City May Be Unable to Pay Fire Department, Other Employees By Year's End (Video)

The Hoboken City Council was unable to move $2 million in line items during Monday night's council meeting, which could mean the city will run out of money to pay its employees before the end of the year.

The largest chunk of the money is $900,000 in fire department overtime. If the money isn't transferred, the city may run out of money to pay its firemen and women, as well as other city employees.

After a roughly hour and a half discussion during the council meeting on Monday night, the four minority members of the city council voted the measure down, saying they didn't have sufficient information to approve the line item transfers. Line item transfers need six votes to pass, one more than the mayor's five-vote majority.

"I want to know who overspent the money," said Councilwoman Beth Mason, who raised her voice multiple times during Monday's meeting. "I want to know why money was spent and this council was not informed before."

"We are not overspending the budget," Council President Ravi Bhalla countered, in one of many back-and-forths discussions of the evening. (A video is attached to this article)

The line items make up about two percent of the city's roughly $100 million budget. "These are routine transfers," said Councilman Peter Cunningham. "We do them all the time."

The reallocation means that money is moved around within the budget, Finance Director Nick Trasente explained. Trasente said that if the line items aren't moved, the city will run out of money to operate before the end of the year. And although the money is in the city's coffers, single line items can't be overspent.

Ultimately, Trasente said, this could result in a state take over or other action by the Division of Local Government Services.

When asked if there is another option to pay employees without moving the line items, Trasente said there is not.

The $2 million figure includes $900,000 in overtime to be paid to the fire department as well as a $500,000 payment to special legal counsel. It also includes $43,350 in salary changes and $260,000 salary settlement with two retired police officers. 

Among the salary increases is the , who will be earning $110,000 annually.

The fire department overtime wasn't anticipated at the beginning of the year when the budget was drafted, Trasente explained.

Bankruptcy Attorney Paul Hollander, of the firm Okin, Hollander & DeLuca—who is owed roughly $500,000 in legal fees—was present on Monday night to explain what he had done for the city. In a fairly heated answer to Councilman Tim Occhipinti's questions, Hollander said he worked countless hours for many months to reach a bankruptcy settlement with and to ensure the hospital sale to

, the amount of his services was exceeded and the line item in the budget will have to be changed in order to pay him. By state statute, municipalities are not allowed to overspend line items.

"It’s a lot of money," Corporation Counsel Mark Tabakin told the city council, but added that he told the council during a prior meeting that the legal cost would be significantly more than initially planned. "At least three of four thousand dollars more," Tabakin said. 

A heated discussion followed, but the two sides of the council—divided not by partisan politics, but their opinion of Mayor Dawn Zimmer—could not reach a compromise.

"The council as a whole looks like irresponsible children if we don’t get a sixth vote here," Bhalla said.