UPDATED Hoboken City Workers Turn Out In Droves For Meeting

HOBOKEN, NJ — After notices of possible layoffs were sent to 79 Hoboken City Hall workers on Friday, scores of workers in red shirts packed a City Council meeting on Wednesday evening.

A lawyer for the Hoboken Municipal Employees Association had said earlier in the day that the union has filed for an injunction before the state Public Employment Relations Commission to prevent layoffs.

A statement on behalf of the union, provided by attorney Marcia Mitolo of Fairfield, alleged that the layoff notices were sent in "retaliation" for the union not agreeing to switch to a "substandard" health care plan during ongoing contract negotiations.

Mayor Ravi Bhalla sent out a letter on Wednesday addressing the layoffs and saying that a recent rumor about a gag order on city employees was false.

Some of the comments in Bhalla's letter were likely in response to a release issued earlier that day from 1st Ward Councilman Michael DeFusco, who has been at odds with Bhalla politically.

The layoffs have been called a "worst-case scenario" by the mayor's spokesman, but have been discussed because the city reportedly faces an impending budget gap of $7 million or more.

Last year's budget was $118 million. The city is currently working on its proposed 2020 budget.

On Wednesday, Bhalla released a letter saying that during his first year, the budget called for no tax increase. He said this year, the cost of city employees' health care plan has risen by $1.5 million.

Pension costs will rise by $600,000, he said in his letter, and "previously negotiated union contracts" will add $3.5 million.

Bhalla also said that revenue has been lost from the municipal court (which generally brings in several million dollars a year in fines) and parking fees.

A release earlier in the day from Councilman Michael DeFusco said DeFusco has drawn up a resolution to ask the city to switch health care plans for its employees, which he says will save millions of dollars. The resolution urges the administration to replace Hoboken’s current healthcare vendor with the state’s NJ Direct 10 Plan.

"The city's health care costs have nearly tripled and utilizing the state’s own health insurance plan could potentially save Hoboken more than $6.5 million a year," he wrote. "This stunning cost saving figure has been raised by multiple city unions who are currently at the bargaining table for new contracts."

On Wednesday night, Councilman Phil Cohen said he'd introduce a resolution specifically for the nine City Council members, who are considered part-time, to give up their city-funded health insurance.

Cohen said this could save more than $100,000 per year.

Gagged?

DeFusco wrote that city employees are reluctant to speak up about the layoffs and related matters because of a "dated clause in their contracts that requires public statements be cleared through the city."

But Bhalla said in his letter, "An important point of clarification – a false rumor has been disseminated is that there is a so-called 'gag-order' or non-disclosure agreement that is in effect for municipal employees and unions. To be clear – no such clause exists in union contracts. ...any employee is welcome to speak out on any issue of importance, without restriction. Any directive that may indicate otherwise from previous administrations has not been, and will not be in effect."

Attorney Mitolo's statement on behalf of the union said, in part, "The city of Hoboken alleges in its Layoff and Demotion Plan that the layoffs are due to the fact that the six collective bargaining associations representing the various groups of city employees did not agree through negotiations to increased co-pays and deductibles by changing to a 'Gold Plus' Plan or 'Health Savings Account,' which is a substandard health care plan. The city is using layoffs as a threat during negotiations."

The letter adds, "The city has refused to meet with the union to negotiate a contract for years. In fact, the city has met with the Association only once and the only area it wished to negotiate over was the change to a substandard health care plan."

"The fact is that the city has mismanaged health care over the last six years," the letter continues. "The city created this problem when it changed to a self-funded plan, which at the time the city guaranteed to the employees would not create additional out-of-pocket costs."

Bhalla wrote that he hopes to present a balanced budget without raising taxes.

"Unfortunately," he wrote, "that may involve some difficult decisions, including the possibility of layoffs. Know that I fully value the contributions of each and every employee in City Hall ... by working together and finding concessions with our unions, exploring additional cost-saving measures within City Hall, and more, I hope we can produce a budget that minimizes this potential while preventing a large tax increase. "

Check back with Hoboken Patch for updates.

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