ATLANTIC CITY, N.J. -- Atlantic City has positioned itself to make short-term required debt payments with no plans to enter bankruptcy, the city's finance chief said Tuesday.
Atlantic City Revenue & Finance Director Michael Stinson said in a meeting with The Bond Buyer that the city is on track to pay its bills this year and a 2015 budget expected to be approved by the end of the day from New Jersey's Local Finance Board would address a $101 million budget gap.
Stinson could not provide specific details on the fiscal plan, but said it would be balanced with no municipal tax increases and budgets for new expected casino revenue. The city's emergency manager Kevin Lavin, who was appointed by Gov. Chris Christie in January, is also expected to issue his second report this week with recommendations to improve the municipality's financial position.
"We're not going to fail to make any bond debt payments this year," said Stinson. "At this point in time there is no plan to go into bankruptcy."
Stinson said the only way Atlantic City will be forced to consider a bankruptcy option is if an agreement is unable to be reached with union workers at the Borgata Casino, which the city owes $153 million in tax refunds. Stinson said he is hopeful that the casino workers will be willing to compromise to avoid Atlantic City being forced into bankruptcy.
The New Jersey Legislature approved a package of bills on June 25 that authorizes casinos to make payments in lieu of taxes over the next 15 years and would reallocate the casino alternative tax to pay debt service on Atlantic City-issued municipal bonds. Stinson said Wednesday he anticipates Christie will sign at least part of the legislation, which would allow the city casinos to achieve additional revenue for its 2015 and 2016 budget. Christie has not commented yet on whether he will support the rescue package.
Atlantic City Mayor Donald Guardian also said negotiations with Borgata would be a key factor in determining if the city avoids bankruptcy. He said Lavin's involvement has been a positive and will help steer the city toward a better future.
"Kevin has been incredibly supportive," said Guardian. "I do believe we are in a good position."
