News Release
For Release: January 19, 2010
Contact:Frank Baraff 914-469-3775

Mayor Hawkins signs fiscal responsibility agreement with state government. Urges City Council to join him in approving the memorandum of understanding

Statement by Mayor Eldridge Hawkins, Jr.
“As a condition of receiving $500,000 in extraordinary aid from the State of New Jersey, Orange and other municipalities receiving extraordinary aid have been asked to sign a memorandum of agreement committing to practices of fiscal responsibility and financial reporting to the State.

The memo is a reasonable and fair request by the State to fulfill its responsibility of fiscal oversight. It is a list of sound practices entirely in keeping with our goal of open and responsible government. I have already signed the agreement and urge the City Council to join me in signing it.”

Text of Memorandum of Agreement

Memorandum of Understanding
ORANGE CITY
FY2010

 

WHEREAS, the City of Orange (hereafter the “City”) HAS BEEN AWARDED Extraordinary Aid (hereafter “Extraordinary Aid”) in the State’s FY 2010 budget and said aid is conditioned on the acceptance and execution of this Memorandum of Understanding [MOU] ; and.

WHEREAS, due to the specific circumstances surrounding Orange’s budget, audits and general financial condition, the Director of the Division of Local Government Services has conditioned the receipt of said aid on the execution of this MOU.

NOW, THEREFORE, IT IS AGREED by and between the City and the Director of the Division of Local Government Services (hereafter, Director) that, in consideration for the award of Extraordinary Aid in the amount of $500,000 for FY2010 as applicable, the City shall observe and comply with the requirements established for the receipt of such assistance, shall implement any and all government, administrative and operational efficiency, and oversight measures necessary for the fiscal health of the City as may be recommended by the Director and shall otherwise completely and fully cooperate with the Director in achieving the purposes for which assistance is being made available, that is to help all the City meet its immediate budgetary needs; and

BE IT FURTHER AGREED that the City shall develop a fiscal and operational plan to reduce the need for Extraordinary Aid in the FY 2011 State budget, which plan may include layoffs and furloughs.  This plan shall be submitted to the Director within sixty (60) days of the execution of this Agreement; and

BE IT FURTHER AGREED, that the City shall comply with certain personnel requirements as stated below:

1. The City shall impose a hiring freeze on new employees.  Any request for new positions (request of waiver) shall be made to the Director with justification for the need of the new positions and the funding source for the positions.  Advertising or posting for new employees is not permitted without prior approval by the Director of a waiver.  This freeze is  applicable to replacements for persons who have left the employment of the City and whose positions are deemed as an essential service by the City and who position is being replaced with no addition appropriation to the budget.
2. The City shall freeze all salaries for all employees not covered by a current contractual agreement.  If the City believes that non-contractual employees deserve an increase in salary, the City shall contact the Division. 
3. The City shall not fund vacancies for non-essential positions.
4. No budget monies shall be expended for charities or “the sunshine fund” type expenditures.
5. The City shall freeze promotions and transfers involving salary increases unless required by contractual obligations or unless the promotion/transfer results in no increased cost to the City (e.g. filling vacated positions).
6. The City shall prepare a plan for reduction of staff through attrition, consolidation of positions, and/or outsourcing of services if savings shall occur.
7. The City shall submit a list of all employees with their title, salary and date hired. If possible, this material should be submitted within thirty days of execution of this agreement.
8. In the event a waiver is granted from the hiring freeze, the City must submit copies of job applications and resumes for all potential employees.
9. The City shall provide a status report of labor negotiations with Division on prior to ratification.
10. The City shall submit copies of all ratified labor contracts to Division.
11. The City shall not hire any consultants including outside attorneys, without prior written approval of the Director. This provision does not include attorney’s, engineers, etc. whose positions are appointed on a regular basis by the City and whose position has been regularly funded through a budget appropriation.
12. The City shall pay salaries and wages in a given year in an amount not to exceed the annual rate of compensation established by ordinance and collective bargaining agreements for each job title.
13. The Director, in his/her discretion may waive any of the above personnel requirements if he/she determines that the City’s fiscal condition is not dependent on a strict personnel policy.

 

BE IT FURTHER AGREED that the City, for any requested creation of a new position, shall prepare and submit a waiver to the Director for the hiring of any new personnel and/or the transfer of any employee in compliance with a resolution adopted by the Board.  The waiver must include a description of the personnel action, salary implication, and a detailed explanation of the need for such action.  The waiver must contain the signatures of the Mayor, Business Administrator and Chief Financial Officer.

            BE IT FURTHER AGREED that the City shall comply with certain budget and operations requirements as stated below:

1. The City shall submit detailed monthly revenue and expenditure budget reports and copies of budget transfer resolutions approved by the governing body to the Director.
2. The City shall not fund nor expand new programs or services without the prior notification to the Division, including funding sources or the new program and/or service.
3. Out-of-state travel is prohibited and overnight stays within New Jersey are prohibited, except when essential for licensure or certification required for employment or where required as a condition of a grant.
4. The City must have certified personnel where required by statute.
5. The City shall impose an expenditure restriction for educational expense.  Educational expense should be limited to certified personnel or those in certification programs requiring CEUs or training.
6. The City shall notify the Division of any changes in insurance plan(s) or carrier(s).
7. The City shall hold timely foreclosures and lien sales.
8. The City must have functional general ledger, fixed asset and encumbrance accounting systems.
9. The City shall prepare its tax billings in compliance with Ch. 72, P. L. 1994, related to State Fiscal Year estimated tax bills and tax billing.
10. Reimbursement for employee meals or entertainment is prohibited and City funds cannot be used for receptions for City employees. Reimbursement for employee meals or entertainment is prohibited unless said reimbursement is required by an existing collective bargaining agreement.  City funds cannot be used for food, drinks or entertainment at any regularly scheduled board or committee meeting, nor shall City funds be used for receptions for City employees.

 

BE IT FURTHER AGREED that the City shall submit the documents/reports to the Division as required by the Director.

BE IT FURTHER AGREED that the City agrees to comply with the general procedural and operational requirements as listed below:

1. The City shall agree to a review of operations by Division staff.
2. The City shall agree to implement recommendations of Division.
3. The City is directed to implement any government, administrative and operational efficiencies and oversight measures necessary for the fiscal recovery of the City.
4. Director may withhold any State Aid payments or future Extraordinary Aid payments if Director finds that City has failed to implement fiscal recovery measures approved by Director.
5. The City shall observe and comply with all statutory requirements with respect to prudent budgeting, fiscal controls, and tax collection procedures, (for City, county and schools).
6. The City shall comply with all requirements imposed by the Director and shall fully cooperate with the Director and the Board in achieving the purposes for which assistance shall be made available.

 

BE IT FURTHER AGREED that, at the discretion of the Director, the Extraordinary Aid allocation may be made in quarterly payments and that such payments will be made based on a compliance review of the terms of this agreement.  If this agreement is for less than the entire year, then payments will be made in equally divisible amounts for the remaining months of the year.

BE IT FURTHER AGREED that the City Governing Body shall review this Memorandum of Understanding and pass a Resolution authorizing this Agreement within 20 days of the date of execution of this Agreement.

 BE IT FURTHER AGREED that the Director may withhold from the City any State aid payments that are disbursed by the Division of Local Government Services if the Director finds the City has failed to implement fiscal recovery measures approved by the Board, and

            IT IS FINALLY AGREED that the terms of this agreement shall be binding upon the City for any and all subsequent years in which Extraordinary Aid funds are allocated to the City.

 

 

_____________________________                                       Date_________                                 Signature of Mayor                                                 

 

_______________________________                                   Date_________
Signature of Director

 

______________________________                                     Date_________
Certification of Municipal Clerk