Murphy Administration Announces Major Financial Milestone for the City of Asbury Park
- Posted on: 06/15/2021
After a Decade of Transitional Aid, the City Has Successfully Achieved Fiscal Stability and is Released from the Program
TRENTON, NJ – Lt. Governor Sheila Oliver and New Jersey Department of Community Affairs (DCA) staff joined state and local officials today to announce a major milestone for the City of Asbury Park with its release from the State’s Transitional Aid (TA) Program. The City has been in the program under the guidance and direction of state technical advisors assigned by the DCA Division of Local Government Services (DLGS) since 2010 when it was declared a “distressed city” due to a significant budget deficit. Under the Transitional Aid Program, the City and State partnership resulted in a significant bond rating upgrade, a decline in municipal property taxes, and a half billion-dollar increase in total assessed property value.
“The City of Asbury Park has experienced a major turnaround as a result of the decade-long partnership between the City and the State and they are now on sound financial footing,” said Lt. Governor Sheila Oliver, who serves as DCA Commissioner. “This is a true comeback story to go from fiscal distress to becoming one of the most popular beach and tourist destinations in the State. The Transitional Aid Program has proven its value in transforming this city and I commend the DLGS staff and the City of Asbury Park’s leadership for working together to achieve this milestone.”
Over the past decade, the City has achieved multiple major financial successes. Its fund balance (surplus) went from $2.5 million in 2015 to $7.1 million in 2020 and its total assessed value (ratable base) climbed from $1.5 billion in 2015 to $2 billion in 2020.
In 2015, the City’s Moody’s credit rating was Baa2 and it has since received a top-tier A1 rating in 2021. The rating upgrade means that the City can now afford to borrow and fund needed water and sewer infrastructure improvements and other capital projects as needed to improve quality of life for residents.
Additionally, under the TA program, the municipal property tax rate declined from $1.26 per $100 of assessed value in 2015 to 92 cents per $100 of assessed value and currently has a 99.9 percent tax collection rate. In 2015, the City had double-digit audit write-ups, and in 2020 they had zero.
“The City of Asbury Park and its mayor, council, and manager have been consistently receptive to suggestions and recommendations made by the Division of Local Government Services state technical advisors,” said DLGS Director Jacquelyn Suárez. “This success story was a collaborative effort to make Asbury Park as efficient and effective as possible while respecting home rule and the mayor and council’s local decisions.”
“We welcome Lt. Governor Sheila Oliver to Asbury Park to mark the release of Asbury Park from the State of New Jersey’s Transitional Aid Program,” said Asbury Park Mayor John Moor. “Asbury Park received much-needed Transitional Aid money and valuable guidance from 2010 to 2017 and has remained in the program for monitoring until now. We are proud that through this partnership, and the years of hard work by City staff, the City can now report that it is financially stable – which is important especially while trying to recover from a pandemic.”
The State’s Transitional Aid Program provides discretionary aid to municipalities that have severe structural difficulties and anticipate difficulties making payments toward nondiscretionary or critical obligations including, but not limited to, debt service, contractual obligations, and payroll.
In 2010, Asbury Park was placed into the Distressed Cities Program (now the Transitional Aid Program) due to a budget deficit and remained in the program from 2010 until 2021 under the direction of State Technical Advisors George Haueber from 2010 to 2016 and Ed Sasdelli from 2017 to 2021.
In addition to the fiscal successes, the City has experienced many non-monetary successes and accomplishments as a result of state monitoring under the TA program, including:
· Adoption and maintenance of a pay-to-play ordinance to help establish public confidence that contracts and activities are awarded on the merits.
· Justification and approval required for most personnel actions, certain contract executions, travel, and other actions to discourage/prevent costs that are not mission critical.
· Professional assistance from the state technical advisor and increased attention from other DLGS staff with respect to: advancing various cost-saving efforts; interfacing with State agencies; and assuring/accessing capital markets.
· Access to capital markets at reasonable rates (lower than would otherwise be achievable) due to the positive view of state monitoring among rating agencies and capital markets.
· Guidance to control the size and cost of government as the ratable base and tourism industry grew considerably and increased demand for services. This was accomplished by encouraging or requiring the consolidation of work assignments through attrition; the use of temporary employees to address seasonal needs; the utilization of Special Law Enforcement Officers (SLEOs); and civilianization to assist with police demands in an efficient manner.
· Conversion to significantly less expensive health plans while maintaining similar level of coverage for City employees and elimination of part-time council members from the plan.
· Facilitated discussions and cooperation between the City and its master developer.
· Assistance with, and Local Finance Board approval of, RAB financings to encourage growth.
· Approval of a short-term cash flow loan to the City when access to markets for conventional short-term financing was limited.
· Assistance with the transition to a new form of government in 2014.
· Assistance with reviewing and revamping all fee schedules/ordinances to maximize revenues from non-tax sources and assistance with increasing other non-tax revenues such as foreclosed properties, auctioning old city equipment, parking revenues, etc.
The Division of Local Government Services serves as an advocate for local government interests. The Division provides technical and financial assistance in budgeting, financial reporting, joint services, purchasing, and management issues. It is responsible for the financial integrity of all local government units in the state. The Division reviews and approves all municipal, county, and fire district budgets, reviews many local government financial actions, and governs and guides the conduct of local government officials.
DCA offers a wide range of programs and services, including energy assistance, housing vouchers, affordable housing production, fire and building safety, community planning and development, local government management and finance, and disaster recovery and mitigation.
For more information about DCA, visit https://nj.gov/dca/ or follow the Department on social media: