was one of 44 public figures arrested in a statewide public corruption investigation. A special mayoral election will be held in November, with the winner finishing the remainder of Cammarano's term.
"We extended the supervision a year because Hoboken does not have an elected mayor, the city has not introduced and adopted a budget on its own, and there are still many fiscal improvements that need to be made," DCA spokeswoman Lisa Ryan said in an e-mail.
Along with the supervision vote on Hoboken, the board weighed in on borrowing plans for local governments throughout the state. Larger bond transactions that the panel approved include a $60 million new-money deal for Vineland in southern New Jersey. The Cumberland County Improvement Authority will issue the bonds on behalf of the city and the sale will include both tax-exempt debt and taxable Build America Bonds, according to Steven Wymbs, the authority's executive director.
Wymbs anticipates heading to market by the end of this month, with the bond proceeds financing a new electric generating system for the Vineland Municipal Electric Utility.
The Camden County Improvement Authority is also considering BABs as a part of its upcoming bond transaction. The board approved a $41 million new-money sale that will include $17 million of recovery zone bonds, with the remaining debt made up of tax-exempt bonds and-or BABs, depending upon market conditions, according to Jim Blanda, the authority's executive director.
"We'll try to take advantage of the recovery zone bonds to the extent that we can, but that's limited to $17 million," Blanda said. "And then depending on the market for the BABs, we'll look at the market and see if we want to do the balance with BABs or maybe it may be more advantageous to do [a mix of] some tax-exempt, some [BABs]."
The authority will select an underwriter in the next 10 days and plans to sell the debt in the next 30. The current plan is to offer one sale, but Blanda said the authority would sell the bonds in two transactions, if need be.
The bonds will go towards a new 9-1-1 tower system, as well as land acquisition and design costs for a new county courthouse in Camden. The sale will also support road improvements, equipment, and other capital needs.
The board also approved $23 million of borrowing for storm water and wastewater improvements in Bayonne through the New Jersey Environmental Infrastructure Trust. The trust typically issues its annual bond deal in October.
Earlier this year, Bayonne officials planned on issuing the debt as redevelopment area bonds, which involve payments in lieu of taxes, but low interest rates offered by the trust helped change those plans. It offers 50% to 75% of loans to municipalities at 0% interest.