In the News - The City That Cried Wolf

Posted by M Paradis

August 27, 2008

NJ doesn’t have an extra $12M to keep up State Police patrols in rural towns - yet $45M in “distressed cities aid” is given to the city of Newark - and even after Newark is slated to receive $45M in emergency funding - a bold (insensitive) move on the part of Newark’s governing body to increase salaries.

Pay hike sought for 63 Newark employees
City leaders, aides among nonunion staff
Sunday, August 24, 2008
BY KATIE WANG
Star-Ledger Staff

Newark Mayor Cory Booker’s administration is proposing to give a retroactive 3.5 percent salary increase to 63 city employees, including the business administrator, city clerk and other department directors who are not represented by a union.

The proposal, which would give a raise for this year and last year, has the initial backing of the city council. It comes less than a week after the state agreed to supply $45 million in emergency funding to plug the city’s budget and dodge a fiscal crisis.

In exchange for the money, the city agreed to tighter restrictions on its spending, including a freeze on hiring, pay hikes or promotions. Any salary increases must be approved by the state Department of Community Affairs and the state Department of Personnel.

“We are currently looking into this situation and have reached out to Newark for further information,” said Chris Donnelly, a spokesman for the Community Affairs department.

Assemblywoman Alison Littell McHose (R-Sussex), who sits on the Assembly Budget Committee and has been critical of Newark’s spending practices, was surprised the raises were being proposed.

“I think it’s very bold of them and a little brazen,” McHose said. “I would think that the mayor would be a little more sensitive to the political ramifications of this.”

The city council approved the first reading of the salary ordinance on Tuesday. It is scheduled to vote on it a second and final time at its meeting next month. If approved, it will then go to state officials.

Michelle Thomas, acting business administrator, said the fiscal impact of these increases is $185,000, but said they have already been included in last year’s and this year’s budget.

“These employees have not received salary increases since 2006,” said Thomas.

Thomas said the employees deserve a raise because they have found ways to increase the city’s revenues even as state appropriations have dropped.

“It’s because of the efforts of these leaders who have been working really hard with no cost-of-living adjustment,” Thomas said.

The proposed increase, she said, is the average of all the increases that union-represented employees received. Thomas said the city just settled and signed off on its last remaining union contract with SEIU 617, prompting the administration to propose raises for management.

The nonunion employees on tap for a raise include Thomas, corporation counsel Julien X. Neals, Police Director Garry McCarthy, Fire Director David Giordano, Police Chief Anthony Campos, city clerk Robert Marasco and Stefan Pryor, director of the Department of Economic and Housing Development.

Thomas’ salary is $178,145, Neals is earning $154,057, McCarthy’s salary is $170,000, Giordano is earning $137,125, Campos’ salary is $149,360, Marasco is earning $148,214, and Pryor is earning $178,125.

Pryor’s salary was adjusted in 2007 from $137,125 to $178,125 — which is what he had negotiated for when he took the job.

“This to me seems outrageous at a time when everyone is struggling financially,” said McHose. “For this small number of political appointees in the city of Newark’s administration to receive retroactive pay raises is wrong.”

In addition to high-level directors, the city also is proposing to give raises to aides in Booker’s office, the executive and personal secretaries in the mayor’s office, and all of the council aides.

The salary range for aides in Booker’s office runs from $58,956 to $135,340, but seven of his 10 aides earn more than $100,000.

Aides include key employees such as chief of staff Pablo Fonseca, who was the highest-paid aide, and deputy chief of staff Jermaine James, who earned $114,821.

Council President Mildred Crump said voting in favor of the increases was a difficult decision for the entire council, which voted unanimously on the first reading of the salary ordinance. Council members Oscar S. James II and Augusto Amador were absent.

“It was a most difficult decision,” Crump said. “The unfortunate truth is the legislation ties the salaries of those who make six figures with those who make $35,000 and $45,000.”

Aides to the council members earn between $43,596 and $64,651.

Crump said she is aware of the negative perception this will bring to a city that has already been criticized for its spending practices.

“As so often happens, there are people who are the recipient of a windfall when you’re trying to help the underdog,” Crump said.

West Ward Councilman Ronald C. Rice said he agonized over voting in favor of the ordinance.

“We did it for the lower-ranking folks,” he said. “We couldn’t separate them out. We thought at the end of the day it was in the interest of the lower-salary folks who are not covered by contracts to get the 3.5 percent.”

Rice said the administration has agreed to find other cuts in its budget in exchange for these increases.

The city has struggled for years to get its finances in order. Under former mayor Sharpe James, it balanced its budget using hundreds of millions of dollars from a one-time settlement with the Port Authority over payments for Newark Liberty International Airport.

Under Booker’s administration, its reliance on the payments has dropped to $40 million, but the city still needed help from the state to balance its budget and avoid a significant tax increase.

City officials anticipate asking for more emergency money next year. In addition to the hiring and salary freezes, employees are forbidden from out-of-town travel and overnight stays in New Jersey.

Katie Wang may be reached at (973) 392-1504 or kwang@starledger.com.