It looks like Gov. Chris Christie’s administration was granted the authority to immediately seize control of financially distressed Atlantic City.
This was the result of the state Local Finance Board voting 5-0 to approve a five-year state takeover of the local government.
This action would be taken in order to keep Atlantic City from becoming the first New Jersey municipality since 1938 to go bankrupt.
What will happen is the state will be given the power to assume key functions usually controlled by local leaders: renegotiating union contracts, hiring and firing employees, selling city assets, and even the reversal of decisions of the city council.
The state needed to take this kind of action back in 2002 when it took over Camden.
City leaders on Monday introduced a five-year financial plan to stave off a state takeover and the Mayor, Don Guardian, had said that if the takeover was approved, the city would challenge the move in court.
The fiscal problem is basically the result of the five casinos that have closed in Atlantic City since 2014, having a catastrophic impact on the city’s tax base.
As a result of these closures, the city has lost $100 million to its budget.
On top of this loss is the fact that the city is more than $500 million in debt.
The governor signed a rescue package in May 2016 that gave local officials 150 days to come up with a five-year recovery plan, after which the state would impose a takeover if the plan was rejected.
One of the areas affected is the city’s Municipal Utilities Authority, which provides residents with water. Those opposing the Governor are concerned that his administration could seek to privatize it.
After the vote was taken, Moody’s Investor Services issued a statement saying the takeover is a “credit positive move” because the state now has the ability to make the city’s debt payments due Dec. 1 and 15.
The vote came a day after Republican Donald Trump was elected America’s president. Christie, one of Trump’s top advisers, could be given a post in the new administration, forcing him to resign as governor.
That would mean Lt. Gov. Kim Guadagno would succeed Christie.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
