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Atlantic City makes debt payment, but mayor says city 'running on fumes'

Tuesday, May 3, 2016   (0 Comments)
Share | 05/03/16

Mayor Don Guardian announced Monday morning that financially imperiled Atlantic City made a $1.8 million bond payment due at the end of the day, avoiding becoming the first New Jersey municipality in nearly eight decades to default on its debt. But the future of the Jersey Shore gambling resort remains uncertain, with the local government still set to run out of money in weeks and state lawmakers continuing a months-long battle over how to help save the city.  "Financially, we're running on fumes," Guardian said at a news conference at city hall. "We really are teetering on the edge." Opposed to a state takeover of the city pushed by Gov. Chris Christie and state Senate President Stephen Sweeney (D-Gloucester), Guardian and city council President Marty Small lobbied the members of the state Assembly to pass an alternative plan set for a vote in the chamber Thursday. 

Had the city not made its payment Monday, it would have become the first Garden State municipality to default on its debt since Fort Lee in 1938. Experts said that might have caused the credit ratings of cities across the state — like Newark, Trenton, Paterson, and more — to fall.  "We think it was the right decision," Guardian said. "If we didn't make the payment, it would have been detrimental to everyone, including us." Guardian said Atlantic City still has enough money to make the upcoming payroll and an $8.5 million tax-collection payment due to its school district in June. He added that $60 million in second-quarter tax payments are coming in. But, the mayor noted, the city has about $240 million in bonded debt, has only about $6 million in money on hand, and will run out of cash possibly by next month if the state doesn't provide aid. He said he can't guarantee the city will be able to make the next debt payment due in June.

But Atlantic City officials noted a report by Politicker NJ that said Christie and south Jersey power boss George Norcross — one of the state's leading Democrats — put pressure on Assembly members this weekend to oppose Prieto's measure. Guardian and Small said that shows Christie and his allies are afraid that Prieto's bill will pass. Meanwhile, Politico New Jersey reported that Christie, a Republican, has called Republican members of the Assembly to Drumthwacket, the governor's mansion in Princeton, for a Thursday morning meeting before the vote. Christie's office declined comment, noting that the governor is holding a news conference in Trenton later in the day. Small, the council president, said he knows "there's a lot of pressure" on Assembly members. "That's why I implore them to do what you were elected to do: to represent the rights of the people," he said."

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