Spending cuts – but not bankruptcy – eyed for Atlantic City

Atlantic City's emergency manager is recommending spending cuts, consolidation and privatization of some governmental functions as a way to get the financially struggling gambling resort back on its feet.

But in a report issued Friday afternoon, Kevin Lavin is not recommending bankruptcy as an option.

Gov. Chris Christie appointed Lavin a year ago to help shepherd the city through a financial crisis. His term ends at the close of business Friday, but he'll still advise the state on ways to help the city.

"While meaningful and measurable progress has been made, the turnaround process needs to accelerate with a sense of urgency for the City to move from its present state of fiscal crisis to long-term fiscal stability," Lavin wrote.

Lavin said the state and city have agreed on ways to reduce a $120 million budget deficit down to $30 million for each of the next five years. But he says additional steps, such as regionalizing the city's police force with neighboring towns and privatizing the fire department, must be considered.

He said he does not support a municipal bankruptcy filing -- something that analysts and some elected officials in neighboring towns have recommended for the resort.

The report came three days after New Jersey lawmakers introduced a takeover bill that would give the state vast authority over Atlantic City's major decisions, including the right to sell off city assets and land. Its sponsor, Senate President Steve Sweeney, wants the city to sell its municipal water plant and the former Bader Field airport site to raise money.

But Lavin's report does not call for the immediate sale of either. Rather, it recommends dissolving the municipal utilities authority and having the city run it more efficiently. It also says Bader Field is an extremely valuable piece of property, but its current value is low. The city should hold onto it with an eye toward selling it in the future when things improve, Lavin says.

The report notes that police and fire operations account for a major part of the city's budget and calls for regionalizing the police department and privatizing the fire department.

It also says the city will need to negotiate with casinos and other property owners to accept less for outstanding tax appeals they already have won from the city.

Lavin says ACDevCo, a public-private entity, should assume a greater role in planning and developing land in the city with an eye toward spurring new development.

The report came hours after Bob McDevitt, president of Local 54 of the Unite-HERE casino workers union, endorsed the state takeover.

"Atlantic City is out of easy choices," McDevitt said. "All of us, our families and our friends, have been affected by the free-fall we have endured for several years now. Atlantic City and its primary industry is still the economic motor of South Jersey. Tens of thousands of jobs and families depend on us to make smart -- and often tough -- decisions. For that reason, I believe we should view the plan to have the state of New Jersey assume management of Atlantic City's finances as an opportunity, and we should reach for the helping hand rather than bat it away."

Also Friday, City Councilman Kaleem Shabazz wrote to Sweeney and other sponsors of the takeover bill asking them to reconsider their "proposal to disenfranchise the citizens of Atlantic City."

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