PERTH AMBOY — This is an official communication released by the City of Perth Amboy. The following is a response to allegations released [Friday, September 28, 2012] on www.njtoday.net, by James J. Devine, entitled “Facts Catch Up To Mayor,” of false financial budget information provided by the City’s governing body to the residents of Perth Amboy.
During the Caucus Meeting on Monday, September 24, 2012, a report of the outstanding debt of the city was requested and provided to Councilman Fernando Gonzalez. The report discussed all of the methods used by the prior administration to create debt.
The claims stated in the article refer to an Annual Debt Statement that does not record all of the debt. The Calendar Year 2012 Budget Message (a 22-page public document) released on February 24th and provided to the City Council Members, contains all the forms of debt for which the City is liable.
The false statement claims that the City’s outstanding debt is $230 million. The total inherited debt of the City at the start of this administration was about $250 million, by the end of 2012 the total will be under $195 million. Mayor Wilda Diaz’s estimate of debt reduction is underestimated; it has actually been reduced by more than $55 million.
The errors in the claims are due to the misunderstanding of the actions of the former administration, such as the following:
• Use of capital leases by the former administration funneled through the MCIA
• Use of off-the-books debt that was not reported to the Local Finance Board or the Division of Local Government Service
• Taxable issues that were not included and lastly;
• Not recognizing savings resulting from the use of premiums paid to the City by the successful bidder, which were applied directly to debt reduction in addition to the reduced interest rates.
In support of the administration significant improvements and debt reduction, Standard & Poor’s, a credit rating agency raised the City from a stable to a positive outlook, due to the City’s financial responsibility, reflecting improved financial management, practices and reserves. Standard and Poor’s stated in their report:
“With a new administration in place, proactive financial management actions, and consistent levy waivers, finances have improvements. The city changed its year-end to Dec. 31 from June 30, effective for fiscal 2011. With the transition, management was able to bolster its current fund and achieve some flexibility in making budget adjustments and implementing a surplus rebuilding plan.”
Also, in a written letter from Thomas H. Neff, Director of Local Government Services of the State of New Jersey stated “In particular, your (Mayor Wilda Diaz) efforts at fiscal restraint and restructuring debt, in a manner that almost cut interest rates in half, have saved the taxpayers scarce resources and otherwise restored the trust of the private market place, which is so critical to Perth Amboy’s continued progress.”
REGARDING THE ALLEGATIONS ABOUT CHEVRON:
The sale price of $260 million included non-taxable business personal property. By all accounts from those who understand commercial/industrial valuations/assessment practices in New Jersey, the City’s settlement was beneficial to the City. For nearly five years the appeal was fought. It was settled on the best possible favorable terms for the City.
REGARDING THE ALLEGATIONS ABOUT THE LANDINGS:
The refund to Landings was not a settlement, but a payment made at the direction of the Tax Court. The City disputed the appeal diligently and lost most of its case due to errors in the original valuation performed at the time of the revaluation managed and decided by former Mayor Joseph Vas.
The Administrator, Finance Officer and Senior Accountant can each provide calculations to show the errors of these false claims. The Local Finance Board and the City Council have been fully informed of the financial condition of the City to the present date. The current administration only provides accurate information to the public.
For additional information on the Calendar Year 2012 Budget Message, please visit: http://ci.perthamboy.nj.us/agendas/Finance/cy_2012_budget_message_20120216.pdf.
Press Release 9/28/12
