McKeon: Prieto Bill Will Include PILOT, Introduce Benchmarks

Assembly Speaker Prieto, whose alternative Atlantic City takeover bill goes to committee tomorrow.
Assembly Speaker Prieto, whose alternative Atlantic City takeover bill goes to committee tomorrow.

An alternative Atlantic City takeover bill from Assembly Speaker Vince Prieto (D-32) goes to the Assemby Judiciary Committee tomorrow. Chairman John McKeon (D-27) told PolitickerNJ that the bill will include the payment in lieu of taxes agreement that became a companion bill to the Senate version, and that the new legislation would introduce a benchmark system. Prieto’s “Atlantic City Plan for Implementing Economic Recovery Act” would also keep the state from intervening in public union contracts for another two years.

McKeon New Jersey Legislature

Prieto’s bill would create a five-person committee for adjudicating decisions about the city’s finances. That committee, McKeon said, would include Atlantic City Mayor Don Guardian, Governor Chris Christie’s second-biggest foe in the takeover standoff after Prieto. The Atlantic City Council President, the state treasurer, the head of the Department of Local Government Affairs, and an appointee from the governor. A member of the state Supreme Court would have final say over whether the city warrants further state oversight at the end of each year.

“The five of them will craft a five-year plan, with benchmarks, as it relates to putting the fiscal house in order, and will give them ever-increasing authority on a year-by-year basis if the benchmarks that that they set are not substantially met,” McKeon said. “It’s a graduated version, with checks and balances, of frankly what the governor is looking for now.”

“The PILOT was never really the controversy here,” he said of the agreement being merged into the language of a single bill.

In the first year, city assets can be divested if the city fails to reach those standards. If the benchmarks have not been met by year two, union contracts will be back on the table for being altered or torn up. An independent public accountant would also be given final authority over any sale, merger or privatization of the city’s water authority after that two-year period.

Christie has said that he will veto any Assembly bill that differs in any way from the version passed in the Senate. Prieto’s bill will have a hard time reaching Assembly floor that same day, the last Assembly session before Atlantic City is slated to run out of money. Though Prieto’s counter-proposal has the support of many in the Assembly, it most likely will not have the two-thirds majority required for it to go to a vote on the same day it is introduced in committee.

According to the Assembly Majority Office, under the bill:

  • The casino gaming properties in Atlantic City would, no more than 30 days after the bill’s effective date, provide $120 million total to the city for tax year 2016 in payments in lieu of property taxes. Such payments would continue for 10 years. The figure can change annually based on gross casino revenues and inflation. Of this money,  13.5 percent would be remitted to Atlantic County.
  • The bill also requires the casinos to make additional payments to the state for 2015 through 2023, starting at $30 million for 2015. This money would be remitted by the state to Atlantic City upon approval of a financial plan submitted by the city to the Local Finance Board.
  • A 5-member Atlantic City Planning Committee would be created to, within 90 days, develop and adopt a five-year financial plan for the city. The plan would include specific annual fiscal benchmarks the city must reach each year.
  • The committee would include the state Department of Community Affairs commissioner, the state Local Government Services director, the state treasurer, the Atlantic City mayor and the Atlantic City council president.
  • Upon creation, the committee would be able to control litigation and the city’s legal affairs, retain professional services for the city, retain bond counsel and adopt bond ordinances, negotiate and execute documents on behalf of the city and procure goods and services.

After a year, the committee would issue a report on whether it has reached its benchmarks to a special master appointed by the state Supreme Court chief justice. If the special master determines benchmarks have not been met, the committee could then:

  • Dissolve municipal departments and other operations, except for those directly related to public safety and emergency services.
  • Veto the minutes of Atlantic City’s governing bodies.
  • Sell, lease or dispose of municipally owned assets, such as the water, sewer and wastewater facilities.

If the benchmarks are again not met, the committee could then:

  • Amend or terminate any existing contracts or agreements.
  • Unilaterally modify, amend or terminate any collective bargaining agreements, except for those related to school districts.
  • Act as the sole collective bargaining agent for the city.
  • Unilaterally modify wages, hours or other terms of employment for any expired collective bargained agreements.
  • Abolish any non-elected municipal positions in the city at any time.
  • Enter into an agreement with Atlantic County or other municipalities in Atlantic County to share or consolidate municipal services.
  • Exercise other various authorities under state law.

The bill also repeals the law requiring the Casino Reinvestment Development Authority to enter into an agreement with the Atlantic City Alliance.

“Nothing in the bill prevents the governor from also using his existing authority to help Atlantic City, including using transitional aid agreements to compel financial actions,” Prieto said. “With this bill and the remedial actions it can bring, along with the governor’s existing tools, we can put Atlantic City on the right track for fiscal success and help it transition to the resort destination we all know it can become in the coming years. It is the right compromise for everyone, especially the people of Atlantic City.”

McKeon: Prieto Bill Will Include PILOT, Introduce Benchmarks