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Atlantic City state overseer Chiesa: "There is no cap on our fees."

Former Sen. Jeffrey Chiesa, the state-appinted, $400 an hour Atlantic City overseer, refused to disclose how much he and his team of lawyers and accountants have billed tax payers to run Atlantic City the last four months.

ATLANTIC CITY _ Former Sen. Jeffrey Chiesa was on the line, offering a rare interview, but the state-appointed, $400 an hour Atlantic City overseer still refused to disclose how much he and his team of lawyers and accountants have billed tax payers to run Atlantic City the last four months.

Despite calling police and fire department negotiations, both of which are tied up in court over his proposed cuts, a "money grab," against a backdrop of "financial chaos," and seeking layoffs of 100 firefighters, Chiesa said of his own team's bills, "There is no cap on our fees."

"The bills will speak for themselves," he said Wednesday, speaking from his West Orange law firm. He referenced multiple lawyers in his law firm and accountants on his team engaged in many aspects of Atlantic City work, but declined to give an exact number. An open records request for his billing filed by the Inquirer is still under review, according to the state's Department of Law.

"We're going to do everything we can to protect the city's financial interests in a professional way," he said. "I understand, and it's legitimate for people to want to look at our fees.

"It's a significant discount on our fees," he added, of the hourly pay rates proscribed in his retention agreement, which also allows a $90 an hour rate for paralegals, which union officials have described as higher than the fire chief's hourly rate. An associate, Francis M. Giantomasi, paid at $240 an hour, was working out of the state's fifth floor office in City Hall on Wednesday.

Chiesa, a former state attorney general, is a partner in the law firm of Chiesa, Shahinian and Giantomasi, formerly Wolff & Samson, whose former partner, David Samson, another close ally of Gov. Christie, was recently sentenced to probation and home confinement on a bribery conviction related to a United Airlines flight to his vacation home in South Carolina.

Chiesa was appointed the "director's designee" to run Atlantic City, with broad powers to hire, fire, sell assets and break union contracts, under the state's Municipal Stabilization and Recovery Act designed to address Atlantic City's fiscal crisis and opposed by Mayor Don Guardian and city council.

During the nearly hour-long conference call interview, with his $350 an hour partner Ron Israel listening in, Chiesa said he believed his law firm's involvement was already bearing fruit, and would leave the city "in a financial place, better than it is now, with more investment to come in to the city." He also cited the recent sale of the Trump Taj Mahal to Hard Rock International.

"The negative perception is way overstated," Chiesa said. "There's real opportunities here. The climate has definitely improved.""

Chiesa said he was still willing to negotiate directly with the police and fire unions, both of which have gone to court to block pay cuts, layoffs, schedule adjustments and other changes to their contracts Chiesa is seeking to impose. Judges have temporarily blocked those actions pending further hearings.

But Chiesa said he views the police and fire contracts as structural impediments to solving the overall financial crisis in Atlantic City, where five casinos have closed and ratables have plummeted from $20 billion to $6.5 billion in the last decade.

Still, Chiesa said, "I certainly never saw my role as coming here to break the unions. It was never our intention and is not our intention."

He added, though, that "nothing was off the table," including a regionalization of the departments as was done in Camden after its city police department was dissolved. As far as the early retirement incentives that the law allows, he said those become "increasingly less likely" without any agreement with the unions.

"This is all about the money," he said. "There's no public safety at stake here at all."

Asked about Judge Julio Mendez's decision to temporarily block layoffs that would reduce the number of firefighters to 125 based on public safety concerns, and the judge's favoring of a union study that advocated a higher number of firefighters, Chiesa did not back off the 125 figure as his goal.

"This was not a number that was pulled out of thin air," he said. "The judge asked us to go back and speak with them."

Mendez ruled the takeover law constitutional, and said the state's authority was allowable due to its police powers in emergency situations, but he said the law itself placed limits on the state's power, including the requirement that actions be "reasonable."

Chiesa said his team's ability to settle an outstanding $165 million debt with Borgata over its successful tax appeals, to move forward on these contracts and pursue other cost savings avenues like a pending contract to privatize trash collection were proof that the state's role under his law firm's guidance was proving effective.

"I was pleasantly surprised that we were able to resolve it," he said of the $72 million settlement with Borgata and parent company MGM International.

But Chris Filiciello, the mayor's chief of staff, said those items - the Borgata negotiations, city union deals, shared services, were all things the city had already had on the back burner, waiting for various state monitors and emergency managers to act.

"The mayor could have solved half of this stuff already, but ironically the state is taking credit for it," Filiciello said. "But they were the ones holding it up."

Chiesa declined to give specifics on how much further he wanted to cut the city's budget, which the mayor says is currently $212 million, with last year's budget gap of $100 million reduced to about $5 million.

"I don't know what the mayor's referring to exactly," Chiesa said. "I don't have a target figure in mind. We talk to our accountants every week about it. I'm not going to commit to a number. I'm trying to move it to the best spot as I can. I don't want to place any limitations about it."

He said he had not yet decided what path to pursue concerning the city's Municipal Utilities Authority, valued at around $100 million and coveted by several private water companies with close ties to influential political figures.

The state law that gave Chiesa the power to run Atlantic City, adopted last May, does not allow the state to take any action regarding the MUA for one year. Citizens are now organizing a petition drive to bring the issue to a referendum designed to keep the MUA in public hands. The county has also expressed a willingness to take over its operations.

"Our options remain open," Chiesa said.

He said he was still deciding an approach to the city's blue collar unions, where cuts would offer "much less savings on lower paying jobs, quite frankly. I'm sensitive to that."

He said he had other tax settlement liabilities with casinos to negotiate, and did not rule out attempting to renegotiate the city's $350 million bond debt, but said that the Wall Street debt was a lower priority.

"I don't know if we'll be able to negotiate with other bondholders," he said.

He said he has met with entities interested in buying the city's old municipal air strip, Bader Field, and other assets. And he said he was not ignoring quality of life issues in the city, like chronic flooding and poverty, and said that a better financial footing for the city would help all residents.

"We talk to all of the folks that work in the city," he said. "We are trying to address quality of life issues. Taxes are way too high. All the steps taken are designed to reduce the tax burden on the citizens."

He acknowledged he was not working off any written plan. The city's five year plan designed to stave off the takeover was rejected by the state. "We're down here for four months addressing catastrophic financial issues as effectively as we can," Chiesa said.

"There are all kinds of issues that I didn't expect to necessarily be focusing on," he said, "beach leases, all kinds of things happening. I don't know the exact number of lawyers, but the size of the task is enormous."

Chiesa said he had no plans for any wholesale dismissal of city department heads, as was done in Michigan cities under similar state takeovers.

In fact, Chiesa praised the department heads he's worked with as "really top flight professionals I enjoy interacting with," but stopped short of giving credit to Atlantic City Mayor Guardian, who recruited and hired most of them.

He also declined to say what he considered to be the proper role of the Mayor under the state takeover. He said he stopped answering the mayor's e-mails when the mayor became a potential witness in the firefighter's lawsuit against him.

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