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About that Atlantic City takeover? Post-Christie, Sheila Oliver holds the cards

Lt. -Gov.-elect Sheila Oliver will decide whether to retain the services of Chiesa, Shahinian and Giantomasi, a West Orange law firm that has billed $3 million to run Atlantic City for Gov. Christie

Lt. Gov.-elect Sheila Oliver speaks with Atlantic City Councilman Kaleem Shabazz on Nov. 14 2017 in Atlantic City.
Lt. Gov.-elect Sheila Oliver speaks with Atlantic City Councilman Kaleem Shabazz on Nov. 14 2017 in Atlantic City.Read moreAmy Rosenberg

ATLANTIC CITY — New Jersey Gov.-elect Phil Murphy calls her a rock star.

But in Atlantic City, they may as well call her de facto mayor. Even as the broke-yet-beloved city looks to Councilman Frank Gilliam to be its newly elected mayor, it's Lt. Gov.-elect Sheila Oliver who will determine the fate of Atlantic City.

By appointing Oliver to head the Department of Community Affairs — New Jersey's lieutenant governor is required to hold a cabinet post — Gov.-elect Murphy signaled that Atlantic City will be Oliver's call. The DCA has run Atlantic City for a year under a far-reaching state takeover.

It was his first cabinet announcement, and it was a big one around the Boardwalk. As an assemblywoman, Oliver opposed the takeover altogether.

So if, say, you're a partner in Chiesa, Shahinian & Giantomasi, a West Orange law firm with ties to Gov. Christie, and want to know how much longer you'll be billing taxpayers $400 an hour to run Atlantic City, it's going to be Sheila Oliver's call.

She said Thursday it would be among her first calls.

"The first thing we have to do is take a look at what has been going on here, what the Chiesa firm has engaged in, what is on the table," Oliver said in an interview just before the League of Municipalities' final luncheon, in a room full of New Jersey VIPs, of which she and Murphy were newly minted. "We don't have access nor are we privy to everything that's going on.

"I have concerns with how much they're spending," Oliver said, of the firm, whose billing for the takeover has reached $3 million. "They always say the devil's in the details. But if we were trying to reduce expenses, we have to look at how much it's costing us for an external entity to run the government."

Or if you are a private water company waiting to make your move on the coveted Atlantic City Municipal Utilities Authority, don't look to Oliver for any help.

"I don't support privatization," Oliver said. "Just take a look at Flint, Michigan."

Oliver, former Assembly Speaker and an assistant Essex County administrator, has long signaled whose side she's on. In 2016, she traveled with the Black Legislative Caucus to Atlantic City to voice objections to the takeover.

Atlantic City Mayor Don Guardian, whose power was usurped in the takeover and who lost his reelection bid this month, said selecting Oliver to head DCA, the state's powerful apparatus overseeing state funding and services to municipalities, was a signal to the state's mayors, some of whom, like Guardian, famously tangled with Christie.

"If I can pick anybody in the state of New Jersey to be the head of DCA, that'd be my first choice," Guardian said. "It'll be wonderful for city, for urban issues, for minorities, for all the issues I'm sure every mayor feels have been neglected."

The DCA assumed powers over Atlantic City in November 2016, after legislation authorizing a takeover of the near-bankrupt casino town, where ratables had plunged from $20 billion in 2010 to $6 billion. Tim Cunningham, director of the Division of Local Government Services, was the salaried official given the power, but Christie appointed a designee, former Senator and Attorney General Jeffrey Chiesa, a longtime ally, as overseer.

Chiesa's contract allowed his entire law firm to bill for their time.

The law gives the state power over payroll, assets, union contracts, and city council, for up to five years.

In the last year, the state settled a $165 million tax appeal debt with Borgata Hotel and Casino for $72 million, a savings Christie said more than made up for the law firm's fees — and altered police and fire contracts. It spent a lot of time fighting for firefighter layoffs, which a judge blocked.

Christie's DCA refused an interview request on the takeover, asking for written questions. It then refused to answer those questions. Mayor-elect Gilliam, who said he anticipates the Murphy administration's restoring local control, did not return a message.

Ending the takeover outright would require repealing the legislation, said State Sen. President Stephen Sweeney (D., Gloucester).

"It's not going to be repealed," Sweeney said bluntly.

But the way DCA runs the takeover could change dramatically.

"That's her call," Sweeney said, of Oliver.

A takeover proponent, Sweeney said he was frustrated the state refused to offer Early Retirement Incentives instead of pressing for layoffs. And he said he did not envision the city being run by a law firm in North Jersey billing $3 million.

Now that tax appeals are settled, and state-backed bonds issued, Guardian said the Chiesa firm had overstayed its welcome. He noted two more levels of oversight exist — a business administrator, Jason Holt, who now works for the state, and a state monitor in place since 2010.

"I think the transition should be quick — before they do any more damage," Guardian said.

Oliver, 65, said she is ready to dig in.

"It's the culmination of everything I've done professionally all my life," she said.