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Councilman: A.C. to get powerful emergency manager

Update: Gov. Christie's office confirms creation of emergency management team for Atlantic City.

Atlantic City Mayor Don Guardian gives his unofficial State of the City speech Thursday, Jan. 15, 2015, at Caesars Atlantic City. (AP Photo/The Press of Atlantic City, Michael Ein)
Atlantic City Mayor Don Guardian gives his unofficial State of the City speech Thursday, Jan. 15, 2015, at Caesars Atlantic City. (AP Photo/The Press of Atlantic City, Michael Ein)Read more

Update: Gov. Christie's office sent out an update officially announcing that a new "Atlantic City Emergency Management Team" would be introduced following the 11 am. Summit. The team will consist of Kevyn Orr, the former emergency manager for Detroit, which just emerged from bankruptcy, and Kevin Lavin, a corporate finance consultant at FTI Consulting who more typically advises financially troubled companies.

ATLANTIC CITY - On the eve of Gov. Christie's third Atlantic City summit, City Council President Frank M. Gilliam Jr. said Wednesday night that the state was poised to bring in a powerful emergency manager to oversee city government.

"They're moving forward with an emergency manager," Gilliam said before the Council meeting. "It's very upsetting."

Christie is scheduled to speak at the opening of Thursday's summit. The governor's office did not release any further details Wednesday.

Among proposals to help Atlantic City recover from the closure of four casinos in recent months is a Detroit-style emergency manager with extraordinary powers over city government and finances - an idea opposed by Mayor Don Guardian.

Talk of an emergency manager permeated City Hall on Wednesday. Councilman Moise Delgado posted on his Facebook page: "There will be a New Czar in town soon."

Gilliam said he was distressed that the governor was resorting to a quasi-takeover when he and the Guardian administration had been working proactively to cut the budget and address the city's cash crunch.

"I don't understand why," Gilliam said. "We've done everything we possibly can do from a municipality's standpoint."

Guardian's chief of staff, Chris Filiciello, would say only that "we are waiting to hear what the governor proposes tomorrow." Guardian had said he was "100 percent" opposed to a manager.

State Sen. James Whelan (D., Atlantic), a former mayor and council member, said Wednesday that he was hearing what everyone else was hearing - that the guy from Detroit was coming to Atlantic City.

Detroit's high-powered emergency manager, Washington bankruptcy attorney Kevyn Orr, recently ended his tenure there as the city emerged from bankruptcy. He has not said what he will do next. He did not return a phone call for comment on the Atlantic City situation.

In Michigan, powerful emergency managers essentially sideline the mayor and city councils, and have power to impose cuts, privatize workers, and outsource departments.

"All I can say is, if we bring this guy in, what powers he will have is still to be determined," Whelan said. "Will he be a supercharged city manager sharing powers with the fiscal monitor, or will he be a full, full-time city manager? We don't know yet.

"What his role will be vs. what the mayor's and City Council's duties will be, the governor will make this judgment."

The city is already under supervision by a state monitor, Ed Sasdelli, through the Department of Community Affairs.

Business administrator Arch Liston declined to comment after speaking privately with Gilliam after a well-attended noon presentation on new housing options in Atlantic City.

Jon Hanson, the head of Christie's summit commission on Atlantic City, which recommended imposing an emergency manager modeled on Michigan's law, said, "I anticipate that the governor will respond [Thursday] to the recommendations that we made. The ball's in his court."

Hanson also proposed diverting the $30 million a year now used for marketing to help ease the city's budget crunch and converting casino-tax payments to a 15-year PILOT (payment in lieu of taxes) program in which the casinos pay $150 million a year the first two years and $120 million per year afterward. He has proposed creating a new public-private development arm in the city as well.

Whelan urged his fellow lawmakers and Atlantic County freeholders to support the PILOT program, through a bill cosponsored by Assemblyman Vince Mazzeo (D., Atlantic) and Senate President Stephen Sweeney (D., Gloucester). He criticized a competing Republican tax-relief package.

"As we face the reality of another very difficult budget year due to declining ratables, it is becoming clear that without this PILOT legislation, taxes will be raised significantly for Atlantic County taxpayers and businesses," he said in a statement. "It is my sincere hope that Assemblyman [Chris] Brown drops his competing proposal and joins his fellow Republicans to support the PILOT legislation and the rest of the legislative package."

Whelan said "a clear consensus of local leadership" needs to get behind his plan, and since Guardian is a Republican mayor, having Republican support in Trenton was critical for the tax package to gain approval as a bipartisan effort.

Whelan said he expected the Legislature to vote on his tax package next month.

Brown, who is advocating a five-year property tax freeze in his relief plan as opposed to a PILOT program, said the Whelan-Mazzeo plan was flawed.

"It has been my position all along, we should not just stabilize property taxes for a few casinos off the backs of hardworking middle-class families," Brown said in an e-mail. "I remain steadfast in my willingness to work with anyone to get it right. That is why I shared my plan with Mr. Hanson, so we can discuss everyone's ideas face to face as a group at tomorrow's summit."

Gilliam said the city would be happy to accept any help sent its way, but "we won't be open to usurping our powers as elected officials."

On Jan. 7, the City Council voted, 6-0, in favor of Guardian's proposed recovery plan, which in many ways mirrors the Whelan-Mazzeo-Sweeney plan. But in his 26-page plan, Guardian remained adamant about not bringing in an emergency manager, saying it would only add "a layer of government bureaucracy."